Logistics News ME - July 2018

Warehouses

China

Viewpoint

Technology and efficiency go hand in hand

The changing global dynamics

Is Amazon Go altering the grocery business?

Connecting trade professionals with industry intelligence

In charge of change Rami Suleiman, newly appointed regional president at UPS, discusses the company’s capabilities in the face of World Expo 2020 Dubai

July 2018

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Contents

Contents

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Website: www.CBNme.com/logistics-news twitter: @logisticsnewsme Facebook: /LogisticsNewsME

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R e a d a l l t h e l at e s t i s s u e s o n I s s u u

Start 10 | News 20 | Op-ed

Customisation of fleet management along the lines of retail supply chain

Features 22 | Cover story

UPS regional president Rami Suleiman on principles, trends, and Expo 2020 Dubai

28 | Interview

In conversation with Pankaj Shrivastava from Rockwell Automation

30 | Warehouses

Experts discuss the impact of technology systems

36 | Country focus China’s logistics industry continues to flourish and globalise

44 | Viewpoint

Is Amazon Go changing the world of grocery shopping?

46 | Case study

Empowering the female labour supply chain force

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48 | Supplier News 50 | Diary

Logistics News ME | July 2018 | 3

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Regional News

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E d i to r ’ s L e t t e r

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A note from the editor

Pa r o m i ta d e y @paromitadey1 |

linkedin.com/in/paromita-dey

Halfway through 2018 and we are already in an exciting phase of the year where the logistics sector in the region has been performing quite up to the expectations. Market indicators from several sources point to the resurgence of the sector in 2018, with a steady growth in air and sea freight markets over the next few years.

The Dubai Chamber of Commerce and Industry recently undertook an analysis of the UAE logistics sector, based on the data supplied by BMI Research. The analysis forecasts that the UAE’s air freight market will expand by a compound annual growth rate (CAGR) of 4.8% over the 2017-2021 period. Over the same time span, container port traffic in the UAE is expected to rise from 22.4 million TEUs in 2017 to 28.4 TEUs by 2021.

Not to be left behind, within the GCC region, e-commerce has experienced rapid growth and is emerging as a significant growth driver for the logistics sector.

In these exciting times, one of the leading players in the sector, UPS, appointed a new president for Indian Subcontinent, Middle East and Africa, Rami Suleiman. UPS

CEO Wissam Younane wissam@bncpublishing.net Director Rabih Najm rabih@bncpublishing.net

represents a brand that cares for its people and customers. And the July cover story talks about the same.

Suleiman discusses the technology that UPS currently works with and has been a pioneer in this field.

One of the other important features in this month’s issue is the technology being used in the warehouses in the region. Today’s warehouses are not just about serving as simple storage points.

They are distribution or fulfillment centres, focussed on the rapid movement of product in as few touches as possible. Popularity of technology like automatic guided vehicles (AGVs), robots, Big Data, and warehouse management systems (WMS) continues to rise in warehouses, ensuring that operations notice a variety of benefits— from a decline in errors and costs, to a rise in picking accuracy—as they strive to improve operations and enhance productivity.

Have a good read!

Paromita Dey Editor

Group Sales Director Joaquim D'Costa jo@bncpublishing.net +971 50 440 2706

Senior Sales Manager Vishvanath Shetty vish@bncpublishing.net

Business Development Director Rabih Naderi rabih.naderi@bncpublishing.net +966 50 328 9818

Editor Paromita Dey paromita@bncpublishing.net Reporter Mehak Srivastava mehak@bncpublishing.net Art Director Aaron Sutton aaron@bncpublishing.net Marketing Manager Mark Anthony Monzon mark@bncpublishing.net Photography Hayder Al Zuhairi Farooq Salik

SU B S C RI B E subscriptions@bncpublishing.net PO Box 502511 Dubai, United Arab Emirates P +971 4 4200 506 | F +971 4 4200 196 For all commercial enquiries related to Logistics News ME contact

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Opinions expressed are solely those of the contributors.

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Regional News

Regional News A n u p dat e f r o m a r o u n d t h e r e g i o n Partnership

Magento elects DHL as premier shipping partner for the region

Deutsche Post DHL Group announced its collaboration with Magento, an e-commerce platform built on open source technology, as Premier Partner for Shipping.

The partnership enables DHL and Magento to offer a broad range of shipping services to e-commerce merchants, small and medium enterprises (SMEs), start-ups, and online entrepreneurs in the Middle East and North Africa (MENA) region.

Nour Suliman, CEO, DHL Express Middle East and North Africa, commented: “With the shift in trend towards consumer markets and growing use of e-commerce channels by SMEs in the MENA region, we see a tremendous potential in our partnership with Magento.

We look forward to providing online merchants on Magento platform with reliable and 10 | Logistics News ME | July 2018

flexible shipping options to help them deliver exceptional customer experiences.”

“Magento connects merchants and shoppers.

DHL connects shoppers with their goods,” said John Pearson, CEO Europe and global head of commercial, DHL Express.

“Our collaboration will provide Magento merchants with industry-leading international shipping and value-added shipping features from DHL, that easily and flexibly connect shoppers with their goods.”

Accepting the Magento partnership emphasises again Deutsche Post DHL Group’s intention to be the leading global provider in e-commerce logistics. The group’s divisions together comprise the most international company in the world, present in 220 countries and territories, allowing

online merchants to leverage the group’s unsurpassed global reach to execute their e-commerce strategy.

Online retailers connected with the Magento platform will be able to select from a range of DHL shipping services, with the partnership expected to expand over time to include an increasing portfolio of parcel, express, freight, and other logistics services provided by the different DHL divisions.

As a Premier Partner, DHL will connect with merchants through strategic placement on Magento properties and the core product merchant administration panel. In addition, DHL will have the opportunity to educate merchants on shipping integration best practices and how to increase cross-border shipping via the Magento Community online, webinars,

thought leadership pieces, events including Imagine and MagentoLive, and in one-toone meetings. DHL will also have early access to Magento product roadmaps so as to improve integrations and the merchant experience.

“We’re particularly excited about the potential of Magento Shipping, and will integrate our most advanced shipping solutions there,” said Pearson. “Deutsche Post DHL Group has a history of working with leading technology partners like Magento. We will maintain our global leadership position only by innovating and adopting new technologies.

Magento is at the leading edge of e-commerce technology, and DHL is the global logistics leader. Our association is sure to benefit both organisations – most importantly our e-commerce customers.” www.cbnme.com

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Turkish Airlines, ZTO Express, PAL Air form joint venture

Turkish Airlines, Chinese cargo giant ZTO Express, and Hong Kong-based PAL Air Limited inked a memorandum of understanding (MoU) to operate as a global express courier company mainly focusing on global e-commerce market with full door-to-door services.

The partnership is not only a big strategic step for Turkey prior to the opening of the Istanbul New Airport, but a game changer for the global express transport business.

The agreement was signed in Istanbul by Milker Aycı, chairman of the Board and the executive committee, Turkish Airlines; Mei Song Lai, chairman, ZTO Express, and Vivian Lau, vice chairman, PAL Air. Aycı remarked: “We are delighted to make this strategic move into global express business together with the strong partnership of ZTO, the best and largest express company from China, and our long-term cross-border forwarding partner PAL Air

Ltd., from Hong Kong. The joint venture, after reaching quickly to fully functional and operational levels, is expected to take place within the world’s largest integrators. In five years’ time, it will generate over $2bn of revenue. The growth is expected to continue gradually parallel to the e-commerce demand.”

The new JV company, which will be based in Hong Kong, will provide all door to door logistics activities: trucking, collection and distribution, freight transportation, cross docking, and final mile delivery. It will also include warehouse management, order, and supply chain management when necessary.

The cooperation between the three partners will form synergy by combining strong core competencies and integrating key resources and will no doubt effect positive progress in the areas of global express delivery, warehousing, cargo freight, and aviation route development and more, and will ultimately benefit traders and consumers globally.

The data Haramain Express High-speed electric train between Makkah – Madinah

$16bn

Value of project

453km

Length of the main line linking the two cities, with extensions to Jeddah and King Abdullah Economic City

2012

Initial launch date

September 2018

Current launch date for first train

300kmph

Maximum service speed

60mn

Number of passengers to be served annually

417

Seating capacity per train As reported by Arab News

Quick news

DP World Sokhna welcomes first vessel from Maersk’s enhanced ME6 service, the M/V AS California, connecting the Mediterranean and Europe with Sokhna, Egypt.

Peikko Gulf LLC, commences work on a new factory and warehouse premises on an 11,500sqm industrial plot located in Ras Al Khaimah.

Dubai Airport Freezone Authority (DAFZA) announces a new strategic partnership with Daegu Gyeongbuk Free Economic Zone Authority (DGFEZA) in South Korea.

Logistics District at Dubai South launches a new smart electronic system that reduces the transit time of goods and vehicles, called Masary.

Logistics News ME | July 2018 | 11

Regional News

RTA adds 900 new vehicles to Dubai Taxi fleet

Dubai’s Roads and Transport Authority (RTA) has awarded a contract for procuring 900 new vehicles to bolster the Dubai Taxi fleet. The new lot includes 370 environment-friendly hybrid vehicles fitted with dual fuel-electric power motors.

Mattar Al Tayer, director-general and chairman of RTA, remarked: “The procurement of new vehicles is part RTA’s efforts, represented by the Dubai Taxi Corporation (DTC), to improve passenger transport services in Dubai. It enables the offering of unique and exclusive taxi services, meet the growing public demand, and enhance the level of service to achieve higher levels of customer happiness.”

Al Tayer added: “The contract includes the procurement of 142 Toyota Camry, 193 Toyota Innova, 55 Lexus, 370 Hybrid Toyota Camry, and one Toyota Hiace. The contract also includes 15 Nissan Altima, 123 Hyundai Sonata, and one H1.”

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Emirates SkyCargo facilitates crossborder delivery for Cainiao

Emirates SkyCargo, the freight division of Emirates Airlines, signed an MoU with Cainiao Smart Logistics Network Ltd. (Cainiao), the logistics arm of the Alibaba Group, to jointly facilitate the delivery of cross-border parcels as Cainiao looks to expand its global logistics infrastructure with Dubai as a hub.

The MoU was signed

by Nabil Sultan, Emirates divisional senior vice president, Cargo and Xiaodong Guan, general manager of Cainiao Global Business at Cainiao’s global headquarters in Hangzhou.

It is a landmark agreement for both Emirates SkyCargo and Cainiao to leverage each other’s strengths in crossborder e-commerce trade and airline cargo operation. It will also support Cainiao’s broader efforts to offer enhanced customer experience. Cainiao recently unveiled plans to develop six global hubs in six cities around the globe. Dubai is one of them.

Under the terms of the MoU, Emirates SkyCargo and Cainiao will work closely to manage e-commerce shipments in the Middle East and other neighbouring regions through Dubai.

Further details of the tie-

up will be announced progressively as they are developed by the two parties.

“We are delighted to be entering into this agreement with Cainiao. The MoU that we have signed is the first step in what will be a deep and fruitful relationship between Emirates SkyCargo and one of the biggest players in the global e-commerce supply chain,” said Nabil Sultan.

“With Emirates SkyCargo’s network spread, frequency of flights including close to 50 weekly flights from China, our state-ofthe-art hub facilities, and the strategic location of Dubai which allows it to serve as an effective logistics hub for the region, we are confident that we will be a strong partner for Cainiao to bring an enhanced experience to their customers in the Middle East and neighbouring regions.”

“As a key gateway that links Asia and Europe, Dubai is well positioned to help us achieve our goal of 72-hour global delivery. The MoU with Emirates SkyCargo is another milestone to reach this goal,” said Xiaodong Guan. “We have a strong commitment to Dubai and the neighbouring markets.

This fits well with our broader strategy.” www.cbnme.com

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Quote

Transport

Alstom initiates testing for Riyadh Metro

We have set a course to bring Ukraine’s infrastructure into the 21st century. Hyperloop is a key component to our goals of creating a smart and sustainable transportation infrastructure.”

Ukraine’s Minister of Infrastructure, Volodymyr Omelyan, following the signing of a framework agreement between HyperloopTT and Infrastructure Ministry of Ukraine.

IVECO BUS secures award at Transports Publics 2018 IVECO BUS won the prestigious Public Transport Innovation Award in the “Move Green!” Energy-Environment category, at a ceremony on the opening day of “Transports Publics 2018”, the European Mobility Exhibition in Paris, France.

