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February 2018 Issue 45

ENHANCING THE BUSINESS OF LOGISTICS

2018’S TECHNOLOGY TRENDS

For the air freight industry

UD Trucks

The region’s sturdiest trucking partner

Bahrain

Improving connectivity

Truxapp

Facilitating business


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                                                                  

         

Bespoke Logistics Project of the Year 2017

Domestic Logistics Service Provider of the Year KSA 2017

GCC Supplier Of The Year 2017 KSA Supplier Of The Year 2017


Tech trends for air freight SIGNATURE MEDIA FZ LLE P. O. Box 49784, Dubai, UAE Tel: 04 3978847/3795678 Email: info@signaturemediame.com Exclusive Sales Agent Signature Media LLC P.O. Box 49784, Dubai, UAE Publisher: Jason Verhoven jason@signaturemediame.com Manager: Brian Cordeiro brian@signaturemediame.com Managing Editor: Munawar Shariff munawar@signaturemediame.com Art Director: B Raveendran ravi@signaturemediame.com Production Manager: Roy Varghese roy@signaturemediame.com

Printed by United Printing Press (UPP) – Abu Dhabi Distributed by Tawseel Distribution & Logistics – Dubai

We’ve all noticed the change in the way we live our daily lives due to technology. For example; I have moved most of my non perishables grocery shopping to many of the available online options, be it through apps, or online stores. And while I check out with my order, I have an option to have the stuff delivered to a nearby pick up location or to my home address. So from a logistics standpoint, the traditional warehouse concept has changed. The warehouse now is not one huge building, but it is a collection of big and small facilities at different locations that are convenient for pick up and drop off to the end user. And honestly this is just one small example of how our daily lives have changed. There are too many examples that will tell us how technology is affecting the traditional way business was done, the traditional way supply chains were run. Our cover story identifies the top five technology trends that are currently affecting the air freight industry. When we speak of the air freight industry, e-commerce is not far behind in the conversation. This is perhaps the biggest disruptor that has caused the domino effect for other major changes, such as the example mentioned above. These are exciting times as we witness change all around us and become the generation to have seen it all - the before and the after. Do send us your thoughts on my address below. Let’s strike up that conversation today.

Munawar Shariff Managing Editor munawar@signaturemediame.com

Contributor’s opinions do not necessarily reflect those of the publisher or editor and while every precaution has been taken to ensure that the information contained in this handbook is accurate and timely, no liability is accepted by them for errors or omissions, however caused. Articles and information contained in this publication are the copyright of Signature Media FZ LLE & SIGNATURE MEDIA LLC and cannot be reproduced in any form without written permission.

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GUEST COLUMN

February 2018 Issue 45

ENHANCING THE BUSINESS OF LOGISTICS

25 06 News 16 Country report Bahrain Bahrain focuses on its transport sector Bahrain is working hard to improve its connections to the rest of the world

25 Cover Top 5 airfreight logistics tech trends for 2018 The most prominent technology trends affecting the air freight business for the year

30 Global airfreight business still buoyant IATA confident of maintaining growth momentum through 2018 4 FEBRUARY 2018

36 Honeywell’s voice technology for aerospace services Honeywell’s advanced cyber and smart technologies for the logistics and construction industries

42 UD Trucks on a roll UD Trucks notches up several milestones in its six-decades plus long drive in the MENA region

48 Trucking tech gains traction Truxapp - the trucking industry’s newest app

52 What lies ahead for the logistics and supply chain industry? 2018 will be about continued chaos, disruption, change and transformation

55 Continental’s new monitoring system to boost bus and truck safety The tyre manufacturer’s new patented safety system is designed to focus on safe driving

58 Robots in the warehouse Are robots going to replace people in the warehouse?


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Jafza pharmaceutical and healthcare sector under scanner at Arab Health 2018 Jebel Ali Free Zone’s (Jafza) pharmaceutical and healthcare sector, currently comprising over 300 companies from over 50 countries, showcased its capabilities and opportunities at the recently concluded Arab Health 2018 Conference and Exhibition in Dubai. According to Jafza, the volume of trade in the healthcare and pharmaceutical sectors in the freezone was US$ 3.86 billion in 2016,

accounting for nearly a quarter of the UAE’s health spend of US$ 16.1 billion in that year. “The healthcare and pharmaceutical are key strategic targets in the Dubai Industrial Strategy 2030. As a trade and logistics hub, Jafza fully supports this vision and the freezone is already the regional headquarters for many international healthcare companies,” stated Sultan Bin

Sulayem, Chairman and CEO of DP World. According to a recent research report from BMI, a Fitch Group company, the UAE’s pharmaceutical and healthcare markets are among the regional best performers in the Middle East and North Africa (MENA) region. The report forecasts that in the UAE the sector will grow from US$ 16.96 billion in 2017 to US$ 17.88 billion in 2018, before hitting US$ 21.27 billion in 2021. For the MENA Region, it forecasts growth from US$ 174.43 billion in 2017 to US$ 182.43 billion in 2018 and US$ 213.1 billion by 2021.

SriLankan Airlines attains a new monthly revenue record For the first time in its 38-year history, SriLankan Airlines achieved the highest ever monthly revenue in the company history in December 2017. The airtransport operation of the Company recorded revenues of US$ 100.1 million. The airline attributes the increase in revenue to its expanded network and ongoing improvements in revenue management processes. It fared well in other parameters. It recorded a Passenger Load Factor (PLF) of 85.9 per cent, well above that of most major airlines in the world. Cargo carriage in the month rose 23 per cent over the corresponding December 2016 period to 12,016 metric tonnes.

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The airline also recorded a successful month in terms of operational efficiency, recording an average aircraft utilisation of

13.8 hours per day. The wide-bodied fleet of Airbus A330 aircraft achieved an average daily utilisation of 15.2 hours.


Pakistan’s Fauji Fertiliser successfully deploys SAP technology Enabling Pakistan Vision 2025’s goals of growing the country’s agricultural contribution to GDP through technology, the Fauji Fertiliser Company (FFC), Pakistan’s largest fertiliser company, has gone live on a digital core for realtime analytics after successfully implementing the SAP S/4HANA next-generation business suite. Agriculture is core to Pakistan’s economy, representing 45 per cent of the workforce and 21 per cent of GDP, according to Pakistan Vision 2025. The Vision aims to use technology to make farmers 20 per cent more efficient, decrease the crop yield gap by 40 per cent, and reduce crop losses by 50 per cent. “By leveraging on the latest and emerging technology innovations provided by SAP S/4HANA, FFC has been able to transform its business processes to attain higher productivity levels previously impossible with traditional management practices,” said Lieutenant General Shafqaat Ahmed (Retired), CEO and Managing Director, FFC. “Digital transformation will contribute to Pakistan’s economic growth. Data analytics can enable agile planning for more productive businesses,” commented Saquib Khan, Country Manager, SAP Pakistan.

DP World Chairman meets Canadian PM at Davos DP World Group Chairman and CEO Sultan Ahmed Bin Sulayem and Canadian Prime Minister, Justin Trudeau held a bilateral meeting at the 2018 World Economic Forum Annual Meeting in Davos, Switzerland. Bin Sulayem stressed DP World’s commitment to Canada and lauded the support of the Canadian Government. DP World operates Canadian port terminals in Vancouver and Prince Rupert on the west coast and Saint John, New Brunswick on the east coast. DP World completed the Phase 2 North expansion of Prince Rupert in August 2017 raising capacity to 1.35 million TEU, making it capable of handling the largest vessels afloat. Bin Sulayem also touched on DP World’s growth strategy to develop complementary sectors in the global supply chain such as industrial parks, freezones and logistics to add further value for all its stakeholders. “We are delighted to have Canadians as our business partners. The development

of Transpacific and Atlantic trade, our global strategy for growth, employment opportunities and supporting local economies over the long term were other areas of discussion,”Bin Sulayem added.

MEPCO wins award by CFI The publicly listed, Jeddah-headquartered Middle East Paper Company (MEPCO) has been awarded the Best Corporate Governance Leadership – Saudi Arabia 2017 accolade by Capital Finance International (CFI). MEPCO is one of the largest paperboard producers in the Middle East with a proven track record of maintaining the highest levels of corporate governance, CFI noted. CFI formally recognised a diverse array of MEPCO’s accomplishments, including its ongoing methods of sustainable large-scale production, reducing the company’s impact on the environment and enhancing its Corporate Social Responsibility (CSR) programmes. “Our team has made great progress towards aligning our company with international standards and best practices in order to achieve the highest levels of corporate governance standards in Saudi Arabia,”affirmed Eng. Sami Safran, CEO, MEPCO. MEPCO was also the recent recipient of the King Khaled Award from the King Khaled Foundation in the field of ‘Responsible Competitiveness’. The company’s products are exported to over 40 countries.

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Cargill and ARASCO open corn milling facility in Saudi Arabia

Gulf Navigation to acquire a majority stake in Atlantic Navigation Gulf Navigation Holding (GulfNav) has announced that it is in discussion to acquire a majority stake in Singapore’s Atlantic Navigation Holdings (Atlantic), an integrated offshore supply operation engaged in the provisioning of marine logistic services, ship repair, fabrication and other marine services. GulfNav is in discussion with major oil companies in the GCC to provide key project solution and offshore services. According to the company, this potential acquisition will propel the business forward and create

added opportunities that both companies can deliver. “This investment marks a major milestone in GulfNav’s strategy to grow our offering to customers in the regional offshore supply vessels and energy sectors in the GCC,” commented Khamis Juma Buamim, MD, Group CEO of Gulf Nav. “We look forward to working together and drive our shared ambitious growth strategy in the offshore oil and gas sector,”remarked Wong Siew Cheong, Executive Chairman and CEO of Atlantic.

CNN interviews UAE’s AI Minister CNN anchor Becky Anderson recently interviewed Omar Bin Sultan Al Olama, the UAE’s first and newly-appointed Artificial Intelligence Minister on her show about the impact AI is making on communities globally. “Every single discussion we have seen so far has been theoretical. This is what we should do. No one actually went and put something on the ground. We are the first country that did it. We put our money where our mouth is,”the Minister said in reply to a question on what specifically the UAE was doing to be a leader in AI.“The possibilities for this are endless,” he added.

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Middle East Food Solutions Company (MEFSCO), a joint venture between Cargill and Saudi Arabia’s ARASCO (Arabian Agricultural Services Company), inaugurated a new corn milling facility to meet the growing demand of the region’s food and beverage industry in the Al-Kharj Governorate in the Kingdom’s central region. This also marks Cargill’s first investment in Saudi Arabia. The MEFSCO facility was built to serve the GCC countries. With the new plant, the joint venture is able to double its glucose and starch production capacities, triple total production volume and expand its product portfolio to include high fructose corn syrup to meet the growing demand across the confectionery, juice, bakery and catering segments in the region. “The MEFSCO facility gives regional food and beverage manufacturers access to high quality, in-house developed products,” said Julian Chase, Global Group Leader for Cargill Starches, Sweeteners and Texturisers. “MEFSCO will manufacture to the strictest food safety and hygiene standards in our advanced Al-Kharj facility,” said Ziyad Alsheikh, CEO of MEFSCO.


KGL wins DLA’s logistics contract Kuwait & Gulf Link Transport (KGL) has announced that the US Defence Logistics Agency (DLA) has awarded it a new contract to lead logistics and distribution operations for US military personnel across the Gulf region. Under the terms of the contract, the fifth of its kind awarded by the DLA, KGL will procure, import, store and distribute food products from both United States of America and local sources to support more than 20,000 U.S. military personnel in Kuwait, Iraq and Jordan. KGL will provide services primarily from its procurement and distribution hub in Kuwait. The value of the contract is estimated to be US$ 690 million, but will not exceed US$ 1.38 billion for a period of 60 months. “We look forward to continuing to work with the US military as we have done over the past two decades on solving complex logistics challenges and supporting the American mission in the Gulf region,”said Sam Khatib, Chief Business Development Officer, KGL. For more than 60 years, KGL has been providing comprehensive logistics solutions for international commercial and government clients, most notably the United Nations and the US Government throughout the Middle East.

