Logistics News ME - January 2017

Interview

Country focus

Transport

DP World in the hotseat

The UAE’s road ahead

On the road with Mercedes-Benz

Connecting trade professionals with industry intelligence

January 2017

Industry experts share their insider tips and predictions

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Start 8 | News

Features

Contents

18 | Transport Mercedes-Benz showcases its waste management vehicles

20 | VIP Interview An in-depth look at the achievements and ambitions of DP World

22 | Technology The gadgets transforming warehouses and workers

26

26 | Cover Story The year ahead according to those set to shape it

36

36 | Country Focus Examining Oman’s unique trends and challenges

44 | Viewpoint 54 | Supplier News 58 | Diary

20

40

46

50 Logistics News ME | January 2017 | 3

Editor’s Note

A

s far as years go, 2016 was declared the worst in living memory at around seven months in. Across the board it seemed almost every country, individual and company had a reason to welcome

2017 as soon as possible. But it was a particularly bad year for the shipping industry.

Shipping has been at the mercy of three major factors: a steep uptake in the number of mergers and acquisitions (M&A), global volatility, and stagnant demand for goods globally. These events have not only set the stage for the shipping industry’s short term future, but are also contributing to the make or break success of each individual firm.

The bankruptcy filing of Hanjin Shipping Co, is a prime example. Hanjin had suffered at the hands of historically low container freight rates, in addition to a number of other factors, including the activitites of the firm’s senior executives.

The backlash of the August 31 filing was felt across the industry and coincided with the busiest shopping period in the US, for which Hanjin was carrying about 7% of the country’s retail stock.

Although the adjustment from its absence has since helped ease the situation for those left in the industry, some observers caution that the lessons should still be considered.

It is thought 2017 will be the start of an era of consolidations that could significant adjust the balance of power between remaining container carriers, but the volatility of geopolitical relations could undo all that potential.

With an unpredictable POTUS, “independent” Britain, rich and actively spending China and something nobody is really sure about maybe happening in Russia, where we will be in 12 months is anybody’s guess.

But building on the foundations of recent years, the coming time will be defined by adaptability, agility and the capacity to react appropriately to the threats posed by global trends and events.

2017 will be the year we begin to settle into the new present – a time that is built on the trends of emerging markets, urbanisation, sustainability, e-commerce and digitisation.

Trends we have seen slowly gathering pace over the last decade, which are now almost mainstream.

The coming years will bring with them some incredibly hard choices and fundamental changes in how, where and why we do business. Preparation will be key.

Melanie Mingas Editor

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In the NEWS

Iran places $16.6bn Boeing order,

Iran Air currently uses a number of Airbuses in its fleet

I

ran’s national carrier has purchased 80 aircraft from Boeing for a total of $16.6bn – the first deal of its kind in almost 40 years and a contract that allows Boeing to compete with Airbus.

The deal includes 50 737 MAX 8s, 15 777-300ERs and 15 777-9s, the company said in a statement on its website last month. The aircraft will be delivered over 10 years starting in 2018, according to the state-run Islamic Republic News Agency, which cited Iran Air Chief Executive Officer Farhad Parvaresh.

Boeing hasn’t delivered a plane to Iran since 1977, two years before the 8 | Logistics News ME | January 2017

revolution. According to a statement, Boeing coordinated closely with the U.S. Government leading up to the sale and continues to follow all license requirements as it implements the sales agreement, which will support nearly 100,000 U.S. jobs in the U.S. aerospace value stream for the full course of deliveries.

The first airplanes under this agreement are scheduled for delivery in 2018. “Boeing can’t compete with Airbus if it can’t sell to places like Iran and China,” said Loren Thompson, a defense analyst with the Lexington Institute, a nonprofit that has received funding

from companies including Boeing.

The deal’s value of $16.6 billion is based on list prices before the big discounts that are customary for major airlines.

Boeing and its more than 13,600 U.S. supplier and vendor partners across all 50 states are proud to ensure America continues to lead in global aerospace and to create jobs and opportunities in communities across the nation.

Boeing’s U.S. supply chain currently supports more than 1.5 million U.S. jobs Boeing has also received a $10bn order from India’s Spicejet for “at least” 92 aircraft.

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DHL, Mubadala announce partnership

Gulf Navigation expands into northern emirates Gulf Navigation has announced its intention to expand operations into the northern emirates of the UAE through a set of comprehensive maritime activities, under the GNH Northern Project. Activities will including ship building, ship repair and offshore platforms, equipment and services, logistics, marine specialised operations and global mobile ship repair and services including a float and during voyage. GNG will collaborate with Wuchang Shipbuilding Industry Group Co. Ltd and Qingdao Beihai Shipbuilding Heavy Industry Co. Ltd, both of which are members of China Shipbuilding Industry Corporation (CSIC) group and will review and finalise the project plans.

The GNH Northern project will be developed in three phases and as part of future business expansion and growth conceived and approved by the board of directors under its “change and transformation” plans, which intends development and expansion of GNH’s infrastructure in the northern coast and deep waters areas including the Arabian Gulf, Gulf of Oman, the Arabian Sea, the Indian subcontinent, Eastern Africa and the Red Sea.

G

lobal forwarding and freight specialist DHL has announced a five year partnership with Mubadala Development Company to combine assets and expertise to enhance service in Abu Dhabi.

According to a statement, “with its unique logistics expertise and portfolio, DHL will support globalisation and growth as well as deliver value across Mubadala Aerospace assets, their customers as well as Abu Dhabi as a whole by aligning all logistics related processes efficiently and replicable.”

Mubadala is looking to transform its inbound to aerospace manufacturing logistics (I2M) as well as its maintenance, repair and overhaul (MRO) material flows.

DHL’s solution aims to achieve this by streamlining all logistics process flows of Mubadala Aerospace assets horizontally, leading to an efficient, effective and replicable modality. This way the need for customisation of individual assets is reduced. The approach ensures continuous visibility, control and improvement.

“With this new strategic partnership we as DHL can demonstrate our expertise as an innovative lead logistics partner. Our solution enables the end-to-end management of Mubadala’s supply chain creating visibility across all assets in scope”, commented Claudio Scandella, DHL CEO, MEA. Logistics News ME | January 2017 | 9

news

GAC breaks ground at Dubai South

G

AC Dubai has broken ground on the site of its newest contract logistics facility that will bring its total capacity to more than 200,000 pallet positions serving customers active in the local and regional markets.

Construction of the three chamber warehouse and executive office complex in the Logistics District of Dubai South is due to be completed in the fourth quarter of 2017, with operations expected to go live in January 2018. It will add to GAC’s existing contract logistics capacity and complements established facilities in the Jebel Ali and Dubai Airport Free Zones.

The ground-breaking ceremony was held in the presence of Ahmed Al Ansari, acting CEO of Dubai South, Joe Labaky from Amana Contracting and Steel Buildings, GAC group president Bengt Ekstrand and GAC Dubai MD Stuart Bowie.

The new 72,900 pallet facility is designed to handle a diverse range of product categories including FMCG, food and beverage, plus healthcare and beauty products classed as dangerous goods (DG).

It will offer an extensive range of Value

10 | Logistics News ME | January 2017

Added Services to meet a wide range of customer requirements and international quality standards.

GAC has invested in the latest technology to equip the warehouse and supporting facilities with an environmentally-friendly district cooling plant, advanced building management systems, 100% recycled water, LED lighting and solar power.

“We welcome the GAC Group to the Dubai South family,” said Al Ansari. “Dubai South’s Logistics District is designed to optimise speed and efficiency for businesses and companies and has attracted the best-in-class global brands from the industry.

“A multi-modal futuristic platform, the Logistics District, provides the ideal platform and integrated ecosystem for companies such as GAC to grow their networks of clients and prospective business partners, as well as connect with key global markets. Our unique location offers seamless connectivity, opening a world of commercial opportunities for businesses. We look forward to a long and fruitful partnership with the GAC Group.”

Turkish logistics faces year-end contraction Reuters has reported that Turkey’s logistics sector experienced slight contraction in 2016 following a series of clashes on its southern borders, a crisis with Russia, sharp fluctuations in foreign exchanges and tightening EU borders.

