Logistics News ME - February 2018

Last Mile Delivery

F ly i n g E y e H o s p i ta l

Tyres

Vital piece in the eCommerce puzzle

Eye-care now more obtainable via Orbis

Trends in the regional market

Connecting trade professionals with industry intelligence

FEBRUARY 2018

APM Terminals Great voyages begin here

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TRUCKS

Start 12 | News 20 | Op-ed Sprii’s insight on the growing potential of mCommerce

Features 22 | Cover story Bahrain’s APM Terminals is positive of growth in 2018 30 | eCommerce Last mile delivery plays major role in consumer preferences 34 Report Agility studies global markets in its annual logistics index 38 | Commercial

vehicles Experts comment on the challenges and growth in the regional tyre market

44 | Healthcare

Orbis is transporting healthcare to the world— literally

20

48 | Viewpoint An analysis of ABC classification for supply chain inventory 52 | Supplier News 54 | Diary

38

TO THE FINISHING LINE

30

44 Logistics News ME | February 2018 | 3

www.cbnme.com

CEO Wissam Younane wissam@bncpublishing.net

Editor’s Note

I

n the ninth annual Agility Emerging Markets Logistics Index, the UAE is first in the region and is ranked third globally, after China and India, for a fourth consecutive year, staying atop the compatibility and connectedness sub-indices. The country is also attributed the number one spot for quality of infrastructure.

The report states that the UAE maintains its high ranking across several indices with its abundance of free trade zones, no corporation tax, the offer of full ownership, and unlimited repatriation of profits, still setting the benchmark for emerging markets.

In the 50-country index rankings, compiled from economic, trade, and social data, the world’s two largest markets, China and India, come out on top again. Russia moves up three spots to the seventh amid a resumption in growth.

Brazil, struggling to climb out of its worst recession in a century, slipped to the ninth spot. Egypt, Bangladesh, and Uruguay are among those making impressive gains in the index. Egypt is the standout of the 2018 index, vaulting six countries to 14th in the rankings, the largest jump of any emerging market.

The February issue provides more details about the report (Read page 34).

This issue also digs deep within the eCommerce sector, where industry leaders talk about last mile delivery in the

region. People nowadays are more addicted to buying from the comfort of their houses rather than venturing out.

How do the companies tackle the growing demands of consumers efficiently is what the story highlights.

This issue also gives a sneak peek into the third annual Breakbulk Middle East, the only exhibition and conference in the region specifically for the project cargo and breakbulk industry. More than 60 exhibitors, representing the end-to-end value chain for the transport of oversize cargo, will be present at the show.

Hope to see you there!

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

Sales Manager Lionel Matthews lionel@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 Executive Mark Anthony Monzon mark@bncpublishing.net

Paromita Dey Editor paromita@bncpublishing.net @paromitadey1 linkedin.com/in/paromita-dey

Photography Hayder Al Zuhairi

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On the web Keep up to date with all the latest news, features and much more on our website.

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Opinions expressed are solely those of the contributors.

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Re g i on a l N e w s

Regional News An update from around the region

For News, features and more, Visit www.CBNme.com/logistics-news Follow us on twitter for breaking news: @logisticsnewsme Follow us on Facebook for up-to-the-minute breaking news

Growth

Emirates SkyCargo reports strong 2017 growth

E

mirates SkyCargo, the freight division of Emirates, completed a year of strong growth in 2017. The air cargo carrier’s robust performance, set against the backdrop of a resurgent global air cargo market, was underlined by the introduction of specialised customer focused air transportation solutions across a number of industry verticals, and by continued investment in infrastructure.

Between January and December 2017, Emirates SkyCargo’s hubs at Dubai International Airport (DXB) and Dubai World Central (DWC) saw a combined cargo throughput of over 2.5 million tonnes.

In response to increasing demand from its customers, Emirates SkyCargo introduced a range of air transport solutions specific to industry verticals including Emirates Pharma, Emirates Wheels, and Emirates Fresh.

Emirates Pharma, developed for the secure transportation of temperature sensitive pharmaceuticals from origin to destination, has been extremely well received by pharma customers worldwide.

Volumes of pharmaceutical cargo travelling through Emirates SkyCargo have grown by 38% since launch.

Emirates SkyCargo also worked with DuPont on developing a new thermal cover called White Cover Xtreme, offering enhanced protection for cargo in hot, cold and wet weather conditions. Emirates SkyCargo operates world-class EU GDP 12 | Logistics News ME | February 2018

certified facilities at its hub in Dubai to ensure secure transportation of life saving medicines and treatment.

Emirates Fresh has helped producers around the world transport fruits, vegetables, flowers, and other perishables including fresh fish and meat. In 2017, Emirates SkyCargo transported over 285,000 tonnes of perishables across its network. In February Emirates SkyCargo unveiled a unique rose decal on one of its freighter aircraft to highlight the importance of air cargo to the floriculture industry.

With the introduction of Emirates Wheels, Emirates SkyCargo has been transporting close to 150 cars a month not only in the peak summer season, but throughout the year. In addition to individual customers, the air cargo carrier has worked with major car manufacturers and distributors to transport premium and luxury cars.

With its focus on structured and customised offerings, Emirates SkyCargo is well positioned to further address customer needs in 2018 in other sectors including e-commerce.

In May 2017, Emirates SkyCargo entered into a first of its kind strategic operational partnership with Cargolux.

The two carriers started working together on a number of operational areas including block space and interline, aircraft charter and hub connectivity. In October, Emirates SkyCargo and Cargolux

announced a code share agreement for cargo. Emirates SkyCargo has had one Cargolux Boeing 747 freighter aircraft chartered full time since June 2017.

In the UAE, Emirates SkyCargo signed an MoU with Mohammed Bin Rashid Space Centre to become the space science centre’s preferred partner. In the e-commerce segment, the air cargo carrier entered into an understanding with Dubai CommerCity to develop new solutions for the global e-commerce industry and to strengthen Dubai’s position as a global hub for e-commerce.

In addition to offering belly hold cargo capacity on its fleet of 254 wide body passenger aircraft, Emirates SkyCargo also offers freighter capacity on its fleet of 13 Boeing 777-Fs and one Boeing 747400ERF. In 2017, Emirates SkyCargo’s fleet of freighters transported cargo to more than 140 destinations including scheduled and charter operations.

In addition to commencing scheduled freighter services to Luxembourg in June 2017, the air cargo carrier also increased frequency of freighter services to Hong Kong from 22 to 26 flights a week. Unique cargo transported onboard Emirates’ freighters included horses, luxury cars, boats, heavy equipment, and aircraft engines.

Emirates SkyCargo facilitates global trade flows by transporting cargo across six continents and over 155 destinations.

Freighters from the Emirates SkyCargo fleet connect over 40 scheduled destinations across the globe.

Emirates SkyCargo was acknowledged in a number of industry forums this fiscal year, including the ‘Best Cargo Airline Middle East’ award at the annual Cargo Airline of the Year 2017 awards organised in London by Air Cargo News; ‘Best Air Cargo Carrier- Middle East’ at the 2017 Asian Freight, Logistics and Supply Chain (AFLAS) Awards held in Singapore by Asia Cargo News; and the prestigious DHL Carrier Award for Reliability and Excellence (DHL CARE) for pharma in Singapore in June 2017. www.cbnme.com

Aviation

Airbus launches airframe for first next-gen airlifter Airbus has rolled out the first structurally complete airframe for the new BelugaXL, the first of a fleet of the next-generation airlifters from its assembly hangar in Toulouse, France.

Once operational, these aircraft will be used to transport completed sections of Airbus aircraft among the company’s European production sites and to its final assembly lines in France, Germany and Spain.

The BelugaXL is one of the most voluminous aircraft in existence, and everything about it speaks to that fact. With a bulging upper forward fuselage and enormous cargo area, the BelugaXL is hardly recognisable as the outsized airlifter version of the Airbus A330-200 jetliner from which it is derived.

“We have the A330 as a foundation,” said Bertrand George, head of the BelugaXL programme, “but many changes have been successfully designed, introduced into the aircraft and tested. Transforming an existing product into a super transporter is not a simple task.”

This initial BelugaXL is expected to be flying by mid-2018. “The whole team is really looking forward to seeing its first flight and, of course, its smiling livery,” said George, referring to the supersized smile that will be painted across the ‘face’ of the transporter, the winning design of six options presented to Airbus employees for a vote in early 2017.

Before that can happen, the aircraft will undergo a months-long battery of tests after installation of its two jet engines, ensuring each of the BelugaXL’s systems function as intended.

George added: “We will perform bench tests in Toulouse and Hamburg, Germany – testing our systems on flight simulators and in laboratories, as well as using hydraulic jacks to simulate flight loads on full-scale copies of specific joints between the new upper bubble and A330’s lower fuselage.

“The data from these tests will be used to clear the aircraft for flight and, later on, to attain type certification,” the official pronouncement of the aircraft’s safety and airworthiness.

While the first structurally complete BelugaXL moves into its testing phase, the

second A330 to be converted into a BelugaXL arrived on schedule in Toulouse to begin its integration process. George noted that with lessons learned from the production of the first transporter, the assembly time for the second is expected to be about two months shorter.

The BelugaXL programme was launched in November 2014 to address Airbus’ increasing transport requirements. At six metres longer, one metre wider, and with a payload lifting capacity six tonnes greater than the BelugaST transporter version, it is replacing, the BelugaXL will be able to transport both wings of the A350 XWB jetliner at once, instead of the single wing currently accommodated on the BelugaST. All told, five BelugaXLs are scheduled to enter service for Airbus’ airlift needs.

Bitesize news

Emirates Group Security and Etihad Aviation Group signed an efficiency and security agreement for the benefit of both groups’ customers, both within and outside the United Arab Emirates.

RTA will operate a free circular bus route as an alternative service following the full closure of the rail track of the Dubai Metro Red Line between Nakheel Harbour & Tower Station and JLT.

Flag carrier Oman Air carried 8.542 million passengers in 2017, a record 10.9% increase, as compared to the 7.7 million passengers ferried in 2016. The total fleet capacity increased to 48, for the same period.

The cruise quay at Port Rashid received four cruise ships simultaneously, late December– Aida Stilla, Main Chef 5, MSCSplendida, and Coasta Mediterrania– a first in its history.

Logistics News ME | February 2018 | 13

Re g i o n a l N ew s

Finance

Bahri Dry Bulk secures SAR360mn funding from Saudi bank

Bahri Dry Bulk, a business unit of global transportation and logistics leader Bahri, has announced that it has secured a Sharia-compliant funding of SAR360mn from Bank Albilad, to finance the purchase of four new bulk carriers as part of an agreement signed by the company in 2017 with Hyundai Mipo Dockyard (HMD), a member of Hyundai Heavy Industries (HHI) Group, the world’s largest shipbuilding company based in South Korea.

The credit facility, which will be paid over six months, and has a tenure of 13 years including a three-year grace period, will be used to finance 80% of the agreement concluded on August 27, 2017. The company has provided all the necessary guarantees for obtaining the loan, including a pledge of the four carriers upon delivery from the shipbuilding yard.

“We are pleased to collaborate with Bank Albilad to obtain this Shariacompliant credit facility for purchasing the four carriers, which we signed in the fourth quarter of 2017 with Hyundai Heavy Industries (HHI) Group, to enable 14 | Logistics News ME | February 2018

us to cater to the growing demand for the import of essential grains into KSA,” said Ali Al-Harbi, CFO of Bahri.

“It also makes us proud that the financing deal with Bank Albilad, which is known for its initiatives to support the Kingdom’s business development and economic growth, contributes toward the concerted efforts made by different sectors in the country to help meet its wide-ranging needs and further cement its pre-eminent position as a global economic powerhouse,” added Al-Harbi.

Nezar Banabeela, president of Bahri Dry Bulk, said: “The new funding from Bank Albilad is a major milestone for Bahri Dry Bulk, as we are keen on expanding our business into new markets in the region and globally, to explore new horizons of growth, and play a key role in supporting the Kingdom in achieving the national goals and strategic directions of the government. Moreover, with the addition of four new carriers to our fleet, we will be fully equipped to cater to the increasing demand for essential grains, such as barley, wheat, and corn, in the country.”