Goodyear launches extreme truck tyre line Goodyear is launching Kmax Extreme, a new truck tyre line specifically engineered for use in conditions of extreme heat. The tyre will be available in the GCC markets in the second half of 2018. The new line, which offers improved wear, greater durability and lower operating costs have been designed for trucks operating long distances in multiple loading conditions where long term resistance to heat is the main performance factor, the manufacturer said in a press statement. “The New Goodyear Kmax Extreme truck tyres have been developed for hot running conditions such as in the GCC countries,”said Rupert Kohaupt Sales Director Truck Tyres,

Emerging Markets Goodyear EMEA. “These conditions increase wear and reduce durability in standard tyres so the new tyres have been engineered to not only overcome these issues but also to save fuel and reduce operating costs,”he added. “A special feature of the KMAX S EXTREME steer tyre is IntelliMax Rib Technology. The tread design comprises stiffener bridges in the central grooves. These connect when the tyre rolls through the footprint allowing the two central ribs to support each other, stiffening the tread design and limiting slip especially when cornering,”commented Laurent Colantonio, Director Truck Tyre Technology for Europe, Middle East and Africa.

Tabuk Pharmaceuticals signs agreement with Red OTC Jordan’s Tabuk Pharmaceuticals has entered into an exclusive licensing and supply agreement with Red OTC, a German company that creates and develops innovative and highly competitive OTC (over-the-counter) products. Under this agreement, Red OTC has granted

Tabuk exclusive rights to commercialise and distribute Ivy ODF, a herbal extract used as an expectorant in productive cough, in Saudi Arabia, the Gulf and Levant area. “We are very excited to establish this collaboration with Red OTC and expect that this will be the start up for a long-term collaboration

on new products in different areas,”asserted Dr. Rana Azzam, leading the Business Development in Tabuk. “Working exclusively together with Tabuk, we are convinced that our partnership will be extremely fruitful for both companies,”commented Dr. Thomas Haffner, General Manager of Red OTC.

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Cepsa and Masdar partner to expand internationally

FedEx is ranked among the ‘World’s Most Admired Companies’ FedEx is once again ranked among the most admired companies in the world, according to a recent survey published in Fortune, the US business magazine. The latest edition of the annual“World’s Most Admired Companies” report released lists FedEx as the number 9 ranked company overall. The survey measures nine attributes related to financial performance and corporate reputation. “FedEx is honored to have been recognised again among the world’s most admired companies,” said Frederick W. Smith, Chairman and CEO, FedEx Corp.“This honour reflects the outstanding dedication and performance of our more than

400,000 FedEx team members worldwide.” This is the 18th consecutive year that FedEx has ranked among the top 20 in the Fortune ‘Most Admired Companies’ list, with 14 of those years ranking among the top 10.The factory also has a large storage facility for raw materials, which enables it to meet urgent customer requirements faster by reducing lead time for production. All products are ISO 9001, ISO 14001 and OHSAS 18001 certified. Scientechnic’s metal enclosures and panels are used in a number of applications by electrical retailers and wholesalers, panel builders, control panel assemblers, MEP contractors and firefighting system contractors.

SABIC acquires strategic stake in Clariant Saudi Arabia Basic Industries Corporation (SABIC), a world leader in diversified chemicals, has agreed to acquire approximately 83 million shares in Clariant a Swiss specialty chemicals company from 40 North and Corvex Management. The acquisition of this approximately 24.9 per cent

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stake in Clariant will make SABIC the largest Clariant shareholder and represents another key milestone in SABIC’s growth and diversification strategy to become the preferred world leader in chemicals. “SABIC is an established global leader in the chemicals industry and we are confident

that this transaction allows Clariant to continue on its path to becoming a global specialty chemicals leader,” observed David Winter, CoCEO of Standard Industries and Co-CIO of 40 North. The closing of the transaction is subject to completing regulatory approvals.

Spain’s global energy company Cepsa and Masdar, Abu Dhabi Future Energy Company, have signed a Memorandum of Understanding (MOU) to explore international renewable energy project collaboration, especially wind and solar. The collaboration between Cepsa and Masdar is the outcome of the constant search for synergies among businesses of the Mubadala Investment Company which owns Masdar. The combination of Cepsa’s technical excellence in operations and execution of industrial projects in places like Algeria and Latin America, coupled with Masdar’s experience in renewable energies in the Middle East, the United Kingdom and other markets, will help drive the development of projects in strategic countries for both companies, Mubadala noted in press statement. The two companies plan to explore opportunities in the locations where they already operate including Spain, the Middle East, North Africa, Latin America and Europe.


flydubai adds two new destinations flydubai has announced the start of its two new flights to Thessaloniki in Greece and Aqaba in Jordan from June 2018. The latest additions to the growing flydubai network give passengers from the UAE and the region the option to travel to more than 100 destinations through Dubai’s aviation hub. flydubai is the first UAE carrier to operate flights to Aqaba and Thessaloniki. Flights to Thessaloniki will operate three times a week starting from 15 June, while flights to Aqaba will operate four times a week from 16 June. “With the addition of Aqaba and Thessaloniki to our network, we increase the number of underserved markets served by flydubai with direct flights from the UAE to 71 destinations,” observed Ghaith Al Ghaith, CEO of flydubai, flydubai earlier announced the launch of several new routes for 2018 including Tivat (Montenegro), Krakow (Poland), Dubrovnik (Croatia), Catania (Sicily), Kutaisi and Batumi (Georgia), and Qabala (Azerbaijan) from March onwards.

ADNOC Distribution to open 13 new stations this year

ADNOC Distribution, the UAE’s fuels and convenience retailer, has announced plans to open at least 13 new service stations in 2018 including, for the first time, sites in Dubai and the Kingdom of Saudi Arabia. Three new service stations are planned for strategic locations across the Emirate of Dubai, nine new stations will open in the Emirates of Abu Dhabi, Ajman and Fujairah and at least one site will open in Saudi Arabia under a franchise agreement. In addition, major

extensions will be completed at three existing stations in Abu Dhabi in 2018. “We will transform ADNOC Distribution into a more commercially minded and performance-driven company. This year we will deliver new stations quicker and at a lower cost while enhancing our customers’ experience and maintaining our focus on health and safety,” commented ADNOC Distribution’s Acting CEO, Saeed Mubarak Al Rashdi.

DAE receives Aviation 100 M&A ‘Deal of the Year’ Award Dubai Aerospace Enterprise (DAE) has announced that it has received the M&A ‘Deal of the Year’Award from Airline Economics during its recent Aviation 100 Global Leader Awards ceremony in Dublin, Ireland. This award is

recognition of DAE’s highprofile acquisition of the leading aircraft lessor Awas in 2017, which propelled DAE into the top tier of global aircraft lessors. DAE Capital now features an owned, managed and committed fleet

of nearly 400 aircraft with a value of over US$ 14 billion. The Aviation 100, an annual publication by Airline Economics, recognizes the year’s most outstanding performers in the aerospace industry.

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Dubai’s PCFC collaborates with IBM to launch cloud disaster recovery service Dubai’s Port, Customs and Freezone Corporation (PCFC), and its technical arm, DUTECH, recently announced an agreement to launch a cloud-based disaster recovery service in Dubai. As part of the agreement, IBM will implement an IBM cloud-based disaster recovery as a service (DRaaS) solution at DUTECH’s data centre. The new service will enable PCFC entities and other government agencies as well as private businesses in Dubai, and potentially, the region, to benefit from a cloud-based disaster recovery as a service. This will help protect them against data loss from their own servers or from other cloud services, and can maintain readiness,

without the need to invest in physical space or stand-by hardware. “It is important for organisations to always stay one step ahead of any potential internal or external threats,”said Juma Al Ghaith, Executive Director of Customs Development Division at Dubai Customs.“Through the new service, organisations will benefit from faster detection and removal of vulnerabilities as well as speedier data recovery and reduced downtime,”he added.“IBM offerings like DRaaS and Cloud Resiliency Orchestration are built to simplify and automate the disaster recovery process, increase workflow efficiency, and reduce risk, cost, and system testing time,”said Amr Refaat, General Manager, IBM Middle East and Pakistan.

FarEye’s parcel shop technology to revolutionise e-commerce marketplace FarEye, a digital logistics platform, has announced the successful introduction of its new parcel shop technology, ‘Drop&Pick’. Launched in January 2017, the technology is already being incorporated by various large businesses like DHL, DTDC, First Flight and many others to facilitate paperless, high speed and secure dispatch and delivery of parcels through its parcel shop network. This technology is also targeted towards logistics businesses offering franchisee models. The customer gets an option of getting parcel delivered to a nearby ‘parcel

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shop’, both during the time of order placement as well as before the actual delivery. ”The product is built to enable fast and convenient delivery and dispatch of parcels which provides logistics companies

innovative and value-added services, thus increasing their revenue streams,”says Kushal Nahata, Co-Founder and CEO, FarEye. The global e-commerce market is currently estimated at about US$ 2 trillion.

Philips Middle East and Turkey appoints new CEO Royal Philips has announced the appointment of Özlem Fidancı as Chief Executive Officer for the company’s operations in the Middle East and Turkey. Fidancı, a Philips veteran, is set to continue driving the company’s strategic objectives and overall growth across the region. In her new role, Fidancı will be responsible for 16 countries. Commenting on her new appointment, Özlem Fidancı said, “Philips has had a longstanding history in the region, and the Middle East and Turkey is an important market for Philips.” A graduate from Turkey’s Boğaziçi University in 1992, Fidancı began her career with Tetra Pak as Business Development Manager until 1998, where she then joined Philips, and held a number of senior roles. After having served as the Philips Consumer Products General Manager since 2008, Fidancı became the Head of Marketing, Sales and Strategy to the Philips Electronics business in Singapore in 2010. In 2011, she rejoined the region as Vice President and General Manager to the Philips Consumer Products Middle East, Turkey and Africa (META).


David Christmas appointed to top DHL regional position

NYU Abu Dhabi and Abu Dhabi Airports to advance aviation innovation NYU (New York University) Abu Dhabi signed a Memorandum of Understanding (MoU) with Abu Dhabi Airports to foster innovation in aviation through the exchange of knowledge, research and technology in the form of a joint initiative consistent with the objectives of the ‘Year of Zayed 2018’, titled “Innovation and Accelerating the Future.” The MoU is set to further accelerate the development of advanced capabilities for Abu Dhabi International Airport. The first phase of the partnership will see NYU Abu Dhabi and Abu Dhabi Airports organising joint workshops and events to identify ideas and opportunities

to develop the capital’s airport to a new standard of technological progression. The agreement was signed at a ceremony by Abdul Majeed Al Khoori, Acting Chief Executive Officer of Abu Dhabi Airports and NYU Abu Dhabi Vice Chancellor Al Bloom a ceremony held at the NYU Abu Dhabi campus attended by guests and representatives from both entities. Specialists from both institutions will conduct studies on subjects of interest in the field of aviation, providing academic and technical facilities for researchers to carry out field studies and surveys.

DHL Supply Chain Mainland Europe, Middle East & Africa (MLEMEA) has announced that David Christmas, has been promoted as the CEO of Middle East and Africa. Christmas brings a wealth of experience to his new role, having joined the business in 2004 as Client Director. In his new role Christmas will be leading the overall strategy for the supply chain business and the direct managerial team, while overseeing operations and business activities. “We continue to see tremendous opportunity in the Middle East and Africa region and we hope to further strengthen our leadership as the supply chain service provider of choice,”said Christmas. His career in logistics spans over 20 years across Europe, Asia and Africa in various roles including, general management, business development, transport and customer relations.