The revenue of the sector, which included transportation, logistics and warehousing, was announced slightly above $100 billion in 2016, showing some slight shrinkage compared to the previous year.

Looking ahead, members of the Association of International Forwarding and Logistics Service Providers (UTiKAD) are expecting a potential liberalization in railway transportation in 2017.

They said the Kars-Tbilisi railway line and the reestablishment of peace in Syria would have a positive impact on the sector.

“The crisis with Russia, shutting roads to the Middle East due to problems in Iraq and Syria, a wait-and-see tendency for investments after the July 15 coup attempt, and tightening EU borders amid the refugee crisis have negatively affected the logistics sector,” UTiKAD President Emre Eldener has said. “Severe fluctuations in foreign exchange rates have also hit our businesses. We can say that the declining trends in freight transportation will likely have a negative impact on the sector’s revenue,” Eldener said at a press meeting on Jan. 3 and stressed that a similar trend was expected in 2017.

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THE SAFETY AND EFFICIENCY OF YOUR FLEET

IS IN YOUR HANDS

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Logistics News ME | January 2017 | 11

news

Wholesale City signs MOU with China

D

ubai Wholesale City has signed a Memorandum of Understanding (MoU) with The China Commodity City (CCC) Group, the world’s largest exporter of goods, in China’s Zhejiang Province.

Aiming to build a long-term strategic relationship between the two parties and leverage possible future collaborations between the UAE and China, the agreement will facilitate mutual trade and investment activities and the exchange of expertise, with a focus on developing wholesale trade destinations and wholesale e-commerce. Dubai Wholesale City will collaborate with the Municipality of Yiwu City and the Government of Zhejiang Province, the largest shareholders in the Commodities City Group, in terms of investment and business development in the trade, manufacturing and logistical services sectors.

Abdulla Belhoul, CEO of Dubai Wholesale City, and Wenge Zhao, general manager of the CCC Group, signed the MoU in Zhejiang’s Yiwu City in the presence of senior city and province officials as well as Dubai Wholesale City delegation members, (pictured).

Commenting on the agreement, Belhoul said: “China and the UAE enjoy long-standing bilateral trade and economic relations. Today, China is the UAE’s second-largest trading partner and the largest importer to the country. In addition, the UAE serves as the main gateway to the GCC region for Chinese products. This partnership will reinforce the UAE’s position as a trading and re-export hub for Chinese exports to the Middle East, Africa, and the Mediterranean region.”

He added: “The MoU provides us with the opportunity to develop our existing relationship and take advantage of new channels of collaboration between our two countries in the trade and investment sectors in order to maximize mutual benefits.”

Located in central Zhejiang province, Yiwu City is universally recognised as a key global commodities trading hub. The China Commodity City Group owns Yiwu International Trade Market, the biggest market for small commodities in the world. Spread across an area of more than 6.7 million square metres, the complex houses over 100,000 suppliers offering goods across a myriad of categories that are exported to 200 countries and regions worldwide.

12 | Logistics News ME | January 2017

GES opens second Lebanon office Globe Express Services has opened its second office in Lebanon at the Middle East Airlines (MEA) Cargo Centre, a dedicated import and export facility within the BeirutRafic Hariri International Airport.

The strategic move comes in line with its expansion plans in the country to address its rapidly growing logistics sector. The new outlet will enable GES to remain ahead of the competition at a time when cost-efficient express services which involves definite door-to-door service at a highly economical price is the game changer.

With its clear vision and strategic growth plans to maintain operations and continue reform plans, the MEA Cargo Centre is the epicentre of the Lebanese economy.

The location of GES’s new branch brings it closer to all its stakeholders and partners, enabling it to deliver all air shipments within 24 hours of arrival through the combination of both air and truck freights.

Mustapha Kawam, president and CEO, Globe Express Services, said: “As a multinational group operating in the Middle East, Globe Express Services has bolstered its operations in the region while being farsighted for better times. We are gearing up for the economic rebirth of the Levant region and the opening of a second office in Lebanon’s airport is a major step in the right direction.”

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Gulf Navigation secures new fleet

G

ulf Navigaiton has secured a new fleet of tankers to be chartered to MENA Energy for carrying crude oil and petroleum products.

The value of the deal has yet to be announced but it is part of Gulf Navigation’s efforts to “significantly reduce debts” by the end of the year, repaying $35m in 2016 according to estimates

by Khamis Juma Buamim, Gulf Navigation MD and chief executive.

Last year the company said it would issue $60 million of convertible bonds in an attempt to ease pressure from its creditors, however Gulf Navigation’s shares have been one of the best performing on the Dubai Financial Market General Index this year, rising from AED0.60 at the start of the year to AED1.60 on Thursday.

In a statement to investors last month, the Dubai-listed company said that under the terms of the deal it would acquire or order up to 12 new vessels of between 50,000 metric dead weight tonnes (dwt) and 120,000 dwt.

Khamis Juma Buamim, Gulf Navigation’s managing director and group chief executive, said the deal was “another step forward in Gulf Navigation’s strategic business expansion process”.

DP World eyes Vietnam investments DP World is to support its long term infrastructure developments in Vietnam with dedicated logistics zones said Vietnamese Prime Minister Nguyen Xuan Phuc in Hanoi in a meeting with DP World group CEO and chair Sultan Ahmed Bin Sulayem.

Replicating the Smart capabilities of DP World’s Dubai operations to ensure the seamless transfer of goods between the multi-modal infrastructure.

Sulayem said: “Vietnam has many opportunities to develop its supply chain offering and its economy and we look forward to exploring them with its leaders and the business community bringing our international expertise on these issues to any further discussions. Connecting logistics and business parks with multi-modal transport and digital infrastructure is key in encouraging economic growth.”

DP World is already involved in Saigon Premier Container Terminal (SPCT), an 80:20 joint venture between DP World and Vietnamese state-owned Tan Thuan Industrial Promotion Company (IPC).

The government of Vietnam has invested in a series of road upgrades leading to the Hiep Phuoc Industrial Park where SPCT is located.

“Throughout our network we have found that free zones and logistics parks next door to transport arteries provides quick and low cost access to national, regional and international markets,” Sulayem said.

“When coupled with efficient electronic systems to enable trade, customs and cross border processes it becomes much easier for business to operate so benefitting nations,” he added.

Turn to the cover story to read Sultan Ahmed Bin Sulayem’s predictions for 2017

China Silk Road Fund to acquire 10% of SIBUR Holding

A

share of 10% of SIBUR Holding, Russia’s largest gas processing and petrochemicals company has been purchased by China’s Silk Road Fund in a $40bn deal secured last month.

The deal is the second time a 10% stake of the company has been bought by a Chinese company following a deal between SIBUR and Sinopec in 2015.

This transaction is expected to be completed this month.

“The fact that a financial institution as large as the Silk Road Fund became a shareholder of SIBUR confirms the investor appeal of the company and strengthens its positions in the international market. We are confident that our cooperation will contribute to further development of economic ties between Russia and China,” said Leonid Mikhelson, chairperson of SIBUR, in a statement quoted by China Money Network.

As part of the deal, the Silk Road Fund will be able to nominate its representative to SIBUR’s board of directors. According to a statement from SIBUR, the deal is to be closed subject to the Russia regulatory approval.

Logistics News ME | January 2017 | 13

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2016 CONTAINER CONSOLIDATION

Abu Dhabi Ports hosts the region’s first IPCSA Conference

CMA CGM/ APL CHINA COSCO HOLDINGS CO Total value USDbn* Number of vessels

Total value USDbn* Number of vessels $7.0 190

HAPAG-LLOYD/ UASC/ CSAV Total value USDbn* Number of vessels

MOLLER MAERSK AS/ HAMBURG SÜD Total value USDbn* Number of vessels

$9.9 319

6.0%

$6.0 150

6.9%

9.7%

5.3%

$5.4 123

MOL/ NYK LINE/ K LINE Total value USDbn* Number of vessels

$5.1 129

5.2%

*Fleet values and statistics include fleet on the water and on order.

Fleets do not include chartered in tonnage. Valuations are charter-free.

CON S OLIDAT E D CO N TA I N E R F LE E T S AR E WO R TH

33%

OF THE TOTAL BOXSHIP FLEET.