The Public Transport Innovation Awards, organised under the auspices of the French Ministry for Ecological and Inclusive Transition, recognise European companies that are focussing on developing new products and services for public transportation.

IVECO BUS, a brand of CNH Industrial N.V., won the “Move Green!” category with its pioneering range of Urbanway and Crealis electric buses that combine two-wire overhead supply lines with battery-based power storage.

“This award is tremendous encouragement for our new generation of trolleybuses which complete our range of alternative traction vehicles,” said Sylvain Blaise, vice president of IVECO, in charge of IVECO BUS. “This award recognises the excellence of our range of natural gas and electric vehicles. Our multiple options enable us to meet the expectations of municipalities and operators, whatever their needs or preferred energy.”

Alstom, an integrated transport systems provider headquartered in France, has achieved a major milestone for its Fast consortium with the launch of initial dynamic tests for its Riyadh Metro project, which boasts six lines totalling 176km and 85 metro stations.

Alstom has been conducting these tests at the Fast consortium Line 4 Depot test track in Riyadh for the project owner Arriyadh Development Authority (ADA).

The test campaign includes the demonstration of the performance of the railway system, from power supply to signalling systems, using the trains which have already been delivered, said a statement from Alstom.

As per the ADA contract, Alstom will be supplying a fully integrated metro system for lines 4, 5, and 6, which includes: 69 Metropolis-based Riyadh Metro trains, Urbalis signalling system, Hesop energy recovery station, as well as tracks.

The Metropolis-based train for Riyadh is composed of two cars per set and is 36m long. Each train features

three classes: first, family, and singles class. The trains will offer passengers a high level of comfort, ergonomic seating, LED lighting, airconditioning, and passenger information system.

On the key achievement, Didier Pfleger, the senior vicepresident for Middle East and Africa, at Alstom, said: “This test run is a significant milestone for Alstom and the project. We are proud to conduct the tests in Riyadh in order to deliver a state-ofthe-art metro to our customer Arriyadh Development Authority (ADA) and the inhabitants and the visitors of Riyadh.”

Pfleger pointed out that these trains will be driverless.

The train movements are protected by a state-ofthe-art signalling system controlling the speed of the trains, ensuring smooth and safe operations including automatic opening of the train doors.

The fully air-conditioned stations are equipped with platform screen doors that will prevent people from accessing the track, noted Pfleger.

Logistics News ME | July 2018 | 15

Regional News

Energy

SirajPower to implement solar rooftop at Landmark Group facility

SirajPower, the Dubai-based joint venture providing turnkey solar power solutions in the UAE, announced the signing of a new solar rooftop leasing contract with Landmark Group in Dubai.

Under this new partnership, SirajPower will carry out permitting, design, installation, commission, and operation of Landmark Group’s new solar panel solution over a period of 20 years.

SirajPower will deliver 2.1MW of solar energy to Landmark’s Group warehouse facility located in Dubai South, and help the company generate over 3.4mn kWh of clean energy annually, 16 | Logistics News ME | July 2018

resulting in a reduction of the group’s utility bills as well as their carbon footprint.

David Auriau, director at SirajPower, said: “We are encouraged to see more and more UAE businesses recognising the importance and need to adopt renewable sources of energy, and especially solar power, as it remains highest value in the region due to the high solar radiation. SirajPower’s unique solar leasing model offer clients significant savings without the risk of investments and operations of solar plants.

“Our partnership with Landmark Group represents another key milestone for

us as we have been selected as the partner of choice following a very competitive selection process.

This demonstrates the value of SirajPower’s solar leasing model paving the way for many other industrial undertakings in Dubai. We remain committed to help the UAE achieve its ambition of the Clean Energy Strategy 2050 to become a global leader in renewable energy, and make Dubai the city with the smallest carbon footprint in the world.”

Vipen Sethi, group director, Landmark Group, said: “The UAE public sector has been working hard on promoting clean energy and

we are very proud to partner with SirajPower to find sustainable energy solutions for Landmark. The National Agenda UAE Vision 2030 mandates sustainability as a key pillar for all organisations – public and private – to create a blueprint for the use of alternative energy.”

Since last year, SirajPower has continuously showcased its support of the Shams initiative, DEWA’s first smart initiative aiming to connect solar energy and support the diversification of the energy mix, through partnership with key UAE businesses such as RSA Global and Al Abbar Aluminium Energy. www.cbnme.com

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Bahrain Airport expansion key to cargo capacity growth, says BAC Bahrain Airport Company (BAC) said the ongoing expansion work at the Bahrain International Airport’s (BIA) cargo section will help increase the airport’s cargo capacity and enable it to serve very high volumes relative to its size.

The work, being implemented as part of the Airport Modernisation Programme (AMP), was highlighted by a delegation from BAC at the Air Cargo China 2018 expo held recently in Shanghai, reported Bahrain News Agency.

The event, Asia’s leading

airfreight industry exhibition and conference, provided a platform for participants to network, explore opportunities for collaboration, and discuss current

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developments shaping Asia’s airfreight market.

The BAC delegation, which was led by chief commercial officer Ayman Zainal, included

members of the cargo and logistics business development team.

Zainal said that in line with ongoing efforts to transform logistics and air cargo into one of Bahrain’s primary industries, BIA is taking significant steps to overhaul its infrastructure and expand its capacity in this important area.

“BIA had witnessed a 10%surge in air cargo traffic last year. Now once the new passenger terminal building is thrown open we expect this figure to grow considerably,” he added.

Ports

Gulftainer records highest productivity levels at Sharjah Container Terminal Gulftainer announced that it has recorded gross crane productivity of 32.2 crane moves per hour at its flagship gateway terminal, Sharjah Container Terminal (SCT), in Port Khalid.

The milestone feat achieved in April 2018, compares to the industry average of 25 crane moves per hour, and marks the highest productivity levels at SCT since its inception.

In addition, SCT registered a high volume of demand from customers for its new stateof-the-art warehouse facility in Port Khalid, named Shed 3.

Inaugurated in March 2018, the warehouse has already filled up to over one-third of its total capacity, with local businesses choosing it as a cost-effective and efficient alternative to other storage facilities in the area.

The achievements at SCT follow the appointment of Emerson Buarque as the new terminal manager.

Emerson Buarque, terminal manager, Sharjah Container Terminal

Having recently relocated to SCT from Gulftainer’s Brazil operations, Buarque has extensive experience in the international markets administration and general management domains. He has held various senior leadership positions in port operations in Brazil, Europe and Africa, and has won several national and international accolades in projects, operations and health and safety management.

Logistics News ME | July 2018 | 17

Regional News

Trucks

Trukkin reports funding backed by Batic Investment

Trukkin, a B2B technologistics platform, has announced that it will be receiving an undisclosed amount of funding led

by Saudi Arabia’s Batic Investment and Logistics Co, for a pre-series round.

Trukkin was launched in 2017, and in a short period of time, claims to have matched industry expectations with significant commercial transport capabilities, shipping over 5,000 heavy cargo truck movement across GCC. Batic is the only large publicly listed logistics and private security company in Saudi Arabia and has implemented a consolidation strategy focused on building a unique Saudi logistics national champion. The roadmap to build this national champion is focused on identifying accretive and unique acquisition targets and investments to achieve the required level of excellence that global clients expect. Batic is taking a comprehensive 18 | Logistics News ME | July 2018

view on technology from both a traditional logistics model to the new asset light technology platforms that are destined to upend the current logistics’s paradigms.

“Support from marquee institutions like Batic is a testament to the fact that we are on the right track. The investment will allow us to further scale our operations and continue the growth of the company,” said CEO Janardan Dalmia.

Omar Al Mohammady, CEO of Batic, said: “Logistics is at the centre of Vision 2030 as a way to cement the region’s position at the crossroads of important international trade routes, between Asia, Europe, and Africa, and build a unique regional logistics hub. We have been closely monitoring the traction of the business for the past few months and are very excited about the potential opportunity Trukkin presents in this field.

We have tremendous faith in the execution capabilities of its team and are very happy to join hands with them.”

Cold chain

Saudia Cargo inaugurates pharma cold storage hub at KAIA

Saudia Cargo recently inaugurated one of the region’s newest and most modern cold storage facilities of pharmaceuticals and medicines at King Abdulaziz International Airport (KAIA), to meet the surge in demand for highlysensitive and temperaturecontrolled shipments.

The refrigerated warehouse was opened in conjunction with the launch of FlyPharma, an innovative product designed specifically to meet the growing demand for the pharmaceutical and life sciences sector.

“The new facility boasts a 1,010sqm pharmaceutical handling space with double operational capacity and conforms to the international standards of World Health Organisation, the European Committee for Medicinal Products for Human Use, as well as the local standards of the Saudi Food and Drug Authority,” said Omar Hariri, CEO, Saudia Cargo.

The centre ships and stores

pharmaceuticals using the most advanced technologies, along with sophisticated active temperature control containers, which require advanced passive solution technology, especially for products needing transportation between +2oC to + 8oC or +15oC to + 25oC. “We have listened, as always, to our customers, their feedback, and expectations during face-to-face meetings, and analysed the results of food and drug shipment surveys.

We built on the feedback and results and came up with a good perception that helped us launch the new project, which is the first step taken in line with the Saudia Cargo new Transformation Strategy 2020,” Hariri explained.

Saudia Cargo aims to open more similar facilities Kingdom-wide in line with its vision and is currently planning to launch an 800sqm specialist pharmaceutical handling facility in Riyadh, offering FlyPharma services.

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Airlines

Etihad Airways reduces core losses by $432mn in 2017

Etihad Airways improved its core operating performance by 22% in 2017, despite facing challenges including significant fuel cost increases, the entry into administration of its equity partners Alitalia and Airberlin, and initial investment in a comprehensive business transformation programme.

The airline increased revenues from core operations by 1.9% to $6.1bn (2016: $5.9bn), while reducing losses in the core operations by $432mn to $1.52bn (2016: loss of $1.95bn). Results published for 2017 are for core airline operations and exclude any extraordinary or one-off items; 2016 figures have been restated to show a like-forlike comparison.

Passenger and cargo yields improved as a result of

capacity discipline, changes to the network with an increased focus on point-topoint traffic, leveraging of technology, and improving market conditions.

A strong focus on efficiency delivered a 7.3% reduction in unit costs, despite the adverse impact of $337mn from higher fuel prices.

The airline reduced administration and general expenses by 14%, or $162mn, over 2016.

Etihad Airways carried 18.6mn passengers at a 78.5% load factor. Available seat kilometres (ASKs) increased by 1% in 2017, reflecting a significant moderation of capacity growth, and contributing to an improvement in the quality of the airline’s revenues.

Etihad Cargo reduced

capacity by 6%; however, revenues declined only marginally, down 0.8%, driven by stronger load factors and yields. Etihad Cargo carried 552,000 tonnes of cargo in 2017.

HE Mohamed Mubarak Fadhel Al Mazrouei, chairman of the Board of Etihad Aviation Group, said: “Our airline continues to be a key driver of Abu Dhabi’s vision to develop its tourism sector, grow commerce, and strengthen links to key regional and international markets.

“This was a pivotal year in Etihad’s transformation journey. The Board, new executive leadership team, and all our employees worked extremely hard to navigate the challenges we faced. We made significant progress in driving improved performance and

we are on track in 2018.”

Tony Douglas, group chief executive officer of Etihad Aviation Group, added: “We made good progress in improving the quality of our revenues, streamlining our cost base, improving our cashflow, and strengthening our balance sheet.

“These are solid first steps in an ongoing journey to transform this business into one that is positioned for financially sustainable growth over the long term.

I would like to thank our people for their hard work and dedication in 2017.

“It is crucial that we maintain this momentum, retaining talent and attracting leading professionals from around the world to work alongside our highly-skilled UAE national workforce.”

Logistics News ME | July 2018 | 19

Op-Ed

Opinion

Tarik Taman, VP and GM of IMEA (India, Middle East and Africa) at Infor, discusses personalisation of fleet management supply chain

Custom-made The more strategic and efficient method for identifying the most critical assets is determining which assets would have the largest impact on operations.”

20 | Logistics News ME | July 2018

W

ith power shifting from the retailer to the consumer, the personalised supply chain has been a buzzword in the retail industry for quite some time. But why are we talking about retail in an article about fleet management?

Because the same principles can — and should — be applied when you think about fleet. For retailers to remain competitive in today’s consumer-driven market, they are expected to meet and beat customer demands for customisation and express shipping — all without increasing costs. This requires that retailers know their products and their supply chain inside and out — and understand what can be adapted quickly to meet consumers’ expectations.