UAE ranked 8th globally for introduction of autonomous vehicles The United Arab Emirates is among the top ten countries in the world when it comes to readiness to accommodate driverless vehicles, revealed KPMG’s Autonomous Vehicles Readiness Index (AVRI). The study, which evaluates the preparedness of countries globally, places the UAE at number eight, ahead of South Korea and New Zealand. The KPMG AVR Index, a first-of-its-kind initiative, highlights global best practices to help countries accelerate their adoption of autonomous transport, capacity for adapting autonomous driving technology, as well as highlights the progress achieved in making driverless

cars a reality. The Index places the UAE after the Netherlands, Singapore, the United States, Sweden, the United Kingdom, Germany, and Canada. The study carefully evaluates every country’s ability according to four pillars: policy and legislation; technology and innovation; infrastructure; and consumer acceptance.

As the world’s most innovative countries have started the journey to make driverless cars a reality, the UAE consolidated its dominance as number one among the 20 countries for road quality, a critical factor in infrastructure readiness. At number six on the policy and legislation pillar, the UAE is also credited for having a dedicated and autonomous

function within its transport department, for quality of regulation and for government capability in KPMG’s Change Readiness Index, which assessed countries’ ability to manage change and cultivate opportunity. This strategy is expected to bring US$ 6.0 billion in annual economic revenues, via a reduction of transport costs, carbon emissions and accidents, and hundreds of millions of hours wasted in conventional transportation. “The UAE’s desire to excel in the field of technology will ensure that the nation is at the vanguard of the urban autonomous mobility,”said Ravi Suri, Partner and Global Head of Infrastructure Finance, KPMG Lower Gulf.

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Bahri welcomes new VLCC addition to its fleet Bahri, the Saudi Arabian maritime transportation and logistics company has recently received the delivery of the ‘Kassab’, its first Very Large Crude-oil Carrier (VLCC) to enhance the company’s maritime offering and increase its market share in crude oil transportation. The 300,000-DWT carrier, built by Hyundai Samho Heavy Industries (HSHI), the world’s largest shipbuilding company based in South Korea, lifts Bahri’s total number of multipurpose fleet to 89 and VLCCs to 42, further solidifying its position as the largest VLCC owner and operator worldwide. Bahri took the delivery of ‘Kassab’, which is the first of five vessels on order for the year,

Swedish engine plant is Volvo’s first climateneutral manufacturing site Volvo Cars’ engine factory in Skövde, Sweden, has become the company’s first climate-neutral manufacturing plant, having switched to renewable heating as of 1 January 2018. Skövde is the first plant in Volvo Cars’ global manufacturing network to reach this status, which marks a significant step towards the company’s vision of having climate-neutral global manufacturing operations by 2025. Skövde also becomes one of only a few climate-neutral automotive plants in Europe. “Improving energy efficiency is our first priority and then, for the energy we need to use, we aim for supplies generated from renewable sources,”said Javier Varela, Senior Vice President of Manufacturing and Logistics at Volvo Cars.

14 FEBRUARY 2018

at a ceremony held at the HSHI’s Mokpo shipyard in South Jeolla Province, South Korea in the fourth week of January 2018. “After delivering a solid performance in 2017, we are gearing up for another year of outstanding growth with our enhanced offering, leveraging our renewed approach to revolutionise the global maritime sector,”said Eng. Abdullah Aldubaikhi, CEO of Bahri in a press communiqué. According to Bahri, the addition of the tanker will further strengthen the company’s ability to provide its customers with worldclass transportation solutions offering a diverse service portfolio that includes transportation of crude oil, oil products, chemicals, bulk, and general cargo.

A new agreement between Volvo Cars and the local provider ensures that all heating supplied to the Skövde plant is generated from waste incineration, biomass and recycled bio-fuels. Since 2008, along with the company’s other European plants, its Skövde site’s electricity supply already come from renewable sources. “Environmental care is one of our core values. Along with our plan to electrify all new Volvo cars launched from 2019, climateneutral manufacturing operations will significantly reduce our overall carbon footprint, supporting global efforts to tackle climate change,”said Stuart Templar, Director for Sustainability.

Emirates SkyCargo offers increased protection for pharmaceutical cargo Emirates SkyCargo has stepped up its commitment to securely transport temperature sensitive pharmaceutical shipments with the introduction of pharma corridors that offer additional protection across selected stations in its network for pharmaceutical cargo. Emirates SkyCargo is working with ground handling partners and other stakeholders at multiple cities across its global network in order to ensure that handling operations for pharmaceuticals at these stations are uniform and comply with Emirates SkyCargo’s stringent norms for pharma transport during transport of temperature sensitive pharmaceutical cargo. “We ensure that pharmaceutical cargo travels under the best conditions not only through our state of the art facilities in Dubai and when onboard our modern aircraft, but right from the point of collection to destination. We are also actively exploring the roll out of dedicated pharma flights across our network,”said Nabil Sultan, Emirates Divisional Senior Vice President, SkyCargo. The air cargo carrier has also invested in developing ‘White Cover’ thermal blankets in addition to innovative containers such as the Emirates SkyCargo ‘Cool Dolly’ or the ‘White Container’ to guarantee that lifesaving medicines travelling through its network are not compromised. Emirates SkyCargo has a fleet of over 50 cool dollies dedicated to pharma cargo.


Dubai Industrial Park announces expansion Dubai Industrial (DI) Park, a designated district within Dubai Wholesale City (DWSC), has announced the US$ 36.75 million infrastructure development and road expansion project spanning an area of 16 million square feet that is set to commence on its premises. The expansion works stem from the park’s commitment to address the potential growth of the industrial sector in Dubai and wider UAE, as part of the Dubai Industrial Strategy. The contract has been awarded to Wade Adams, a Dubai-headquartered general construction and project development company.

Set for completion by end-2018, the project comprises two phases. The project will involve enhancements and expansion of the roads networks, followed by the implementation of the ground-work across 16 million square feet. “Dubai Industrial Park is committed to meeting the requirements of its business partners and enabling them to take advantage of available opportunities in contributing to the UAE’s economic diversification,”said Saud Abu Al-Shawareb, Chief Operating Officer at Dubai Industrial Park. Dubai Industrial Park is a major contributor to strengthening Dubai’s status as a

destination for international manufacturers and traders. DI has witnessed the opening of the world’s largest personal care product plant for Unilever, as well as the inauguration of Patchi’s largest facility in the region. In addition, Bin Touq Transportation LLC has started construction work of its new headquarters, and the inauguration of Al Faris Equipment Rental headquarters in the UAE. The total number of factories operating in Dubai Industrial Park currently amounts to 100, with an additional 120 factories currently under construction, increasing DI’s service network to more than 700 local, regional and global business partners.

ADSB to partner with Rolls-Royce on sustainability and supply chain services Abu Dhabi Ship Building (ADSB), a provider of construction, repair and refit services for naval, military and commercial vessels, and strategic partner to the UAE Armed Forces, has partnered with RollsRoyce to lay the groundwork for the provision of enhanced naval shipbuilding, repair and refit services across the GCC. Dr. Khaled Al Mazrouei, CEO of ADSB and Leo Pantazopoulos, Rolls-Royce’s Senior Vice President, Asia & Middle East, signed a Memorandum of Understanding (MoU) that will see the companies move toward the provision of integrated engineering sustainability and supply chain services for military vessels.

The MoU will enable the development of worldclass lifecycle management solutions for regional defense stakeholders. It will also reinforce ADSB’s technical maintenance, repair and overhaul (MRO)

capabilities, and provide a platform for both companies to explore further opportunities for cooperation in the building of new vessels. Commenting on the occasion, Dr. Khaled Al Mazrouei, CEO

of ADSB, said: “This partnership supports our strategy to capitalise on ADSB’s competitive advantages in MRO services as we look to support our strategic partners’ readiness in the region, as well as help develop national talent specialised in the ship building sector.” This development allows ADSB to enhance its capability management strategy and further expand operations beyond the UAE by providing innovative solutions for marine fleets stationed in the region. It will also offer greater opportunities for ADSB and Rolls-Royce to showcase and channel their combined expertise towards building strong relationships with regional navies.

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COUNTRY REPORT - BAHRAIN

focuses on its transport sector With construction under way on the $1.1bn expansion of its international airport and a further $700m investment being made on road and bridge building, Bahrain is working hard to improve its connections to the rest of the world while shortening journey times for its residents. This Oxford Business Group report on the country’s transportation sector has all the details 16 FEBRUARY 2018

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ublic transit is also a priority for Bahrain. After one year of operation, the average daily ridership had risen to more than 36,000 passengers, and the government has commissioned a detailed feasibility study on a light rail network. Plans for a new rail and road causeway to Saudi Arabia have been discussed for some time; currently the


COUNTRY REPORT - BAHRAIN

Bahrain Public Transport Company in Manama, the capital of Bahrain

project is under review to consider private sector involvement, which looks promising.

Growing significance

Bahrain Public Transport

Transport and communications is a growing component of Bahrain’s economy. According to the Economic Development Board (EDB), in 2015 the sector grew by 5.9 per cent, only slightly decelerating from annual growth of 6.5 per cent in 2014. According to data

FEBRUARY 2018 17


COUNTRY REPORT - BAHRAIN

from the Information and eGovernment Authority, the sector’s contribution to GDP in 2015 was its highest for more than five years at 7.27 per cent at constant prices and 7.52 per cent at current prices, with the latter reflecting a contribution of BD879.67m (US$2.3bn) to the economy in 2015. In the first two quarters of 2016 the pace of the sector’s growth moderated to three per cent and then 2.4 per cent. A white paper titled “Drivers of Economic Growth”, which was published by the EDB, identified transport and communications as a key potential driver of economic growth and diversification, and the report noted that the sector’s contribution to GDP had grown from around 4.3 per cent in 2001 to 6.8 per cent in 2011.

Renewal and expansion

The country is working to improve infrastructure and connectivity, as well as the speed at which people and goods can enter and leave Bahrain. A considerable portion of the US$10bn the kingdom is receiving in investment from GCC neighbours as part of the Gulf Development Fund package is being devoted to the transport sector, where key facilities have long since surpassed the volumes of traffic they were designed to carry. Bahrain International Airport was established in 1927 as the first airport in the Arabian Gulf, with the last major upgrade completed in 1994, handled more than 8.5m in 2015. The airport’s total capacity is also to be expanded to 14m passengers per annum. The 25-km King Fahd Causeway linking Bahrain to Saudi Arabia, which opened in 1986, almost 20 years later in 2005 saw some Driving development 12.7m people cross the bridge. By 2015 this In Bahrain’s Economic Vision 2030, the key had increased to 23m. The Abu Dhabi Fund roadmap steering government strategy for Development is funding 80 per published in 2008, cent of the US$1.1bn Airport policymakers recognised In Bahrain’s Modernisation Project that is the importance already under way, and both of transport and Economic Vision Saudi Arabia and Bahrain have interconnectivity to the made firm commitments to growth and prosperity of 2030, the key build a second causeway that the country. It stipulated, roadmap steering will carry railway traffic, as well “The country will have as cars and lorries. outstanding road, sea government and air connections to strategy global markets” and Gateway hub said it recognised the published in 2008, These infrastructure importance of cuttingimprovements are vital if Bahrain policymakers edge infrastructure is to leverage its strategic position and an appealing in the northern Gulf and its close recognised the living environment for proximity to the largest economy importance of the country’s existing in the region in order to fulfil its population, but also to potential to grow as a gateway transport and attract investment from logistics hub for the GCC. Many interconnectivity overseas. In the “Global of the most recognisable names Competitiveness Report in international logistics have to the growth 2016-17”, the World already recognised the country’s Economic Forum ranked potential, with Aramex, FedEx, and prosperity Bahrain 48th among Kuehne+Nagel, TNT and UPS of the country 138 global among those well established in economies. Although the kingdom. DHL made Bahrain its overall position slipped from 39th place in its Middle East hub in 1976. Forty years later, 2015-16, its infrastructure was given a rank of in January 2016, the Bahrain News Agency 32nd, with roads awarded 25th position, ports reported that DHL had unveiled the two 30th and the quality of airport infrastructure newest additions to its MENA air fleet, which judged to be 46th. Inadequate supply of is based at Bahrain International Airport. The infrastructure was, however, the sixth most Boeing 767-200 aircraft have a maximum takecommon cause for complaint among the off weight of 159,200 kg and will join nine businesses surveyed for the report. 757-200s based in the kingdom, increasing

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the number of weekly flights to destinations across the region to 155. DHL aircraft from Bahrain fly to destinations in Saudi Arabia, the UAE, Afghanistan and Pakistan, and starting in February 2016 DHL Aviation also increased its service from Bahrain to Beirut to offer an alternative for companies unable to ship overland to Lebanon, due to the ongoing conflict in Syria. New firms either considering investing in logistics or hoping to service the wider Gulf region through exports of manufactured goods or services have opportunities to invest in a country that can offer a well-educated, bilingual workforce, as well as increasingly generous rules on foreign ownership in many sectors. In July 2016 the Cabinet approved legislation allowing 100 per cent foreign ownership of firms in the following sectors: administrative services, arts, entertainment and leisure, food, health and social work, information and communications, manufacturing, mining and quarrying, professional, scientific and technical services, real estate and water supply.