Crane Worldwide Logistics sets foot in Dammam

Crane Worldwide Logistics opened its doors in the Kingdom of Saudi Arabia in January 2018, with a fully operational office based in Dammam.

Covering airfreight, ocean freight, and logistics services, the operation is strategically located in Al-Khobar, that is served by King Fahd International airport and King Abdul Aziz Port.

Gerard Ryan, regional vice-president EMEIA, commented: “Saudi Arabia is seen by ourselves and many of our clients as an upcoming logistics hub. With economic diversification as a focus, commercial growth is paving the way for transport infrastructure development particularly at airport and ocean ports. It is an exciting time for us to be opening our doors in Saudi Arabia with our experienced team. We openly invite new clients to try our technology, products, and services, and discover why Crane Worldwide is highly recommended by others in the Middle East region.”

John Magee, president and CEO at Crane Worldwide Logistics, said: “Our new operation in Saudi Arabia is yet another step forward in our commitment to our client’s business in the Middle East. As the major crossroad between Asia, Africa, and Europe, having our own offices in strategic locations across the Middle East region will provide us with the opportunity to expand the services and benefits we are currently offering our clients in other regions.”

Crane Worldwide Logistics also has its own entities in both Dubai and Abu Dhabi with business across a number of sectors including automotive, aerospace, and energy.

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Boeing unveils unmanned electric cargo air vehicle prototype Boeing has unveiled a new unmanned electric vertical-takeoffand-landing (eVTOL) cargo air vehicle (CAV) prototype, that will be used to test and evolve Boeing’s autonomy technology for future aerospace vehicles.

It is designed to transport a payload up to 226kg for possible future cargo and logistics applications.

Greg Hyslop, Boeing’s chief technology officer, commented: “This flying cargo air vehicle represents another major step in our Boeing eVTOL strategy. We have an opportunity to really change air travel and transport, and we’ll look back on this day as a major step in that journey.”

In less than three months, a team of engineers and technicians across

the company designed and built the CAV prototype. It successfully completed initial flight tests at Boeing Research & Technology’s Collaborative Autonomous Systems Laboratory in Missouri.

Boeing researchers will use the prototype as a flying test bed to mature the building blocks of autonomous technology for future applications.

Boeing HorizonX, with its partners in Boeing Research & Technology, led the development of the CAV prototype, which complements the eVTOL passenger air vehicle prototype aircraft in development by Aurora Flight Sciences, a company acquired

by Boeing late last year.

Steve Nordlund, Boeing HorizonX vice president, said: “Our new CAV

prototype builds on Boeing’s existing unmanned systems capabilities and presents new possibilities for autonomous cargo delivery, logistics and other transportation applications. The safe integration of unmanned aerial systems is vital to unlocking their full potential. Boeing has an unmatched track record, regulatory know-how, and systematic approach to deliver solutions that will shape the future of autonomous flight.”

Powered by an environmentallyfriendly electric propulsion system, the CAV prototype is outfitted with eight counter rotating blades allowing for vertical flight. It measures 4.57m long, 5.49m wide, and 1.22m tall, and weighs 339kg.

Ports

DP World highlights key strategies; saw positive trade recovery in 2017 Growing global trade opportunities, diversifying its business across the supply chain, and exploring smart innovation technologies were key strands of DP World’s operations in 2017 which included over $1bn in capital expenditure year to date.

A series of acquisitions, technology tie-ups, and sustainable business achievements all formed part of the activities that saw the global trade enabler expand its business horizons across the world.

The expansion at Prince Rupert in Canada opened for business, DP World Limassol in Cyprus opened a new cruise terminal, work began on a new logistics centre in Kigali (Rwanda) and at a new terminal project in Posorja (Ecuador).

Also in the Americas, DP World took 100% ownership of Embraport in Brazil. In Asia Pacific, they saw the consolidation of Pusan (South Korea), while in Africa they started officially operating DP World Berbera port (Somaliland) under a 30-year concession.

DP World Group chairman and CEO, Sultan Ahmed Bin Sulayem, said: “The recovery of global trade in 2017 has

been stronger than expected and we are pleased to have outperformed market growth once again. We are on course to deliver approximately 10% growth in gross volumes for 2017, and look forward to continued growth in 2018.

“Notable landmarks included strengthening our partnerships in Brazil, Ecuador, Kazakhstan, Cyprus, Somaliland, India, Egypt, and Mali with a range of infrastructure investments to enable global trade and connect countries to international markets. This was coupled with a series of acquisitions such as the inclusion of Dubai Maritime City and Drydocks World to the Group’s operations, expanding our

service offering to customers. We have also stepped up container handling productivity at our flagship Jebel Ali Port, by adding 1.5 million twenty equivalent units (TEU) to Container Terminal 3 (T3).”

Bin Sulayem added: Our activities aimed at providing added value to our customers at further points in the global supply chain by growing our logistics, industrial parks and freezone operations, and smart digital trade solutions. We have also ensured our sustainable business practices have progressed, joining the United Nations Logistics Emergency Teams (LET) partnership to support humanitarian disaster relief; supporting the development of Hyperloop technologies that could revolutionise the movement of goods across continents; and winning the coveted Dubai Quality Award, evidence of our ongoing commitment to excellence in everything we do.

All of this happened to a backdrop of continued revenue growth, proof that we have a robust portfolio of businesses and a successful strategy to ensure the sustainable growth of our company.”

Logistics News ME | February 2018 | 15

Re g i on a l N e w s

DAFZA launches foreign direct investments strategy The Dubai Airport Freezone Authority (DAFZA) has launched a new strategy to help attract more foreign direct investments (FDIs) to the sectors and support the ‘Dubai – Capital of Islamic Economy’ initiative.

Under the directive of Sheikh Ahmed bin Saeed Al Maktoum, chairman of DAFZA, the ‘DAFZA’s Strategy for Islamic Economy’ is based on strategic initiatives involving the Islamic economy and halal sectors.

It consists of three main directions and 20 strategic initiatives that will be implemented within the coming five years to help achieve the vision of making the Islamic economy more added value and competitive advantage to DAFZA. Sheikh Ahmed affirmed his belief in DAFZA’s high level of competitiveness which ensures the best results in all the freezone’s practical works to enable it to become among the most advanced freezones in the world. He emphasised the importance of the strategy in view of the rapid local and global growth of the Islamic economy, especially after the UAE was ranked first in the Arab World and second globally in the Global Islamic Economy Indicator.

Dr Mohammed Al Zarooni, director general of DAFZA, said: “In the next five years, the ‘DAFZA’s Strategy for Islamic Economy’ will enhance the role of the freezone as an effective partner in achieving the UAE’s aspiration of becoming a leader in all fields and categories. We are proud of our achievements over the past years and we look forward to a promising future that reinforces DAFZA’s position as a leading hub for business, trade and investment.”

He added: “We are also eager to remain a key player in the development of the national economy and the Islamic economy in particular which has become a central sector within Dubai’s economy. The Islamic economy promises prosperity and growth for investors and will positively influence the GDP of the emirate. The Islamic economy is becoming increasingly important due to the high demand for Sharia-compliant products and ser-

16 | Logistics News ME | February 2018

vices. By launching this new strategy, DAFZA aims to broaden its role in the development of the Islamic economy sector, which conveys all the elements of success and growth of various economic sectors.”

After conducting a comprehensive study on the requirements of the Islamic economy market, DAFZA built the strategy based on three main directions for the next five years. The first will focus on two key initiatives: creating a new source of revenue growth for DAFZA by attracting investors in the Halal sector, and providing adequate support for existing customers that intend to enter the sector.

The second will emphasise DAFZA’s role as a major motivator for the growth of the Islamic economy and the local Halal sector in Dubai by developing 10 initiatives that fully support existing and new investors seeking to expand their business and invest in the Islamic economy. The third and final direction will involve eight initiatives that support the establishment of a Halal ecosystem capable of attracting leading companies in Halal industries that include food, fashion, pharmaceuticals, and cosmetics, among others.

‘Dafza’s Strategy for Islamic Economy’ aims to attract more FDI into

the Islamic economy to help the sector increase its revenues and double its contribution to Dubai’s GDP. The strategy is expected to attract more than 40 new investors in various sectors of the highly promising Islamic economy. A report issued by the Dubai Islamic Economy Development Centre covering the period from 2016 to 2017 estimates the global worth of the Islamic economy at $1.9tn. The strategy will help place DAFZA at the forefront of global freezones that support this economy.

DAFZA’s strategy has various initiatives covering all aspects of the Islamic economy, including Shariacompliant initiatives and others related to e-commerce and the Islamic economy. It also covers various initiatives that will define the future of the Islamic economy in the UAE and Dubai and will encourage Halal industries to follow its standards and encourage multinational companies to enter and invest in the Halal sector as well.

In addition, DAFZA will explore investment opportunities within highpriority markets that exported Halal products to the UAE in 2015 such as Singapore, India, France, the Netherlands, Italy, Britain, Germany, America, Turkey, China, Saudi Arabia, and Oman.

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airport

Dubai International Airport reports 7mn passengers in November 2017

The upward trend in passenger traffic continued at Dubai International Airport (DXB) with the hub welcoming close to seven million passengers in November 2017, according to the monthly traffic report issued by operator Dubai Airports.

Passenger traffic at DXB reached 6,953,596 in November compared to 6,581,805 recorded in the corresponding month in 2016, an increase of 5.6%. Year to date, passenger numbers at DXB have risen 5.8% to 80,387,442 compared to 75,947,899 recorded during the same time frame in 2016.

Once again, the most significant contribution to passenger numbers came from the Indian Subcontinent and Western Europe. The two regions were up 7.5% and 8% respectively, and more than 1.5 million passengers travelled through DXB from each region in the month of November.

These figures were reflected in the top cities, where London (310,551) and Mumbai (217,279) were the highest.

For the first time in four months, 18 | Logistics News ME | February 2018

Saudi Arabia (534,906) climbed to the second spot in terms of passenger numbers by country, moving in front of the UK (507,796). India (999,625) remained the top destination country for Dubai International.

November’s flight movement figures at DXB totalled 33,421 down 3.7% on 2016, however, the average number of passengers per flight during the month remained high at 215, up 7.3% year on year.

Freight volumes handled at DXB during November increased by 0.4% in a year-on-year comparison, with tonnage totalling 235,651 compared to 234,743 for the same month in 2016. The year to date cargo volume reached 2,425,475, up 2.7% from 2,362,332 recorded during the first 11 months of 2016.

Paul Griffiths, CEO of Dubai Airports, said: “Over the past year, Dubai International has witnessed consistent growth in terms of passenger traffic.

Given the high passenger traffic volumes we welcomed in December, we anticipate ending the year on a positive note.”

UAE firm acquires Amazon logistics centres for $144mn

UAE-based Gulf Islamic Investments (GII) announced the acquisition of nearly 9.2ha of logistics centres for Amazon for $144mn.

The two Grade A logistics centres, located in Dortmund, Germany, serve as Amazon’s key logistics centres supplying goods to 29 other facilities. The newly built facilities are leased out to Amazon on a long-term lease, with regular rental uplifts linked to Germany CPI. Mohammed Al-Hassan, cofounder and CEO, said: “GII’s real estate investment strategy is to have an exposure to good yielding commercial assets with investment grade tenants. We believe this transaction perfectly matches our investment strategy.”

He added: “Dortmund offers a strategic location for a highgrowth market and is one of the most important logistics hubs in whole Europe. Germany also produces about one-quarter of the EU’s GDP, with investment safety rates and remarkable returns. AlHassan confirmed that GII plans to keep acquiring high quality income yielding real estate assets in the US, UK, and Germany.”

Pankaj Gupta, co-CEO of GII said the property marks its fifth international real estate asset and the first in Germany, adding that its total investment in the European market has crossed $500mn.

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JTS to establish 20,000sqm tank depot in SOHAR Joint Tank Services (JTS) will establish a new depot in SOHAR Freezone on a 20,000sqm green-field site. The tailor-made facility will be dedicated to cleaning, storage, repairs and support services for ISO tanks in line with the growth of tank container traffic in SOHAR Port.

With the new facility in SOHAR, JTS plans not only to consolidate existing services to the tank container industry, but also to expand its portfolio in the future by developing business offerings directly to the chemical industry.