MOLLER MAERSK AS/HAMBURG SÜD Maersk have confirmed rumours that they will acquire German container shipping line Hamburg Süd. Hamburg Süd's strong position in north-south trades will complement Maersk's current business. Maersk is thought to have paid roughly USD 4 billion for Hamburg Süd whose fleet is worth USD 1.5 billion. The deal is expected to complete end 2017. Entry of Hamburg Süd into the 2M alliance will put the alliance into the lead with 15% of global capacity.

CHINA COSCO HOLDINGS CO The Chinese state cabinet approved the merger of COSCO and China Shipping back in December of 2015. The merger is a part of plans to create stronger, larger

More than 100 executives attended the region’s first International Port Community Systems Association (IPCSA) Conference, hosted by Abu Dhabi Ports in Abu Dhabi last month.

Captain Mohamed Juma Al Shamisi, CEO of Abu Dhabi Ports, commented: “The UAE has embraced technology and knowledge as a means to create innovative solutions and has become a pioneering country in developing smart cities.

At Abu Dhabi Ports, we have adopted a similar model in order to realise our vision to become the preferred provider of world-class integrated ports and industrial zone services.

“Adopting technology and keeping up with the latest developments is a crucial element in the process of developing infrastructure and for that, we are privileged to be hosting this year’s annual conference,” he added.

The event was officially opened by Capt. Mohamed Juma Al Shamisi and Dr. Noura Al Dhaheri, followed by a keynote address given by IPCSA chair, Alan Long.

Held under the theme “Digitalising Trade”, the Conference featured 12 speakers and heard from David Kerr, SVP of Cargo at Etihad Airways and Shadi Malak, CEO of Etihad Rail DB. Delegates and speakers at the session discussed their digital transformation plans in providing services while benefiting from the strategic location and world-class infrastructure of the UAE which connects them to the most prominent regional and international markets. They also unanimously agreed on the value of adopting technology and digital systems and the role they play in ensuring business transactions are made faster, easier, more secure, transparent, and of higher quality.

national entities that have greater competitive advantage and prevents the two lines from competing against one another. China COSCO Holdings have the largest fleet on order with 29 ULCVs and 4 post-panamax containerships. The Chinese owned container fleet is the most valuable at USD 17.6 billion and accounts for around 17% of the market.

CMA CGM/ APL The largest acquisition in the French giant's history, CMA CGM acquired Singaporean company, NOL, best known for its APL brand. Recently it was also confirmed that APL would join CMA CGM in the Ocean Alliance which will

Al Habtoor Motors recognised for customer service

subsequently represent 14% of global container capacity, second only to the 2M alliance. The acquisition will make the combined fleet the 3rd most valuable in the industry.

HAPAG-LLOYD/ UASC/ CSAV Hapag-Lloyd completed their integration of Chilean line CSAV earlier this year. In July, they continued their growth by signing a merger agreement with UASC. The new merger will bring Hapag-Lloyd's average age down to 7.8 years from 8.7 years.

Hapag-Lloyd and UASC will be the 4th most valuable fleet up from 10th and 8th, respectively.

MOL/ NYK LINE/ K LINE One of the more recent mergers to be announced is that of MOL, NYK and K Line.

Only the container businesses of these companies will merge and the consolidation is expected to be complete by 2018. The most valuable Japanese container fleet is Shoei Kisen valued at USD 3.0 billion and ranked 8th. In comparison, none of the other Japanese entities feature in the top 10 most valuable container fleets. The merger shows that consolidation can be used very effectively in the container industry to create a large footprint with only mid-size lines. The new arrangement makes the merged entity the 5th most valuable at USD 5.1 billion.

WILLIAM BENNETT Senior Analyst williambennett@vesselsvalue.com Direct +44 (0) 20 3327 9674

Following on from Maersk buying Hamburg Sud for $4bn, Vessel Values’ senior analyst, William Bennett, has put together a report on the top consolidated container fleets. Currently these top five fleets are worth $33.4bn and account for 33% of the entire container fleet.

14 | Logistics News ME | January 2017

F

USO UAE dealer Al Habtoor Motors has be recognised for its customer excellence and service with the ‘Best Customer Service’ Award at the recently held Daimler Trucks Asia Distributors Award 2016 ceremony held in Chennai, India. The event was attended by 217 delegates from 101 countries.

Speaking of the award Habtoor Motors MD Karl Hamer, said: “It is indeed a moment of prestige for all of us as the coveted award recognises our dedicated customer centric efforts to build a loyal customer base and in the process a stronger market for the FUSO brand.”

Al Habtoor Motors is also the exclusive distributor of Mitsubishi, Fuso, Chery, JAC, TEMSA, Bentley, Bugatti and McLaren in the UAE, and a part of the UAE based diversified multi-billion dirham business conglomerate Al Habtoor Group.

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Logistics firms call for more driving training Firms from across the logistics industry have called for higher standards for testing and training drivers of heavy vehicles.

The calls, printed in The National last month, follow a safety event hosted by MAN trucks in collaboration with Abu Dhabi police and transport authorities, as reported in the last issue of Logistics News ME. Calling for vocational trainer and refresher courses, Alex Borg, a managing consultant of Supply and Support Management Group, which has offices in the UAE and the UK, said: “They face long hours and very poor working conditions so it would be a valuable idea to introduce the driver certificate of professional competence, or CPC, and a refresher course every three years.”

His comments were echoed by Michael Dreznes, executive vice president at the International Road Federation, who said: “Commercial drivers are professional drivers, and that means they need to function at a certain skill level to maintain their status.

“Proper, formal initial testing is critical to assure drivers are proficient on the road. Do they know how to operate the vehicle they are driving? Do they know how to respond in case of a vehicle failure? Do they understand the rules of the road? Can they read English or Arabic to understand signs? Do they understand the dangers of speeding as well as distracted and fatigued driving?

“If they do not understand these, they are doomed to ultimately make a mistake, resulting in dangers to not only themselves, but to other road users.”

16 | Logistics News ME | January 2017

BNC Publishing honoured in Dubai Trade’s first appreciation week

D

ubai Trade, the single window for cross-border trade and smart trading solutions and a DP World company, recently recognised strategic and media partners during its first appreciation ceremony this week, held last month.

Among those honoured was BNC Publilshing, with Logistics News publishing director, Joaquim D’ Costa, collecting the award on behalf of the company.

He said: “This is a great honour for BNC Publishing and Logistics News ME and we look forward to working with Dubai Trade in future.”

The ceremony, was inaugurated by H.E. Ahmed Mahboob, director of Dubai Customs who said: “We are working hard to ensure our leaders’ vision for Dubai to become the smartest city globally becomes reality. Dubai Trade has been at the forefront of this effort since its establishment and today provides 820 services through its electronic portal, used by more than 113,000 users leading to 50,000 daily transactions. This is down to those who maintain the portal and the support of our partners who chose to use the services.” Mr. Mahboob pointed out that Dubai Trade is continually improving its support services, such as the introduction of the newly launched Land Transportation Management and Warehouse Booking Systems.

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To find out more, please contact your local authorized Mercedes-Benz Distributor or visit our website: Trucks.MercedesBenzMENA.com

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Everyday, practical solutions R

Mercedes-Benz catches up with Logistics News ME to talk about meeting municipal needs and innovating established waste management methods

apidly growing cities, an expanding construction industry, and large seaports and airports all generate increasing quantities of refuse that needs to be disposed of using purpose built vehicles.

Today, with a fleet of more than five vehicle types, Mercedes-Benz is working with municipalities and private firms to meet their waste management needs.

Mercedes-Benz trucks for municipal operations are tailor-made for the wide variety of tasks in cities and rural areas.

The waste removal process normally involves two stages. In the first, refuse is collected, in the second stage, refuse is either taken to a sorting plant, where reusable items are separated from the residue, or it is taken directly to an incineration plant.

As the inventor of the first truck, 120 years ago, Mercedes-Benz has been pioneering the commercial vehicles industry for more than a century, so truck drivers today can enjoy features 18 | Logistics News ME | January 2017

like the Mercedes PowerShift automated transmission – providing stop/start ability, comfort, high fuel-efficiency and low maintenance.