Investment park Foreign ownership is also under consideration for companies that open at the Bahrain International Investment Park (BIIP), a 2.5m-sq-metre serviced business park that was established in 2005 and is located 10 minutes from Bahrain International Airport, five minutes from Khalifa Bin Salman Port and 20 minutes from the King Fahd Causeway to Saudi Arabia. The park has 121 companies on-site, employing 4,500 workers and has already allocated approximately 86 per cent of its land and 92 per cent of the space in an office building on the site. “Companies are attracted to the physical infrastructure, with the close proximity of the port and airport, but also by Bahrain’s relationship with Saudi Arabia, as there is only one traffic light between here and the causeway,”Maria Gilsenan, marketing executive of BIIP, told OBG.

Investment wharf Logistics companies can also choose to locate at Bahrain Investment Wharf, which consists of a 900,000-sq-metre light industry and warehousing park, with facilities for cold storage, package and re-distribution, along with companies producing pharmaceuticals, plastics, paper, electronics and electrical machinery, textiles and chemical products.


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Logistics zone Close by is a Customs bonded logistics zone, the Bahrain Logistics Zone, which covers over 1m sq metres and caters specially for a number of companies involved in all aspects of component assembly, labelling, packaging, repackaging, weighing, kitting, palletising, testing and repair. The EDB’s September 2016 quarterly reported stated that Bahrain’s first freehold trade zone, phase 1 of the Investment Gateway Project, had opened on a 600,000-sqmetre reclaimed island in Hidd, offering 300 plots for warehousing, light industry and showroom space. Manara Developments has sold 95 per cent of the first phase, but is building an additional 2m-sq-metre area that will be completed in 2018. The clustering of these industrial zones with such ease of access to land, sea and air

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distribution hubs is a draw in itself, alongside low prices and ease of access to the biggest economy in the region.“There are 37 entry points to Saudi Arabia and the King Fahd Causeway is the most efficient, and in these difficult economic times when companies are trying to save costs, these factors offer excellent opportunities for businesses to save both time and money,”Hamad Fakhro, director of the Logistics Zone Directorate at the Ministry of Transportation and Telecommunications (MTT), told OBG. Another attraction for multinational enterprises are the bilateral trade agreements that Bahrain already has established with some 40 countries, including free trade agreements with the UK, Singapore and the European Free Trade Association states Iceland, Liechtenstein, Norway and Switzerland, as well as dutyfree access to a total of 17 Arab nations.

Regional comparisons These attractive ingredients were recognised in the 2016 Agility Emerging Markets Logistics Index, which ranked Bahrain as seventh out of 40 countries for market connectedness, which is one of the factors used to determine its overall rankings. The UAE was judged to be top for connectedness, with Saudi Arabia and Oman ranked fifth and sixth. Qatar was below Bahrain in eighth place and Kuwait ranked 29th. In another key index, the World Bank’s 2017 ease of doing business index, Bahrain jumped up three places to rank 63rd out of 189 countries, although its ranking under the category of trading across borders remained unchanged at number 82nd. The Doing Business report for this category measured the expense and time required to import and export goods and complete Customs procedures.


COUNTRY REPORT - BAHRAIN

Bird view of Manama city, Bahrain

Although export fees were considerably cheaper than both the wider MENA region and OECD high-income countries, when it came to dealing with border agents at the ports, the time and cost involved in receiving government export documents took much longer and cost more than in OECD countries. It took 24 hours to receive the documents, compared to the three hours on average for OECD countries, and a typical cost of $211 in Bahrain, compared to $36 in OECD nations.

Trading partners Bahrain’s pivotal role as a regional centre for both exports of products manufactured in the country as well as re-exports are evident from its trading figures. For instance, the EDB reported that in August 2016 the main export markets were Saudi Arabia ($79m), the US ($67.2m) and

Qatar ($42.8m), while leading re-export destinations were Saudi Arabia ($48.2m), the UAE ($13.8m) and Kuwait ($4.8m). The most valuable categories of imports were for cars, followed by aluminium oxide and mobile phones with China, the UAE, the US and Japan representing the most significant import markets.

Transport imports Although some of the vehicles imported to the kingdom may subsequently be reexported, the full-year data for 2015 shows the importance of the transport sector to import trade. Among its top-100 import categories in 2015, the country imported 52,726 motor vehicles of various sorts with a combined value of BD554.37m ($1.5bn), as well as BD21.84m ($58m) worth of Japanese car parts.

The single most valuable import commodity of the year was Japanese Jeeps, current year, spark ignition over 3000 cc. These 12,897 new four-wheel drives were valued at BD175.42m (US$465.3m), more than the BD174.33m (US$462.4m) in aluminium oxide imported from Australia to feed Bahrain’s aluminium industry. The US, Thailand and Germany were other key exporters of cars to Bahrain in 2015. In the same year, Bahrain also imported BD55.82m (US$148.1m) in aircraft and helicopter parts and engines from the US and the UK and 19 turbo-jets at a combined value of BD6.9m (US$18.3m) from the US. In 2015 Bahrain imported 19 tugs and pusher craft for a combined value of BD35.9m (US$95.2m) from the UK, Panama and Singapore. In addition, BD6.7m (US$17.8m) worth of electric power railway coaches were imported from Canada.

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COUNTRY REPORT - BAHRAIN

Vehicle numbers The dominance of private transport in Bahrain can be demonstrated when vehicle registrations are compared to the total population. By the end of 2016, according to data from the Information and eGovernment Authority, there were 522,780 privately owned cars in Bahrain, when the total population (including citizens, expatriates and children) was 1.37m, which works out as one car for every three people in the country. In the same year, 32,595 new private vehicles were registered in the kingdom. The total number of private vehicles registered on Bahrain’s roads grew by over 109 per cent during the course of 11 years, from 226,918 registered in 2004 to 475,406 in 2015.

at the MTT, told OBG. British company Trueform won the contract to provide 300 of these innovative bus shelters for the MTT. According to figures from the MTT’s Land Transport Affairs Office, the busiest day on record for the BPTC was in July 2016, when it carried 73,000 passengers. By December 2016, average daily passenger numbers had grown from 16,000 to 36,000, and the target is to reach 51,000. In 2017 the MTT has launched a new feasibility study into developing a light rail network for Bahrain, which would further increase the incentives for people to use public transport and reduce congestion on the roads.

Causeway traffic

Easing traffic and avoiding lengthy delays on the King Fahd Causeway is one of the key objectives of transport planners on both sides In an attempt to reduce congestion on of the border. The 25-km bridge is heavily Bahrain’s roads and to offer a transport used by commuters in both directions, with alternative, a joint venture was created to many expatriate oil workers run a new network of preferring to base their families buses. The partners in the These infrastructure in Bahrain, and many Saudi Bahrain Public Transport residents driving their children Company (BPTC) are the improvements are to schools and universities UK’s National Express in Bahrain. It is Bahrain’s key and Ahmed Mansour vital if Bahrain freight route, and thus vitally Al Aali, a major Bahrain is to leverage its important to companies construction and supplying the market in Saudi contracting group. The strategic position Arabia or relying on imports previous bus operator in in the northern for their manufacturing Bahrain had 35 buses, processes. Bahrain is also a but the new firm has Gulf and its close popular weekend destination 141 vehicles and has proximity to the for Saudi citizens, many of been granted a 10-year who have weekend homes in concession with the largest economy the country, and the crossing MTT as the client. It runs in the region in can become particularly busy 29 routes that by 2016 when weekends coincide with covered 77 per cent of the order to fulfil its holidays. The Ministry of the country. The buses are potential to grow as Interior’s Nationality, Passports manufactured by MANS Residence Affairs (NPRA) and Optare and feature a gateway logistics and Directorate is responsible for CCTV cameras, free Wi-Fi checking passports, while and air conditioning. An hub for the GCC Customs Affairs, another app has been created for branch of the same ministry, is responsible finding timetables and fares, and a Go card, for border protection and cargo examination. similar to London’s Oyster card, has been According to the NPRA, visitors arriving introduced to enable cash-free transactions through the causeway in 2016 rose by 3.4 for passengers.“We currently have 4 bus per cent, compared to 11.82m 2015, to a total shelters that have air conditioning so that of 12.22m. More than 23m people travelled we can test the design in local conditions, across the causeway in 2015, a 5.8 per cent and we are also working on solar panels increase on 2014, according to a January tenders to power bus shelter lighting and 2016 Gulf News report. The average number digital information screens,”Nada Yousif of vehicles crossing the bridge was 28,569, Deen, director of land transportation projects

Bus company

22 FEBRUARY 2018

a 6.23 per cent increase on 2014. To speed toll payments and passport controls, there is a plan in place to increase the number of Customs and immigration lanes from 17 to 45 in 2017. Both Saudi Arabia and Bahrain have made commitments that a new crossing, to be called the King Hamad Causeway, will be completed by 2023. The new $3bn crossing is designed to carry both road vehicles and trains and will allow Bahrain to connect to the GCC rail network. The deadline for the completion of the wider rail network has been delayed to 2021 after member countries acknowledged that the original 2018 deadline would not be met. The MTT expects 36 per cent of freight and six per cent of passenger traffic to switch over from road to rail when the new bridge is completed.

Air traffic As construction work on its new $1.1bn terminal gets under way, passenger numbers at Bahrain International Airport are increasing. The total number of passengers travelling through the airport reached 8.02m by the end of November 2016, compared to 7.85m in the first eight months of 2015, a 2.2 per cent increase, according to the MTT. The new airport building will not provide additional cargo facilities. MTT data for 2016 to the end of August showed demand was unchanged, with 139.6m tonnes carried in 2015, compared to 140m tonnes in 2016. Maher Al Musallam,


COUNTRY REPORT - BAHRAIN

Airbus A330-243 A9C-KC Gulf Air

CEO of Gulf Air, told OBG,“There is a lot of growth to look forward to. Bahrain is a mature market in aviation as one of the oldest in the GCC, yet it is emerging in terms of the existing new areas of potential that we are constantly looking to leverage. As we work to build upon the synergy between local aviation entities, Bahrain’s national carrier has a future of strategic growth that sees continued focus on passenger comforts and convenience. Alongside this we are witnessing the development of Bahrain’s aviation infrastructure – boosting the kingdom as a whole.”