This may include areas such as chemical drumming, warehousing and distribution as the value-added petrochemical industry grows in SOHAR. Construction of the new JTS facility is expected to start during second quarter of 2018, subject to approval from the relevant environmental authorities in Oman, and trial operations should be underway by the fourth quarter of 2018.

SOHAR Freezone CEO, Jamal Aziz, speaking after the signing of the land

lease agreement, said: “Throughput at our Hutchison-managed container terminal has increased threefold in the past five years. As our new Liwa Plastics Project comes on-stream at SOHAR, we are going to see phenomenal growth in the petrochemical and downstream plastics industry here, with pursuant growth in the number and complexity of ISO containers being handled through the port. Having specialists like JTS on hand will help to create the kind of world-class cluster we are hoping for, putting Oman on the

map as a major plastics producer.”

Tank containers are made to ISO standards of stainless steel, usually surrounded by a protective insulating layer of polyurethane and aluminium. The tanks are mounted in the middle of a steel frame so they can be handled like regular twenty-foot containers. Originally developed in the UK in the 1960s, there are estimated to be upwards of 400,000 ISO tank containers in service in the world at any one time, built to a variety of specifications to transport hazardous and non-hazardous cargoes.

Agreement

Drydocks World, SBM Offshore sign TMS construction agreement Dubai’s Drydocks World, a marine, onshore, and offshore services provider, has signed a contract agreement with Dutch-based SBM Offshore to carry out the construction of the turret mooring system (TMS) for Statoil’s Johan Castberg floating production storage and offloading (FPSO) vessel.

The Johan Castberg FPSO will be permanently moored by the internal TMS at the Johan Castberg field in offshore Norway. The system will allow the vessel to passively weathervane around the anchor legs while simultaneously transferring fluids, power, and communications signals between the vessel and subsea equipment.

Drydocks World will be responsible for detail design of certain specified works, bulk procurement and construction, including Super Duplex piping work and TLER/TLIR module.

Mohammad Rizal, Drydocks World’s

chief operating officer, commented: “Drydocks World has a strong track record in delivering Turret Mooring Systems with an excellent safety and quality record. We have delivered the world’s largest turret to SBM Offshore, which positioned our yard as a global specialist with expertise in delivering large complex projects. This is the third turret that SBM

Offshore has awarded to Drydocks World.”

He added: “Our long-term business relationship started from 1996 with the first FSO conversion and since then we have successfully completed several FPSO projects. Drydocks World is committed to once again deliver a safe and quality product in a timely manner that fully meets our client’s expectations.”

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O p -e d

It’s Mobile!

Sarah Jones, founder and CEO of the eCommerce startup Sprii, talks about the rise of mobile shopping and tactics for attracting customers to this platform

If 2017 was the year Dubai embraced the notion of eCommerce in its entirety, then 2018 is set to be dominated by the rise of mobile Commerce. After all, penetration rates are higher in Dubai than almost anywhere else in the world; our smartphones are our lifeline to connect, to shop, to plan. What better way for retailers to reach their consumer than with a smart shopping experience that engages and converts without being overtly sales led?

Other markets are well versed on harnessing this form of commerce. Figures from IMRG and Capgemini released last year confirm that mCommerce is increasing at a rapid rate in the UK, with 51% of online retail sales coming via mobile during the latter part of 2015 to January 2016.

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The U.S. too boasts impressive figures. In 2014, according to data from the U.S. Census Bureau and comScore, mobile transactions made up 11.6% of the $303bn U.S. eCommerce total.

BI Intelligence used the above data to forecast future growth, pegging it at a staggering 45% of the total US eCommerce market by 2020.

Growth in this area has been swift in the Western world, but it’s not without its issues.

Low consumer confidence with mobile payments and a frustrating interface experience has perhaps slowed its acceleration.

The potential for mCommerce in Dubai is huge— for 2018 and beyond. It will continue

The potential for mCommerce in Dubai is huge— for 2018 and beyond. It will continue to evolve with other market developments, our own consumer habits, and advancements in technology.” www.cbnme.com

to evolve with other market developments, our own consumer habits, and advancements in technology.

Businesses face a challenge in ensuring consumers have a seamless experience, whatever platform they choose to shop on, and acknowledging issues faced in other markets. Desktop, mobile web, and apps— all need to be optimised for easy navigation and use.

The minute one of these platforms is unresponsive, you have lost your user. The window is only two seconds to get it right, so it’s imperative as an online business to not rush any decisions just because competitors have jumped on the bandwagon, or indeed the trend has emerged.

Think Like the Consumer It’s very easy to simply take a desktop site and migrate it to mobile, but the way we respond (to the mobile site) is completely different. Our expectation about how to navigate changes, and

aligning the UX and UI is key to a smooth transition. Put yourself in your user’s shoes— what do you want from the experience, how do you want to use the platform; it’s a real eye opener.

Data Driven Targeting There’s nothing worse than blanketed communications that lack the personal touch, which is where specific targeting comes into play. Businesses need to be prepared to spend time getting to know their core consumer and anticipating their needs to engage first and convert later.

Smarter Shopping Consumers are demanding more and more from their experiences online, so there is a real opportunity to capitalise on this. Create an efficient checkout process, pre-populate data fields, produce an easy to navigate search tool, and you have the basis for repeat, and crucially, loyal customers.

‘A true entrepreneur is a doer, not a dreamer’. Sprii chief Sarah Jones is living proof of this. Bitten by the bug at just 14, Sarah set up a profitable eBay business importing items from across the globe and selling in the UK, igniting a love for eCommerce and developing an acute business mind in the process.

Four years later, a degree in Economics at Edinburgh University beckoned, which not only heightened Sarah’s financial acumen, but also her highly competitive nature. Her placement at Deloitte London in the retail M&A team led to an international secondment in the Middle East just a few years later.

Spotting a gap in the eCommerce market on arrival, Sarah quickly secured funding to make her idea a reality and Sprii was born.

Sprii’s operating model is 100% dropship, working with authentic distributors, and shipping products directly to the end consumer via third party logistics partners. The technology is custom built, in-house, and provides automated inventory management, a seamless ordering process for customers, and quick delivery regionally.

Website: www.sprii.com

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C ov e r Sto ry

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Centre of

Activity

Mark Hardiman from APM Terminals Bahrain talks to Paromita Dey about the efficient operations of the port operator and its 2018 plans

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n June 2017, 17 shipping container terminals run by APM Terminals were hacked, including two in Rotterdam and the other 15 in different parts of the world. APM Terminals is part of Mærsk Group, operating a global terminal network of 72 operating port and terminal facilities and 140 inland services operations, employing 20,600 people across five continents. Headquartered in The Hague, Netherlands, APM Terminals ranks third globally in container throughput by equityweighted market share.

In 2006, APM Terminals formed a joint venture with YBA Kanoo Holdings to operate the port establishing APM Terminals Bahrain. It’s multi-purpose facility is designed to handle one million twenty foot equivalent unit (TEUs), providing state-of-the-art logistical solutions.

Container operations commenced in 2009, after the Khalifa Bin Salman Port (KBSP) was built on reclaimed land at Hidd, west of the capital of Manama, replacing the older Mina Salman facility. The port currently features four STS cranes with a container outreach of 18 rows, capable of handling vessels of 10,000 TEUs capacity with an annual throughput capacity of one million TEUs. Mark Hardiman, managing director for APM terminals Bahrain, remarks: “The operations in Bahrain is on a concession basis from the Government. We have a 25-year

concession from the Bahrain Government to operate the port.”

When APM Terminals was hit by a largescale cyber-attack on its systems, including those of the KBSP’s operating company, Hardiman mentions that the operator had taken all precautionary measures and procedures and activated the alternative contingency plan to deal with the current situation. “It was a large-scale cyberattack that affected the whole group. What we did in Bahrain was to set up a very good contingency plan and revert to manual operations until we got our systems back and running. We were quite well-versed and as a result, never delayed any vessels. Yes, there was a bit of a delay in getting the gates operational but that was only a day and half to lose.

“We saw a bit of a reduced productivity due to the manual operations as compared to the system-driven ones, but atleast we were able to keep things up and running. There were delays to the cargo, but it was minimised with what we had at that point of time. It was an unfortunate event but it’s the kind of world that we live in now. Cybersecurity is paramount for everybody.”

The operating company coordinated with the Ports and Maritime Affairs and set up a work team to conduct the port’s operations, according to the alternative plan, says Hardiman, adding that work went on as normal at all berths regarding the reception of ships carrying general

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C ov e r Sto ry

We set up a very good contingency plan during the cyberattack and revert to manual operations until we got our systems back and running. ” Mark Hardiman cargo and container ships, as well as the handling of cargo to and from those ships.

In June 2017, the operator marked a milestone with the arrival of the largest container ship ever to call the KBSP. Orient Overseas Container Line (OOCL) Singapore had an overall length of 366.469m and a capacity of 13,208 TEUs. Hardiman remarks: “It is the biggest that we have handled so far. There are bigger vessels in service, but this was our biggest one.

At the moment, we are running up to 40-50% of our vessel capacity, so there are no plans to upgrade currently. Obviously, the dynamics of the shipping industry keeps changing.”

Commanding bigger capacity is not commercially justified, and hence Hardiman points out that they will settle with the current capacity for some time now. “We have got the biggest vessel now and my feeling is that we will settle with that for some time

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now. From the commercial side as well, it doesn’t justify for the shipping lines to bring in bigger vessels because it is not economical if they are empty. At this point, there are no plans of doing massive expansion.”

In April 2017, APM Terminals Bahrain announced plans to launch a new general cargo terminal operating system (GC-TOS) to optimise operational efficiency and customer experience. The new system, which will initially focus on digitising KBSP’s maritime services followed by general cargo and billing, will be key to driving greater transparency and turnaround times, resulting in faster and efficient cargo flow at the Kingdom’s world-class commercial port.

The implementation of the GS TOS is a critical first step by APM Terminals towards digital transformation to improve the management data between the port, cargo owners, shipping lines, and other stakeholders. With this, the planning capabilities of the port will

get enhanced through a centralised information portal including cargo booking and movement, documentation, pre-arrival notifications to name a few. This will further facilitate immediate improvements in terminal productivity and customer service.

Hardiman says: “The rapidly changing maritime landscape calls for continuous investments and transformations in port operations and logistical solutions, to satisfy customer requirements and growing general cargo volumes. Integrating digital solutions into our trans-shipment operations will help catalyse the collaboration and coordination among the many stakeholders and help us to manage activities at the quay, yard, and gate.

“Most importantly, it will maximise efficiencies for the entire supply chain providing stakeholders real-time data and insights, transparency and reliability; creating business value for them. This will further increase port’s competi-

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tiveness, helping KBSP achieve its ambition of becoming the region’s leading trans-shipment centre of the Upper Gulf.”

Hardiman opines that 2017 was a comparatively good year than 2016. “2017 has been good. We had a bit of a disappointing 2016 but we had a good 2015. In 2015 – 2016, the container volumes grew marginally, around 2-3%, which was actually not bad. In 2017, we had about 7% increase from 2016.

“The big hit that we took in 2016 was from the general cargo side because we are not handling only containers but other things as well.

We witnessed a 45% drop in the general cargo volumes from 2015-2016. In 2016-2017, we had around 25-30% increase in the same.”

He also adds that owing to the major number of infrastructure projects that are underway in Bahrain including the BAPCO Sitra Refinery expansion project, Alba Line 6 expansion project, and the cargo coming in for the new

Mondelez factory, have stimulated containerised and non-containerised volumes for the operator. “We have a lot of cargo in the yard coming in for these projects and it has been good for us.”

In 2018, Hardiman predicts that there will be probably a good amount of consolidation among the shipping lines. “We might see some changes in the market dynamics and the trans-shipment volumes. There is a lot of overcapacity in it.”

Hardiman mentions that it has been a challenge to compete in the trans-shipment market.

“We try to capture some of the Northern Gulf.

It is a challenging market due to the overcapacity. The issue with Bahrain is that we are little bit further into the Gulf. What we are try to do is focus all our efforts on the target volumes that we are looking for.

“Our value proposition is very much around the fact that we are a bit closer to Kuwait and Iraq, so the time for a feeder vessel to go from

Bahrain to Kuwait is less than to turn around and come as compared to go to Southern Gulf and come back.”