Just as a retailer must thoroughly understand their product, fleet managers must do the same with their assets. The condition of these

assets is key to their success. When it comes to fleet management, a “personalised supply chain” means having vendors, processes, and systems in place to ensure that necessary parts, materials, and people are available when critical assets require maintenance. Fleet managers often struggle to identify where to properly invest time, but once they identify assets in terms of their level of importance, this challenge can be resolved — and time can be invested in the most critical assets.

While all equipment is important, organisations can begin to identify the most critical assets in their fleets. Often, the most important assets are seen as those that require the most maintenance and are at risk of breaking down in the near future — ultimately leading to costly downtime, repairs or even the need to purchase replacement equipment. This is a more reactive approach.

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The more strategic and efficient method for identifying the most critical assets is determining which assets would have the largest impact on operations. These are assets that, if down, could lead to a potential delay in order fulfillment or delivery — causing a decrease in customer satisfaction and productivity. Adding to criticality is a determination as to which physical assets are most expensive to replace. Once managers identify the most critical assets in their operation, they should focus on using reliability-centered maintenance to maintain the upkeep of this equipment to ensure a smooth-running operation. Preventive maintenance such as this will help to boost productivity, customer satisfaction, and help companies remain competitive.

Reliability-centered maintenance (RCM) is centred around the concept of operating physical assets at top efficiency — including the quick and precise addition of new assets into service. By ensuring that assets are operating at top efficiency, fleet managers are able to respond to customer needs more quickly — increasing satisfaction and experience. Implementing RCM requires identifying assets in terms of their criticality — and the risk associated with each piece of equipment.

Importance can be determined by creating a risk score based on criticality, priority, and various factors that may change over time, such as an inspection that is now overdue, equipment operating conditions that have deteriorated, an environmental situation that has made the work less safe, a regulatory deadline that is fast approaching and many other possible change factors to consider at a given snapshot in time.

All other aspects of an effective asset management plan will be driven by this information.

Next, managers should ensure that the supply chain is prepared to keep critical assets operating. This can be determined by asking the following questions: • Are the necessary replacement parts and materials available?

• Are the quality, value, responsiveness, and delivery time of vendors reliable?

• Are the correct vendors being used based on product availability and purchasing agreements?

• Are the technicians servicing these assets available when needed and do they hold the necessary training and certifications?

In fleet management, preventive mainte-

nance on critical assets may include tires, brake pads, rotors, suspensions, special fluids, or various other electrical components and parts. Certain parts may be manufactured for a specific reason or specific asset. This means that they must be replaced at the right time to optimise uptime.

An essential aspect of any fleet manager’s plan should be enterprise asset management (EAM) software, which can scale as business and maintenance needs grow. EAM supports the personalised supply chain — pinpointing an asset’s condition, last date of service, and any external conditions that could impact performance. This technology can track assets of any size, as well as related materials, suppliers, spares, part location, and the location and details of outside repair/ maintenance shops. An effective EAM solution should be able to analyse data received by fleet managers from telemetry systems to determine asset location and condition, and the best time to schedule maintenance.

To personalise the fleet management supply chain, those who manage it must know the parts, materials, supplier, tools, software, and technicians that keep their assets executing at maximum capacity for as long as possible.

C o v e r S to ry

Drive to deliver

UPS president for the Indian Subcontinent, Middle East and Africa (ISMEA) district, Rami Suleiman discusses the company’s sustainable innovation, customer service ethos, and partnership for World Expo 2020 Dubai

By Mehak Srivastava. Photos by Farooq Salik

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n effervescent Rami Suleiman welcomes us to the UPS regional headquarters in Dubai; recently appointed as the president for the Indian Subcontinent, Middle East, and Africa (ISMEA) region, Suleiman radiates a positive persona, with a ringing passion for the world of package delivery.

“Let me tell you a story that takes me back to the early days of my career, that really defines who I am today,” he jovially remarks.

“I was a young employee in our corporate office, and a phone call came to the office

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by mistake. The customer was talking about a package that was supposed to arrive before Christmas, but which he hadn’t yet received.

I walked to my manager at the time, and since I was young and semi-cynical, I [sic] said this was an error, because it was operations related, not corporate related. And the lesson I got at that time— and it was a long speech— is that it’s a customer at the other end, and now you own [the situation]. I eventually communicated the case to our operations teams and helped solve the problem for our customer.

It is an experience that has really carried me

through the rest of my career. And for us at UPS, it’s all about the customer experience.”

The story sets stage for what UPS represents for both its employees and its customers—it’s a brand that cares for its people. Perhaps this is one of the primary reasons why UPS was elected as the Official Logistics Partner for World Expo 2020.

“Every day, you’ll come across instances of UPS employees that have gone above and beyond to meet and exceed the customer expectations,” says Suleiman. “There was a time when we would talk about customer

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C o v e r S to ry

UPS has always been at the forefront of transforming its business to really meet the needs of our customers and adapt to the environment that we’re in.”

Rami Suleiman experience in terms of KPIs, but today’s conversation is solely around the customer.

There’s an emotional attachment with the service that we deliver to our customers, and that’s what UPS is about.

“We have a lot of stories to brag about, but we know we’re not perfect. We’ve done things that we recognise and work on, but for us there’s an emotional attachment with every package or every piece of inventory that a customer trusts to us.”

Suleiman joined UPS in 1992, and has worked in the United States, United Kingdom, and then the UAE. Highlights from his career include the acquisition of Fritz Companies Inc; the launch of 2,800 access points – a UPS-affiliated retail location like groceries and convenience stories, offering convenient package drop-off or delivery point – across the UK in 18 months; and the successful execution of logistics services for the London 2012 Olympic and Paralympic Games. Suleiman’s experience from London 2012 Games will be integral in UPS’s partnership with and preparations for Expo 2020 Dubai.

From U.S to UAE UPS traces its history back to 1907, where 19year old entrepreneur James E. Casey started the American Messenger Company in Seattle, with a borrowed capital of $100. Initial deliv-

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A lights-out warehouse is a warehouse or distribution centre that runs on machines with no human workers present. Nowadays, lightsout is also a metaphorical term for the increased use of automation in the workplace since it cancels out some or all of the presence of humans and human necessities. eries were made on foot or bicycle. A merger in 1913 lead to the acquirement of the first delivery truck—a converted Model T Ford— and it was in 1916 that the company’s signature dark brown trucks were established. Subsequently, operations were expanded beyond Seattle, and in 1925, the company was named as United Parcel Service.

“UPS was started by an entrepreneur and entrepreneurship continues to be the ethos of UPS,” says Suleiman. “As we look at the different horizons, UPS has always been at the forefront of transforming its business to really meet the needs of our customers and adapt to the environment that we’re in.

“If we look back to the 80s, UPS was traditionally perceived as a domestic U.S company,

but in the 80s we created the airline [division] and went abroad at a fast pace. We began offering services in Canada in 1975; the following year saw the start of operations in Germany. Over the next decade, UPS expanded its service throughout the Americas and Europe.

In 1989, UPS extended service to the Middle East, Africa, and the Pacific Rim. Today UPS moves 3% of the world’s gross domestic product (GDP) and successfully delivers 20 million packages across 220 countries and territories every day.

“We’ve had different horizons, different points that accelerated our growth and transformation to the future, and fortunately for me, my journey has seen some of these transformations.”

Suleiman believes that one of the big transformation projects for UPS was the broadening of their portfolio of services, one of which included freight forwarding. In 2004, Suleiman held the position of finance director in Southern California, where he was responsible for freight forwarding and contract logistics for the Western part of the U.S. He played a major role in driving UPS’s strategy for long-term growth including seven brokerage and forwarding operations. Suleiman hopes to further develop the transformation growth strategy and capitalise on UPS’ investments in its network, technology, and partnerships

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A UPS 747 Jumbo jet sports the Expo 2020 logo, highlighting the company’s role as Official Logistics Partner

to continuously increase UPS’ footprint in the ISMEA region, where the company has been operating since 1989, positioning UPS as a trade enabler within the Middle East from and to the rest of the world.

“When we think of our footprint, we think about our strategy. We have three main pillars that we lean on: one is capability building, and at the heart of that is our [global] network. The second one is advancing our brand. Our brand is more visible in many of the [regional] countries now, versus in 2013. And third is providing solutions not just for our local customers, but also our multinational customers who want to trade in this region.

“That’s our three-pronged approach to advancing our presence and advancing our capabilities in this region.”

Given the UAE and U.S. trade relations, it is only normal that UPS is keen to expand its services in the region. In February this year, UPS announced a daily non-stop flight from its Worldport global air hub in Louisville, Kentucky, to Dubai, reducing time-in-transit between the United States and key destinations in the Middle East by a full business day. At approximately 12,400km, the route is the longest regularly-scheduled flight UPS has ever operated, and is made possible by the new 747-8s,

which offer greater payload over long range.

“We’ve ordered 14 747-8s to enhance our network,” remarks Suleiman. “Much of the benefit will be seen internationally, because we’ve seen unprecedented demand for our services and products. We’re improving our capacity to meet those demands, and I believe we’re very well positioned to do that.

The 747-8s have one of the highest payloads at 300,000 pounds (136,077.7kgs). It’s a lot of customer product, a lot of enablement of growth for companies in the region and those that trade with this region.”

Innovation and sustainability UPS has a long history of developing and applying technological advances to improve logistics and supply chain management. The company pioneered the field of electronic sorting and tracking of packages.

Suleiman explains that a lot of technology that UPS currently works with is seen as either niche or mainstream.

“As this world evolves, niche may become mainstream, mainstream may become niche, and maybe mainstream will become a silly idea someday in the future. There are three that I would classify as mainstream— blockchain is one of them. Blockchain is for dealing with crossing borders and doing it in a way that is efficient and effective, with trans-

parency, compliance and visibility, and speed.

“The second one is artificial intelligence and machine learning, and a lot of that is inside the warehouse— for instance, lights-out warehouses. The third one, which is a source of pride for us, is sustainable innovation.”

UPS’s drive to be efficient and to reduce costs has led it to invest in one of the world’s largest private fleets of alternative fuel and advanced technology vehicles. UPS has a long history with electric vehicles (EVs), having first introduced them into its fleet in the 1930s, and, reintroduced modern EVs in 2001. Currently, UPS has more than 300 EVs and nearly 700 hybrid electric vehicles deployed in Europe and the U.S. In late 2017, the company ordered 125 new fully-electric semi tractors to be built by Tesla in 2019, one of the largest pre-orders to date.

Additionally, last September, UPS announced it will become the first commercial customer in the U.S. to start using three medium-duty electric trucks from Daimler Trucks’ Fuso brand, called the eCanter.

ORION, which stands for On-Road Integrated Optimisation and Navigation, uses IoT technology to analyse several hundred thousand potential routes for a driver based on the destination of the packages in the vehicle, and within seconds identifies the optimum route. In 2016, UPS achieved a 100%

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deployment of ORION in the U.S. In 2017, with ORION technology, UPS has cut the miles driven per year by 100 million, ultimately cutting CO2 emissions by 100,000 metric tons, and realised an additional $10mn reduction in operating expenses over the expected $400mn in savings.

In recent news, a UPS led consortium deployed a radical new charging technology in London that overcomes the challenge of simultaneously recharging an entire fleet of electric vehicles (EVs) without the need for an expensive upgrade to the power supply grid.

The breakthrough signals the beginning of the end of a reliance upon traditional combustion engine powered vehicles, by allowing UPS to increase the number of EVs operating from its central London site from the current limit of 65 to all 170 trucks based there.

Suleiman highlights niche innovations like disruption, 3D printing, robotics, and drones, commenting that these technologies are definitely on the list for UPS. The company has successfully tested a drone launched from the top of a UPS package car. This system would be particularly useful in servicing rural areas by reducing the number of miles that must be driven to deliver a package.

“UPS has an R&D function that’s constantly looking at these things, but sometimes innovation comes from the inside. UPS has a strategic enterprise fund that in effect goes out and invests in startups. And it’s a great learning [opportunity] for a company that has been around for a long time, such as ours, to get to learn from the outside. So, for example, for drone technology we partnered with outside companies to get some insight

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through investments, but our R&D department also worked on it. That’s our two-way approach to innovation.”