Currently, Mercedes-Benz offers a wide range of trucks for the waste

management segment, from the medium-duty Accelo and Atego models to the heavy-duty Axor, Actros and Econic.

Specifications vary from 8T up to 48T GVW with different engines,

Transport

transmissions and power take-offs. In terms of applications, Mercedes-Benz chassis are tailored for every kind of superstructure, from refuse compactors and skip loaders to sweepers, to mention only a few.

Downtime in the municipal and waste removal sectors can have adverse consequences, making dependable vehicles all the more important and ensuring any downtime can impact service levels and cause more inconvenience.

Thomas Hövermann, head of planning, marketing and product management, Mercedes-Benz Trucks, says: “Besides the Mercedes PowerShift, MercedesBenz Trucks are offering plenty of features and services helping to provide maximum Uptime of the truck. First and most important, Mercedes-Benz Trucks are designed and built with an uncompromising commitment to the highest quality standards, providing outstanding reliability over the vehicle lifecycle.

“Additionally, our Mercedes-Benz Service Solutions offer tailor-made after-sale packages ranging from scheduled vehicle maintenance to complete maintenance coverage including wear and tear and extended warranty, giving our customers total peace of mind with round the clock support from our wide network of sales and after-sales partners across the MENA region. And with FleetBoard vehicle management telematics, fleet owners and operators can easily manage their fleets with a cost and performanceoptimised approach, reducing downtime and boosting profitability of their business,” he continues.

In the R&D of vehicles, Mercedes-Benz Trucks closely collaborates with bodybuilders and also key customers in the municipality segment.

For example, the Mercedes-Benz Econic, with a low entry cab and extralarge windows, was particularly developed for municipalities. Other Mercedes-Benz Trucks fulfil specific requirements for municipality applications through a vast choice of different wheelbases, frame overhangs and purpose-built reinforcements.

Mercedes-Benz Trucks chassis are also predominantly the preferred choice of the bodybuilders due to its flexibility to work on and ease of fitment for any potential superstructure.

Truck Chassis/Superstructure Combinations

Hövermann adds: “We take our customer’s feedback very seriously, trying to provide the optimal product and service solution for our client’s needs, which are unique and extremely demanding especially for municipalities.”

The full range of Mercedes-Benz trucks is designed and built with what Hövermann terms an “uncompromising commitment to excellence”.

“Efficiency is the motivating force behind our range, designed to drive down not only fuel consumption, but every aspect of the cost of ownership and operation,” he adds. Mercedes-Benz trucks offers a solution for every task in the municipal and waste management industry, supported by an after sales network of over 40 dealer locations and a comprehensive roadside assistance network.

The range also provides reductions in fuel consumption. Comparing the market, Hövermann continues: “Trucks with the ‘star’ are renowned for their advanced engine-/drivetrain technologies and high fuel efficiency. Here, for example, we can benefit from the fact that Mercedes-Benz is developing and manufacturing all major components of its drivetrain, like engines, gearboxes and axles ‘in-house’, which ensures perfect alignment between all components; a crucial aspect to realise fuel savings.

“Additionally, Mercedes-Benz Trucks is continuously running extensive driveline and fuel efficiency tests worldwide to optimise its performance in every operational condition and environment, whether it be in Europe or even in one of the harshest of environments here in the Middle East.”

Logistics News ME | January 2017 | 19

VIP Interview

Anchors aweigh Group chair and CEO of DP WORLD Sultan Ahmed Bin Sulayem, reflects on the operator’s greatest achievements of 2016 and speaks to Logistics News ME about the plans for New Brunswick, Heathrow and Jebel Ali How did business perform in 2016 compared to 2015?

We were pleased to announce a strong set of first half results, with 50% year-on-year earnings growth and 56% adjusted EBITDA margins. The more modest likefor-like earnings growth is a reflection of the challenging trade environment. This financial performance has been achieved despite uncertain market conditions, which once again demonstrates the resilient nature of our portfolio. In the first half of 2016, we have invested $586 million of capex in key growth markets, and this investment leaves us well placed to capitalise on the significant medium to long-term growth potential of this industry.

What was your greatest challenge in 2016 and how did you overcome it?

We’ve faced the same challenges as our industry peers – lower commodity prices, currency fluctuations and political issues. This has had an impact on trade growth but we remain positive on the medium and long term growth outlook for our industry. We have maintained the existing shape of our ports portfolio that has a 70% exposure to origin and destination cargo and 75% exposure to faster growing markets.

This positioning has allowed us to deliver both earnings growth and 20 | Logistics News ME | January 2017

shareholder value over the long term.

We believe our portfolio is well positioned to continue to outperform the market and we remain focused on delivering relevant new capacity in the right markets through disciplined investment, improving efficiencies and managing costs to drive profitability.

Which ambitions head DP World’s plans for 2017?

We seek opportunities across the globe where we can add value and where our customers want us to be. And we have been busy: In Canada with the recent announcement of an investment vehicle in partnership with Caisse de dépôt et placement du Québec (CDPQ), one of North America’s largest pension fund managers. The investment platform totals $3.7bn, with DP World holding a 55% share and CDPQ the remaining 45%.

Earlier in the year we also won concessions to operate the Fairview Terminal in Prince Rupert on the west coast US and Port St John in New Brunswick on the east coast.

Elsewhere in the world there were other highlights. In Ecuador to develop the Port of Posorja and an associated logistics zone to transform it into a regional trading hub; Taiwan with an

MoU for Kaohsiung Port Terminal 7; Berbera in Somaliland; Cyprus; Kazakhstan – all evidence of our active global footprint, which we look forward to developing further in 2017 should the right opportunities arise.

Meanwhile, at DP World London Gateway in the UK we believe the addition of the third berth, which is expected to be operational in the first quarter of 2017, will make the product even more compelling for our key customers.

We will also continue to work on our expansion plans at our flagship Jebel Ali Port in Dubai – 1.5 million TEU will be added to Terminal 3 in 2017. Terminal 3 will have a capacity of 4 million TEU and will be the world’s largest semi-automated facility once operational. As a global trade enabler it’s essential that any development to our business is highly strategic and our business development team maintains a very close working relationship with all company divisions to identify areas of potential growth. This approach allows us to develop underserved trade routes as well as carry origin and destination cargo which delivers higher margins to our customers. At the same time, we continue to add capacity where needed and we are also always exploring the role of disruptive innovation (e.g. Hyperloop) in future trade.

We have maintained the existing shape of our ports portfolio that has a 70% exposure to origin and destination cargo and 75% exposure to faster growing markets

Logistics News ME | January 2017 | 21

Technology

The future of warehouse technology

From bionic enhancements to floating storage and algorithms, developments in warehouse technology are creating an increasingly sophisticated logistics landscape. Logistics News ME looks at the advances

W

hen technology trends in logistics are discussed they often focus on automation, IoT and tracking. While 2016 saw advances in all these areas, it also saw developments that dwarfed even the greatest achievements in connectivity.

In November, German car manufacturer Audi equipped workers with the wearable ProGlove – a bionic enhancement which features an embedded barcode scanner to allow for multiple tasks at any one time and what 22 | Logistics News ME | January 2017

the automotive manufacturer terms “ergonomic” working. Affectionately personified as “Mark”, the ProGlove underwent a four week testing phase and now Audi employees are using ten of the wearables in five positions in the firm’s Ingolstadt plant.

Employees can trigger the scanning function by pressing the thumb and first finger together, leaving both hands free for their work and saving additional hand movements.

“For our employees, the scanner glove is a real help. It makes them more

flexible; they can move freely and can scan and pack the cartons more easily,” explains Hartmut Bartsch, head of CKD Packing. “In addition, with the help of the glove, we design complex logistics processes to be more innovative and more efficient.”

“The development of ProGlove follows the idea that wearable electronics have to support the employees. That’s why we have developed a light glove for industry that is intuitive to use, and which can be deployed without any integration

Technology

expense,” states Thomas Kirchner, CEO of ProGlove.

Elsewhere, DHL’s Parcelcopter completed successful tests last year delivering medicine and other humanitarian supplies to islands and remote mountain regions in Germany, paving the way for developments in the delivery of relief and other items. The completion of the three month test marked the first time a parcel service provider had directly integrated a parcelcopter into its delivery chain.