In 2017, the operator had announced plans for an Initial Public Offering (IPO), but Hardiman says that it didn’t materialise because of the challenged local market. “The situation was not very conducive for the IPO. We have been in discussion with the Bahrain government to fulfil the obligations that we have as APM Terminals Bahrain in a different way. We are in the process of finalising the deal around in Q1 2018, but not in the form of IPO.” Hardiman says that there will be probably mid-single digit increase in terms of container volumes. He concludes: “There will be an increase for both containerised and non-containerised volumes. We are very optimistic about 2018. The infrastructure projects are stimulating the economy, which in return, means improved volumes for us.”

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E v e n t r ev i e w

In safe hands Intersec 2018 edition saw big names and even bigger discussions at its 20th edition

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ntersec, the world’s leading trade fair for security, safety, and fire protection, ran from January 21-23, 2018, with its double digit annual growth over the last 20 years mirrored by the rapid transformation of the Middle East market.

Intersec was held under the patronage of HH Sheikh Mansoor bin Mohammed bin Rashid Al Maktoum, who opened the 20th anniversary edition.

Held at the Dubai International Convention and Exhibition Centre, Intersec 2018 featured 1,337 exhibitors from 59 countries. The threeday event spanned 60,000sqm of exhibition space across 13 halls, and featured 19 of the world’s top 20 commercial security solutions providers. Compared to the 61 exhibitors at the inaugural show in 1999, it’s clear that Intersec has developed into a global force.

At the show’s official press conference held

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mid-January, analysts Frost & Sullivan (F&S), revealed that in 1998, the Middle East’s homeland and commercial security market combined was worth just $52.4mn. Since then, the market has grown at an impressive CAGR of 33%, and is currently worth $12.2bn, while by 2022, it is predicted to touch $25.3bn.

The steep rise in the regional market is matched by the trade visitor count to Intersec, which in 2018, rose over 32,000 from 129 countries, compared to just 3,100 in 1999. They were treated to latest innovations and solutions across the seven show sections of commercial security, fire and rescue, safety and health, homeland security and policing, information and cyber security, smart home and building automation, and physical and perimeter security.

Ahmed Pauwels, CEO of Intersec’s organiser Messe Frankfurt Middle East, highlighted new additions to the 20th annual showcase,

spearheaded by a new indoor Drone Zone and Drone Pavilion. He said: “New features in 2018 included an indoor Drone Zone, where the Dubai Police and Dubai Civil Defence are among those delivering live demonstrations of their latest drones and UAVs in action.”

The event also saw forums held on drones and artificial intelligence, where 25 government representatives from the USA, Oman, UAE, Saudi Arabia, and Singapore, including regional regulators lead the 70-strong speaking panel throughout the three-day program.

Pauwels added: “Intersec 2018 also saw the return of regular popular highlights such as the Safety Design in Buildings Pavilion, Smart Home Pavilion, as well as an Outdoor Demonstration Zone of the latest fire rescue applications. The exhibition floor itself saw more than 5,000 brands, and dozens of global product launches from the world’s leading solutions providers.”

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E v e n t r ev i e w

Panasonic Middle East is focusing on bringing the Japanese brand quality to the region, and aims to provide the best solutions according to the environment of the market we’re in.”

Tetsuo Okawa, Panasonic The UAE was the second largest exhibitor country at Intersec 2018, with 223 exhibitors covering 10,500sqm of exhibition space, a 6% increase over the previous year. Founding Sponsor NAFFCO was one of the headline UAE companies, and one of the key exhibitors in 2018 that participated at the inaugural Intersec in 1999. From a 12sqm stand 20 years ago, NAFFCO covered 1,700sqm at the Dubai World Trade Centre, from where it showcased its vast range of UAE-made firefighting equipment, protection systems, trucks and vehicles.

Meanwhile, Intersec’s vast international reach was graced by 15 country pavilions from Canada, China, Czech Republic, France, Germany, Hong Kong, India, Italy, Korea, Pakistan, Singapore, Taiwan, UK, USA, and for the first time in 2018, Russia.

Tetsuo Okawa, senior sales and marketing manager, Panasonic Marketing Middle East

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and Africa, highlighted Panasonic’s key solutions at the event, which included the new H.265 compatible outdoor PTZ camera, featuring high-quality full HD WV-X6531NS video resolution with outstanding low light sensitivity of 0.015lx. The heavy-salt damageresistant camera is a new addition to Panasonic’s i-PRO Extreme X-series PTZ (Pan/Tilt/ Zoom) cameras.

Okawa commented: “Due to the growing trend in the camera market, it is getting difficult to differentiate between Chinese manufacturers and others. Panasonic Middle East is focusing on bringing the Japanese brand quality to the region, and aims to provide the best solutions according to the environment of the market we’re in.

“Our niche market focus is on industry complexes, and seaside areas such as ports or oilfields or logistics arenas, where we

aim to provide a high-grade product for such tough environments.”

Okawa mentions that the regional demand for security and surveillance solutions has been healthy, but there has been a rise in competition as well, especially with the evolution of technology.

“In simple terms, high-resolution cameras are now the norm,” remarked Okawa. “But we have the advantage of having an entire division dedicated to consumer and prosumer cameras.

This allows us to offer the best video solutions, with original technologies such as stabilisers, ClearSight Dome coating (which prevents rain drops and dust from collecting on the dome surface), and high-quality camera sensors, setting us apart from the competitors.”

Okawa believes that the clients too have become more informed and are aware of the growing need for better solutions. He added: “The security business is growing, and customers are not

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The key trend everybody is talking about in 2018 is artificial intelligence. ” Stephen Jones, Seagate just thinking about security. They are also looking at integration of solutions—for instance, gate operations with cameras. These new solutions are in demand, and we are combining our technology with video management systems to bring a total package to the end user.”

Stephen Jones, EMEA surveillance manager at Seagate, throws light on the HDD storage company’s surveillance storage technologies, and spoke about the SkyHawk, SkyHawk AI, and Exos X12 products and solutions from its partners Hikvision and Dahua.

Jones commented: “Surveillance is a strength and key market for us. We see two distinct sections within the surveillance market: a box market, dominated by Chinese manufacturers, and we see the systems market, which is made up of IP, high-end technology, systems integration, open platform ecosystem partners, and so forth.

“We have our traditional surveillance brand SkyHawk, and now the latest SkyHawk AI, plus the Exos enterprise range, because we understand that in the Middle East, a lot of systems applications use enterprise storage technology.”

The SkyHawk is optimised for DVRs and NVRs, tuned for 24x7 workloads in capacities up to 10 TB, while the SkyHawk AI is specifically designed for deep-learning and artificial intelligence (AI) surveillance applications.

Typical technology such as advanced video analytics, facial recognition, and other intelligent tech embedded within the camera or servers, can benefit from the latter.

Jones added: “The key trend everybody is talking about in 2018 is AI. Since the tech is still in its infancy, we’re not fully sure of what the demand is going to be like. There is certainly going to be an explosion in data growth in

the next few years, and the importance of data is going rise. For instance, a surveillance camera in a retail store could be enabled to detect the exact number of consumers coming in or be designed to heat map and run in software analytics for various parts of the store, and that’s where AI is really going to benefit us.”

Other ‘originals’ in 2018 included Pelco by Schneider Electric, Teleste, Corodex, Dafoos Fire Protection, Siemens, Zener Electronics, the British Security Industry Association (BSIA), Technoalarm, Kidde Fire Protection, Kidde International, and Vicon Industries.

Pauwels further commented: “Intersec aims to be at the centre of it all, presenting an important platform to network, create and strengthen partnerships, share information, and keep up to date with the latest innovations driving the regional and global security, safety, and fire protection industries.”

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EC o mm er c e

Winning the last mile delivery game is vital for any eCommerce company today. Mehak Srivastava takes a shot at analysing this ever-changing leg of delivery

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one are the days when one would step out to buy the latest pair of shoes or to test out an expensive make-up palette.

Today, the world is at the consumer’s fingertips, literally. One click, and you enter the Internet which holds all that which you require—from groceries, to clothes, electronics, books, baby-care products—you name it, and the website has it, all accessible while you rest on your easy-chair. The entire process is conducted online, save for the final leg of the journey where a human—for now, before the robots and droids take over—delivers the package to the consumer.

This leg is known as last mile delivery.

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“This was tougher than I thought” As the shift from brick and mortar to online retail continues, the difficulties of managing last mile delivery grows. New customer expectations regarding time to delivery, overall delivery experience, and open communication have forced online retailers to invest in new technological solutions to manage their delivery operations.

Nour Suliman, CEO of DHL Express Middle East and North Africa, comments: “Last mile delivery has significant impact on the final price paid by the end consumer. Many of the challenges do come with this last leg and can amount to as much as 30% of the total

delivery costs. This can be detrimental to ecommerce players in the rise of a more priceconscious customer segment.”

Increasing competition in the realm of eCommerce ensures that every portal out there has to be quicker than the next. Data from studies conducted by McKinsey & Company showed that nearly a quarter (23%) of consumers are willing to pay extra for same-day delivery. Taarek Hinedi, vice president of FedEx Express Middle East and Africa Operations, comments: “eCommerce customers want delivery options that suit their needs, whether that be super-fast delivery or nominated day delivery, or even flexible signatory options.

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Idriss Al Rifai, Fetchr

Hassan Hallas, One Click

Faster fulfilment and flexible shipping options are requirements for eCommerce businesses to successfully gain and retain customers. This is particularly the case amongst millennials, as revealed by stats from McKinsey & Company, 30% of whom are willing to pay a premium for same-day delivery.”

“Where do we go?”

Kushal Nahata, CEO and co-founder of Indian startup FarEye, highlights the key issue faced by logistics providers in the region—a coordinated address system. He explains: “With over 30 million online buyers and one of the highest per capita income in the world, the

Middle East region has tremendous growth opportunity. However, eCommerce in the region has not flourished as rapidly as it should have.

One of the key reasons for this is the challenges involved with last mile delivery. While 63% customers in the UAE and 54% customers in Saudi Arabia would pay more for sameday delivery, the ‘unclear’ addresses make it extremely difficult for carriers to ensure timely, accurate and cost-effective deliveries. The legacy delivery systems also do not provide the precise information about orders to the buyers.”

FarEye offers a digital logistics platform which utilises geo-intelligence and FarEye’s personal database of more than one billion stored addresses

to provide better vehicle routing and scheduling than many address-mapping companies.

“Another layer of intelligence is further applied to convert the text-based addresses to geo-pins on map for optimal routing,” explains Nahata, “saving a substantial share of the ‘lastmile’ cost that constitutes about 28%-32% of the total logistics costs, thus reducing miles per delivery. It also empowers customers with realtime visibility by providing live tracking links and zero-error ETA.” Middle East-based companies like fetchr and One Click too have risen to the challenge to make the task of last mile deliveries easier. fetchr operates across two main categories of products, B2C (for businesses) and C2C (for individuals and small-to-mid-sized businesses), offering services that include last mile delivery, international services, warehousing, fulfilment, COD, CCOD, bullet service (30 minutes delivery), etc.

Idriss Al Rifai, co-founder and CEO, fetchr, remarks: “We consider ourselves a technology company that enables logistics, and not the other way around. Technology cuts across all of our operations and interactions with our clients. Our patented smartphone technology allows us to deliver to a mobile phone, so we’re no longer restricted to a physical address. This is a unique differentiator in emerging markets where the lack of street addresses makes delivering for all businesses a nightmare. We also employ route optimisation and dynamic dispatching as part of our daily operations.”

One Click works along similar lines. CEO and co-founder, Hassan Hallas, explains: “Technology enables our services to continuously get smarter by proper use of data as a compass tool to fixing the unorganised addressing system within the region, operational and load route management/optimisation, and most importantly allowing the end consumer the full visibility and live tracking throughout the shopping experience.” Middle East Venture Partners (MEVP) recently made an undisclosed investment in One Click, which Hallas remarks will be used to accelerate their growth plans, team, and technology.

“Is technology impacting the game?”

The McKinsey & Company report predicts that driven by consumer preferences and drop density (for example, longer distances in rural areas greatly increase last-mile costs), three consumer delivery models—also known as X2C, or some form of goods delivered to consumers—are likely to dominate the last mile in the future: autonomous ground vehicles with parcel lockers, drones, and bike couriers.