Expo 2020 Dubai It was in May 2017 that UPS’s tie with Expo 2020 Dubai, as the Official Logistics Partner, was announced. With more than 180 countries expected to participate and hundreds of thousands of visitors on peak days, the Expo will be one of the most com-

plex logistics projects UPS has tackled.

“Our story with Expo is really about partnership,” explains Suleiman. “It’s about partnering with parties where we see a strong relationship and strong opportunity to work together. We clearly see that with the government of Dubai. Expo 2020 is an opportunity for UPS to showcase what we can do in large project logistics and events as critical as the Expo 2020. It’s been a great project for us so far, and if we think about the international portion of Expo 2020, where 25 million people will be attending the event over the sixmonth period, and the logistics that will be involved in putting the event together, it’s a great prospect for us. It will also help us build capabilities for future customers to draw on the UPS experience, and leverage on the infrastructure that we build throughout the time [of the Expo 2020].”

UPS will provide up to 27,000sqm of warehouse space, equivalent to four soccer fields, and a team of up to 1,000 employees during the Expo. The company has already begun storing material at its existing warehouse in Dubai, and has plans to open a facility at the Expo site to store the immense amount of the goods coming in.

“I draw parallel to this to what we did in London, back in 2012. UPS was the exclusive logistics provider for LOCOG [London Organising Committee of the Olympic and Paralympic Games], which was the organising

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committee for London 2012, where we successfully managed 30 million products or inventory items, including moving medals into the venue, out of the venue, to assembling the dormitories for the athletes.”

UPS opened an Olympic Games logistics center in Stevenage, England, in early 2011, spread over an area of 30,751sqm, with a similar facility opened in Tilbury a few months later. UPS relied on its Quantum View technology system to give its teams the ability to see, track, and manage all shipments, and used sophisticated tracking delivery devices with built-in bar code scanning and GPS capabilities. UPS had an operational presence at every event, venue, and hotel connected to the games.

Furthermore, 10 dual-fuel biomethane diesel vehicles, which run on energy produced from organic waste, were added to UPS’s Olympics fleet, showcasing UPS’s frontrunner style when it comes to sustainability. The company made extensive use of bicycles and foot deliveries, and even transported containers from its warehouse at the Port of Tilbury via barges on the River Thames.

On being queried if Expo 2020 Dubai will see similar developments, Suleiman observes: “I believe our shared values on technology as a means to drive sustainability is another reason why UPS won its selection as Official Logistics Partner for Expo 2020 Dubai. Expo 2020 Dubai is a showcase of

UPS has designed their vehicle routing software to eliminate as many left-hand turns as possible (in countries with right-hand traffic).

Typically, only 10% of the turns are left turns. As a result, the company claims it uses 10m gallons less fuel, emits 20,000 tonnes less carbon dioxide and delivers 350,000 more packages every year. The efficiency of planning routes with its navigation software this way has even helped the firm cut the number of trucks it uses by 1,100, bringing down the company’s total distance travelled by 28.5m miles – despite the longer routes. the future and with UPS’s constantly changing rolling laboratory of alternative vehicle solutions, we will be making an assessment on the best fit for our fleet and operations as opening day gets closer. We are keen to help Expo 2020 show a glimpse of the future –

and this includes showing what the logistics of the future will look like.”

UPS’s ideology seems to be rightly aligned with Expo 2020’s theme ‘Connecting Minds, Creating the Future’, which focusses on the increased need to connect people, societies, and ideas for an improved future.

“One of the pillars for future growth for UPS is emerging markets. At the heart of emerging markets is the Indian Subcontinent, Middle East and Africa, and this [Dubai] is the regional office where we manage it all from. If we draw that into the Expo discussion, we see a parallel between us partnering with Expo, with our growth in this market. So, while we’re expanding our footprint, we’re partnering with Expo, and these things will converge and prove UPS’s capabilities moving into the future.”

In May 2018, UPS added an Expo 2020 livery on one of its long-haul aircrafts, representing its partnership with the event.

This is only the fifth time UPS has sported a modified livery on its aircraft and is a symbol of UPS’s unique role in making the event a success.

“It’s an integrated approach, a partnership approach. Our immediate focus is making Dubai successful and we’re committed to build a robust logistics network and, one of the halo effects would be making other customers and future businesses successful in the region.”

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Interview

Need of the hour Understanding the complete potential of a technology is pivotal to correctly utilising a service; Rockwell Automation constantly strives to bring this knowledge closer to its customers

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utomation University, hosted

by Rockwell Automation and members of its PartnerNetwork programme in Abu Dhabi, UAE, is an event focussed on technologies encompassing integrated information and automation solutions, focussing on current and emerging challenges within the oil and gas, metals and mining, water waste, and consumer packaged goods industries. LNME speaks to Pankaj Shrivastava, field business leader - Architecture and Software, Rockwell Automation, to find out more about the event and the topics in discussion.

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What were some of the key topics in discussion at Automation University?

Around the world, Rockwell Automation is committed to putting our customers’ learning needs first by delivering local and regional events designed to foster the knowledge and expertise in best automation practices, placing our customers ahead of their competition.

Automation University, held for the third time in the Middle East, is our signature event and gives visitors the opportunity to meet with industry specialists, share experiences, and to learn and find the best solution to support the

growth of their businesses. The high number of attendees this year is testimony to the demand in the region for learning, and we feel privileged to be able to share our expertise with so many professionals.

Over 400 professionals from 10 countries attended the two-day comprehensive event, encompassing multiple learning sessions, handson labs, demo rooms, and industry focused roundtables. They explored the influence that smart manufacturing, Industry 4.0 and the connected enterprise have on the automation sector, and how information technology (IT) and operation technology (OT) converge to

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as the importance of security, data quality, and contextualisation. They discussed how new technologies, advanced algorithms, machine learning, and artificial intelligence software and devices can contribute to improved oil and gas operations.

bring increased profitability, lower operating costs, and faster time to market.

Some of the key topics addressed during the event included network and security services, connected production, and digitalisation journey.

Can you give us some more details about key discussions from the event?

Rockwell Automation, through its network and security services (NSS), and in collaboration with strategic alliance partners, demonstrated how organisations can secure their infrastructure, protect assets, and maintain network availability in light of the security threats coming with greater connectivity.

NSS sessions at the Automation University included Industrial Network Infrastructures, Virtualisation and Cyber Security Matter; Implementing Security and IP Protection Features in Integrated Architecture; and How to bring Real-time Cybersecurity and Visibility for Industrial Control Networks.

Touching upon the oil and gas industries: there is a lot of talk about ‘digital oilfields’, as the sector strives to improve profitability after many years of depressed prices. Throughout this time, Rockwell Automation has been walking the talk in improving operational flexibility and competitiveness in the oil and gas industry by improving existing plants with data-driven system enhancements.

During the Automation University sessions, we discussed how available technologies and the adoption of digitalisation projects provide a number of benefits for the users in the oil and gas sector. We took a deep approach into showcasing how benefits of Industry 4.0 and IIoT can advance operations into a more connected digital oilfield and solve every day business challenges.

The oil and gas focussed sessions at the Automation University included: • Connected Production in Digital Oilfields This session discussed a secure pathway from production data to actionable intelligence, focussing on how ConnectedProduction provides oil and gas producers the secure connectivity and scalability required to visualise and optimise production from the well head to the point of custody transfer.

• Digitalisation Journey in Oil and Gas Industry Roundtable During this round table, industry experts from Rockwell Automation and its PartnerNetwork discussed the need for digitisation and extracting more value from data, as well

The need of the hour is automation. What are your thoughts on this?

As a solutions provider we need to understand our customers, their businesses, their goals, and together we can assess what they can achieve through automation. The benefits of development depend on what the client wishes to achieve. What is clear is the improvement of the overall performance, increased productivity, and a decrease in downtime. However, in some industries, the goal may be quality improvement or developing production process monitoring. This is why cooperation with partners is paramount.

“Automation University gives visitors the opportunity to meet with industry specialists, share experiences, and to learn and find the best solution to support the growth of their businesses.”

Pankaj Shrivastava

Tell us about Rockwell’s Connected Enterprise technologies.

When you think about all the previous industrial revolutions, they were journeys that began with minor changes and led to several innovations. The move towards connected enterprise is not that much different from those previous phases. Regardless of size, every company must work hard to survive. Rockwell is the world’s biggest company dedicated solely to industrial automation, so naturally, we have a lot of experience regarding these processes. We work closely together with our partners. Everyone should understand that joint efforts are always more successful than trying to make it in isolation.

Manufacturing competitiveness is indeed reaching its peak, especially with the surge in online e-commerce and digitalisation of the supply chain.

Is automation the right solution to improve trade— or is supply peaking over demand?

We are indeed witnessing a significant transformation in the industry, the aim of which is to leverage the latest technologies and increase productivity. Although it holds challenges, I believe it also offers great opportunities. These opportunities are not only available to manufacturers, but also to their vendors and the companies developing new technological solutions.

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Warehouses

Levelling the playing field

Seamless operations and technology have become synonymous for warehouses, according to the service providers implementing these strategies

By Mehak Srivastava

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t is said that over the next decade, several trends will noticeably affect warehouses and distribution centres. New developments will change the way work is accomplished— and that has already happened to a large extent. Today’s warehouses have transformed from what they were a decade or two ago, with the fundamental factor behind this transformation being technology.

Modern warehouses are not just about serving as simple storage points. They are distribution or fulfillment centers, focussed on the rapid movement of product in as few touches

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as possible. Popularity of technology like automatic guided vehicles (AGVs), robots, big data, and warehouse management systems (WMS) continues to rise in warehouses, ensuring that operations notice a variety of benefits—from a decline in errors and costs, to a rise in picking accuracy—as they strive to improve operations and enhance productivity.

Al Naboodah Group Enterprises (ANGE) is one of the UAE’s largest and most respected family-owned conglomerates with a diverse portfolio of business. In 2016, the various businesses owned by Al Naboodah were brought

together under the ANGE banner and this had a direct impact on Abdelkader Al Seidawi, ANGE warehouse and logistics manager.

Al Seidawi explains: “Until that point, I mainly looked after Swaidan Trading goods, such as Hyundai batteries, Goodyear tyres and batteries, and heavy goods such as forklift trucks, but when we consolidated the businesses, I was then in charge of all the Gulf oil products and Al Naboodah Electrical products, including SMKA Electric.”

SMKA is a leading provider in the industry, supplying premium electrical, lighting, and

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home automation products. With a large portfolio, the company represents a number of global brands including Dulight, MK by Honeywell, and OBO Bettermann. Al Naboodah’s electrical arm also branches out globally with Al Naboodah Technologies in Saudi Arabia.

In addition, Al Naboodah Electrics launched its own brand of eco-friendly LED lighting solutions called Lumez.

Al Seidawi continues: “In any given month, I am responsible for ensuring over 1,000 SMKA products are delivered and safely received on time to customers all over the UAE and beyond, while also ensuring that over 900 Swaidan Trading goods are also delivered on time. This ensures that all 20 of our trucks are out delivering all day, every day.”

It is clearly a huge undertaking, with between AED120-150mn worth of stock in his warehouses at any time. Repeatedly awarded the ‘Best Distributor in the Middle East’ for MK products by Honeywell, SMKA Electric has an enviable reputation in the region as one of the most reliable companies to work with, and this is in no small part due to the efficient managing of stock through the warehouses. These products are supplied to most major contractors in the region, as well as over 300 sub-dealers, and to end-users through eight showrooms across the emirates.

The warehouses themselves are vast. At the Al Naboodah warehouse in Al Qusais, the site spans over 17,651sqm, while the Al Awir site covers about 25,540sqm. Keeping track of all those goods and deliveries is clearly not an easy task. According to Al Seidawi, it is done via an enterprise resource planning (ERP) system called Epicor.

He explains: “Before Epicor, we used JDE [JD Edwards] as our ERP system but it wasn’t meeting our needs, so we upgraded to a new ERP system. This system has a very high degree of automation and minimises manual transactions. Before that, we had to fill in the data manually via an excel spreadsheet. That is how we kept track of stock in and out.

“With Epicor, it is all fully-automated through the system, from the delivery coming in to the delivery going out. We are able to monitor stock levels and track where stock is going. When any item is low, an automatic email report is sent out to that business unit to alert them, so they can reorder. We are also in the process of getting barcode scanning installed, which will be an even faster and more efficient method of stock taking.”

Stock taking is not the only area where tech

“The warehouses [where possible] conserve energy, engage in recycling, and implement other aspects of our sustainability roadmap.”