The firm has also made advances in the area of machine-human interaction and collaboration in logistics. Augmented reality (AR) accessed via smart glasses has exceeded predicted levels of impact.

So far mainly adopted for order picking in logistics (also known as ‘vision picking’), smart glasses enable intelligent, hands-free operations. First productive deployments have delivered promising results. A pilot by DHL and Ricoh in the Netherlands showed a 25% efficiency increase as well as strong positive feedback from the users.

“With this combination of fully automated loading and unloading as well as an increased transport load and range of our Parcelcopter we have achieved a level of technical and procedural maturity to eventually allow for field trials in urban areas as well,” said Jürgen Gerdes, management board member for post, e-commerce, parcel at Deutsche Post DHL Group.

Not to be forgotten, Amazon made the papers on a near weekly basis in the final quarter of 2016 when news broke of the successful patent application for drone warehouses and the retailer confirmed it is working on an app it describes as “Uber for trucking”.

The first development, a continuation of its Prime Air initiative to refocus the delivery service its business model currently depends upon. By using blimps to store goods, drones can then make deliveries within hours, rather than days, of purchase.

The “airborne fulfilment centre” (AFC) is an airship capable of flying at altitudes of 45,000 feet or more, housing items the company sells through its online marketplace. In the patent, Amazon describes a method by which drones would fly into the warehouse, pick up the items they need to deliver, and then deliver those items to the customer’s home.

The second piece of news has the

For our employees, the scanner glove is a real help. It makes them more flexible; they can move freely and can scan and pack the cartons more easily potential to redefine logistics on a global scale: that Amazon is at work on an app expected to be released in the summer of 2017.

The app matches truck drivers with shippers looking to move freight, while also removing the need for a third-party broker, who can typically charge a commission of about 15% for doing the middleman work.”

The news follows Uber’s recent acquisition of self-driving truck start up company Otto for roughly $680 million and its intent to become both a freight hauler and technology partner for trucking. In 2012 Amazon made its $775 million acquisition of Kiva Systems, a developer of mobile-robotic solutions that automates e-commerce order fulfilment and warehouse operations.

For a company with slim profit margins, which are entirely dependent on efficiency, these plans would demand heavy investment – so how sure can founder Jeff Bezos be of their success?

Changing times The use of technology to automate and enhance warehouse operations is nothing new and it was only a few short years ago when we envisioned a post 2020 world largely run by robots. But while technology has improved by leaps and bounds, it hasn’t followed the predicted trajectory.

First of all, it is far from optional; in order to be commercially competitive logistics firms and warehouse operators have had no choice but to adopt, and adapt to, technological developments. Secondly, it seems the more bizarre the idea on paper, the more chance there is it will become reality and it isn’t just the logistics companies who are innovating – tech companies are devising more and more solutions to assist the industry.

Summarising its predictions for what it calls a “period of rapid change” the World Bank predicts technology will continue to define progress.

Jean Francois Arvis, senior economist, Trade and Competiveness Global Practice, The World Bank, says: “Logistics will experience a systemic change in terms of workforce and technology adoption. Logistics will be challenged by increasing competition as well as a growing shortage of skilled workers as the baby boomer generation retires. To solve these challenges, logistics is entering a phase of technical transition. Adoption of automation technologies like collaborative robotics will significantly rise in order to meet increasingly complex customer needs Logistics News ME | January 2017 | 23

Technology

and to cope with the aging workforce and skills shortage.”

2017 is tipped to be a big year for AI – potentially at the cost of jobs – following huge developments in Silicon Valley and the newly discovered applications of autonomous machine learning.

The coming decade will see a drastic transformation sweep the industry and the ultimate impact of that will be how humans and machines work alongside each other. While tech driven alternatives are likely to take on manual tasks, workers will become the brains of the machines, constantly required to optimise their performance for ultimate efficiency.

Prof. Dr. Michael ten Hompel, chair of Materials Handling and Warehousing at TU Dortmund University and MD at Fraunhofer Institute of Material Flow and Logistics IML, says: “Even more fundamental are the logistics-related issues arising from human-machine interaction.

“Today, machines can already be controlled by voice commands or gestures. In future, people will communicate with complex robots and even with swarms of simple cyberphysical systems like inBins or intelligent mobile shelves. Communication won’t be unilateral anymore. Machines will also approach humans, for example, in order to trigger replenishment activities or schedule maintenance work. To put it straight: machines will be able to make decisions. This causes two fundamental questions: What role will humans play in the decision-making of the machines and 24 | Logistics News ME | January 2017

how will responsibilities be shared between humans and machines?”

In addition to optimising the performance of machines, the ability to analyse and scrutinise the power of “big data” will also become an essential skill.

In its “2017 disruptive technology” countdown, Forbes wrote: “Big data will be a necessary asset for companies in all sectors, from trucking to data entry, big data algorithms will change the landscape in a big way, metaphorically and literally – geographical information systems will get a major upgrade in speed and efficiency.”

This is expected to bring its professional development and training challenges moving forwards.

Gerdes says: “The digitalisation of everything is a phenomenon that is changing and, in many cases, disrupting almost all established industries. The postal sector learned first-hand the transition from analogue to digital through the advent of email and online communications; these services have diminished mail volumes over the last 15 years. But is this the fate of other logistics services as well? Will physical transportation be displaced by an exchange of bits and bytes?”

Transforming systems The warehousing market is expected to expand at a CAGR of 5.8% during 2014– 2019, to reach a market value of $709.7 billion, according to figures from SOHAR Port and Freezone CEO, Mark Geilenkirchen. He says: “Upcoming technology trends, such as the use of

robots in warehouses, automated vehicles and drones for product distribution, are going to impact the structure and dynamics of the warehousing market by 2020.

“Warehousing is a significant part of logistics enabling the value chain players to stock goods in appropriate condition until the market demand is elicited. The global storage and warehousing industry has grown at a strong pace to reach a market size of $566.4 billion as of 2014, driven by export-import growth, the global retail industry, especially e-commerce, and overall industrial production,” he adds.

But change will not be confined to the warehouse. At all points of the supply chain, automation, connection and wearable tech will drive forward change and enhance transparency in operations For the future, Gerdes predicts: “It may sound far-fetched but 3D printing could impact goods transportation in much the same way as email impacted letters. Some products will no longer be manufactured in large mass-production facilities and shipped around the globe.

Instead, product schemes will be digitized and sent to small factories where products will be 3D printed closer to the customer. This allows for a hypercustomisation of products, resulting in ‘batch size one’ production, accompanied by subsequent new logistics service concepts.”

While many focus on the technology we are likely to see emerge, DHL has also named the fads it believes will be absorbed by more sophisticated systems moving forwards. These include cryptocurrencies and crypto-payments, which the firm says is “out of scope” and realtime services, which it says will be absorbed by other trends such as “cloud logistics, the Internet of Things, and digital identifiers.”

The logistics industry falls at an intersection for hyper connectivity, unique to any other industry; pulled and pushed by the trends driving clients and consumers alike. In a short space of time it has adopted app-based operating systems, collaborative software and GPS and automation technology in order to survive and the future will surely demand more investment in even further reaching systems. How successful that will be is entirely dependent upon the interaction between human and machine – in the warehouse and beyond.

Cover Story

26 | Logistics News ME | January 2017

Cover Story

2

016 was a year characterised by the surreal and unbelievable. On the global stage we saw the election of Republican presidential candidate Donald Trump, likely triggering a sustained period of unpredictable and unprecedented foreign policy and trade deals. In Europe the UK’s vote to leave the EU shook markets and stirred caution as who is in and how is out of the single market, continues to be a point of disagreement in Brussels. In Turkey a failed military coup gripped the world and has since led to the arrest of thousands of citizens, with small scale violence and bombings continuing and a marked increase in instability over recent weeks, including the New Years Eve attack on a nightclub.

Zika Virus broke out in the host country of the 2016 Olympics; Iran cut ties with its Arab allies and recalled its ambassadors; and North Korea claimed a successful nuclear test. Russis is also flexing its muscles - how and why remain to be fully understood. Terrorist attacks continue to sweep major cities across the world and a string of natural disasters have touched every continent.