Gulf Air The national carrier, Gulf Air, which is 100 per cent owned by the government’s Mumtalakat Holding Company, is investing in $7.6bn worth of aircraft orders that are expected to begin arriving in 2018. The airline will purchase 16 Boeing 787-9 Dreamliners and 29 Airbus A320s and A321s over a number of years. As part of its fleet renewal programme, it awarded B/E Aerospace a contract to supply all business class seating, while Rolls-Royce was awarded a $900m contract for Trent 1000 engines to power 10 Boeing Dreamliner aircraft and provide long-term service support, while giving Gulf Air the option to buy a further six engines. In tandem, an agreement with Thales will secure the AVANT in-flight entertainment system for the newest 787s. In 2015 Gulf Air reported a 62 per cent

decrease in losses to BD24.1m ($63.9m), reflecting continued improvement in the airline’s overall performance since its restructuring back in 2013. Losses have eased by a combined 88 per cent since 2012, when they totalled around BD196m ($519.9m). This positive trend is expected to continue in the years ahead, given the company’s ongoing strategy of investing in the airline’s controlled future growth.

Sea traffic Since 2009 the Khalifa Bin Salman Port (KBSP) has handled most seaborne freight traffic in Bahrain, with the older Mina Salman Port serving the requirements of the US Navy’s Fifth Fleet. KBSP has an 1800-metre quay that includes a 900-sq-metre container terminal served by four 61-metre postPanamax cranes. It also has facilities to handle general cargo, roll-on/roll-off and passenger craft, with cruise liners among the many ships calling at the port. The port is operated by the private operator APM Terminals and supervised by the MTT’s Ports and Maritime Affairs Directorate. Data published by APM Terminals for 2016 showed a decline in volumes of some general cargo, which may have more to do with wider changes in the economy or particular business ventures than the port’s operations. For instance, there was a dramatic decrease in the number of livestock shipped through

the port from more than 439,000 to just over 117,000, which may have resulted from the government’s ending of meat subsidies in the second half of 2015. Meanwhile, the reduction in tonnage of sugar shipped from 285,668 tonnes to 60,618 may be a reflection of the activities of the country’s sugar refinery. The number of cars handled by the port also declined from 95,534 to 53,817. The container shipping levels had increased slightly by 1.2 per cent from 260,857 full twenty-footequivalent units (TEUs) to 263,981 in 2016. The number of empty containers handled has also increased marginally from 109,2020 TEUs to 110,494 TEUs, as did overall number of containers handled, which was up from 370,059 TEUs to 374,475 TEUs.

Outlook The start of construction work at Bahrain International Airport and the regular sight of red public buses on the streets of the kingdom are signs of progress being made in improvements to the country’s public transport facilities and services. Although the prospect of a new light rail network and a second causeway may be more distant, transport planners in the country know that these are challenges that must be solved if the economy is to grow through improvements in tourism, logistics, transportation and trade. -www.oxfordbusinessgroup.com

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COVER

2018 Top 5 airfreight logistics tech trends for

We’re already a full month into 2018 and the e-commerce-driven demand for airfreight show few signs of abating. While the outlook for the year is generally positive and confidence in the industry is high, there are still many bottlenecks in the supply chain that need to be addressed, including increased safety and transparency, improved product quality and faster processing of cross-border shipments. Randy Woods, Editor, Air Cargo World, provides insights into the most prominent trends for the year

F

ortunately, there are countless technology firms willing to help forwarders, carriers and shippers manage these issues and increase the overall efficiency of air cargo transport. To help make sense of the array of options, we at Air Cargo World have chosen the top 5 tech trends we expect we will hear about the most for the rest of the year – creating products and services that may soon become the next gold-standard for the industry. On the following pages, check out some of the top, cutting-edge solutions:

FEBRUARY 2018 25


Flexible warehousing These are not your big static boxes anymore. Today’s warehouses have been transformed into dynamic hives of logistics activity. And it’s no longer about just one big building, but a network of large and small facilities strategically placed to serve the ever-shifting needs of customers. The warehouses of tomorrow are increasingly reliant upon robotic vehicles and are designed to be customisable to meet today’s on-demand needs, serving as both retail outlets and e-commerce distribution centres. In some cases, warehouse space is being leased for short-duration storage during peak times only and then released for use by other customers.

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Since Amazon.com purchased Whole Foods last year, expect that warehouses will have to pick up the pace of delivery in ever-decreasing window of time from order to final destination – in some cases, just a few hours.

Talk of blockchain implementation Blockchain is the airfreight buzzword that refuses to go away – mostly because there is so much obvious potential for it to automate and secure the mechanics of the supply chain. Note that we specifically said“talk”; while 2018 may not be the year of blockchain’s big breakthrough in air cargo, the heated discussion about possible real-world uses will be with us for quite some time.

There is, of course, a reason for the blockchain technology hype. By establishing a shared, automated record of all the transactions that occur in a network, blockchain grants trusted parties exclusive access to data in real time. The companies that hope to introduce the technology as a way of digitalising global cross-border trade say it’s one of the best methods to achieve transparency without compromising security or privacy. One of the most promising logistics developments is actually happening in the maritime sector, where Maersk and IBM have formed a joint venture to implement a blockchain-based global


COVER

trade digitalisation platform. If this proves successful, it will almost inevitably migrate to the air sector as well.

The Internet of things and interconnectivity After being discussed ad nauseum for that last decade in Silicon Valley, the “internet of things” (IoT) may seem like a dated – and awkwardly termed – concept. However, it is still gaining enough traction in the logistics field that we may begin to see some widespread implementation this year, using well-established technology such as radio-frequency identification (RFID) and GPS tracking systems.

Lufthansa Technik AG subsidiary Lufthansa Technik Logistik Services (LTLS) is launching an IoT program to digitalise its warehousing operations with a digital warehouse pilot destined for Munich Airport (MUC)

Because airfreight involves the movement of so many tangible items – from ULDs to trucks to 777s – it is uniquely well-suited to IoT technology. For instance, Lufthansa Technik AG subsidiary Lufthansa Technik Logistik Services (LTLS) is launching an IoT program to digitalise its warehousing operations with a digital warehouse pilot destined for Munich Airport (MUC). In other applications, DHL Supply Chain has launched a“narrowband internet of things” program at a DHL automotive site in Liuzhou, China, in partnership with Chinese technology conglomerate Huawei Technologies. French tech firm OCEASOFT has begun testing its mobile temperature data logger Cobalt ML3,

FEBRUARY 2018 27


COVER

which uses IoT track temperatures of pharma products in real time long-range wireless data transfer. IoT technology is even being used to help curb theft of delivered packages from consumers’ porches. There appears to be no limit on the utility of this type of old-but-stillnew technology.

UAVs: Not just for last-mile anymore Small drones designed to deliver small, highvalue commodities, such as pharmaceuticals to remote hospitals, have been around for years, and all of them are hampered by the same restrictions from most world regulatory agencies that ban their use beyond line-ofsight piloting and above a few hundred feet, out of concern for public safety. It’s a major issue, and it may not be solved for some time. But the types of drone aircraft being discussed this year are not the same as

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the little quad- or hex-copters favored by hobbyists. For 2018, the discussion will shift to a much larger machine, capable of carrying larger payload several kilometers away. The announcement earlier this month that Boeing’s deep aviation pockets were putting muscle behind vertical take-off and landing UAV’s has reinvigorated the industry. Several other firms, including Sabrewing Aircraft Co., Natilus and China’s JD.com are working on large, fixed-wing prototypes that can fly hundreds of kilometers to remote areas that may not have adequate infrastructure. UAVs, though largely grounded by regulation, are at least growing up.

Artificial Intelligence and predictive software Right now, perhaps no other technology has the greater potential to be disruptive that artificial intelligence (A.I.), which crunches

the collected “big data”from the supply chain and uses machine learning to identify hidden patterns of daily e-commerce. This is the industry that practically invented the phrase“I need it shipped there yesterday,” and with the mind-bending capabilities of the latest data-driven predictive software, shippers and forwarders may soon be able to anticipate bottlenecks like weather events, traffic slowdowns and other until-now-unforeseen variables that can gum up the supply chain. A.I. can also be used for anticipating not just potential problems, but future buying habits, so shippers can better estimate when certain products will be most popular and can react swiftly to move these commodities to distribution centres closer to their customers. Alibaba’s research in machine learning has made great strides in the A.I. arena with its PAI 20. Platform. www.aircargoworld.com


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AIR FREIGHT UPDATE

Global airfreight

business still buoyant IATA confident of maintaining growth momentum through 2018 Official airfreight data recently released by IATA points out to healthy growth in November 2017 and satisfactory performance during the 11 months of the past year. That growth pattern is sustainable in H1-2018, IATA reveals. 30 FEBRUARY 2018


AIR FREIGHT UPDATE

Manufacturers in the major exporting nations of China and Japan, in particular, have continued to report rising demand for their exports, helped in part by a pick-up in economic activity in Europe and a continued solid performance from the US

I

ATA’s latest announcements have brought cheer to the global airfreight community and the released statistics bode well for the remainder of 2018. Air freight volumes posted another month of robust growth in November 2017. Global freight-tonne-

kilometres (FTKs), a critical benchmark for the industry, rose by 8.8 per cent year-on-year in November and remain on track for their fastest full year of growth since 2010, says IATA. Another robust month of FTK growth in November year-on-year growth in industry-

wide freight-tonne-kilometres accelerated to 8.8 per cent year-on-year in November, up from 5.8 per cent in October. The result confirmed industry reports of buoyant activity during the traditional period of strong demand seen every fourth quarter.

FEBRUARY 2018 31


AIR FREIGHT UPDATE

As a spin-off, key indicators of cargo demand indicate that FTK growth is carrying momentum into the first half of 2018. International FTK growth rose in year-on-year terms in most regions in November, and stayed in double-digit territory on the continent of Africa. Freight capacity grew by four per cent year-on-year in November 2017 alone.

32 FEBRUARY 2018

Having risen by 9.7 per cent in year-onyear terms over the first 11 months of 2017, air freight volumes remain on track for their fastest full year of growth since 2010. Putting this into context, the current pace of growth is around three times the ten-year average growth rate of 3.3 per cent. The seasonally adjusted (SA) upward trend in volumes however has moderated. Over the

past six months SA air freight volumes have trended upwards at an annualised rate of around 4 per cent, well down on the doubledigit pace seen in late-2016 and early-2017.

Investment traction Other factors including the long-awaited pick-up in investment in Europe, buoyant consumer confidence, as well as reports of


AIR FREIGHT UPDATE

anticipated strong growth in international e-commerce flows, are also expected to continue. Each of these factors should help to further strengthen demand for air freight in the near term. All considered, the drivers of freight demand suggest that industry-wide FTKs still look set for a solid year of growth in 2018. IATA expects industry-wide FTK

growth to come in close to its five-year average pace in the region of a healthy 4.5 per cent in 2018 as a whole. The industry-wide load factor in November 2017 increased by 2.2 percentage points compared to the corresponding period in November 2016. The upward trend in demand outstripped that of capacity during most of 2016 and early-2017. This implies

demand and capacity have now been trending upwards at broadly similar rates over the past six months or so. International FTKs grew by nine per cent year-on-year in November 2017, up from the 14-month low of 5.8 per cent in October 2017. As a spin-off, key indicators of cargo demand indicate that FTK growth is carrying momentum into the first half of 2018.

FEBRUARY 2018 33


AIR FREIGHT UPDATE

International FTK growth rose in year-onyear terms in most regions in November, and stayed in double-digit territory on the continent of Africa. International freight capacity grew by four per cent year-on-year in November 2017 alone.

and Latin American airlines accelerated sharply in November.

Middle East

Africa tops the growth chart among all regions for the 13th month in a row. This comes on the back of an increase in the number of direct services between the two continents on the back of ongoing foreign investment flows into Africa from Asia; FTKs flown on the segment have surged by more than 67 per cent in year-on-year terms in the first ten months of the year 2017.