- Abdelkader Al Seidawi, ANGE is deployed at Al Naboodah; the company recently took delivery of automated loading bays. Preceding this, the loading bays were adjusted manually, with considerable effort needed by those on site. Now, however, a hydraulics system is able to adjust to the height of each container with the touch of a button.

This, says Al Seidawi, has made deliveries much faster and more efficient.

There is also tight security on site with a linked series of cameras (CCTV), covering every square inch of the warehouse. This cabled system, consisting of over 30 cameras, is

directed to a multi-screen display in the management offices.

“The company as a whole is very focussed on sustainability with a roadmap, plus policies in place to support the roadmap,” clarifies Al Seidawi. “The warehouses follow suit accordingly, and where possible, conserve energy, engage in recycling, and implement other aspects of our sustainability roadmap, which also covers areas such as employee welfare, and health and safety.

“One energy conserving measure is adopting the use of power hoses to clean our vehi-

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Warehouses

“Technology has been positively affecting the logistics field since a while, especially in Europe, but it does not mean at the cost of unemployment.”

- Walid Khoury, ALS Logistic Solutions cles. We used to use hoses attached to mains water, but we now use a high-pressure machine which saves a lot of water. Also, in our air-conditioned warehouses, where we need to keep the interiors temperature controlled, we replaced the split AC units with high power units. They are far more efficient, and from having to use 12 split AC units in the same space, we now just have four air-conditioning units, with only two in use at any one time.

This is a big energy saving measure. It is also company policy to switch off lights and any electrics when not in use, and we have personnel who ensure this is done at the end of every working day.”

In recent news, Saudi Arabia-based Almjadouie Logistics Company deployed Infor

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SCE to enhance business agility as it poises for further growth. The project was successfully managed by Infor’s global supply chain partner, SNS, a provider of supply chain consulting and software solutions in the Middle East, Africa, and Europe.

A powerhouse in the logistics and supply chain industry in the region, Almajdouie has more than 4,000 employees and over 2mn sqm of terminal and storage facilities across the GCC, which move an average of 1.6 million tonnes of goods annually. As the need for increased operational efficiencies arose, the company looked to improve the flexibility and scalability of its business, and sought an integrated system that could support its current and future requirements. After a thorough

and detailed evaluation, it decided to adopt Infor’s best-of-breed warehouse management solution, Infor SCE. “Our customers’ businesses demand that we keep pace with emerging value-added services,” says chief operations officer, Brent Melvin, Almajdouie Logistics. “We can provide them with complete visibility about their inventory, enabling them to reduce freight costs, optimise service levels, and improve overall operational efficiency. With Infor SCE, we are now able to make faster and better-informed decisions, improving our customer service, increasing throughput, all while reducing the costs of running our operations.”

Meanwhile, the Logistics District at Dubai South recently launched Masary, a new smart electronic system that reduces the transit time of goods and vehicles. Masary is digitally connected to Dubai Police, Dubai Customs, and other relevant government departments, and is characterised by its speedy process while issuing permits, by reducing the time from four hours to a mere 10 minutes.

Nestlé and XPO Logistics are reportedly co-creating a 59,272sqm distribution centre at the new SEGRO East Midlands Gateway Logistics Park in Leicestershire, United Kingdom.

The facility will be occupied predominantly by Nestlé for its consumer-packaged goods and will function as a testbed environment for XPO technology prototypes prior to global release.

The custom-designed distribution centre, scheduled to be complete in 2020, will feature advanced sorting systems and robotics, alongside automation co-developed with Swisslog Logistics Automation. The site’s digital ecosystem will integrate predictive data and intelligent machines to deliver one of the most advanced distribution management centres in the world.

Furthermore, furniture retailer IKEA announced that it was teaming up with SSI SCHAEFER to implement faster service and greater storage capacity for its new distribution center in Montreal, that will service both the United States and Canada. The new facility will allow the retailer to further compete in e-commerce and smaller retail formats.

Set to be completed by spring 2020, the distribution centre will have an automatic shuttle warehouse design that utilises SSI SCHAEFER’s 3D-MATRIX Solution, a highbay warehouse (HBW) with 245,000 pallet storage locations, ergonomic multi-order-picking workstations, and the warehouse control software WAMAS. Post the Montreal project, SSI SCHAEFER will implement two follow-up orders for IKEA in Sweden and Switzerland.

It is clear that technology has clearly taken over several operations within warehouses.

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Omani officials visit the Muscat air cargo terminal facility

So what impact does this have on the workers whose jobs are now done by machines and complex coding?

“Usually the biggest hitch is the reluctance to adopt new technology by the employees, particularly those who have been here for a long time,” remarks Al Seidawi.

“Often people don’t like change and they want to continue using the same methods and old systems, and these people need to be encouraged and supported in learning to adapt to new technology.”

Al Seidawi mentions that they use coaching and mentors to help employees see the benefits of the new tech and how it can help them.

“We have approximately 73 staff at our warehouse and some of them have been with us for over a decade. We even have staff members who have been here for 17 to 18 years, and they have witnessed a lot of change. They often need support in adapting to the changes, and we always prefer to train in-house and retain our staff.”

ALS Logistic Solutions are specialists in the material handling and storage systems’ automation sector, providing products and services for airport consulting and IT solutions, air cargo handling systems, automated storage and retrieval systems (high-bay warehousing), warehouse management systems, and automated car parks.

Says Walid Khoury, managing director, ALS Logistic Solutions: “Technology has been positively affecting the logistics field since a while, especially in Europe, but it does not mean at the cost of unemployment. By

using automation, the warehouse might have a lot more space to offer other services that require different manpower, such as e-commerce, value-added services, special picking from workstations, etc. The trends are surely pointing to adopt the changes and elaborate the most efficient man-machine interface and strategy. From voice recognition to driverless trucks, artificial intelligence definitely sharpens the market.”

Khoury believes that innovations and sophisticated technologies are an inevitable and necessary change for the logistics market, but at the same time, a challenge.

“ALS has a training program designed for all sorts of automation technology that we design and install at our customers facility. We enable their staff to handle the sophisticated technology, which becomes easy to handle once introduced to the personnel in a friendly and knowledgeable way.”

ALS’ projects for the year include expansion of the OSR shuttle system for Dubai Duty Free Warehouse; automated pharma warehouse in Saudi Arabia; fully automated airport cargo terminals in Muscat and Salalah; supply and installation of airport cargo terminal in Dammam; installation of automated storage and retrieval system (ASRS) for WFS/BFS in Bangkok, ULD handling system for WFS Frankfurt, and upgrading the facility for FedEx Dubai.

Khoury remarks: “You remember Bill Gates’ quote, “the first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.” We absolutely agree with this statement. We always say that earlier involvement of a logistics consultant at the design stage minimises the risk of decision mistakes, whereas the after-sales support and training guarantee the most efficient systems operations and longevity of the installed solution.”

Automated cargo facility implemented by ALS Logistic Solutions for Muscat Airport

Logistics News ME | July 2018 | 33

T r a n s p o rt

Transporter transformation Cardiff General Transport discusses how it continues to flourish in the oil and gas sector

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ardiff General Transport is one of the foremost suppliers of heavy vehicles and heavy equipment in Abu Dhabi. According to operations manager Ziyad Mohammed, the company is striving to deliver on its promise of excellence in service to all of its loyal clients through a company culture that is oriented around professional team work.

Cardiff first started operations in 2009 and as it nears its first decade in the market, Mohammed says, it has fully embraced a philosophy revolving around a high standard of

34 | Logistics News ME | July 2018

safety and quality of customer service. He adds that the company has established a wide range of operations in the oil-field industry, attracting one of the sector’s biggest players, ADNOC. Providing 24/7 on-shore and offshore transportation, project management, vehicle lease and vehicle rental, custom clearing, and forwarding services to their major client demands, they follow some of the highest safety and quality standards in the region.

Rather than rest on its laurels, Mohammed says that the company is in a constant state of adaption and improvement to ensure it con-

tinues its impressive start in the market.

“The market situation is challenging, customers are becoming more and more empowered, and demand more for less,” he says. “Therefore, we need to be proactive and offer personalised solutions to meet their expectations. The backbone of our service is extensive support from customer-oriented operations team and well-trained drivers and operators who are specialised in the oil and gas industry. We utilise the capabilities of our full services according to customer requirements.

We treat every working project as our own

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and complete the task as a partner.”

Supporting Cardiff is a combination of the local know-how of Darwish Bin Ahmed & Sons Co and the international might of MAN Truck and Bus Middle East. Mohammed says the company has built a fleet of 60 MAN trucks but is continuing to add vehicles and will be bolstered by the end of 2018 with the addition of the 4x4 TGM, 6x6 TGS, and the TGS 8x8 off-roader, a rugged vehicle with high clearance, making it adept at supporting remote pipeline installation.

“MAN helps because the quality of the trucks is important for the successful running of the business,” he says explaining why Cardiff has built up a sizeable MAN fleet. “The mileage is fantastic, fuel consumption is economical, and the MAN trucks can go on- and off-road which makes it more flexible and better than other brands.”

Fleet purchasing at Cardiff is driven by the needs of its clients. Mohammed says that the company’s renewal of its fleet targets a fiveyear rotation with the sale of older trucks contributing to newer replacements. Given the remote locations and harsh environment that Cardiff operates in, inspections on the vehicles are conducted on a regular basis and support from MAN and Darwish Bin Ahmed & Sons Co is vital. He adds that they have formed a strong partnership over the time.

“We started with a small number of vehicles, but the truck number has grown to above 60 because of the trust and long-term relationship. The workshop and after sales support is very good thanks to the dealership in the UAE - Darwish Bin Ahmed & Sons Co, and we have benefitted from their quality and durability over a long period of time,” says Mohammed. “The vehicles have performed without major breakdowns, providing peace of mind and re-assurance.”

The UAE’s heavy truck fleet is an important part of the oil and gas industry and it is crucial that transporters are able to match the safety and environmental requirements of a sector that is becoming cleaner and greener.

The company has established its own dedicated HSE department as part of an effort to protect lives and the environment from any hazard materials as required by the UAE waste management regulations.

“In the oil and gas industry, everything is reported and safety comes first,” he adds. “There is no compromise on safety rules and regulations. One of the major factors that we care about is safe transportation. Cardiff ’s HSE department monitors and trains employees to work according to oilfield site rules and regulations. Whoever violates safety rules, they will

(L-R) Basheer Mohammed, marketing manager; Shameer Mohammed, general manager; and Jishar Mohammed, finance manager. have to face actions according to the violation matrix and given safety orientation in order to improve the quality and standard of work.”

“We are delighted to have enjoyed such a long partnership with Cardiff,” says Khalifa Darwish, managing director, Darwish Bin Ahmed & Sons Co. “We see it as our duty to help them continue to be a success.”

Rises in fuel costs are a major pressure for fleet owners in the region and Cardiff is drawing on MAN’s expertise to better manage the overall cost of its vehicles and operation.

“The continuous hikes in fuel price is having a serious major impact on the expenses side of the business. It is really very tough to maintain the same cost for trips with the current competitive market situation.”

According to Franz Freiherr von Redwitz, managing director, MAN Truck & Bus Middle East, the work with Cardiff is a demonstration of how it provides customer-centric solutions in different segments, including oil and gas, to keep fleet costs manageable.

“By focussing on individual transport costs, the correct MAN solution is recommended and supplied to any of the MAN operators in the region. Not only do we provide vehicles with an outstanding quality, our after sales services support our customers throughout the journey with MAN,” says Redwitz. “We guarantee maximum uptimes and therefore high profitability through our repair and maintenance contracts, extended warranty, and MAN Genuine Parts that come with a two year warranty.

“MAN Truck and Bus Middle East also helps to save costs and improve overall profit-

ability, especially in the long run through our MAN ProfiDrive driver education program which is proven to increase fuel economy which, on average, is a 10% improvement comparing a driver before and after the training session.”

Another less-understood challenge for fleets is the temptation to save costs in a market that is more competitive than ever by purchasing non-OEM parts. MAN has invested millions into its genuine parts programme, working with a carefully selected group of globally recognised suppliers who manufacture according to its demanding specifications, and MAN Truck & Bus Middle East’s head of after-sales, Richard Brown, believes this can help avoid failures and lower the the risk of accidents.

“Counterfeit or grey market substitutes will cost less initially but the lower prices hide a haphazard production process using poorer materials and minimal checks which would have trimmed down the quality of the final product.”

Whether it is truck quality, customisation, training, or advice on parts, Mohammed says that Cardiff will continue to draw on MAN’s expertise to maintain its own high level of service.