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EC o mm er c e

Nour Suliman, DHL

Taarek Hinedi, Fedex

Ammonia cooling systems

Kushal Nahata, FarEye

fetchr is conducting applied research with planned incremental roll-outs leveraging UxV’s (Unmanned Aerial/Ground Vehicles) to help with the last mile delivery process using a hierarchical fleet system.

“This may involve using trucks, motorbikes, then UGV’s to complete a given delivery cycle,” explains Rifai. “The purpose would be to improve efficiency with minimal human intervention throughout the last mile process thereby reducing per unit operational costs.” Rifai also

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believes that last mile costs represent a big portion of an eCommerce business costs, sometimes exceeding 50% of the costs. He says: “As the logistics market continues to be disrupted through the power of technology, we’re seeing that cost going down. This enables e-commerce businesses to drop their prices and reach a wider segment of customers who want to buy products from the local or international markets while enjoying a good customer experience.”

Industry experts like FedEx and DHL have

had their own share of the technology pie. FedEx offers an interactive eCommerce delivery solution, FedEx Delivery Manager, which provides customers extra flexibility by allowing recipients to customise the timing and location of their deliveries at no extra cost. Recipients expecting deliveries to their residence will receive a notification by email from FedEx when their package is shipped. The recipient can choose to change the delivery instructions as per their convenience in a few simple steps via

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Spanning the supply chain

TO THE FINISHING LINE a secured website, and have the shipment delivered to their office instead.

Hinedi adds: “FedEx also offers a smart tracking device called SenseAware, which provides customers and retailers with to-theminute updates on their shipment, including details such as location alongside temperature, humidity, shock and more.”

Suliman remarks: “At DHL, we are constantly seeing new advanced methods taking shape in the last-mile space, in the likes of au-

tonomous vehicles and drones already being used commercially in Europe and the US, and now delivery bots are being trialed in the last mile. DHL Lockers, secure delivery boxes, incar deliveries, click and collect and automated door openers meet the needs of the consumer for convenience and choice whilst Geo-coding, GPS positioning, and location mapping increase accuracy of delivery, speed, and lower costs. The options are endless, and it is a very exciting journey ahead.”

Specialised local companies are sprouting out to grab a piece of the last mile delivery business. This is in turn also fueling the development of last mile technology and new infrastructure solutions.

SPAN Group is one such company, whose technology development team is embracing these changes and a range of various input devices or equipment that were not part of the intralogistics business just a few months ago.

As an intralogistics integrator, SPAN provides complete e-commerce solutions to fulfilment centres. They ensure that their e-commerce customers enable their supply chains to meet the challenges of today, and tomorrow. For example, SPAN provides route sorters equipped with weighing, dimensioning, and route validation options to help customers achieve a more efficient operation.

Efficiency and accuracy gains within the warehouse help last mile providers to differentiate themselves and provide a faster and more accurate delivery.

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R e p o rt

Monitoring the market Agility’s annual market index aims to provide a deeper understanding of the world’s most vibrant markets. LNME brings you key highlights from GCC, India, and China

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n late January 2018, Agility, one of the world’s leading providers of integrated logistics, and Transport Intelligence (Ti), a leading analysis and research firm for the industry, released the ninth annual Agility Emerging Markets Logistics Index.

The index, in its ninth year, is a broad gauge of economic competitiveness that includes a survey of more than 500 logistics industry professionals and a data-driven analysis of 50 emerging markets countries by size, economic strength, infrastructure, transport connections, and business climate.

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In the 50-country index rankings, compiled from economic, trade, and social data, the world’s two largest markets, China and India, come out on top again. Russia moves up three spots to No. 7 amid a resumption in growth. Brazil, struggling to climb out of its worst recession in a century, slipped from No. 7 to No. 9. Egypt, Bangladesh and Uruguay are among those making impressive gains in the index. Egypt is the standout of the 2018 index, vaulting six countries to No. 14 in the rankings, the largest jump of any emerging market.

Nigeria, Kazakhstan, and Venezuela are among countries that disappointed. There is mixed news for others, including Ukraine and the Philippines.

GCC This year’s index scores and rankings of GCC countries have perhaps not shifted as much as one would think given the upheaval experienced in the region in 2017. The data has not yet caught up with events so next year’s figures are likely to be more volatile.

This year, the worst performer by score was

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Saudi Arabia, which fell by 0.19 points and slipped one rank to No. 6. Its market size and growth sub-index score fell by 0.30 points as its economic growth forecasts were cut and its financial stability worsened.

Compatibility also fell as foreign direct investment (FDI) was down, non-tariff barriers became more burdensome, and the business costs related to security worsened. The connectivity sub-index remained the same.

Kuwait also struggled as it fell three places to No. 29, although its score declined by just 0.13. Its compatibility sub-index score slumped by 0.60 points as its security-related business costs worsened.

Index scores for the UAE (-0.06 to 7.01, level at No. 3) and Bahrain (+0.08 to 5.24,

up one place to No. 22) did not change much. Oman registered a greater improvement of 0.13 points to 5.75, holding its rank of No. 13. Its compatibility sub-index improved by 0.29 on the back of improved economic diversification.

Indeed, political developments affecting a number of GCC countries have stolen the headlines in 2017.

The most obvious episode that directly affected the logistics sector was the June 2017 economic isolation of Qatar imposed by Saudi Arabia, Egypt, Bahrain, Yemen, and the UAE. In addition, later in the year in Saudi Arabia, more than 200 princes, ministers, and businessmen were detained on anticorruption charges. Reports suggest that the elites being

held may be allowed freedom in exchange for a certain proportion of their assets, boosting public finances.

Social and cultural reforms in Saudi Arabia are pressing ahead too: women will be allowed to drive from summer 2018, and cinemas may open for the first time in decades.

At the heart of it all is Muhammad bin Salman (commonly known as MBS), Saudi Arabia’s 32-year old crown prince who is poised to become the Kingdom’s strongest ruler in decades, with King Salman bin Abdulaziz expected to hand over the throne soon.

Vision 2030, the crown prince’s plan, aims to reduce the country’s dependence on oil by diversifying its economy. Among many objectives, the plan aims to boost non-oil exports, raise the contribution of the private sector from 40% to 65% of GDP, the share of small and medium-sized enterprises (SMEs) from 2% to 35% of GDP, and vault Saudi Arabia from number 25 in the Global Competitiveness Index to one of the top 10.

In other words, it aims to fundamentally transform the economy.

All other GCC markets have similar plans for structural economic change, sparked into action by the oil price crash.

One common economic change that has grabbed headlines is the introduction of VAT across the GCC. VAT of 5% across goods and services will be introduced at the beginning of 2018. GCC logistics providers expect a surge in volumes in the run-up to the introduction of the tax and something of a lull afterwards. Overall, the introduction of VAT will improve governments’ fiscal positions, but may have an adverse impact on demand as prices increase.

In summary, there is almost universal approval of the GCC’s economic transformation plans. Politically, however, things are murkier.

The war in Yemen has proved costly, and not all GCC members support the isolation of fellow GCC member, Qatar. Economic reforms promise much for the development of formal logistics processes and diversification across the GCC, but the events of 2017 show that supply chain disruption is never too far away.

India and China China’s overall index score increased by 0.12 points to 8.00 this year. Once again, it sits atop the overall index ranking and has also maintained its positions at the top or near the top of all three sub-indices. There is little change to speak of. Its score primarily improved due to superior economic forecasts

Logistics News ME | February 2018 | 35

R e p o rt

compared to last year. Many argue that China’s gross domestic product (GDP) growth is illusory. The argument here is not that the figure itself is incorrect (although there are those that would make that case), but that the government’s GDP growth targets of recent years have only been met due to huge levels of debt-financed investment in ‘unproductive’ projects. Based on official Chinese GDP figures, estimates suggest that China’s debt-toGDP ratio has surpassed 300%. Unofficial estimates put China’s debt-to-GDP based on ‘productive GDP’ above 800%.

On the other hand, the index this year reveals little change for India, as its score fell by just 0.02 points to 7.12. It has maintained its rank of No. 2, behind China. It may perhaps surprise some that India has not progressed, given the hype around its economic reforms, but the data has not yet really had a chance to catch up. Greater change to its index score should be expected next year.

One of India’s key economic reforms in this year included the demonetisation initiative. On November 8, 2016, the Indian government surprisingly announced that it would remove all existing 500 and 1,000-rupee notes from its economy, meaning 86% of its cash could no longer be used, effective from midnight of the same day. These may sound like high denominations, but 500 rupees was worth, on average, just over $7 or just under €7 in 2016. These were the bank notes that households, businesses, and retailers were primarily using for transactions every day. Old notes needed to be exchanged for new 500 and 2,000 rupee notes.

The motivation behind the move was to curtail the shadow economy and crack down on the use of illicit and counterfeit cash to fund illegal activity. The upshot was that demonetisation proved to be a short, sharp shock on the Indian economy, but most of its effects were relatively short-lived. While jarring, it forced Indian businesses and consumers to rapidly adopt modern cashless payment systems and techniques. It severely negatively impacted the informal logistics sector (small, unorganised, often one-person operations) in the short run, but looks to be a shot in the arm for the organised logistics sector in the long run, particularly if it dismantles corruption, as some have suggested.

The other major initiative is the Goods and Services Tax (GST) reform package, which was rolled out on July 1, 2017. These have replaced more than a dozen levies with a single tax regime.

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Key Index and Survey Highlights • Egypt’s improving business climate drove its surge in the index. In market compatibility, the category of the index that looks exclusively at business conditions, Egypt shot up 26 spots, the most dramatic jump made by any country in any portion of the index since it was first published in 2010. Egypt also improved its rank three spots in the area of the index that evaluates infrastructure and transport connections.

• Emerging markets growth prospects look brighter than they have in years to logistics industry executives, who say small and mediumsized companies are the most likely to benefit from fresh acceleration of those economies. Nearly two-thirds surveyed agree with the International Monetary Fund’s 2018 emerging markets forecast of 4.8%-4.9% GDP growth. That would mark the fastest expansion for emerging markets since 2013 and a second consecutive year of higher growth for developing economies, which have slowed dramatically since a 7.4% GDP gain in 2010.

• There is no consensus among supply chain professionals when it comes to the Trump administration’s high-stakes brinkmanship with Mexico and Canada in negotiations aimed at updating the North American Free Trade Agreement (NAFTA). They are sharply split about whether a new agreement would help Mexico (24.3%); hurt Mexico (21.8%); or leave trade broadly unchanged (25.7%).

• Logistics executives are unconcerned, for now, that emerging markets economies will be harmed by Brexit, the UK’s departure from the European Union. Nearly 45% say emerging markets will be unaffected; 25.4% say emerging markets could gain from Brexit through expanded market access. A year ago, nearly 69% expressed concern that Brexit and the failure of various trade initiatives were a threat to trade.

• 55% of those surveyed say small and medium-sized businesses – those with fewer than 250 employees – will benefit most from emerging markets growth. 20% said large companies would be the biggest beneficiaries.

• Cheap labour is losing its attraction as a driver of emerging markets growth in the eyes of logistics professionals. They rate economic growth, foreign investment, trade volumes, location, and transport infrastructure as more important factors.

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1 – 3 May 2018 www.automechanikaDubai.com

The largest international trade exhibition for the automotive service industry in the wider Middle East Some compelling show figures: 1,955 Exhibitors 30,322 Trade Visitors 25 Official Country Pavilions

57 Exhibiting Countries 136 Visiting Countries 38 International Trade Associations

Register online to visit at www.automechanikaDubai.com/Logistics

C o mm er c i a l V e hic l e s

Grip the

R ad

Tyres are what make a vehicle move ahead—literally. Experts discuss the importance of tyre safety, challenges within the industry, and the Middle East market.

By Mehak Srivastava

38 | Logistics News ME | February 2018

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We’ve seen an increase in the number of budget brands launching in the region, which increased the competitive pressure at that end of the market.”

Mete Ekin, Bridgestone Tyres are of fundamental importance to road safety as they provide the only contact a vehicle has with the road. Basic checks such as making sure tyres are correctly inflated can make all the difference, as the pressurised air inside an HGV tyre has to support the weight of the vehicle and its load. Tyres must also be well maintained in order to keep the vehicle stable as it travels around corners, work in harmony with the vehicle’s main suspension system, and help the vehicle accelerate and brake effectively.