In the industry it was a particularly difficult year for shipping which suffered catastrophic consequences from a combi-

nation of major events. Overcapacity, consolidation of carriers, stagnant global demand for goods and downbound oil cut freighter bunker fuel prices removing the cost advantage of larger ships.

The climate created then triggered the collapse of Hanjin Shipping Co Ltd over the summer. Speculation on how and why the massive company failed covered everything from the actions of senior executives to overspending during bullish periods.

The silver lining is that in the four months since Hanjin’s bankruptcy filing freight rates have improved significantly for the industry’s remaining container lines.

The low oil price continued to put pressure on every industry, even more so once sanctions on Iran stepped closer to being lifted and it looked likely the nation could flood markets with supply.

There will likely be huge changes on the horizon due to the political events of 2016 and there will also, no doubt, be some tricky times over the coming 12 months, with Iran, Iraq and Egypt all tipped for changes – both positive and disruptive.

2016 didn’t disappoint, but 2017 will be the year we feel the very real consequences of some very strange events.

Logistics News ME | January 2017 | 27

Cover Story

Sultan Ahmed Bin Sulayem

Ruth Waugh

Group chair and CEO DP WORLD

International business development director, Twintec Middle East Regional Office How did business perform in 2016?

Twintec established a permanent office in the UAE this year and following the hard efforts during 2015 laid more metres squared of ‘jointless’ SFRC floor slabs than any other year to date in the Middle East region. Logistics operations represented a large proportion of this volume. The greatest challenge we had to overcome was responding to the large increase in enquiries for Twintec’s unique design and build service. We believe this was a result of clients having poor warehouse floor slabs previously due to poor design or execution during the construction phase, however moving forward this can be overcome by employing and training local staff.

What do you predict will be the key trends and events that will shape the regional logistics industry in 2017?

A higher occurrence of VNA racked or automated warehouses as the region embraces the latest logistics technology. This will lead to a requirement for flatter floors to enable the VNA trucks to operate safely and effectively.

What will be Twintec’s big news in 2017?

Twintec will introduce a totally joint-free floor slab to the local market that eliminates all construction, expansion and saw-cut joints.

What do you predict will be the key trends and events that will shape the regional logistics industry in 2017?

While we don’t forecast, Drewry says 2017 global port throughput will be 2.4%. Drewry’s forecast for 2017 global fleet growth is 5.9%. Short term turmoil caused by Hanjin’s bankruptcy (i.e. $14 billion-worth of goods have been held up in the supply chain) is temporary. Drewry believes it signals the bottom of the market. Meanwhile, conditions for recovery in the medium term are improving, so long as carriers encourage them wisely. The industry is also consolidating with mergers, acquisitions and alliances. Global freight rates have been forecasted by Drewry to improve by 8% in 2017 after four years of decline, leading the industry to potentially make a small $2.5 billion profit in 2017. For DP World, we expect Expo 2020 and the opening up of new markets to drive medium term growth. Our confidence in the region was boosted further when our recently raised $1.2bn for a seven-year sukuk to be listed on NASDAQ Dubai received such strong investor interest that it was two times oversubscribed, receiving more than $2bn in bids. This is a clear sign of support for the economic fundamentals of Dubai and the UAE.

28 | Logistics News ME | January 2017

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Cover Story

Dan Farley

Stefano Pollotti

Chief investment officer, State Street Global Advisors, Investment Solutions Group

Managing director, Gefco Middle East

Proposed global trading agreements are losing support across all markets and the incoming US presidential administration opposes the 12-nation Trans Pacific Partnership (TPP). Moreover, the number of protectionist trade measures imposed globally in 2016 is five times as many as through the same period last year.

A broad reversal in global trade is almost certainly a negative for global growth and is consistent with our modest return forecasts for global equities. Within certain local industries, however, protection will be beneficial as firms become more competitive domestically, just as it will be a drag on companies with substantial global exposure.

30 | Logistics News ME | January 2017

It’s not going to come as a shock to anyone that the past year has been something of a challenge. And I think ‘challenge’ is the right term for it.

2016 has not been a disastrous year, it has been a time for potential client building, re-establishing relationships and making the most of the time to foster new partnerships. For many organisations, whether in logistics, manufacturing, heavy industry or services, this should have been a time to consolidate and keep heads above water but it should not have been a deal-breaker, as long as you channelled your business in the right directions. For us, we placed a much heavier emphasis on our far East operations, where we actually beat our sales targets by 40%. It was a recordbreaking year for that market despite the difficulties elsewhere.

Probably the greatest challenge for us this year could have been the low oil prices, which led to a drop in trade volumes. As I said, we adapted a good strategy in turning our focus in the right directions. GEFCO also has a very flexible cost structure, once again the key word is adaptability and we have the resources and experience to put the theory into practice.

As for the new year, GEFCO has just been awarded an €8bn contract to optimise PSA Group’s global supply chain. This means designing and implementing the global logistics and transport solutions for the three PSA Group brands, Peugeot, Citroën and DS. There can be no better start to the year than that.

There will be some massive changes ahead in terms of political implications on trade but we can only speculate at the moment what those will be. Iraq and Iran are obviously huge factors in how the logistics industry in the Middle East will fare over the next twelve months and beyond. Egypt is another decisive market which is constantly growing and is still, to some extent, an untapped opportunity. It is going to be a defining year in so many ways for so many industries, and logistics is going to play a significant role in all outcomes.

For GEFCO in the Middle East, we are fairly confident that the challenges of 2016 are behind us. Saudi Arabia looks as though it will open several new channels for us and Qatar will once again be back on track. We have a big focus on Qatar – GEFCO is a major player in bringing together the metros, stadia, and infrastructure.

Cover Story

Mahmood Al Bastaki

Steen Jakobsen

CEO, Dubai Trade

Chief economist, Saxo Bank

What was your greatest challenge this year and how did you overcome it?

We anticipated the depressed global economic outlook and took measures to diversify our revenue streams through new customer acquisitions for our flagship products – Dubai Trade Portal Framework and Rosoom. We continued to look for innovative ways to address the needs of our customers and by adopting new technologies to improve our service offering.

What do you predict will be the key trends and events that will shape the regional logistics industry in 2017?

2017 will be another important year for global and regional logistics industries.

Based on multiple expert opinions we are predicting continued macroeconomic headwinds for the first half of 2017 with cautious optimism for the second half of 2017. We see this as an opportunity to be ready for another uplift in regional logistics services and are actively developing new platforms in transportation and warehousing for the benefit of our customers. We believe in working responsibly and sustainably to build a strong business for our customers, people and society. With this long-term approach, we also embrace technology in our everyday operations and the recent government announcement regarding BlockChain technology is a key focus area for us. BlockChain is a new and highly-

secure way of online transactions. It works on the concept of a distributed ledger of database transactions with low-cost and low-latency. This makes BlockChain suitable for the recording of events such as container movements and other records management activities, customer identity management and proving provenance.

We have already demonstrated a proof-ofconcept for BlockChain in trade facilitation at the last GITEX event in October this year. We will continue to work with government leaders, technology providers and customers to pioneer the innovative use of BlockChain technology for crossborder trade and logistics operations.

After a year in which reality has managed to surpass even seemingly unlikely calls – with the Brexit surprise and the US election outcome – the common theme for 2017 is that desperate times call for desperate actions.

With change always happening in times of crisis, 2017 may be a wakeup call which sees a real departure from the ‘business as usual’, both in central bank expansionism and government austerity policies which have characterised the post-2009 crisis.

It is important that investors are aware of the range of possibilities outside of the market consensus so that they can make informed decisions, even in seemingly unlikely market scenarios.

What will be Dubai Trade’s big news next year?

2017 will be another important and crucial year for us as we launch our global operations. We have been invited to establish a similar electronic trade facilitation portal in many countries around the world and we will be making announcements regarding these developments in the first half. We’ve also set up a subsidiary company called DT World through which we will offer our expertise and products to other countries.

This will have a positive impact on local trade too, as exports from one country could trigger the necessary import transactions here in Dubai and the UAE and vice-versa.

Logistics News ME | January 2017 | 31

Cover Story

Hans Christian Ettengruber Managing director, Unitechnik How did business perform in 2016?