“MAN is our important partner as Cardiff has to provide the message to the UAE that we are able to provide services in oilfield operations safely. This is one of our priorities as it demonstrates that we are a quality brand to trust,” he says. “MAN also helps us by developing additional features that enable us to meet very high standards.”

Logistics News ME | July 2018 | 35

C o u n t ry f o c u s

Marching ahead Experts discuss China’s stronghold in the logistics industry, and its excellent trade relations with the UAE

By Mehak Srivastava

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he growth of China’s trade links with the UAE reflects the changing global dynamics that saw the emergence of China as one of the world’s fastest growing economic and political superpowers. According to a report released by the Center for Forecasting Science under the Chinese Academy of Sciences, the total value of the logistics industry in China will approach ¥280tn ($43.5tn) in 2018, an increase of 6.5% year on year.

The report highlights that development in the high-end manufacturing industry and the consumption boom will drive demand for logistics services. In 2018, logistics facilities and equipment will be upgraded and innovation in logistics will be made to enhance the efficiency

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of the industry. It is expected the total revenue of the logistics industry will exceed ¥9tn in 2018, while the total cost of the industry will reach ¥12tn.

The big numbers Zhang Tian Bing, partner, Deloitte China Consulting, who leads the supply chain service line, says: “In 2017, China’s government had proposed to strengthen the construction of infrastructure networks such as water conservancy, railways, highways, water transport and aviation, pipelines, and logistics. This is the first time that logistics has been mentioned as a part of the infrastructure of the nation’s transportation network, elevating the logistics industry to

a new and far more prominent position.”

Bing highlights several trends in the logistics industry in China: “Economic globalisation and the rapid development of multinational corporations, coupled with the constant innovation of internet technologies, has prompted logistics enterprises to work together on a global scale. The global retail industry drives the consolidation of the logistics enterprises to form a global logistics network.

In 2018, we expect that logistics enterprises will ride on the coattails of the ‘One Belt and One Road’ Initiative to aggressively seize new overseas markets.”

The Belt and Road Initiative (BRI) was launched by China in 2013, with an aim to

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revive the great Silk Road as well as provide a new platform for multilateral cooperation to create new trade routes, economic links, and business networks. Six economic corridors have been identified from China to Central and South Asia, the Middle East and Europe (the Silk Road Economic Belt) and, along a maritime route, from Southeast Asia, Oceania to the Middle East, Africa, and Europe (the 21st Century Maritime Silk Road).

Spanning across 69 countries and encompassing around 60% of the world’s population and 40% of global GDP, the blueprint is also a collection of interlinking trade deals and infrastructure projects, set to be mutually beneficial to BRI countries and China.

COSCO Shipping is now a globally renowned logistics brand, being China’s largest and the world’s leading group specialising in global shipping, modern logistics, as well as ship building and repairing.

Captain Wang Song, president of COSCO Shipping West Asia, says: “The company’s development is a reflection of the needs for growth within China’s logistics industry, as well as the needs for Chinese companies expanding their businesses abroad. Through a series of industrial amalgamation, business expansion, and scaling up, COSCO’s shipping lines cover over 1,600 ports in more than 160 countries and regions worldwide, and its fleet size ranks the first in China and the second in the world.”

COSCO is positioned the first in China and the fifth in the world by container fleet size, and is also the first in the world by dry bulk fleet. It takes a lead in the world for comprehensive strengths of professional bulk, multiple-purpose vessel and special vessel fleet, including the super tanker oil fleet.

According to a Knight Frank report, the UAE has been ranked as third in a global index of nations that stand to benefit most from the Belt and Road Initiative.

“China is the largest trading partner of the UAE, which hosts the largest Chinese small commodities market outside [of] China,” says Song. “In Dragon Mart, you can find any type of small commodity, and it is from here that these products move on further into GCC, North Africa, East Africa, Central Asia, and other neighboring countries. The Chinese people who live and do business here, have also brought along [with them] the Chinese culture, cuisine, and friendship.

“China has a strategic partnership with the UAE, and actively supports the economic development of the country; Chinese companies leverage the UAE as the regional hub to ex-

“The mutually beneficial development trajectory of the bilateral relationship is firmly rooted in the two countries’ historic experience, current economic drivers, and future potentials.”

- Captain Wang Song, COSCO Shipping pand commerce and investments in neighboring countries. The positive investment environment of the UAE has brought opportunity and a solid platform for Chinese companies to do business and invest. The mutually beneficial development trajectory of the bilateral relationship is firmly rooted in the two countries’ historic experience, current economic drivers, and future potentials.”

In September 2017, Dubai Multi Commodities Centre (DMCC), signed a memorandum of understanding (MoU) with the Xi’an International Trade and Logistics Park at the Xian Dubai Free Trade Zone Economic Cooperation Conference 2017 in China. Just prior to this, DMCC announced that it signed an MoU with the China Chamber of International Commerce (CCOIC), to explore the possibility of establishing a joint business

council, organising cross-border trade delegations, as well as enhancing collaboration in the legal services sector.

In November 2017, Abu Dhabi Ports and China’s COSCO Shipping Ports broke ground for the construction of a new container terminal at Khalifa Port. Abu Dhabi Ports, which operates Khalifa Port, last year signed a 35year concession agreement with COSCO to operate a new $700mn terminal that will add 2.4 million twenty-foot equivalent units (TEUs) a year to the port’s existing capacity of 2.5 million TEUs. COSCO Shipping also has an option to increase the capacity by a further 1.1 million containers.

The move is part of Abu Dhabi’s broader strategy to develop the port as a regional hub and link it with industrial free zones to expand and diversify the economy.

Logistics News ME | July 2018 | 37

C o u n t ry F o c u s

“In 2018, we expect that logistics enterprises will ride on the coattails of the ‘One Belt and One Road’ Initiative to aggressively seize new overseas markets.”

- Zhang Tian Bing, Deloitte

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ed to change not only the investment landscape of the UAE, but also create significant growth opportunities by attracting more foreign direct investments, especially into the non-oil sectors.

Song remarks: “Chinese companies can benefit from the UAE’s comparative advantage in terms of geographical location, industrial development, management philosophy, reformative vision, and support for innovation, to achieve mutually beneficial development and win-win with their UAE partners via commerce and investments.

COSCO’s vision is to focus on our base in the UAE, develop markets around the broader West Asia region, and connect to the world’s shipping network. The plan will be further adjusted in line with geostrategic developments across the region. Our destiny is closely intertwined with the people of the Middle East, we are here for good and want to achieve long term growth in this region.”

Technology and e-commerce China’s courier industry has seen unprecedented growth in the last few years, given the rise of e-commerce. The surge in business has helped the founders of China’s biggest express delivery firms become billionaires.

Bing says: “In 2016, Jack Ma (the founder and executive chairman of Alibaba Group) put forward the concept of new retail and new logistics. The new logistics mode shares information among upstream and downstream

enterprises across the entire industry chain. It is an important bridge linking consumers and manufacturers. In 2018, all sectors of the logistics industry will cooperate with one another to reconfigure their own social resources to jointly expand business operations and improve operational efficiency so as to maximise the benefits of joint distribution.”

New retail is Alibaba’s strategy to redefine commerce by enabling seamless engagement between the online and offline world. Alibaba CEO Daniel Zhang, summed up the unfolding challenge in a letter to investors when he said companies must use big data analytics to redefine the traditional core elements of retailing— consumers, merchandise, and stores—and the relationship among those elements to upgrade current formats and create new retail occasions. Trends such as consumer-centric retail models, customised goods and delivery, and omnichannel shopping have changed the entire business model.

Bing continues: “New logistics technologies that use artificial intelligence have been continuously emerging, driving the application of intelligent techniques such as automatic sorting, electronic waybill and so on. Artificial intelligence is penetrating each and every aspect of the realm of logistics, especially in the last-mile delivery to consumer stage. In 2018, the overall procurement and utilisation of `smart equipment’ in the logistics industry will continue to rise.”

In the second quarter of 2018, Abu Dhabi Ports and the Jiangsu Provincial Overseas Cooperation and Investment Company Limited (JOCIC) announced that 15 Chinese companies have signed agreements to invest in Khalifa Port Free Trade Zone (KPFTZ), the largest free zone in the Middle East, totaling $1bn in value.

Under the terms of last years’ investment cooperation agreement, China-UAE Industrial Capacity Cooperation (Jiangsu) Construction Management Co., a UAE company established

by JOCIC, would occupy and develop approximately 2.2sqkm of the free trade zone for companies from the Chinese province of Jiangsu.

This area, now dubbed as the China-UAE Industrial Capacity Cooperation Industrial Park, is part of the KPFTZ and is expandable to reach 12.2sqkm.

In recent news, the UAE introduced a law to allow up to 100% ownership to foreign investors. According to experts, the move is expect-

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Trucks

A safety evolution not revolution Volvo Trucks shows how it is building on its long history in safety at last month’s Innovation Days

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hink Volvo. Think Safety. It’s a wellworn view of the Swedish brand, but as Volvo Trucks celebrates its 90th anniversary the company says it is well on the way to making progress in its mission to have zero truck accidents on the world’s roads. The company swung open the doors of its Gothenburg home last month to show a rotating army

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of distributors and journalist from across the globe the latest in its long line of technologies stemming back, most notably, to the invention of the three-point seatbelt in the early 1960s.

Amidst a dauntingly broad demonstration of its progress in areas such as semi-autonomous, autonomous, and even remote-controlled vehicles, it was the ready to be used on

the road technology that really impressed at the Innovation Days event.

At the top of the list were the improvements and additions to the Volvo Dynamic Steering system with better traffic safety, and an enhanced working environment for drivers was the goal for the four new enhancements to the driver support system. Carl Johan Almqvist,

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traffic and product safety director at Volvo Trucks says that the company has been working to fuse existing technology such as the Stability Assist and Lane Keeping Assist systems to assist the steering of heavy trucks in a ground-breaking way.

“Volvo Dynamic Steering has truly revolutionised the driver’s job behind the wheel.

Better directional stability, easier manoeuvering, and higher comfort have reduced the risk of road accidents and strain-related injuries.

Now we are building further on our success with new functions that help make the traffic environment even safer. This is all in accordance with our vision that no accidents involving Volvo trucks should ever occur.

These functions were developed to help drivers avoid some of the most common accident scenarios identified via our accident research programme,” says Almqvist.

By integrating Volvo Dynamic Steering with its other comfort and safety-enhancing systems, Volvo Trucks has developed two accident prevention driver support systems: Volvo Dynamic Steering with Stability Assist and Volvo Dynamic Steering with Lane Keeping Assist.

“Imagine you’re driving on a wet, slippery road and you suddenly notice that the rear of the truck is starting to lose its grip on the asphalt. Before this develops into a skid, you steer gently in the opposite direction until the danger is over. That’s exactly the way Volvo Dynamic Steering with Stability Assist works.

The big difference is that the system can discover the risk and help stabilise the vehicle before you’ve even noticed that something is about to happen,” explains Almqvist.

Volvo Dynamic Steering with Lane Keeping Assist gives the driver a helping hand when the system detects that the truck is showing signs of edging towards the lane marking. With a slight turn of the steering wheel in the appropriate direction and gentle vibration in the steering wheel, the driver is notified and is helped to steer the vehicle back into the lane, he adds.

In addition to the two new driver support systems, Volvo Trucks revealed it is introducing a longed-for function that makes it possible to adjust steering wheel resistance individually in trucks equipped with Volvo Dynamic Steering. Using a touch-screen, drivers can change how the truck reacts to changes on road such as cornering or contact from the steering wheel on the fly.

“Each driver has a different perception of how light or heavy the steering system should be. Now every driver can adjust the steering wheel resistance exactly as he or she

Volvo FE Electric set to spark in 2019 The first Volvo FE Electric, an electric refuse truck with a superstructure developed together with Europe’s leading refuse collection bodybuilder, Faun, will start operating in early 2019 in Germany’s second-largest city, Hamburg.

“Hamburg, which in 2011 was named European Green Capital of the EU, has worked long and successfully on a broad front to enhance green and sustainable urban development. This applies not least in the transport sector, where electrified buses from Volvo are already being used in the public transport network,” says Jonas Odermalm, product line VP for the Volvo FL and Volvo FE at Volvo Trucks. The experiences and ambitions from this venture make Hamburg a highly interesting partner for us.”