Research by Continental Tyres shows that as many as one in four truck tyres may be running underinflated by 10%. This not only leads to significantly higher fuel costs – as under-inflation can increase fuel consumption by up to 3% - but also contributes to the likelihood of tyre failure, which is currently responsible for 20% of all truck breakdowns.

Continental Tyres and RoadSafetyUAE organised an event in December 2017 to show the German tyre manufacturer’s state-of-theart technology ContiPressureCheck, which

can use data from tyres to save even more lives as well as lower fleet costs.

Ian Jackson, Technical Systems, sales and services manager for Continental Tyre Group, explains how the tyre pressure monitoring system (TPMS) uses an array of sensors to provide live pressure data and additional warnings at the point where there has been both a 10% and then 20% reduction in air pressure inside the tyre, notifying the driver of a problem.

“ContiPressureCheck allows for the safe resolution of a potential tyre incident, allowing the driver to stop at a service station or off the road before the situation becomes critical,” explains Jackson. “As tyre inflation pressure directly contributes to the vehicle’s overall fuel efficiency, providing the ability to constantly monitor this offers the operator the opportunity to reduce their fuel costs.”

In addition to inflation pressure, ContiPressureCheck also constantly measures tyre temperature. According to Jackson, the system looks for spikes in tyre temperatures as it can be an in-

dicator of a failure which, if left untreated, could have costly or even dangerous consequences.

“Should spikes in temperature occur, which when investigated cannot be attributed to the tyres, this flags potential mechanical issues such as binding brake or wheel bearing failures,” he remarks.

According to Jackson, 90% of tyre related breakdowns are preceded by undetected punctures. He says: “Safety is, of course, the primary benefit as the system will pre-warn the driver of any temperature or inflation issues.

Larger commercial vehicles obviously have quite a distance between where the driver is sitting and the tyres themselves, so it is important for them to be aware of the condition of their tyres.”

He continues: “The main benefit with ContiPressureCheck is that it is constantly transmitting live data, continually pre-empting any potential issues in real time.”

With thousands of tyres available, choosing the right tyre for a vehicle and individual driving needs can be quite a task.

Logistics News ME | February 2018 | 39

C o mm er c i a l V e hic l e s

“The key is educating consumers,” comments Luis Ceneviz, managing director - Latin America Tire Operations and Europe Tire Operations, Cooper Tires. “Drivers need to be informed about our products, the benefits they offer, and their performance. Often, consumers simply compare prices, but that does not represent the entire picture. It is up to us to help educate them about topics such as quality and performance as well as safety.

“One of the biggest challenges facing the tyre industry in the region is the import of counterfeit tyres, that are simply not suitable for the conditions in the region. This doesn’t just affect the reputation of the true brands, it affects safety on UAE roads. We are committed to ensuring that consumers are not negatively impacted by the counterfeit trade.”

The Emirates Authority for Standardisation and Metrology (ESMA) recently announced that it was introducing a smart chip system to prevent the use of fakes and monitor the integrity of tyres. It is an intelligent and sophisticated system – the UAE’s is the most advanced system of its type in the world.

Ceneviz further highlights Cooper Middle East’s website, designed to offer a seamless user experience. The website features extensive content including product pages, company information, and a dealer locator, all designed to ensure that customers have easy access to the most up-to-date product and dealer information. It includes a dealer locator tab which allows customers to find their local dealer from among the eight regional dealers that currently operate across five Middle East countries. The website also allows customers to source their perfect tyre, searching by size specification.

Ceneviz comments on the challenges of working in the Middle East: “The overall environment in the region is challenging. It is hot, and vehicles often travel at higher speeds,

One of the biggest challenges facing the tyre industry in the region is the import of counterfeit tyres, that are simply not suitable for the conditions in the region.”

Luis Ceneviz, Cooper Tires

WABCO Holdings, a provider of electronic braking, stability, suspension and transmission automation systems for heavy duty commercial vehicles, has introduced OptiTire, a tyre pressure monitoring system (TPMS). The TPM system allows vehicle builders to choose either external or internal wheel sensors for the tractor as well as for the trailer. Unlike an external sensor, an internal sensor also tracks the tyre’s temperature, which improves pressure monitoring accuracy. By adding temperature data, OptiTire enhances early leakage detection, which helps to improve vehicle maintenance and up-time.

WABCO’s OptiTire system is easy to retrofit and increases fuel economy up to 2% and extends a tyre’s lifetime as OptiTire continuously supports keeping tyre pressure at recommended gauge on the widest range of commercial vehicles.

In addition, WABCO’s OptiTire system is fully compatible with trailer telematics solutions, which depending on vehicle and system configuration, allow for direct communication between the driver, vehicle and fleet manager regarding a suite of real-time vehicle operating data.

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so we have to make sure we design products that can withstand these conditions. The legislative requirements are also unique here, which can present a challenge. Cooper continues to focus on developing products that work for the region.”

Bridgestone, a global tyre company based in Japan, recorded double-digit growth in overall sales volume in the Middle East and Africa, while Firestone, a Bridgestone family brand, saw a strong increase in demand across the region.

Mete Ekin, regional managing director, Bridgestone Middle East and Africa, comments: “2017 presented a particular set of challenges to tyre manufacturers and other related segments. First of all, an increase in raw material prices has hampered the profitability of some brands. At the same time, we’ve seen an increase in the number of budget brands launching in the region, which increased the competitive pressure at that end of the market.

“We expanded our reach to Iran, which is a huge and growing market. Our sales volume also doubled in East Africa following a restructure, while double-digit growth was recorded in the Gulf, Levant and Egypt. Despite the challenges in the market, however, Bridgestone’s commercial segment has shown significant growth in 2017 and more opportunities for growth remain in the market.”

Ekin believes that the influence of changes in Europe will also be felt in this region, especially those concerning sustainability, recycling, and fuel efficiency. “We expect regional governments to take the initiative and increase regulations in these areas, particularly as a global trend for tyres that are both more efficient and manufactured in a sustainable way grows.”

Currently, Bridgestone is globally testing a tyre pressure monitoring system (TPMS) for commercial drivers that would be implemented at truck parks. TPMS sensors will be installed on existing valves and receiver posts at the gates of the truck park, which record data on tyre pressure and temperature. When a TPMS-equipped vehicle drives through a gate with receiver posts, the same data is sent to Bridgestone’s fleet data server via a GSM network.

Truck tyre pressure can therefore be monitored in real time, and if the data is outside of prescribed limits, an email is sent to the fleet and service provider where action can be taken. Across an entire fleet travelling hundreds of miles a day, this one corrective action can have a significant impact on fuel consumption and emissions output.

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Case St udy

Gareth Conley, general manager (UAE) for Byrne Equipment Rental, explains the company’s process of providing A to Z logistics and power solutions for events

42 | Logistics News ME | February 2018

www.cbnme.com

M

edia City Amphitheatre (MCA) has hosted some of the biggest music and cultural events in Dubai for a number of years.

The event space attracts fans from all over the UAE to sample the world class acts that perform live. The end of 2017 was no different with performances from major English artists such as Liam Gallagher and ‘Take That’ to the Egyptian Popstar Amr Diab and the magical Dubai Winter Festival; Dubai MCA had a very busy end to the 2017 event season.

Byrne Equipment Rental was successful in supplying all power, cabins, and ablutions for the six events between October and December 2017, which has been extended to cater for all the events until the end of February 2018 including the popular Emirates Dubai Jazz Festival returning for the 16th year.

The events team work closely with all of the companies that organise each of the individual events, managing the supply of equipment from delivery to completion and ensuring a seamless event is delivered from one event to the next. As each event has bespoke requirements, the technical team is required to analyse the client’s requirements for each of the individual shows and, by working in parallel with the sales team, Byrne was able to provide a turnkey solution for all requirements. As Byrne Equipment Rental has over 10,000+ items of equipment from primary power, secondary power, office cabins, and ablution units, this gave each customer the reassurance that their event was in safe hands and all requirements could be fulfilled.

The overall power requirements for each event varied and Byrne coordinated with each individual third-party vendor to ascertain their electrical demands and provide a power management solution for the entire site including the stage, catering, bars, back of house, and ancillary areas. Byrne’s solution was to divide the power into distinct areas on each plan, as each event utilised 95% of the space at the amphitheatre. The operations team were meticulous in their preparation and providing enough distribution for every area in order to guarantee a sufficient and stable power supply would be provided without any technical issues. With safety at the forefront, the operations team used Byrne’s cable ramps to give the event companies peace of mind that all attendees would be safe from any trips or falls from the distribution.

As Byrne is capable of supplying a full turnkey events equipment solution, they were also able to provide a range of cabins, toilets, and tower lights for the events. Calculating the req-

uisite quantity of ablution units for all events to cover the anticipated event attendance whilst also supplying sufficient cabin space for production and artist areas. Working closely with All Events Services (AES) for the MCA Events, who supplied structures and fencing, Byrne was able to give a full and complete event solution.

The volume of equipment delivered to MCA for all the events demanded that the logistics was carefully planned and executed.

Once again, the close relationships that the sales and technical team had formed with each customer enabled them to work together with all parties involved on site and ensure a smooth schedule of deliveries. Approximately, 35 trailers were utilised to transport the equipment from their facility in Dubai Industrial City over a two-day period. The use of a 75-tonne crane facilitated positioning of the cabins, ablution units, and generators, quickly and efficiently so as not to delay the construction of the stage and VIP structure. The delivery and off-loading experts on site ensured all health and safety measures were implemented and no issues with delivery were experienced.

As each event’s opening night drew closer, Byrne’s operational, technical, and sales team carried out a final review of all areas to ensure nothing had been missed for the upcoming event. Organising diesel for the diesel tanks and tower lights, waste collection and water deliveries for the ablution units, and the supply of cleaners to keep the units looking their best for the customer, all assisted in making the pre-event final preparations smoother for the client. During the event, standby electricians and plumbers are supplied as a further back-up, should there be any technical issues.

The standby team has the knowledge and experience to pre-empt anything that may occur.

Of course, on every event, there are potentially minor technical problems, but having staff on site prevented those problems escalating into major problems.

With 2018 upon us, Byrne has been working hard to ensure they are able to maintain the excellent work that was completed in the latter stages of 2017, and are again collectively working with all parties that have up and coming shows, to continue to supply a full turnkey events equipment solution.

Logistics News ME | February 2018 | 43

H e althca r e

Health takes wings Millions of people across the world lack access to basic eye care; and so, the Orbis Flying Eye Hospital takes the expertise to them.

By Mehak Srivastava

I

t’s not every day that one comes across non-profit organisations and individuals who dedicate their entire life for the underprivileged. To put it in Orbis International’s words— “the gift of sight is priceless, lifechanging and at the heart of what we do.”

Started in 1982 in an effort to curb blindness and raise awareness about preventable eye diseases, Orbis works around the globe in some of the most under-served areas in the world, and their goals are simple— to deliver sight by strengthening local eye care institutions, training staff, introducing ophthalmic technology, advocating for supportive policies, and increasing public awareness about eye health.

The non-governmental organisation (NGO) collaborates with local partners— hospitals, universities, government agencies, and ministries of health— to provide hands-on ophthalmology training, strengthen healthcare infrastructure, and push for policies.

The Flying Eye Hospital is Orbis’ zenith,

44 | Logistics News ME | February 2018

essentially a hospital with wings. Dr Jonathan Lord, global medical director at Orbis, explains: “Our founder, David Paton, realised that doctors working in low income countries were missing out on the opportunities to continue their medical development and to consult with other doctors about their cases. He decided that we could fill this gap by creating a dedicated education tool to bring services and knowledge to them. Thus, the Flying Eye Hospital was born.”

Inside the aircraft The first plane used by Orbis was a DC-8, donated by United Airlines, and was in service since 1982, and subsequently retired in 1993 after it became too expensive to maintain. It is now a permeant museum piece in Shanghai, China.

The second-generation plane was a DC-10 and conducted programmes from 1993 – 2016.

It is also now retired and takes pride of place at the Pima Air and Space Museum, Arizona.