Business for Unitechnik was constant on the services provided by Unitechnik. On the project side of our business we feel a slight slowdown because of reduced budgets or cancelled budgets for projects that have been planned.

What was your greatest challenge this year and how did you overcome it?

To identify the customers, that are willing to invest in spite of an economical downward trend. Those will be the winners, when the economy will pick up again. Then those customers have their supply chain well organised and their cost reduced to give them a competitive edge.

32 | Logistics News ME | January 2017

What do you predict will be the key trends and events that will shape the regional logistics industry in 2017?

Customers are more likely to go for automation in projects as they now see the benefit of it; the utilisation and analysing of in house data will become more common; warehouse management systems will be the tools to use more comprehensively.

What will be Unitechnik’s big news in 2017?

We are planning to increase our service part of the business, so customers can achieve higher availabilities with the systems we have provided for them.

Cover Story

Jean-Francois Condamine President, UPS Indian Subcontinent, Middle East, and Africa District What was the greatest challenge for UPS in 2016?

From Syria to Nepal to Rwanda, some of the world’s greatest challenges today revolve around logistics. Humanitarian aid and relief efforts require the collaboration of many entities, across sectors and geographies. The core mission of UPS Foundation is to help build stronger and more resilient communities. UPS invests in the Middle East from infrastructure to technology to human capital to make a measureable impact for those in need.

You can see this with our relief efforts sent from UAE to Nepal and Haiti, where we worked with partner organisations to provide relief supplies and logistics support after the devastating earthquake and hurricane. Or our partnership with the Dubai government to convene dialogue around pandemic preparedness. We are constantly looking for innovative ways to enhance humanitarian logistics to help save lives.

Our partnership with Zipline and Gavi is transforming the delivery of critical life-

saving medicines and supplies to remote areas in Rwanda.

grow and scale their operations to meet their customer needs.

What do you predict will be the key trends and events that will shape the regional logistics industry in 2017?

Look out for small and medium businesses – they are a source for growth that is not to be underestimated in the region. A recent report by the Dubai SME says Small and Medium Enterprises are the “engine” for economic growth and vital contributors to the country’s gross domestic product (GDP). We couldn’t agree more. That’s why UPS will continue to contribute to the national economy by supporting the SMEs in developing their businesses. We have the expertise, with 109 years of experience and access to more than 220 countries and territories, to tailor the right solutions for small businesses. Our company started with two bicycles and a $100 loan, so you see the SME spirit is still part of our DNA. Small businesses represent the future and we are in the business of helping them

What will be the leading “mega-trends” defining your 2017 plans?

Boston Consulting Group identified six megatrends that we agree are impacting the regional logistics industry.

Those include the rapid development of emerging markets, urbanisation, sustainability, infrastructure congestion and scarcity, e-commerce, and digitisation.

We also think that factors such as the Expo 2020, Qatar 2022 FIFA World Cup and National Logistics Development Plans will continue to drive the logistics sector.

While broader macroeconomic factors may potentially soften demand in some areas, we are bullish on the region – and see plenty of opportunity for economic growth. While broader macroeconomic factors may potentially soften demand in some areas, we are bullish on the region – and see plenty of opportunity for economic growth.

From Syria to Nepal to Rwanda, some of the world’s greatest challenges today revolve around logistics

Logistics News ME | January 2017 | 33

Vi e w p o i n t

One Road, One Belt impact in Asia and Darryl Judd, COO, Logistics Executive Group, writes about the potential impact of China’s global trade plans how the industry can explore the benefits

T

here has been so much hype about the One Road, One Belt (OBOR) project. It has been compared to the Marshall Plan however, it is over 12 times this. Superlatives have been flowing since it was first announced by Xi Jinping in 2013. It has been hyped as the Fourth Industrial Revolution.

In China alone apparently over one million documents have been published about it, according to Theresa Fallon’s article “Xi Jinping’s Belt and Road Initiative: How to Win Friends and Influence Europeans”. Xi Jinping has positioned it as the third phase of China’s reform from which it will emerge as a regional leader in international trade that coincides with the emergence of new Chinese led multilateral financial institutions.

As the names suggest, it will connect China via land and sea with the rest of the world. The belt mainly follows the historic Silk Road through Central Asia, West Asia, the Middle East and Europe Southeast Asia, Oceania and Africa.

The Maritime Silk Road will continue through Southeast Asia, Oceania and North Africa and includes the highly contiguous South China Sea. China also plans to connect inland cities to the Indian Ocean to seaports on the east coast, including the transport of oil from Iran and Iraq directly to China by rail which will affect trade through the Malacca Strait.

Investment scope The Chinese Government has estimated the cost of this enterprise to be in the staggering realm of $8 trillion. They emphasise that investment will need to be market-based, were “markets decide on the most efficient allocation of resources” according to Financial Secretary JohnTsang Chun-wah and financing underwritten on international standards. China’s Silk Road Fund of $40 billion will finance infrastructure

34 | Logistics News ME | January 2017

projects linked to OBOR, according to the European Institute of Foreign Studies.

Many countries in the Belt have rushed to join the China-led Asian Infrastructure Bank (AIIB) which some suggest is China’s answer to the American Trans-Pacific Partnership and The Transatlantic Trade and Investment Partnership. The AIIB is dedicated to lending for infrastructure projects with an authorised capital of $100 billion, 75% of which will come from Asian and Oceanian countries.

Political Implications The Chinese government has officially promoted it as a means of creating cohesion through inter-governmental cooperation on a macro level and be underpinned by the development of soft infrastructure in areas such as trade, investment, and customs cooperation.

The aim of “financial integration” through joint efforts AIIB and BRICS (Brazil, Russia, India and China) signing

of MOUs in bilateral financial regulation is to establish efficient regulatory control mechanisms.

However, there have been mutterings of an underlying geopolitical push behind OBOR. Russia, in particular, has raised concerned about the influence China will have over Central Asia. India and other countries have expressed security concerns in the Indian Ocean Region including the issues in the South China Sea and President Obama’s Asian Pivot Policy are all matters of delicate consideration.

Economic Implications The intention of OBOR was, according to some analysts, to find new markets for China’s growing excess capacity of products like steel and construction materials. For example, the Chinese Railway Group is building a high-speed train from Belgrade to Budapest on the proviso that Chinese construction materials are used.

Vi e w p o i n t

Alternative thinking is that it will provide a long needed stimulus for Asia that will relaunch global economic growth.

It will address the “infrastructure gap” paradox that even though the world is flush with savers’ money, infrastructure cannot attract private investors because they do not trust governments to regulate their deals.

Internally China will be able to move its industrial and manufacturing to other parts of Asia and by doing so address domestic pollution and environmental damage. This trend is already occurring in China in any case due to rising labour costs.

Financial Risks There has been a concerning trend for OBOR funding to come not from commercial banks or multilateral institutions like the AIIB as originally planned but from Chinese bilateral policy banks like China Development Bank and Exim Bank, which are known for their risk appetite. Domestically Chinese banks have always been protected so it will be interesting to see how they manage in the international market.

Many underdeveloped countries require so much initial investment to get up to a standard that it is hard to see how this could return a profit and not be seen as aid. Chinese officials insist that OBOR is not a costly geopolitical project offering charitable government aid projects but strictly based on commercial terms.

However, in countries like Pakistan financial losses have been reported and Venezuela a write-down on loans.

Political Risks There have been delays in some parts of the OBOR due to political and economic instability in regions such as the Middle East. Local business investments need government support in policies, and investment protection to facilitate continued grow. Some of China’s partners pose economic, political and social risks. These factors could induce economic uncertainties which China needs to safeguard against in order to ensure their investments are sound.

There is also a worrying truth in the expression: “strategic economic benefits often coincide uncomfortably beside strategically defensive benefits”. China’s expansionist ambitions are feared by

It does not matter if it’s China or someone else, it has to happen countries which have remained cautious in their approach to negotiations based on the impact of the conflict in the South China Sea. These countries are asking for more depth and detail as reassurance that their intentions are not expansionist which makes for a slower process.