Ongoing solid trend for Middle Eastern traffic Airlines based in the Middle East posted a relatively low year-on-year growth in international FTKs but the November figure of 6.6 per cent was a silver lining, an improvement from 4.6 per cent in October. Moreover, the bigger picture is that SA FTKs flown by Middle Eastern carriers has continued to trend upwards at a healthy annualized rate of eight to 10 per cent during the second half of 2017. Freight loads have increased substantially to and from the Middle East to North America in recent months.

Latin America

Europe

Alongside an ongoing recovery in Latin America Airlines based in Latin America flew 9.6 per cent more international FTKs in November 2017 compared to a year ago, well ahead of the five-year average growth rate (0.9 per cent). In SA terms, FTKs are currently back to levels last seen in late2014, helped by the ongoing recovery in the continent’s largest economy, Brazil. It is worth noting, however, that international capacity growth for both African

Demonstrating robust growth, but moderating trend in Europe, the continent’s airlines posted double-digit annual growth in international FTKs for the ninth time in ten months in November at 10.1 per cent, up from 6.3 per cent in the previous month, and well above the five-year average of 4.9 per cent. It is important to note that the current robust year-on-year growth rate mainly reflects strong gains in SA volumes seen during H1-2017. As with the industry-wide

Africa rising

34 FEBRUARY 2018

FTK series, the upward trend in international volumes flown by European airlines has moderated during the second half of the year.

Asia Pacific Year-on-year FTK growth remains strong, at more than twice its five-year average pace (8.8 per cent in November, compared to 3.3 per cent). SA volumes however have trended sideways over the past six months. Nonetheless, the favourable backdrop of buoyant export order books for the region’s manufacturers is, once again, expected to support demand for air freight into 2018. Manufacturers in the major exporting nations of China and Japan, in particular, have continued to report rising demand for their exports, helped in part by a pick-up in economic activity in Europe and a continued solid performance from the US. The comparative strength of the US economy and dollar over recent years has helped to support inbound air freight volumes to the US. It is noteworthy that imports by air from China and Germany have increased substantially in year-on-year terms in 2017, which is consistent with the strong demand conditions seen on the air freight market segments across the Atlantic and the Pacific in 2017. -David Oxley economics@iata.org


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TECHNOLOGY

Honeywell’s voice technology for aerospace services

Honeywell also introduces advanced cyber and smart technologies targeted to the logistics, supply chain and construction industries The partnership by Honeywell and TS&S to implement the region’s first sound and voice technology for the maintenance, repair and overhaul (MRO) sector was finalised at the recently concluded MRO Middle East 2018 exhibition in Dubai 36 FEBRUARY 2018


TECHNOLOGY

I

n collaboration with Honeywell, Abu Dhabi’s Turbine Services and Solutions (TS&S), the solutions, maintenance, repair and overhaul (MRO) provider for gas turbines and driven equipment, is set to introduce the region’s first voice technology for MRO projects. This deal will enable TS&S to become the first aerospace company in the Middle East to use Honeywell’s maintenance and inspection (M&I) voice system. Under the terms of the agreement, the US global software-industrial company’s voice system will lead to a ‘hands-free, eyes-free’ environment that significantly reduce paper-based documentation within TS&S’ operations by allowing operators to ‘speak’-log their observations and diagnosis in real-time, dispensing the need for manual data entry and improving data integrity.

Norm Gilsdorf, President, Honeywell, Middle East, Russia, Turkey & Centr

Philipose Jacob, Regional General Manager, Honeywell Building Solutions

Honeywell said its M&I voice system offers advanced voice and sound-recognition capabilities, and will seamlessly integrate with TS&S’ Materials Requirement Planning (MRP) system, allowing for the automation of existing processes. “As we grow our operations to new markets, implementing advanced technologies that enable process optimisation are critical in ensuring that we meet the growing demand of our services to the highest compliance standards,” commented Mansoor Janahi, Deputy CEO of TS&S at the official signing ceremony on the sidelines of the exhibition. Over the years, Honeywell has affirmed that its voice system has enabled organisations around the world to save US$ 20 billion in operational costs, improve productivity by 35 per cent and reduce operational errors by 25 per cent.

FEBRUARY 2018 37


TECHNOLOGY

“Honeywell will deploy the latest advances in Internet of Things technology, cloud solutions and automation to tackle operational inefficiencies and disconnects. We will bring advanced hardware and software solutions to market that can help organisations streamline tasks, improve productivity, drive compliance and boost connectivity across all industries,� stated Norm Gilsdorf, President, Honeywell Middle East, Russia, Turkey and Central Asia. It may be recalled that during the November 2017 Dubai Airshow, Mubadala Investment Company, a wholly owned investment vehicle of the government of Abu Dhabi in the hightech sector, and Honeywell announced plans to establish capabilities for Honeywell Auxiliary Power Unit (APU) models in the Middle East.

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TECHNOLOGY

TS&S is a key player in the Middle East’s MRO industry and has commercial partnerships with global original equipment manufacturers such as GE, Rolls-Royce, IAE (Pratt & Whitney) among others.

Honeywell forays Honeywell has also developed new building technologies that help improve data visualisation and decision-making in the logistics and supply chain and construction segments. At Intersec 2018, the recently held exhibition in Dubai for security, safety and fire protection, Honeywell announced its latest smart building technology, Command and Control Suite Release 200 (CCS R200), which connects building personnel with data analytics to help drive operational improvements and efficiencies. According to Honeywell, CCS R200 offers more user interfaces to bring building performance

“Honeywell will deploy the latest advances in Internet of Things technology, cloud solutions and automation to tackle operational inefficiencies and disconnects,” Norm Gilsdorf, President, Honeywell Middle East, Russia, Turkey and Central Asia

data to key personnel, from building operators and managers to security incident response teams, helping to reduce operational costs, mitigate risk and enhance business continuity. Honeywell’s claims CCS R200 combines intelligent automation, advanced analytics and data visualisation with the contemporary user experience of consumer home and mobile electronics, bringing simple, intuitive displays to building operations to enhance facility and security management in an easy-to-understand manner for building operators in the region. Honeywell believes the latest release brings the holistic integration, map-based visualisation and incident workflows to create a seamless hub of information pulled from IT networks, building control systems and outside sources, which allows for better incident response and operational decision-making. “The value of a building’s data is dependent on how easily the right people can access and understand it. With regional governments introducing strict regulations for the installation of integrated solutions, there is a growing need for operations to become increasingly data-driven in the Middle East,” said Philipose Jacob, Regional General Manager, Gulf, Honeywell Building Solutions. Jacob emphasised that the command station is a single-window, single-monitor interface, designed for a desktop PC, laptop and Windows tablet, and is often ideal for facility technicians, security guards and management as well as for casual use by occupants. He further added that this allows even inexperienced users to quickly understand the overall situation at a glance by providing solutions in a straightforward manner, while allowing expert users the ability to drill down to technical detail and full system control.

Honeywell debuts Cloud Historian At Intersec 2018, Honeywell also announced the launch of its Honeywell Connected Plant Uniformance Cloud Historian, a softwareas-a-service cloud hosting solution for enterprise-wide visualisation and analysis, helping customers improve asset availability and increase plant uptime.

FEBRUARY 2018 39


In a statement, Honeywell explained that the Uniformance Cloud Historian’s design is an industry first, fusing the real-time process data analysis of a traditional enterprise historian with a data lake, enabling the integration of production, Enterprise Resource Planning (ERP), and other business data coupled with analytics tools to provide business intelligence. “Uniformance Cloud Historian brings the full power of cloud and big data to Honeywell’s traditional process historian for the first time, connecting even the most complex multi-site organisations

40 FEBRUARY 2018

With regional governments introducing strict regulations for the installation of integrated solutions, there is a growing need for operations to become increasingly data-driven in the Middle East,” Philipose Jacob, Regional General Manager, Gulf, Honeywell Building Solutions

effortlessly,” said Vimal Kapur, President of Honeywell Process Solutions. Kapur asserted that Honeywell’s new offering collects, stores and enables replay of historical and continuous plant and production site process data and makes it visible in the cloud in real time. The historian combines a time series data store, which empowers plant and enterprise staff to execute and make decisions with a big data lake, which then enables data scientists to uncover previously unknown correlations between process data and other business data in the enterprise.


TECHNOLOGY

In Kapur’s estimation, projects that previously took weeks or months can now be achieved in hours. These efficiencies, combined with the ability to use a customer’s existing tools and functions, can significantly reduce deployment and engineering time. Additionally, the scale and performance delivered through native cloud technology can reduce enterprise information technology costs by up to 25 per cent. Uniformance Cloud Historian is the latest addition to the Honeywell Connected Plant portfolio, which is turning data into insight, to help customers improve their bottom line, according to Kapur.

FEBRUARY 2018 41


COMMERCIAL VEHICLES

on a roll UD Trucks

UD Trucks notches up several milestones in its six-decades plus long drive in the MENA region

With its purpose-built offices and dedicated operational team in the UAE, UD Trucks enables its regional importers enjoy short lead times, increased uptime as well as lower transport and inventory costs, thereby better serving customers in the region, explains Mourad Hedna, the manufacturer’s Middle East President

42 FEBRUARY 2018


COMMERCIAL VEHICLES

T

he GCC and MENA (Middle East North Africa) have been key, promising markets for UD Trucks, with a deeply-rooted presence in the region exceeding 60 years. The 1935-established Japanese manufacturer of a range of diesel trucks, bus chassis and special-purpose vehicles has been an early entrant to this region. “Our commitment to the Middle East is demonstrated by the fact we have a dedicated UD operational and management team in Dubai, which is fully focused on the region and allows us to be close to our partners and our customers,” states Mourad Hedna, President, UD Trucks Middle East, in an exclusive interview with Global Supply Chain. “We currently have an 8,000 sq metre modern warehouse for spare parts in Dubai and we run an advanced competence development centre that allows us to support our customers and partners with all the technical and commercial training that they need,”he continues. According to Hedna, who was appointed to his current position in November 2016, the regional market is volatile and in a perennial state of flux.“We need to constantly innovate and become ingenious with our machinery and truck manufacturing capabilities,”he emphasises.“Companies are constantly looking for dependable trucks that can satisfy multiple needs, we therefore created multi-purpose trucks that meet the wide variety of needs specific to the region, including off and on-road use, construction, distribution and longhaul transportation,” he adds.

The ‘Quester’, a fast-selling truck model from the UD Trucks portfolio, was a runaway success since it was first launched in the region. Its popularity, in his estimation, can be attributed on the fact that it was developed focusing on the requirements of the typical truck user in Middle East. The all-new Croner model, which was introduced in the Middle East last year, also proved to be a hit, racing ahead of its peers and competitors. “Here also the winning recipe was similar. It was designed with Middle East customers’ demand and commercial needs in mind. The Croner has been engineered to help customers stay ahead of the competition through the simple concept of saving time,” he states. The ‘Croner’ is a versatile truck range built with top quality components to deliver extra productivity and superior uptime.“The driveline in particular with both Croner and Quester is very much appreciated by our customers. We recently announced record breaking sales figures for 2017, this success has very much been a result of us offering a wide range of trucks developed with the Middle East market in mind,”he affirms.

Holistic offering Customer and reliable post-sales services are important part to UD Trucks.“Uptime is crucial and our three main areas of focus are parts availability, network density and

FEBRUARY 2018 43


COMMERCIAL VEHICLES

proximity, and thirdly, network quality and service provided by having the right competences,�he stresses. The UD Trucks regional offices in Dubai includes a parts distribution centre which delivers over 12,000 different spare parts to UD Trucks partners across the region. Thanks to its location in the UAE, UD Trucks importers enjoy short lead times, as well as lower transport and inventory costs to better serve the customers in the region and increase vehicle uptime for its clients.