The third-generation plane is a MD10/30, a donation by FedEx Express, and was launched in 2016, expected to run for about 20 years. The MD-10 is custom-designed to fit a fully-accredited surgical suite, a classroom with 46-seats, and treatment rooms. From the on-board classroom, or even medical institutions back home, both students and specialists can view in real time surgeries occurring onboard the flying eye hospital through a 3D camera.

The Yuen Yee Operating Room provides a place for surgery, which often doubles as a place for teaching local medical professionals how to do certain procedures. A laser and exam room provides a place to do laser surgery, and there is also an instrument sterilisation room. One of the last rooms on the aircraft is a recovery room that is manned with teddy bears whose eye patches mimic patients’ operations as a way to comfort young children. The teddy bears are cour-

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tesy Swiss luxury watchmaker, OMEGA. The pilots of the MD-10 are volunteer pilots who also fly for FedEx or United Airlines, and who receive all of their training courtesy of FedEx. How does it work?

Dr Lord remarks: “I always tell people that the Flying Eye Hospital celebrates a marriage between two of the most highly regulated industries in the world - medical and aviation. And the two fit together very well.”

Orbis stats for 2016 reveal that the organisation’s partners, with the support of the Flying Eye Hospital and their training programmes, carried out more than 3.5 million eye screenings of

which 2.7 million were tests for children. They carried out over 82,000 surgeries and trained more than 40,000 eye health professionals, including doctors, nurses, and community workers.

How do they ensure it all runs hassle free?

“What we need to run our hospital,” explains Dr Lord, “is an airport that we can land our MD-10 at, and a supply of aviation fuel and water. Other than that, the plane is entirely self-sufficient. We generate our own power and medical gases, and we have a full purification plant in order to treat the water we have access too. The plane carries all the supplies that we need in order to deliver a programme, and dur-

ing the year, we build in restock points where we refresh these supplies.”

Specialists in logistics work with airport authorities and governments on behalf of Orbis, to get the permissions required to land and to use it as a hospital. This includes acquiring full medical licencing for the staff and the volunteers in that country.

The logistics side, outside of permissions, includes ensuring the necessary equipment is in place to help us set up and run the programme, such as sourcing staircases, or security access, water, food, and fuel.

Dr Lord says: “We are immensely grateful for the flexibility and adaptability of our hosts

Logistics News ME | February 2018 | 45

H e althca r e

around the world who allow us to fly onto their tarmac and help treat avoidable blindness within the local communities.”

Global partners The hospital has touched and transformed a number of lives around the globe—and it has received recognition for its efforts. A number of international companies, organisations, and individuals, have contributed to support the cause.

In 2015, a series of print ads featuring Nicole Kidman, Cindy Crawford, Chad le Clos, Michael Phelps, and Sergio Garcia were released

by OMEGA, to draw attention to Orbis and its work, followed by the custom DeVille Prestige Orbis, or ‘teddy bear watches’ to showcase OMEGA’s continuing support for the cause, with a portion of its sales donated to Orbis.

In October 2016, Dubai Airports and its partners raised AED1.25mn, enough help restore the sight of as many as 31,000 children suffering from cataracts worldwide. In mid-2017, UTC Aerospace Systems made a contribution of $1mn, which will go towards establishing a mobile simulation center outfitted for the aircraft.

“Orbis and the Flying Eye Hospital have made a tremendous impact on the world by restoring vision to hundreds of thousands of people in need,” says Dave Gitlin, president, UTC Aerospace Systems. “The mobile simulation center will help Orbis widen its influence by offering training to more volunteer medical professionals in even more remote areas. It will enable them to get in the field faster and make a difference faster.

We are so proud to be associated with such a world-class organisation that makes a profound difference in people’s lives every day.”

Zodiac Aerospace supported the third-generation Flying Eye Hospital by donating galley insert equipment, such as coffee makers, refrigerators, and oxygen equipment. ExecuJet began its fixed based operations at Al Maktoum International Airport in November 2017, and announced its decision to provide FBO handling support for the Flying Eye Hospital. LIFT Strategic Design provided the livery design for both second- and third- generation Flying Eye Hospitals and contributing to the cabin design of the MD-10. Rockwell Collins improved the communications systems both on board the flying hospital, as well enabled Orbis to effectively keep track of the flight as it travels across the world. And these are just a few names.

Dr Lord comments: “The plane gains us more in revenue than it costs to run a programme. Various sources fund our long term, on-ground projects and the plane is part of the implementation of many of

46 | Logistics News ME | February 2018

A World Health Organisation (WHO) study reveals that out of the 253 million blind or visually impaired people globally, a full 90% are in the developing world, and four out of five of those cases would be completely treatable or preventable with access to appropriate healthcare.

those projects. The plane works as an icon and helps us to generate revenue to invest back into programmes.”

The Flying Eye Hospital made its debut

at the Dubai Airshow 2017, and was wellreceived. Visitors were offered on-board tours and were awarded a glimpse of the inner workings of this winged charity.

“Did you know that 36 million people in the world are blind, and of those, 75% have a condition that could be reversed or avoided if they had access to eye care?” remarks Dr Lord. “For us, that situation is unacceptable, and the plane is an important tool which helps us to highlight just this. We’ve welcomed people from presidents, to health officials to Mother Teresa on board. This helps us to shout about the issue and work with governments to ensure eye health is firmly on their agenda. There are many different levels of impact the Flying Eye Hospital can help us to have, but at the heart of all of our work is our patients. Restoring sight has an enormous impact not only on those struggling, but also their families and the community.”

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V i e wp o i n t

Ralf W. Seifert and Richard Markoff dissect the ABC classification for supply chain, and how to effectively employ it for optimal data management

A

BC classification: It is one of the oldest, most reliable methods for catalogue or customer segmentation. It relies on the properties of the Pareto distribution, and states that about 20% of a population will account for about 80% of the volume. ABC classification has entered popular language and is often referred to as the 80-20’ rule. A quick google search will yield many real – and many not-so-real – examples of the 80-20 rule, explaining distributions in fields ranging from the natural to the sociological.

But for supply chains, the 80-20 rule has definitely demonstrated its merit. In most contexts, about 80% of the sales volume is indeed from about 20% of the product catalogue. From this, the ABC classification arose and has been a staple of supply chain inventory management for over 30 years in applying segmentation strategies.

If a company is going to perform an ABC classification, the first, most basic question is ‘why’? This question may be harder to answer than one might think. We asked supply chain planners from the same company how to man-

48 | Logistics News ME | February 2018

age their stock keeping units (SKUs), i.e., whether an “A-SKU” should have more inventory or less inventory than the “B-” and “CSKUs”. About half said that A-SKUs should have less inventory, because they are so impactful to the stock levels. The other half felt that A-SKUs should have more inventory than the other SKUs, as they are most vital to revenue.

The right answer, we would argue, is that the A-SKUs return the highest value from attention in determining the appropriate target service level and required inventory and supply chain agility. Getting that message out and adopted by a broad, extended community of planners is in itself a managerial challenge. In multinational organisations, it is not even evident which product catalogue should be used for the classification. Should it be done for each market, for each factory, or for both? In addition, different functional managers have different perspectives on what should constitute “the volume” basis.

Should it be revenue, units, profit or something else altogether?

With these questions in mind, it is actually worthwhile to return to foundational ideas of

something as basic as ABC classification at a time when supply chain digitalisation is getting everybody excited about Big Data, artificial intelligence and predictive analytics. They can serve as a reminder how even the most apparently simple concepts entail real implementation challenges. The challenges can be categorised as data challenges and managerial challenges.

Data challenges In order to calculate an ABC classification, only two data are needed: the product catalogue and the volume of each SKU. However, in each of these, there are nuances that must be addressed. Starting with the product catalogue, many companies would prefer not to include SKUs that have just been launched or that are being discontinued. Including recently launched SKUs could overstate their weighting as the volume likely includes pipeline build, and including products close to discontinuation would needlessly dilute the importance of ongoing SKUs and render the ABC classification quickly obsolete when those products drop out of the offering.

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The method for quickly identifying and excluding these SKUs is by means of a product lifecycle status indicator. We are in an age where the consumer has ever increasing expectations of customisation and product renewal, which drive increased product churn. Maintaining accurate product lifecycles status is critical, but also a true data management challenge.

Planners are often under staffed and have many operational responsibilities to attend to. It can be a tough to convince them to maintain this additional data field that has no apparent immediate benefits for them, when they already know well in their heads, which products are launching or discontinuing.

Once the right SKUs have been identified, the volume used to classify them can be the subject of much internal debate. Finance managers may prefer to use gross or net margin, arguing that the most critical element is not revenue, but margin. Another approach is to use direct product costs rather the cost of goods, with the reasoning that fixed costs would be spent in any case. This may sound trivial, but we have seen large, mature companies reject automated, APSembedded ABC classification tools in favour of Excel for this reason.

In some industries, such as luxury goods, the promotional products supply chain plays a critical role in the distributional channel presence and customer expectation. It could be argued that these SKUs should be included as well.

As these products do not generate revenue or margin, this further clouds the picture of which dataset to use.

Managerial challenges Today, supply chains usually have multinational footprints, with a many-to-many supply chain configuration. A factory could service many markets, which could in turn be serviced by many factories. This reality leads companies to ask where the attention to A-SKUs is to be paid: upstream or downstream. This is critical for deciding which population of SKUs to use for the classification.

If one of the goals of the ABC classification is to identify the upstream bottlenecks, it can be argued that the classification should be done over the production catalogue of each factory.

In other words, each individual factory would perform an ABC classification for its specific catalogue. The downside to this approach is that the ABC classification has distanced itself from its reflection of revenue importance. It can be difficult for the supply chain to justify additional flexibility (often in the form of component inventory) for SKUs not seen by the business actors as critical.

The temptation is then to look downstream

that even if companies succeed in finding the right managerial level for the ABC classification, it is quickly obsolete and must be redone to maintain relevance. The wide range of potential catalogues makes it challenging for the ABC refresh to be an automatic process.

Some supply chains also look to identify a second dimension of product segmentation, often referred to as the XYZ classification. The objective is to identify the references that are more variable and thus more difficult to forecast. If a SKU is both an A-class and highly variable, the logic of this approach would be that it warrants more effort in demand planning and upstream agility. The XYZ classification can be a powerful tool for secondary segmentation, but only as a complement to the ABC classification with its inherent complexities.

Ralf W. Seifert

and perform the ABC classification over the population of products sold in markets. This too has its downsides. If the ABC classification is performed in each market, the difference in product catalogues in each market make it possible that far greater than 20% of the total company catalogue be identified as A-class. It is also possible that some factories may find the majority (or almost none) of their products are A-class.

Getting it Right So, how do practitioners enact ABC classifications? We spoke to Jeremy Basckin, who has held senior supply chain positions at three major FMCG companies. Jeremy described the approach he has refined over time, one that addresses the issues we describe and may constitute a best practice as follows. He explained that his strategy was to develop a collaborative ABC classification for each region, bringing together the supply chain, commercial, and marketing teams along with general management. Jeremy formalised the process around four criteria: volume in units, service/lead time, strategic importance and margin. The exercise was done at the market level, so when tallied up for each region, this usually led too far more than 20% of the catalogue being “A-class”. The regional general management would then arbitrate to lower the A class to 20% of the catalogue. Jeremy admits that this process is a bit heavy and manual, but with discipline and training the classification can be updated twice yearly.

For companies now facing the array of choices and opportunities that supply chain digitalisation has to offer, this is a reminder that the underlying foundation of data rigor, discipline, and aligned cross-functional priorities can be difficult to implement.

Simply complicated The net effect of these considerations is that companies face a challenge in having end-to-end alignment on what constitutes a critical product that warrants investment in resources for greater reactivity, time in demand planning, and definition of service expectation. Even if properly calculated, companies often have several competing ABC classifications.

The ever-increasing catalogue turnover and promotional intensity of products also means

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 collabora-

Richard Markoff

Logistics News ME | February 2018 | 49

E v e n t p r ev i e w

We look forward to the third annual conference this month, which will no doubt contribute to the success of key projects in the GCC and will support the continued development of the industry in the region.�

Ben Blamire, Breakbulk 50 | Logistics News ME | February 2018

www.cbnme.com

Officials at the Breakbulk Middle East press conference in November 2017

Breakbulk Middle East 2018

M

ore than 70 exhibitors, representing the end-to-end value chain for the transport of oversize cargo, as well as 30 speakers and 2,000 delegates will be present at Breakbulk Middle East 2018. The two-day event will be held at Abu Dhabi National Exhibition Centre (ADNEC), on February 6-7, 2018.