Dr Rüdiger Siechau, CEO of Stadtreinigung Hamburg, says he sees a large potential for environmental benefits with electric trucks in the city.

“Today, each of our 300 conventional refuse vehicles emits approximately 31.300 kg carbon dioxide every year. An electrically powered refuse truck with battery that stands a full shift of eight to ten hours is a breakthrough in technology. Another benefit is the fact that Stadtreinigung Hamburg generates climate-neutral electricity that can be used to charge the batteries.”

The new Volvo FE Electric will be offered in several variants for different types of transport assignment. For instance, with Volvo’s low-entry cab, which makes it easier to enter and exit the cab and gives the driver a commanding view of surrounding traffic. The working environment improves too as a result of the low noise level and vibration-free operation. Battery capacity can be optimised to suit individual needs, and charging takes place either via the mains or via quick-charge stations.

“Our solutions for electrified transport are designed to suit the specific needs of each customer and each city. In addition to the vehicles, we will offer everything from route analysis to services and financing via our network of dealers and workshops throughout Europe. We also have close partnerships with suppliers of charging infrastructure,” concludes Odermalm.

Our active safety systems are part of a holistic solution that clearly helps reduce risks in traffic, but it is important to bear in mind that technology alone cannot do the job.”

Carl Johan Almqvist Logistics News ME | July 2018 | 41

Trucks

wants for comfortable, relaxed, and safe driving,” says Almqvist. “This is a very practical feature, not least for trucks that often have different drivers.”

A further and potentially interesting system for construction site operators is the External Steering option which allows the vehicle to be controlled remotely via a suitably ruggedised controller complete with shoulder strap, joystick, and an emergency stop. Ulf Andreasson, product range requirement manager for the FM/FMX, says it saves time, improves productivity, and reduces the need to climb in and out of the truck – improving the working conditions of the driver. Andreasson adds that it can be installed in the Middle East through its electronic interface by bodybuilders.

Innovation Days was also an opportunity to see the Collision Warning Brake system, which slows and then stops the truck if there is a risk of an accident, in action from inside the cab.

The system monitors the vehicles in front with the help of camera and radar technology and functions irrespective of whether it is sunshine, mist, fog or darkness. If there is a potential collision, the driver is alerted via gradually escalating light and acoustic signals.

If the system does not detect a response from the driver, the truck automatically starts braking gently. If the driver still does not respond, the emergency brake is deployed until the vehicle comes to a complete standstill. After a further five seconds without any movement of the steering wheel or other reaction, the handbrake is automatically engaged, a safety measure to prevent the truck from rolling if the driver is in shock or is unconscious.

When the emergency brake is deployed, the brake lights start flashing to warn vehicles to the rear, and when the truck’s speed drops to 5kmph the flashing emergency warning lights are also activated.

To demonstrate how it works, LNME’s driver took his feet off the pedals at 40kmph as our truck headed towards a stranded (inflatable, thankfully) car on the test track and the truck came to a grinding halt with a metre to spare.

Despite impressing, Almqvist says he still prefers drivers to be in control of their own destiny behind the wheel.

“Our active safety systems are part of a holistic solution that clearly helps reduce risks in traffic, but it is important to bear in mind that technology alone cannot do the job,” he says.

“A safe traffic environment requires active interaction between all road users. An experienced, attentive driver who handles his or her vehicle responsibly is still the best form of accident prevention.”

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Some of the technologies on show have been available for a number of years, but have been improved with the use of a cloudbased service, Connected Safety, which allows Volvo trucks and Volvo cars to automatically alert each other of hazardous traffic situations. Thanks to the collaboration, two independent vehicle manufacturers are allowing their cars and trucks to share real-time traffic hazard information.

The passenger-car version of Connected Safety was launched by Volvo Cars in 2016.

With Volvo Trucks now rolling out its version of the service, trucks and cars are able to alert each other to potential hazards. This is possible because the two companies share safety-related data between their respective clouds.

“Expanded cooperation between different players is one of the most important keys to improved road safety,” says Almqvist. “If more vehicles are able to exchange real-time information about the traffic situation, it will lower the risk of accidents. With Connected Safety we are opening the door to the future, with the hope that more vehicle manufacturers will join in.

Connected Safety was developed to send out alerts to nearby vehicles connected to the service whenever a driver activates the vehicle’s hazard warning lights.

When the hazard warning lights are switched on, the truck sends a signal via the driver’s

internet-connected mobile phone to Volvo Trucks’ cloud service. From there the information is forwarded to the corresponding service at Volvo Cars. An alert is then transmitted to all connected cars and trucks approaching the location of the vehicle whose hazard lights have been activated.

“A vehicle standing still by the roadside in poor visibility risks being hit from the rear, which can have severe consequences,” Almqvist explains. “An alert issued well in advance gives all drivers of nearby cars and trucks the same opportunity to reduce speed, adjust their driving to the traffic situation, and avoid a collision.”

Connected Safety is currently being rolled out in in Sweden and Norway and installed on Volvo FH16, Volvo FH, Volvo FM, and Volvo FMX. In the longer term, the cloud-based service can be expanded with additional safetyenhancing functions.

Emanuele Piga, director customer solutions and new services development at Volvo Trucks says “As the technology undergoes further refinement and more vehicles are linked to the system, real-time information will become an important complement to the various intelligent safety and driver support systems found in our trucks today. Connected Safety marks the start of a new phase in our ongoing drive to promote safe driving and prevent accidents.”

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Vi e w p o i n t

A shopper scans an Amazon Go app on a cellphone while entering an Amazon Go store in Seattle in January 2018 // AP Photo

Shop fresh Will Amazon do to the grocery industry what it did to e-commerce?

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mazon has been busy lately. After entering the grocery delivery market with Amazon Fresh and buying Whole Foods, it is now in the process of launching its own supermarket, Amazon Go. These moves have many wondering if Amazon is about to transform the grocery business just as it did e-commerce and publishing. Actually, this is a very different market. The limited profitability of online deliveries leaves little room for Amazon to innovate and Whole Foods only attracts a restricted, wealthier market. That being said, Amazon Go might just be the disruptive force to transform the grocery industry.

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Online grocery delivery remains only a small part of the overall grocery market, with online shopping accounting for about 6-7% of the UK grocery market, 5% in France and the Americas, and less than 2% everywhere else.

Asia is ahead of the curve, with 37% of shoppers in Asia Pacific claiming to have ordered online groceries compared to 13% in Europe.

Not only is online delivery only a small part of the overall grocery market, but the profitability of online grocery is dubious.

UK grocer Tesco claims 2-3% profit margins and recently implemented steep order minimum increases to firmly position home gro-

cery delivery as a convenient and upmarket offering. Ocado, a purely online UK grocer with 1% of the UK grocery market, eked a profit in 2016 and returned to losses in 2017. In fact, its revenues are increasingly only driven by contracting out their e-commerce expertise rather than in online grocery.

The logistics of online grocery make profits hard to get. The products are perishable, need to be kept chilled or frozen as they are stored and delivered, and are not very stackable. Tesco and Ocado showcase the basic approaches available for fulfilling orders. Online orders can be picked and shipped from stores, known as the “store

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fulfillment model”, as is generally the case with Tesco. The other option, as Ocado does, is to use dedicated warehouses. They both have their adherents, with the former being a bit faster (by being closer to customers) and the latter a bit more efficient (with less handling of goods).

Amazon has tried to insert itself in the market, most notably with Amazon Fresh. Using the dedicated warehouse model, the effort began in Seattle in 2007 and slowly rolled out until it reached 11 cities and opened in London in 2016.

Amazon has tweaked the pricing model several times and late last year announced that Amazon Fresh was shutting down in five markets.

Whole foods Last summer, Amazon bought Whole Foods, and it has dominated the grocery conversation since. Despite Whole Foods having less than 2% of the US market, shares of competitors plummeted 5-10%.

When Amazon implemented a new store replenishment system, the system that replaces whatever goods have been sold, it almost immediately caused seemingly catastrophic results.

Vendors began complaining about imposed cost increases and expectations, employees rebelled, and the availability on the shelf began to suffer. This may be the precursor to disrupting the whole market or, more likely, Amazon is learning the ropes of a new business.

But as many predicted, Amazon is using Whole Foods as a platform for online grocery as well as a new pillar of its Amazon Prime program. The Whole Foods clientele is upscale and there is a natural overlap between Prime and Whole Foods. In order to benefit from lower prices and promotions, Whole Foods shoppers must be Prime members. In fact, the Whole Foods loyalty program has now been folded into Amazon Prime. This will enable

Views shared by: Ralf Seifert is professor of Operations Management at IMD. He directs IMD’s new Digital Supply Chain Management program, which addresses both traditional supply chain strategy and implementation issues as well as digitalisation trends and new technologies.

Richard Markoff is a supply chain researcher, consultant, coach and lecturer. He has worked in supply chain for L’Oréal for 22 years, in Canada, the US, and France, spanning the entire value chain from manufacturing to customer collaboration.

Amazon to receive valuable data on its grocery consumers, which it can use to keep the best stock and predict buying patterns.

The latest effort by Amazon to revolutionise the grocery industry is to leverage the Whole Foods platform and offer Prime members free two-hour delivery in two pilot markets by using the store fulfilment model.

Almost no one is making money offering next-day delivery. So, to introduce that to grocery deliveries could disrupt the market. Amazon famously operates at best at break-even for its e-commerce business (as opposed to other

ventures like cloud hosting). Should Amazon demonstrate the same willingness to lose money in online grocery, its competition will come under intense pressure.

It’s possible that, through a combination of the higher Whole Foods price points and the recent increase in Prime membership fees, Amazon sees a path to profitability.

After all, in China, Alibaba is revolutionising online grocery by positioning itself as a fast, upscale alternative to normal supermarkets. The Amazon approach with this Whole Foods pilot bears some resemblance. Whole Foods stores are in dense urban areas and are in close proximity to their clientele who have more income and a taste for organic, healthier food choices.

Amazon Go A few months ago, Amazon turned heads with the public opening of their Amazon Go store in Seattle. The shop has no cashiers and uses a checkout process by using technology like computer vision and deep learning to capture products customers take from the shelves. It’s exciting, fun, and may be a glimpse into the future of retail as Amazon just announced it is expanding the stores to two new cities in the US. But before Amazon Go can be considered a grocery revolution, it will have to evolve its scalability. The Seattle store is a mere 167sqm with a very restrained product catalogue. For comparison, the typical US grocery store is almost 4,000sqm and offers about 40,000 different products.

Amazon certainly has grabbed headlines and attention with its recent grocery moves. Some like Amazon Go, may prove to be genuine innovations. When looking at their recent moves with Amazon Fresh and Prime, Amazon may end up disrupting online grocery, but only for select, affluent, and urban consumers.

This article was first published in The Conversation.

Customers waiting to enter the Amazon Go store, during the opening day at the Seattle Amazon headquarters in January 2018 // VDB Photos

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Ca s e S t u d y

Successful, together Business for Social Responsibility (BSR) partnered up with ANN to improve and facilitate efficiency for 100,000 women in the latter’s global supply chain labour force

via Shutterstock

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hrough its work with BSR and participation in BSR’s HERproject, ANN, the parent company of Ann Taylor, LOFT, and Lou & Grey, was able to set—and achieve—its commitment to empower 100,000 women in its global supply chain community between 2012 and 2018.

The Challenge ANN is a purpose-driven company that aims to help women “put their best selves forward every day.” Women comprise more than 70% of ANN’s supply chain labor force, and company leaders recognised this opportunity to help improve the lives of those women who are manufacturing their products.

ANN therefore set out to deepen its investments in women’s empowerment in supply chains. ANN started its partnership with BSR’s HERproject in 2012. Following discussions between BSR and company leaders, in 2014, ANN made its pioneering ‘100,000 Women Commitment’, through which the company committed to empower 100,000 women working in its global supply chain community.

The Strategy BSR worked with ANN’s corporate responsibility team to design and implement a strategy to realise its bold commitment.

The first pillar of this strategy was a deepened investment in HERproject—BSR’s flagship women’s empowerment initiative, which uses peer-to-peer training to enable women workers to acquire and share knowledge and skills on health and financial literacy. HERproject brings together international companies, their suppliers, and local partners to deliver workplace-based trainings that increase women’s knowledge and selfesteem, while also strengthening management systems to create inclusive workplaces. ANN expanded its work with HERproject to include 58 factories in China, India, Indonesia, Vietnam, Bangladesh, and the Philippines.