44 FEBRUARY 2018


One of the key challenges is that the Middle East is a dynamic, rapidly changing market, becoming progressively mature as it grows. As in any market, customers are increasingly aware of the total cost of ownership rather than the price of the truck alone and they want their business to be more efficient and profitable. He believes UD Trucks has a premium offering which strikes the right and optimum balance between desired features, product quality and service. Hedna is mindful that UD is a long and well-established commercial vehicle brand with good credentials. “’Our

FEBRUARY 2018 45


role as a truck manufacturer is to give customers all the tools to succeed, not only when it comes to the products, but also the services. We strive to build strong relationships with our partners to keep their trust. The relationship with the customer does not stop when we handover over the keys to a new truck. It is about providing long term value for money. “

Expansion UD Trucks has robust plans for continued expansion in the region for 2018. Among the new offerings is the Quester 40T vehicle

46 FEBRUARY 2018

for heavy construction, the only Japanese manufacturer offering this model on this scale. The company has also introduced the Quester 8X4 Rigid and a wider range of medium-duty trucks. The company also recently concluded deals with the UAE’s utilities provider FEWA (Federal Electricity and Water Authority) and Sharjah Police through United Diesel (part of the Al Rostamani Group) as the agent for Dubai and the Northern Emirates. In East Africa, UD Trucks has entered and established a presence in three brand-new markets in Somalia, Sudan and Ethiopia.

In Bahrain the truck manufacturer’s retail partner, Y.K. Almoayyed & Sons, has invested nine million US Dollars in a new 22,000 square metre state-of-the-art workshop featuring 36 repair bays to service the growing truck population in the kingdom. “We will be seeing increased investments from our partners as it is vital for our brand to be close to customers,”asserts Hedna.

Technology to drive future Governments in the region, especially in the UAE, are focusing on new technologies with a particular focus on the passenger car


COMMERCIAL VEHICLES

segment and it is a trend that is gradually permeating the commercial vehicle market. “We constantly innovate to create trucks with advanced technology and apt mechanics. Whether it is improving productivity and engine consumption reduction, such as engine downsizing, advanced injection system technologies, driver coaching devices, or telematics, these are all proven technologies and are available with our trucks,”says Hedna. UD Trucks is also committed to preserving the environment. In the lifecycle of a truck, the largest share of greenhouse

emissions released comes from CO2 generated during the actual operation of the truck. The first commercialised trucks with SCR (Selective Catalytic Reduction) system, a mechanism that is now a fixture in the mature markets such as North America, Europe, Japan which helps to reduce the nitrogen oxide component was introduced by UD Trucks in 2004. As part of the Volvo Group, UD Trucks also has access to leading technologies available internally and we are closely monitoring the market and the future needs of our customers.

Meanwhile, there is renewed talk of automatic transmission trucks being provided in the region and UD Trucks appears to have taken the lead on this count. “Our medium-duty range Croner, is already equipped with automatic transmission and we have received encouraging feedback from our customers and partners. For the heavy duty sector we have the technology available in the group and we are now working on introducing it to the region as we see a customer demand. It will be made available for our customers in the near foreseeable future,”he predicts.

FEBRUARY 2018 47


T Trucking tech gains traction

ruxapp burst into the UAE only last year, in 2017, as a provider of comprehensive transportation solutions through technology. However, in this short span of time, its co-founder and CEO, Naseer Ahmed, believes the company has come a long way and is now in high gear and on track for growth. “Truxapp is rapidly emerging as a market leader in the UAE and this has been primarily due to our advanced technologies and our team of dedicated, capable, logistics professionals with an entrepreneurial attitude and outlook,” explains Ahmed who appears to be a man in a hurry.“While Truxapp is already active in cross-border trucking and

Truxapp’s proprietary cloud based solutions delivered through apps are highly adaptable, thereby suiting diverse businesses – 3PL providers, construction, automobiles, retail, pharmaceutical and many other industrial sectors, explains Naseer Ahmed, co-founder and CEO, Truxapp in an exclusive interview

48 FEBRUARY 2018


TECHNOLOGY INTERVIEW

has aspirations to acquire a pole position in the UAE, it is also quickly accelerating towards a pan-GCC presence in the first half of 2018,” he continues. Ahmed puts it down to economic diversification, as enunciated by the various energy-rich GCC governments which are gradually but surely weaning away from traditional oil and gas businesses.“This is a key factor in growing the logistics sector as governments place increased emphasis on manufacturing. The region is also witnessing an expanding e-commerce sector, expected to reach US$ 20 billion in the next two to three years as reported by several research consultants. This is in addition to the overall increase in merchandise and cross-border

trade, along with a surge in logistics activities as a result of Expo 2020,”he remarks.“The industry will not be able to efficiently support this growing sector if it does not keep pace with technological developments,”he rues. The differentiator is that Truxapp technologies cover the complete order life cycle in the sector which includes not just the client but also the transporters and drivers. The order life cycle besides covering the usual visibility, ordering, tracking, e-pods and other applications also includes solutions such as dashboards showing real-time data, various heat maps including scope of reverse haulage, automated documents and reports, utilisation and uptime index, employee and vehicle management, data analytics, flexible pricing, and much more, according to Ahmed.

Customised technologies “There is enough secondary research and information, freely available, that supports the fact that logistics, and more specifically trucking, is a technology-neglected sector suffering from high fragmentation, low or no visibility of demand and supply, minimal regulations which in turn results in irregular demand and supply, high costs, low productivity, and availability of critical data for decision making,”observes Ahmed. “These are just but a few issues that plague the sector. This is true not only in the emerging markets where Truxapp is currently operational, but also in the more developed ones,” he further notes. “The Truxapp founders, early age entrepreneurs, have a varied and diverse entrepreneurial background, with exposure to logistics in some form or the other and experienced the same pain points as a client in their previous ventures,” avers Ahmed.

Their own findings were validated by conducting primary research and interacting with potential clients, single truck driver / owners, transportation companies, other professionals from within the logistics sector and government agencies. According to Frost & Sullivan, in 2016, the size of the logistics sector in GCC was estimated to be US$ $107 billion of which the road transportation sector accounted for US$ 26.9 billion growing at a conservative rate of five per cent year on year. Saudi Arabia and UAE are the largest logistics markets in the GCC, with an estimated market size of US$ 55 billion and US$ 30 billion respectively. In addition, the quantifiable road transportation opportunity size across the GCC is US$ 24 billion, and this is where technology in transportation logistics is becoming increasingly relevant. Dubai’s share of the UAE’s logistics market is a staggering 45 per cent and the city has historically been the gateway to the GCC and to the larger MENASA (Middle East, North Africa and South Asia) region as far as goods freight and distribution are concerned. Naseer Ahmed “With a world class facility like the Jebel Ali Port and with the The Truxapp Dubai World Central Airport facility becoming founders, early age operational, Dubai has entrepreneurs, have cemented itself as a a varied and diverse regional logistics and distribution powerhouse entrepreneurial and in fact starting to become an active global background, player in this sector. Expo 2020 and a growing with exposure to e-commerce market is logistics in some further driving the growth in the logistics sector,” form or the other remarks Ahmed. and experienced the “More importantly, with Dubai being well same pain points established, organised as a client in their in clusters, and already supporting regular cross previous ventures,” border trucking to the

FEBRUARY 2018 49


region, Truxapp was able to experience and scale up much quicker, as compared to starting off in any other geography in the GCC. Other established and well-known facts such as its strategic location, sizable and ready to adapt market, business friendly policies, competitive trade tariffs, and extensive road network connecting the UAE with other GCC countries, availability of human resource and access to financial capital helped us cement our decision,”he reinforces as he makes the case for consolidating Truxapp operations in Dubai.

Truxapp appeal Truxapp leased vehicles and spot hiring in a seamless manner with few self-defined parameters, making it a 5th PL (Party Logistics) transport technology infrastructure. Clients through a customised, bespoke web and mobile app form can issue ‘vehicle requests’ and allocate it directly to drivers or Truxapp for ‘Uberised’ selection and hiring. The requests in real time are accepted and acted upon by transporters and drivers through ‘Pilot Apps’ after algorithms execution and field validation for vehicle deployment. Thereafter, desired notifications and tracking is available to all the stakeholders, through messaging services, SMS, app notifications or emails. In addition, Truxapp provides over 10 transportation processes for rates finalisation such as contractual, spot, bidding, and other related services available to its customers as well as the transporters thereby covering the complete order life cycle. Appeal to users through simple graphics, multilingual screens has been the foremost approach for users and drivers to adapt to Truxapp applications.“With focus on business through contemporary technology, Truxapp has displayed very high early adaptation among the users,” observes Ahmed who adds that their technology can be integrated with the existing ERP systems including SAP and Oracle with clients enabling significant operational efficiencies.

Expansion Truxapp has clear plans for expansion in the GCC countries, including Saudi Arabia, which is a key market for them.“As we are already executing cross-border movements for some very large global MNCs and regional giants within the GCC, we are well equipped to set up operations in the other neighbouring countries. In fact, some of

50 FEBRUARY 2018

Truxapp is emerging as a market leader in the UAE and this has been primarily due to our advanced technologies and our team of dedicated, capable, logistics professionals with an entrepreneurial attitude and outlook

these MNCs want us to service them in their operations in the region,”he says. “With this kind of support and momentum, the set up and scale up in the rest of the MENA region will be very quick,” admits Ahmed who was educated in Kuwait and has been in the region for over 20 years now.“I had the opportunity to travel and spend time extensively in the region which has also helped develop a substantial business network, which we will use to Truxapp’s advantage,”he says. Ahmed is confident that Truxapp has the first mover’s advantage in this sector. For example their competitors don’t have their exclusive Real Aggregation Model. Presently there are over 20,000 commercial vehicles listed and growing. Due to this aggregation of supply and the ability to real time communicate with the complete supply side available in the GCC enables Truxapp to operate in different industry verticals with various flexible models including, ad hoc, short and long-term lease, short and long-term rate contracts and options. Proprietary technology, which is completely built, managed is always evolving. “The competition is either using off-the shelf generic technology products or it


TECHNOLOGY INTERVIEW

does not have such a comprehensive tech product which has been developed by us over years understanding and addressing the pain points of the sector and is extremely holistic, covering and positively affecting all stakeholders and the complete order life cycle. This is also partly due to the fact that we spend considerable, time, effort and resources in R&D,” he claims. “Our process includes, identifying the problems, prioritising the solutions, designing, rigorous testing and then launch and measure,”he adds. “Having developed our own proprietary technology, it gives us and businesses much more flexibility to customise and adapt services – on demand as well. Through the Truxapp platform, businesses can effectively use the resources to collect valuable data, predict production and delivery schedules through customisable dashboards, resulting in enhanced market reach and customer satisfaction. These value-added services give us a unique advantage in the sector,” he affirms.

Outlook There seemed to be a slowdown in the cross-border building material supply in Q4 last year along with practically all

industries preparing themselves to be VAT ready, but this seems to be stabilising quite quickly and the loads are picking up again. The oil and gas market along with the infrastructure and other construction projects also seem to be seeing some positive movement, allowing companies some additional project cargo business. Being ‘Asset Light’ also helps Truxapp not depend heavily on any one industry since the solutions and services practically cover the complete market needs. The backbone of future growth remains dependant on technology, not just for Truxapp, but the sector at large. “What we have learnt from other successful unicorns is the use of the same logic of organising the organised and the power of becoming an aggregator. It is quite evident that it is technology that will determine not only the success of the ventures but also the pace and size of growth,”he points out. According to Ahmed, time, effort and resources in R&D and making sure that there exists a dynamic process of technology evaluation and upgrading using the most sophisticated and up to date tools and methodologies available in the tech space. “’Talent acquisition is another front that

Truxapp spends and will spend its resources on. We believe in having the right mix of sector experienced team members along with young and hungry individuals who would like to be part of a game changing venture,” he says. However, in a Truxapp eco-system, there is a readily available aggregated pool of vehicles and reliable, audited and verified transporters on-board for the supply of road freight at competitive costs, because of which a client can then concentrate on their core business rather than getting burdened with managing and maintaining a fleet and the exhaustive list of related issues,”he justifies. “Slowly but surely clients are understanding this and now either engaging outsourced, pooled resources or gearing up for it. With this, there will be a surge in demand which will be transferred to the transporters. With the use of its proprietary technology it distributes business evenly to the transporters and increases the efficiency of the transporter’s assets by optimum usage. This along with reverse loads increases the profitability of the transporters. There is surely pressure on the pricing, however, the transporters reap much more in increased business as their up-time of resources is pushed to an all time high,”he concludes.