The event offers a full conference schedule where key industry members can share their knowledge and experience, including leaders from Fluor, Petrofac, Saudi Aramco, and Technip.

In addition to the exhibition, the event offers educational seminars—all of which are free for attendees—as well as networking opportunities, including luncheons hosted by leading shippers.

A press conference announcing the official details of the event was held in early November 2017, where Dr Abdullah Al Katheeri, director general,

Federal Transport Authority, was joined by senior representatives from Abu Dhabi Ports and Instar Projects, Shipping Services to discuss how regional organisations can capitalise on the current industry landscape.

Dr Al Katheeri had commented on the occasion: “The Federal Transport Authority’s participation in this exhibition and conference, which is being held under the patronage of HE Dr Abdullah bin Mohammed Balheif Al Nuaimi, Minister of Infrastructure Development and chairman of FTA, will be focusing on the vital sectors of transport and cargo, a key pillar for the oil and gas and infrastructure sectors across the region. The exhibition is the perfect occasion to showcase the multi-billion dollars development projects in the region.”

This year’s sponsors include Abu Dhabi Ports, King Abdullah Port, DP World, Agility, MICCO Logistics, Bahri, Instar, Sarjak Container Lines, Port of Salalah,

Ceekay Shipping, Freightcare, Höegh Autoliners, NTC Logistics, Babaji Shivram, KDL Logistics, and Fayamonville.

Key topics of discussion for panel discussions and seminars include ‘Risk management: handling projects in postconflict regions’; ‘My niche or yours? The evolving industrial project supply chain’; ‘Will online shipping platforms lead to a digitised project industry?’, and more.

Ben Blamire, commercial director, Brealkbulk, comments: “Breakbulk Middle East brings the region’s foremost experts in the industry together with the leading shippers, carriers, freight forwarders, transport specialists and related service providers here to discuss how to strengthen the value chain. We look forward to the third annual conference this month, which will no doubt contribute to the success of key projects in the GCC and will support the continued development of the industry in the region.”

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Sup p lie r N e ws Turkish Airlines, Airbus sign agreement for A350-900 aircraft

Turkish Airlines and Airbus signed an MoU to acquire 20, plus five optional A350900 aircraft. The agreement was signed at the Élysée Palace, Paris, during Turkish President Recep Tayyip Erdoğan’s official visit to France with French President Emmanuel Macron.

M. İlker Aycı, chairman of the board and the executive committee, Turkish Airlines, commented: “With Turkish Airlines serving more destinations than any other airline around the world, we will be delighted to rely on our new A350 XWB to further develop our major international routes from Turkey.”

Aycı added: “With this agreement today, we have signed our goodwill to carry on and finalise the acquisition with Airbus. Our agreement is a significant step forward in enhancing our passengers’ flight experience. This order

is set to play a key role in our growing business in the years to come. As we will be strictly evaluating during the talks to finalise the order, furthermore the increased business volume for the local Turkish supplier industry by Airbus will be a great gain for the sector.”

Turkey is an integral part of the Airbus supply chain for almost 20 years, being a partner in all Airbus aircraft programmes, including the prestigious A350 XWB. While Airbus focusses on the continued development of long-term cooperation projects with Turkey, the Turkish aeronautical industries progressively have embarked and built-up a remarkable portfolio of high capabilities and skills over the last 10 years.

The A350 XWB is an all new family of mid-size wide-body long-haul airliners shaping the future of air travel.

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IBM signs $85mn IT agreement with Emirates Airline IBM has signed a 10-year, approximately $85mn managed services agreement with Emirates airline.

The agreement will enable Emirates to focus its efforts on highly strategic initiatives, while IBM handles the day-to-day management of its IT infrastructure.

Signed in Q3 2017, the new agreement expands upon a services agreement signed in 2016 and will see IBM manage and transform the underlying IT infrastructure, which supports Emirates’ mission-critical global operations. This will assist Emirates to benefit from improved business application performance, a resilient, scalable, and agile environment, and operational savings.

IBM will also manage Emirates’ backup environment and implement a private cloud solution at the airline’s two data centres in Dubai, UAE. The private cloud will provide Emirates with access to a self-service portal which will be managed by IBM and allow Emirates’ business teams to order infrastructure services for their internal consumption.

Emirates’ global footprint spans more than 155 cities, in 84 countries across six continents. In an effort to streamline Emirates’ global operations, IBM will also provide data centre networking services to enable employees to have access to Emirates’ core IT environment and business critical applications remotely, at any time of the day, regardless of their geographical location.

Amr Refaat, general manager, IBM Middle East and Pakistan, commented: “Under the new agreement, Emirates will benefit from a resilient, scalable, and agile service, as well as operational savings. With its expanding global footprint, it is imperative that Emirates’ IT operations are streamlined and accessible to its employees anywhere and anytime, and this is where our expertise comes into play to achieve this.”

Neetan Chopra, Emirates senior vice president, IT Strategic Services, said: “A key component of Emirates’ IT strategy is to transform our data infrastructure to a cloud architecture, and drive both agility and efficiency benefits. IBM has been our long-standing partner and we are happy to work with them to achieve this goal.”

The agreement builds off of the 10-year and approximately $300mn agreement Emirates signed with IBM in 2016 to provide IT Infrastructure delivered as a service, allowing the airline to improve the efficiency of its passenger support systems and functions. In the same year, Emirates also collaborated with IBM to enhance its Passenger Service System (PSS) to facilitate the re-design of its business processes and to streamline airport operations. www.cbnme.com

FarEye launches parcel shop technology via mobile application FarEye, a digital logistics platform, announced the successful introduction of its new parcel shop technology – ‘Drop&Pick’.

Launched in January 2017, the technology is already being incorporated by various large businesses like DHL, DTDC, First Flight, and others, to facilitate paperless, high-speed, and secure dispatch/delivery of parcels through its parcel shop network.

FarEye’s Drop&Pick, aimed at major enterprises and logistics firms globally, is built to fulfil the need for fast and convenient dispatch/delivery of parcels with minimal cost of infrastructure.

Its successful roll-out is now revolutionising traditional dispatch/ delivery processes into efficient and customer-centric approaches.

Drop&Pick follows a key three phased ‘book, manage, and deliver’ process, which is based around a simple-to-use and intuitive mobile application. The app enables any parcel shop to quickly register a parcel, and the sender’s details (including capturing handwritten information), followed by scanning the shipment and adding recipient name, delivery details, and parcel size. It then calculates shipping fees which the sender can pay in multiple ways – prepaid, wallets, cash, or card. The parcel shop personnel can also book multiple parcels under one sender ID. In the back end, data entry processes convert images to actual data. The parcel is then handed over to the courier, and electronic proof of transfer is collected, who then delivers to the end customer and once again, receives electronic proof of delivery from the customer.

This technology enables quick and seamless dispatch and receiving of parcels and has two additional benefits: SME ecosystem development; the technology is providing significant benefits for small and medium-sized enterprises (SMEs) and micro-SMEs who want to sell their products online but cannot build an inhouse delivery infrastructure. They need fast and convenient delivery services for their customers. The sellers may easily deposit their parcels at selected parcel shops or they can also raise a parcel booking request online (and prepay it). It generates a ‘parcel label’ which then acts as a unique order ID. The technology also has the benefit of reduced carbon emissions;

door to door delivery can waste a lot of time and fuel in finding home addresses, while if parcel is dropped at a network shop, it saves resources. The customer can later collect the parcel at his or her convenience.

This technology is also targeted towards logistics businesses offering franchisee models. While this model has been available since a long time to book parcels, the need now is to add a layer of visibility and efficiency to the processes to help businesses make real-time data backed decisions and in parallel empower the customers with easy deliveries, event alerts and notifications. The customer gets an option of getting parcel delivered to a nearby ‘parcel shop’, both -during the time of order placement as well as before the actual delivery.

Kushal Nahata, co-founder and CEO, FarEye, remarked: “The reaction to FarEye’s parcel shop technology Drop&Pick has been exceptional. There is a sharp increase in online transactions and both sellers and buyers require smart and efficient dispatch and delivery of goods as quickly as possible. The global ecommerce market is about $2tn, and FarEye with its technology excellence is integrating into the systems of major logistics service providers, helping them capture this market. Our mobile application for Parcel Shop Delivery is a key aspect of the technology, which is being used by many of our clients including DHL. We expect to see the use of this technology across many key markets in 2018.”

KGL wins fifth US Defense Logistics Agency contract Kuwait & Gulf Link Transport (KGL), an international logistics firm based in Kuwait, was awarded a new contract by the US Defense Logistics Agency (DLA) to lead logistics and distribution operations for US military personnel across the Gulf region.

Under the terms of the contract, the fifth of its kind awarded by the DLA, KGL will procure, import, store, and distribute food products from both US and local sources to support more than 20,000 military personnel stationed in Kuwait, Iraq, and Jordan.

KGL will also provide services primarily from its procurement and distribution hub in Kuwait.

The value of the contract is estimated to be $690mn, but not to exceed $1.38bn for a duration of 60 months.

Sam Khatib, the chief business development officer at KGL, commented on the winning the contract: “For more than two decades, KGL has been one of the premier logistics suppliers for the US military in the Middle East. We are grateful for the confidence the US government continues to have in KGL. We look forward to continuing to work with the US military on solving complex logistics challenges and supporting the American mission in the Gulf region.”

For more than 60 years, KGL has been providing comprehensive logistics solutions for international commercial and government clients, most notably the United Nations and the US Government throughout the Middle East.

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Save t he dat e

Save the date

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

February

6-11

February

25-28

Singapore Airshow Singapore The biennial Singapore Airshow is the leading event for aerospace and defence business in the Asia Pacific Region. The past editions of the event have seen attendees ranging from high-level military and government delegations as well as leading industry players, airlines, and airport. Returning exhibitors include bigwigs like Airbus, Boeing and Lockheed Martin, and new exhibitors such as Honda Aircraft, Aviation Learn and Boom Supersonic. Key highlights of the event include the 50th anniversary celebrations by the Republic of Singapore Airforce (RSAF), plus the second run of the Singapore Airshow Aero Campus (SAAC) - a programme aimed at getting secondary and tertiary students, as well as young working adults, interested in the sector.

Retail Supply Chain Conference 2018 Phoenix (Arizona), USA The Retail Supply Chain Conference, organised by the Retail Industry Leaders Association (RILA), aims to gather top executives in retail supply chain to network and learn. This year’s conference focus will be on ‘Reinventing the Retail Supply Chain: Accelerating What’s Possible’. Featured speakers will include Sona Chawla (COO, Kohl’s); Aaron Conant (managing director, eCom Advisory); Mike Griswold (VP of supply chain research group, Gartner); Mark Holifield (Executive VP, Supply Chain & Product Development, The Home Depot, Inc.); and many more. Visitors will get to interact directly with retailers, and share new and creative solutions for a host of complex challenges.

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February

6-7

May

1-3

Breakbulk Middle East Abu Dhabi, UAE Held under the patronage of the Federal Transport Authority- Land and Maritime, Breakbulk is the only exhibition and conference in the region specifically for the project cargo and breakbulk industry.

More than 60 exhibitors, representing the end-to-end value chain for the transport of oversize cargo, will be in attendance.

The event offers a full conference schedule where key industry members share their knowledge and their experience, such as leaders from Fluor, Petrofac, Saudi Aramco, and Technip. Attendees will have the opportunity to visit exhibits detailing new and proposed projects in the GCC, as well as network with all participants.

Automechanika Dubai Dubai, UAE Automechanika is the world’s biggest trade fair for the automotive service industry, with visitors and exhibitors from industries such as automotive sport, workshop equipment, tyres and batteries, parts and components, electronics and systems, repair and maintenance, accessories and customising, etc. The Dubai edition is the most sought-after event in this part of the world, with industry experts proclaiming it to be the perfect time to explore new products, find new suppliers, connect with new distributors and wholesalers, while comparing product alternatives.

The number of official country pavilions taking part this year is 25, which includes the world’s largest German pavilion for the automotive aftermarket industry. www.cbnme.com

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