In addition, through this partnership, ANN was instrumental in designing and implementing a new iteration of the HERproject platform, the “HERnetwork” methodology, implemented by “HERtoolkit.” HERnetwork and HERtoolkit were created to train local NGOs on the HERproject, allowing them to implement HERproject programs independently. Through the HERtoolkit, BSR was able to increase the reach of the trainings to women that would not have otherwise had access to these programs, and work toward sustaining the program as another resource for factories to use to reach the women.

Importantly, ANN became the first American women’s specialty retailer to commit to the UN

Women’s Empowerment Principles (WEPs)— seven principles that provide a holistic framework to empower women in the workplace, marketplace, and community. ANN committed to integrating these principles into its responsible sourcing practices to ensure its supply chain supports women. In 2018, ANN, under the umbrella of the Ascena Retail Group, launched a revised Code of Conduct for suppliers that incorporates a gender lens, which ensures that specific obstacles that women workers face are incorporated into the company’s expectations of suppliers.

Outcomes and Impact In March 2018, ANN announced that it had achieved and surpassed its 100,000 Women Commitment earlier than expected.

Through the widescale implementation of HERproject across six countries, more than 2,800 peer educators were trained, which led to a sharing of knowledge and skills with more than 104,000 women.

These outcomes led to impressive results for workers in ANN’s supply chain. Specifically, ANN and HERproject have measured the following: • A 38 percentage point increase among women that have performed a self-examination to recognise symptoms of breast cancer • A 26 percentage point increase among women in the use of sanitary napkins rather than scraps of cloth from the factory • A 25 percentage point increase among women in awareness that HIV can be prevented • A 50 percentage point increase among individuals in the feeling that they will be able to meet their families’ future expenses in the next two years In addition, the 100,000 Women Commitment has helped suppliers of ANN improve

their performance. ANN and HERproject have measured a 4.5 percentage point decrease in turnover and a 22 percentage point decrease in products requiring rework, signaling stronger efficiency and accuracy in products made by these women across 37 factories in six countries.

ANN also engaged its customers in this effort by communicating in stores, multimedia, and through a microsite about the ongoing success of the project.

Lessons Learned The 100,000 Women Commitment demonstrated the motivating power of a bold commitment.

Such a commitment enabled ANN to mobilise its key stakeholders and ensure continued investment in its supply chain women’s empowerment programs.

The implementation of the commitment also reinforced the power of the peer-to-peer methodology for reaching large numbers of women workers in global supply chains.

Finally, the project highlighted how investing in women generates positive returns—for women, their families, and their communities.

The positive impacts on women’s health and financial behavior were also mirrored by positive business impacts for suppliers. HERproject gives suppliers the framework and the guidance to share knowledge on healthcare and financial literacy with their workers. The suppliers have taken ownership of the program by customising it to meet their workers’ needs, whether through health fairs or having local doctors come in and run health clinics or nutritional sessions for men and women. As a result, ANN has strengthened its relationships with its suppliers and developed a model for generating systemic improvements for workers in global supply chains.

via Shutterstock

Logistics News ME | July 2018 | 47

Supplier News

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Up d a t i n g y o u o n t h e r e g i o n ’ s s u pp l i e r s

FarEye expands footprint in European market with first office in London

FarEye, a global digital logistics platform, announced the opening of its first European office in the heart of London, with an aim to expand its business foothold in the region and to serve its customers directly.

With a total of six corporate offices in India, Dubai, and Singapore, FarEye currently serves customers in over 20 countries.

FarEye boasts of marquee clients like DHL, Blue Dart, and Walmart, enabling more than 100 companies across retail, logistics, e-commerce, healthcare, and food sectors globally. FarEye’s logistics management software helps in digitising end-to-end operations by automating field processes and workforce thus eliminating inefficiencies in logistics.

Already leveraging its software solutions for customers in Europe, the company sees humongous scope in the market. To capitalise the explosion in online sales in Europe, which is estimated to reach $700bn a year by the end of 2018, FarEye has launched its first office 48 | Logistics News ME | July 2018

in the continent. Some of its innovative offerings in the market include – Drop&Pick, a cloud-based web and mobile application to enable parcel shops; FarEye Visibility suite; Foodeligent, an artificial intelligence-based platform to cut food delivery time by 15%; Delivery Happiness Platform, among others.

Commenting on the same, Kushal Nahata, co-founder and CEO, FarEye, said: “The opening of our first office in Europe is a crucial step towards our business growth strategy.

With a strong presence in Indian, GCC, and Southeast Asian countries, expanding our physical presence in Europe would help us widen our horizon and serve the market. We are aiming at the growing sectors of retail, e-commerce, courier and postal, and food delivery in the European market by bringing the most effective technology solutions to all our customers.

Our unique and innovative solutions, built with robust technology framework, would help the companies streamline their operations and impart a superior customer experience.”

Hactl helps offload 18.8T machinery components for AirBridgeCargo Hong Kong Air Cargo Terminals Limited (Hactl) – Hong Kong’s largest independent cargo terminal and freighter ramp operator – has handled two charter flights for its customer AirBridgeCargo Airlines, each carrying 20m long machinery components weighing 18.8 tonnes.

The outsize loads were carried on two of the airline’s brand-new B747-8 freighters from Schiphol, Netherlands, to Hong Kong; their final destination was Guangzhou on the Chinese mainland.

Due to their length, the machinery components were secured to customised built up pallets and had to be unloaded through the aircrafts’ nose doors. Unable to use cranes due to local regulations, Hactl deployed four main-deck loaders, which had to be lowered in per-

fect alignment to avoid any damage to the cargo.

Manoeuvring the unloaded cargo from aircraft side to the cargo terminal presented a further major challenge; traffic on the ramp road was temporarily re-routed, and a direct path to the terminal was cordoned off, to provide a straight journey without any sharp turns.

Remarked Hactl COO Chee Hong Tan: “These were among the longest shipments we have unloaded from B747 freighters, and required extreme care due to their size, weight and delicate nature. It’s at times like this that the vast experience and skills of our ramp team really come into their own, ensuring this unusual cargo was handled with the necessary care, and that the aircraft departed on schedule.”

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Boeing, Turkish Technic collaborate on fleet care maintenance Boeing and Turkish Technic Inc., the maintenance, repair and overhaul (MRO) arm of Turkish Airlines, announced signing of a Global Fleet Care supplier agreement.

Turkish Technic is now a strategic Boeing supplier for line maintenance, heavy maintenance of airplanes, component service, and repair.

Boeing and Turkish Technic will collaborate together in the training and certification of technicians from different parts of the world.

Ahmet Karaman, general manager of Turkish Technic Inc., said: “We provide a broad portfolio of MRO services in 50+ international line maintenance locations as well as our existing base maintenance facilities in Istanbul and Ankara. In addition to the current services we provide, more will be available to our customers at our brand-new facilities, located at Istanbul New Airport as of October 29, 2018. We are so glad to announce such a remarkable collaboration with Boeing today, which will significantly contribute and add value to our business in our new home base. Within the extent of Boeing Global Fleet Care program including aircraft maintenance, repair and training, Boeing operators will be able to experience the world class quality of Turkish Technic’s MRO services through this agreement.”

Last year, Boeing and the Turkish Government announced the Boeing Turkey National Aerospace Initiative, launched to support the growth of the Turkish aerospace industry, in conjunction with the

targets set by Turkey’s Vision 2023, that were specially designed for the 100th establishment anniversary of the Turkish Republic.

The initiative outlines a strategic framework that aligns Boeing investment and programs with the Turkish Government, Turkish airlines, aerospace service companies, and industry suppliers in the areas of research, engineering, and skills development.

“Turkey is one of the Boeing’s top strategic growth countries, and we see strong capability and growth potential in aviation services and maintenance in Turkey,” said Marc Allen, president of Boeing International. “Positioning Turkey as a global player in aviation services is one of the key elements of the Boeing Turkey National Aerospace Initiative we announced last year. With this agreement, we are taking our successful collaboration with Turkish Technic one step further in a manner that aligns to the growth of Boeing and Turkey.”

Through its Global Services division, Boeing provides technical support to more than 60 customers and over 2,500 airplanes through its Global Fleet Care program.

This customisable portfolio offers engineering and planning activities associated with managing the technical performance of the airplane.

A power-by-the-hour based offering, Global Fleet Care solutions in the form of engineering, materials, and maintenance programs bring inherent efficiency to airline operations.

Nestlé, XPO Logistics collaborate on 5.92ha distribution centre in UK

Nestlé and XPO Logistics are co-creating a 5.9ha distribution centre at the new SEGRO East Midlands Gateway Logistics Park in Leicestershire, UK. The facility will be occupied predominantly by Nestlé for its consumer-packaged goods and will function as a testbed environment for XPO technology prototypes prior to global release.

The custom-designed distribution centre, scheduled to complete in 2020, will feature advanced sorting systems and robotics alongside automation co-developed with Swisslog Logistics Automation. The site’s digital ecosystem will integrate predictive data and intelligent machines to deliver one of the most advanced distribution management centres in the world.

The XPO-owned facility will be strategically located in the Midlands to benefit from direct access to the M1 motorway for road transport, the East Midlands Airport for cargo flights, and an onsite rail freight terminal with direct access to the major UK ports of Southampton, Felixstowe, London Gateway, and the Channel Tunnel.

Nestlé director of Supply Chain, David Hix, said: “We are thrilled to be working with XPO Logistics to build a flagship digital warehouse and technology laboratory at the East Midlands Gateway Logistics Park. This is a world-first investment for Nestlé that builds on a century and a half of proud history in this country. Our partnership with XPO will encourage innovation and experimentation in our UK logistics operations and help future-proof our business. We will be able to be even more responsive for our customers across our brands, which include some of the most recognisable in the world.”

Richard Cawston, managing director, Supply Chain, XPO Logistics Europe, added: “Nestlé has entrusted XPO with the digital architecture for its future vision. The new East Midlands centre will operate as both a think tank and a launch pad for XPO innovations, with far-reaching impacts on the way business is done. We look forward to an inventive collaboration with Nestlé.”

Logistics News ME | July 2018 | 49

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The key exhibitions, conferences, and seminars coming up this month

July

3-5

July

4-6

ASEAN Ports and Shipping Johor, Malaysia The 16th ASEAN Ports and Shipping exhibition and conference will take place in Johor Bahru, Malaysia, located on one of the busiest shipping routes in the world. The two-day event will see a gathering of senior port executives, alongside shippers, cargo owners, importers-exports, freight forwarders, and more. Key topics in discussion include maritime investment in the ASEAN region, container trade, impact of blockchain and other technology, and intermodal connectivity, amongst others. The event will also include a technical site visit for all delegates to the ports of Pasir Gudang and Tanjung Pelepas, to see and study first-hand the latest commercial and operational developments taking place at both ports.

Hopsitalog Asia Singapore The HospitalogAsia 2018 conference will bring together a leading faculty of industry experts providing actual case studies in best practices in healthcare logistics. The two-day conference will address various healthcare industry challenges, from controlling operating costs to ensuring hospital efficiency and technology implementation whilst ensuring patient safety. This conference is designed for senior executives from hospitals, integrated delivery networks, and other healthcare facilities responsible for pharmacy, auto identification, patient safety, information systems, medical error prevention, materials management, medication administration, and finance.

50 | Logistics News ME | July 2018

July

17-18

August

16-18

UK Light Rail Conference Manchester, United Kingdom Organised by the Mainspring Ltd, the event will focus on the current developments and future of Light Rail in the UK. Creating efficiencies from data-rich systems, disruptive transportation models, and technologies are key subjects of interest. 2017 saw parallel streams on strategy, scheme development and funding, and technical and operational innovation. Topics for 2018 include creating efficiencies from data-rich systems; disruptive transportation models and technologies; creating climate resilience; intelligent depots and maintenance by design; next-generation traffic priority measures; mobile and wearable tech as the great enabler for accessibility, and more.

Transport & Logistics Philippines Manila, Philippines Transport and Logistics Philippines is the region’s leading exhibition of delivery vehicles, trucks, transport system, material handling, and logistics and supply chain equipment. Aside from the exhibition, there will be a conference and various seminars where experts will share the latest trends, advanced technologies, and best practices in the market. The event gathers thousands of entrepreneurs, agents, purchasers, and end-users each year. Also happening alongside is the Transport and Logistics Forum, discussing topics such as paving way for an efficient logistics sector, improving Philippines’ connectivity and efficiency in supply chain, transport & logistics: the role in PH’s economic development, and more. www.cbnme.com

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