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OPINION

What lies ahead for the logistics and supply chain industry?

2018 will be about continued chaos, disruption, change and transformation across supply chains and logistics providers among other developments warns Tom Craig, President, LTD Management, in this outline

B

race for turbulence in 2018. There will be snags, disturbances, interruptions and even confusion across the global supply chain and logistics platforms and industry as a whole. This year will also be marked by expansion and growth of e-commerce across international markets, industries and countries also in part because of the fluid geo-political situations. What does it means to supply chains and logistics?

Here are a few takeaways: There will be a trend towards mergers and acquisitions (M&A) by retailers and manufacturers to support their supply chain capabilities, especially for e-commerce. A new breed of service providers will emerge to meet the demands of the e-commerce supply chain. M&A by logistics providers will fill the need for new capabilities and deal with new market realities. Logistics providers, retailers, and manufacturers will increasingly be ‘Amazoned’ There will be even faster supply chain velocity demands – velocity square New terminologies and nomenclatures are also emerging. Related developments include and I am going to enumerate these as follows: Digitisation – the new normal Blockchain Cryptocurrency

52 FEBRUARY 2018

Disintermediation (reduction in the use of intermediaries between producers and consumers) Platform businesses Artificial Intelligence and its underlying requirement for speed of responses Internet of Things (IoT) Data analytics Augmented Reality and Virtual Reality Driverless vehicles Robotics – warehouse and delivery Drones 3D printing Transforming supply chain for e-Commerce success – The What and How to Start The essentials for the new Supply Chain that deliver e-commerce success in line with customer expectations are: End to end (comprehensive) Velocity (speed) Order delivery


OPINION

Inventory Warehouse Network Alignment Upstream Supply Chain Technology Integration of systems Processes, especially internal Metrics and quantifiables Velocity – inventory Perfect Order – includes order-delivery velocity These above are among other parameters will be the defining forces for the new supply chain landscape

Some things to remember for transforming your supply chain-Your current supply chain, with its design and operating issues, did not happen overnight. So, transforming will not happen overnight. There is no quick, easy answer. Avoid signs along the way that say e-fulfillment answers, last mile solutions and other optimistic terms. Watch out with the ‘low cost’ or cheap ideas, from both internal and external sources. They are part of the ‘easy answer’

cadre of providers and programmes that can take you down the wrong paths. Avoid ‘agile’ which is a code for trying to do more with your supply chain than it is designed to do.

How to start:

Hint – remember it is about velocity Assess, define, measure and identify gaps. For example, how well do you perform at delivering customer expectations? This will establish where you are and how you are doing. Know your segment products and suppliers. Know what is important, why and where. Use lean value stream mapping, especially for international supply chain and compress time. Remember, this is about your end-toend supply chain and not just the logistics components in the supply chain. So always stay focused. -www.ltdmgmt.com. Tom Craig can be contacted on tomc@ltdmgmt.com

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ENHANCING THE BUSINESS OF LOGISTICS

ENHANCING THE BUSINESS OF LOGISTICS

ENHANCING THE BUSINESS OF LOGISTICS

OIL AND GAS Diversification is key Top

CARGO CARRIER 2018’S TECHNOLOGY Emirates SkyCargo

TRENDS

The value chain Of precious stones

Roambee

Real time solutions

For the air freight industry Tristar

Genavco’s accolade Celebrating 50 years

Transforming the supply chain

Adopts blockchain

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1/4/18 7:40

Is blockchain the answer?

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UD Trucks

Bahrain

The region’s sturdiest trucking partner

The pharma chain

Hellmann identifies today’s trends

12/6/17 16:10

Truxapp

Improving connectivity

Facilitating business

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2/9/18 5:18

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SAFETY

The tyre manufacturer’s new patented safety system is designed to take the daily hassle of monitoring truck and bus tyre pressure and temperature away from drivers, so that they can focus on safe driving

Continental’s new monitoring system to

boost bus and truck safety

C

ontinental of Germany has announced the Middle East launch of ContiPressureCheck (CPC), a first-of-its-kind tyre pressure and temperature monitoring system for buses and trucks aiming to reduce overall fleet costs and improve road safety by ensuring the proper usage and maintenance of tyres. The regional roll-out of the system comes in line with recent regulations issued by the GCC authorities to achieve maximum safety and reduce injuries from vehicle accidents, especially trucks.

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SAFETY

“We work in co-operation with the authorities in the region to provide technologies that contribute to the overall driving safety measures set in the local markets. Our ContiPressureCheck system also looks out for their safety and is an added reassurance for them on the roads,� said Juan Uruburu, Head of Sales, Commercial Vehicle Tyres, Continental Middle East.

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SAFETY

The ContiPressureCheck system consists of four main components: Tyre Sensors – Mounted on the tyre inner liner inside a rubber housing, the sensors continuously measure tyre temperature and pressure. Central Control Unit (CCU) –Receiving tyre sensor signals directly or via the additional receiver, this evaluates the data and sends the status of all of the vehicle’s tyres to the driver’s display screen. Driver Display – Positioned inside the vehicle, this shows tyre pressure, temperature and provides the driver with warning alerts. Telematics Integration (optional) –Gives drivers the option to be linked with local telematics systems for live monitoring.

Key benefits from Continental’s CPC are:

“Under-inflated tyres lead to higher operating costs, to counter this, the new ContiPressureCheck system continuously measures the pressure and temperature of all tyres on vehicles even when driving. This helps to save fuel and increase mileage. It also significantly reduces the risk of tyre failure, whilst maintaining the value of the casing, and thus the re-treadability,” he adds.

Easy – Quick and easy to install, mounting inside the tyre guarantees high data accuracy. ContiPressureCheck is compatible with all tyre brands. Economical – Driving with the correct air pressure can lead to significant fuel savings, increased mileage and maintain the value of the tyre casing, thus making your fleet more economical. Reliable and safe – The ContiPressureCheck system helps prevent tyre-related breakdowns that can lead to costly downtime, late fines, negative publicity, danger to other road users and loss of sales or profits. Eco-friendly – Running the correct inflation pressure lowers fuel consumption, reduces tyre wear, decreases CO2 emissions and consequently protects the environment. Connectivity – The system can be integrated in the vast majority of telematic fleet management systems, providing fleet maintenance managers with a real-time status of each and every tyre on a vehicle.

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OPINION: ROBOTS

Robots in the warehouse Are robots going to replace people in the warehouse? Certainly robots are transforming warehouse environments because of their efficiency. www.supplychain247. com makes the case for an eventual influx of robots in the warehouse 58 FEBRUARY 2018

T

o even the casual observer, robots obviously are becoming quite popular if you read anything on the internet or any news about robotic technology. In the context of warehouse automation, applications of robotic technology are appealing for the reasons of speed and accuracy. When we combine the two, as is evident especially in e-Commerce, there is a tremendous growth in the number of orders and in the amount of volume that is being pushed out by DCs (Distribution Centres).

We also have the reliability factor. Robots are always there, every day. They don’t call in sick. They can work 24 hours a day, and that lends itself obviously to a fear factor. Are robots going to replace people in the workforce? There is also an issue of availability of labour, so robots are becoming very popular because they fill a void that exists right now in the warehouse environment. Especially when the busy Christmas retail season rolls out and warehouses are looking to increase their employee base by as much as five or tenfold sometimes, they can’t find that workforce.


OPINION: ROBOTS

Cobots Now, enter cobots. We are seeing robotic technology that can work in conjunction with labourers. They call them cobots. We have robot technology that can supplement a travel application. They are replacing or at least providing a more efficient picking process so that the robots can take over the travel. They can travel to and from the picking and the shipping consolidation area. There is also the cost factor. Robots are becoming a very good economical alternative or supplement to consider improving the warehouse automation.

Better together: Humans and robots in the warehouse It’s not hard to find headlines touting a ‘Robots taking over the workplace’ narrative, like this recent article in the Wall Street Journal, “Robots are replacing workers where you shop,”or this one from CNN Money,“Robots could wipe out another 6 million retail jobs’. However, before declaring a protest on all robots, it is important to hear another perspective that doesn’t get as much press. An article that appeared earlier this year in the Houston Chronicle read,‘In Houston, Amazon’s robots men more work for humans,

not less’. The article went on to state that Amazon expects to hire 2,500 full-time employees to staff its massive warehouse, more than double the number of jobs it announced the prior year at the outset of the project. Amazon isn’t the only company finding common ground for humans and robots in its warehouses. Earlier this year in Tennessee, USA, DHL began testing robots to assist its pickers in order fulfillment. Rather than pushing a bin or cart, the robots work alongside workers, helping them pick out medical devices that need to be shipped quickly. Third-party logistics provider Quiet

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OPINION: ROBOTS

Logistics, which fulfills online orders for retailers like Bonobos and Zara, uses the same type of mobile robots in one of its warehouses to support its employees.

Robot + human collaboration equals cobot Unlike the doomsday narrative of robots taking over the workplace, savvy companies are creating synergistic scenarios where robots perform repetitive, simple job tasks and human laborers focus on tasks that require deeper thinking and strategizing. The new term for this collaboration,‘cobot’, allows each type of worker to focus on the tasks they do best. For example, some robots can be used to guide workers to the items that need to be picked or routed through the warehouse to the workers who need to pack and ship them. According to Barclay’s research, the cobot market will be worth US$ 3.1 billion by 2020.

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The affordability of the technology is playing a big part in its adoption, too. Barclay’s research found that pricing for collaborative robots is steadily dropping by 3 per cent to 5 per cent a year. With an average price in 2015 of US$ 28,000, the expected price of a cobot in 2025 will be around US$ 17,500. Another plus for cobots is that they don’t require a pricey extensive network of conveyor belts and automation systems. Collaborative robots can be especially useful for handling surges in sales that happen around the holidays when it can be difficult to find extra workers.“It’s not meant to replace human labor, but you can get greater throughput with the same size workforce,”said John Santagate, an analyst with IDC Manufacturing Insights.

The future of cobots: brain-computer interfaces Aside from lower prices and higher adoption

rates, there’s another interesting cobot trend worth keeping an eye on, which is the ability for human workers to control machines with nothing more than their thoughts. The key to this remarkable technology is a wearable device that measures brain activity and translates it into a language a computer can understand. Researchers at MIT are already hard at work on developing what’s being called braincomputer interfaces (BCIs). They’re even claiming they’ve been able to achieve up to 20 per cent robotic performance improvement by enabling robots to adapt to users’ thought commands. While these claims feel more like something from a sci-fi movie, it is nice to know that even if a robot can’t read your mind, it can still improve workplace productivity by working collaboratively with labourers rather than working against them.


w us, we carry the UK.

our client focused range of products, edicated cargo team, you can rest ed that Oman Air Cargo will move consignments with the shortest ptance cut-off time at origin, and the highest loading and delivery ity at your chosen destination e applicable.

man Air Cargo, we ensure we deliver your ignment wherever you may need.

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GLOBAL SUPPLY CHAIN FEBRUARY 2018 ISSUE  

Supply Chain, Supply chain management , logistics and supply chain segmentation, warehousing, RFID, healthcare logistics, 3PL, 4PL, six sigm...

GLOBAL SUPPLY CHAIN FEBRUARY 2018 ISSUE  

Supply Chain, Supply chain management , logistics and supply chain segmentation, warehousing, RFID, healthcare logistics, 3PL, 4PL, six sigm...