Seizing the Opportunity “It does not matter if it’s China or someone else, it has to happen,” said Ronnie Chan, the Chairperson of property developer Hang Lung. Chan pointed out that there is burning demand for infrastructure throughout the developing world that needs to be addressed for economies to continue to grow.

The rationale may be global connectivity but from a business standpoint, there are clear opportunities at a time of rapid accent of the renminbi, including currency swaps, trade financing deals, and offshore bond issuance. OBOR will encourage Chinese firms to invest outwards, and RMB internationalisation will play a significant role in this process.

The International Monetary Fund statistics confirm that by 2020, countries along the land and maritime belts will account for 50% of global GDP and generate opportunities for both China and its increasingly international corporations.

Government agencies in advanced economies are promoting OBOR as an investment to be seized with both hands.

These agencies prove an excellent starting point for companies who are interested in finding out more about how they can benefit from the opportunities presented by OBOR. OBOR holds tremendous export potential for products technologies and services to enter the country. Even though the Chinese economy has slowed, optimism remains high. China aims to double its 2010 income levels by

2020 as the country moves from exports to services and increases in domestic consumption, from manufacturing to innovation and technology focus. The Chinese domestic consumer market is growing, both through e-commerce and retail and is projected to become the largest in the world, opening up an enormous new customer base that has a taste for luxury goods. Aside from the construction industry benefiting from infrastructure investment, there will be additional opportunities created through OBOR initiatives in other industries such as e-commerce, logistics, finance and education.

In the short-term, foreign investors who have already substantially invested in developing integrated supply chains in China will be able to find new uses for their services, rather than relocating elsewhere. For example, Alstom, the French power equipment giant, that rebuilt a turbine factory near Beijing now plans to supply its Chinese hydropower partners as they bid for dam contracts in third countries.

Long term, however, there are substantial gains to be made through collaborations. Chinese companies have the money but multinationals offer technology, experience and good local relationships.

Partnerships with members of the host country can ease challenges such as different standards, cultures, financial and legal frameworks.

This knowledge transfer is central to China’s plan to transition to a higher value-added economy. Pfizer, for example, has committed to staging their global R&D operations in Shanghai, despite concerns about IP protection in China. They will open up their R&D processes, and in return the collaboration will offer them access to the large domestic market which will expand as healthcare reform takes shape, as well as good tax incentives.

In weighing up the risks and benefits, whether it meets all its promises remains to be seen, but OBOR cannot be ignored. Local businesses can get on the front foot by keeping an open mind and being up to date on how their particular industry can partner with Chinese counterparts to seek out and exploit opportunities the OBOR will offer for years to come. Whatever the case, it is well and truly happening, so entrepreneurs belt up if you want to take advantage of the opportunities!

Logistics News ME | January 2017 | 35

Country Focus

The missing pieces The UAE’s logistics sector has enjoyed growth in the face of global slowdowns, in addition to heavy investments from its government and private sector. But despite a predicted industry growth of 14% in 2016, significant challenges remain

T

he UAE’s exponential growth over recent years has been the success story of the region and, even at the height of the oil price crash, the diversified economy of the UAE remained strong.

The continued development of places such as Dubai South, Kizad and Jebel Ali has created a national infrastructure to rival even the most high-tech logistics hubs in the world. But it didn’t come about by accident.

One of the richest countries in the world, the UAE enjoys a robust GDP, with an aggregate average growth rate of 5.5% per annum, despite growth forecasts being cut by the IMF in January of 2016 and the tangible risk of recession in the year’s earlier quarters.

In Dubai alone, for the last three

36 | Logistics News ME | January 2017

decades GDP has increased almost 11 times. During the same period in Singapore GDP showed a 10 fold increase, in Hong Kong seven fold and the US three fold. The IMF predicts that by 2018 the gross domestic product per capita in the United Arab Emirates will reach $57,000, up from $24,000 in 2013.

Consider this growth is recorded in the face of a global downturn in consumption and, ultimately an absence of the usual demand drivers for GDP growth.

The UAE Minister of Economy, His Excellency Sultan bin Saeed Al Mansouri, was quoted in a report this year as saying: “The UAE Economy has proven to be among the strongest economies regionally and the most promising globally. Our economy has

maintained high growth rates in the past few years confirming its strength through a very challenging period.

While many economies worldwide slumped in the years following the global financial crisis of 2008, our economy continued to follow a positive growth trajectory.

“The current fall in oil prices poses a great challenge to all oil exporting countries and the UAE is no exception.

However, our national economy has once again proven its resilience. Thanks to the leadership’s efforts to diversify the economy and reduce its dependence on oil in line with the UAE Vision 2021 and the national agenda, the contribution of non-oil sectors to the national economy has reached 69%, leaving only 29% to the oil sector. “

Country Focus

The successes we are witnessing are the result of a number of integrating factors political stability, security, advanced infrastructure, and an enabling legislative environment. All these factors have made our country a desired destination for businesses

Aluminium and cement manufacturing remains strong in the UAE along with tourism, which has been reinforced recently with worldclass leisure offerings and two major airlines driving arrival numbers. In Dubai, where 25% of the country’s GDP is generated, a strong focus on trade, tourism and construction has created strong economic growth.

While development of Expo related infrastructure will be the primary driver of almost all industries in the country for the coming 24 months, it won’t be the only factor driving growth in the logistics industry.

Looking at recent events there are three primary industry drivers: economic diversification of the country; strength in the international

trade ties of the GCC nations, in additional to regional trade and customs regulations; and the continued development of infrastructure.

Regardless of the GDP predictions it is widely believed that 2017 will be a year of economic strength and progress ahead of the deadlines for such national strategies as Dubai Urban Masterplan 2020, UAE Vision 2021 and Abu Dhabi Economic Vision 2030.

According to plan All these strategies place a huge focus on infrastructure and it is this, coupled with capacity expansions, that will strengthen the competitiveness of Logistics Service Providers (LSPs).

As a statement on Vision 2021 reads: “The National Agenda highlights the

importance of infrastructure and aims for the UAE to be among the best in the world in the quality of airports, ports, road infrastructure, and electricity.

Leading telecommunications infrastructure will allow the UAE to become a forerunner in the provision of Smart services.”

In May, it was announced that the UAE ranked among in the top five of the Nabarro Infrastructure Index, which rates 25 countries across the world in terms of investment attractiveness. The latest index followed the Infrastructure Index 2012, where the UAE was ranked 12th.

The new index rated the UAE as a more attractive investment location than European powerhouses France and Germany. Only the UK, Canada, US and

Country Focus

The economic outlook

Frost and Sullivan predicts 2016 growth for the UAE as a whole to have settled at around 4% with CAGR of 5.7% between 2015 and 2020, driven in part by Expo2020 but, in another part, by logistics development plans and international trade agreements. MEED predicts a growth rate of 4 – 5% GDP a year from 2017 to 2020, following what it termed a “difficult” 2016, with growth of 3.1%, although the official numbers are not yet published.

Australia are more highly rated, said the report. It is this ease of doing business, which ensures the capability to complete such projects is available locally.

For example, this year the $2.88 billion contract for the Route 2020 project by the Roads and Transport Authority (RTA) was awarded to a consortium of French, Spanish and Turkish firms, with a track record for UAE operations.

The service will begin on May 20, 2020, five months before the official opening of the Expo. As part of the project, 50 trains will be purchased with 15 for the Expo service and 35 to upgrade the metro system, said the report.

In the Logistics Performance Index by the World Bank, an interactive benchmarking tool to help countries identify the challenges and opportunities they face in their performance on trade logistics, the UAE ranked 13th in 2016, out of 160 countries.

The index examines performance 38 | Logistics News ME | January 2017

In principle we agreed on 2021 as a ceiling. Some countries might link before 2021 and some of them might even need a higher ceiling. The suspension was logical because you simply cannot build your part and wait for others across six factors: the effectiveness of border and customs management in terms of simplicity and speed; the quality of trade and transport infrastructure; the ease of shipping at competitive prices; the efficiency and quality of logistics services; the ability to track and trace cargo; and arrival of cargo to destinations on time.

“Logistics performance both in international trade and domestically is central to countries’ economic growth and competitiveness,” said Anabel Gonzalez, senior director for the World Bank Group’s Trade and Competitiveness Global Practice.

“Efficient logistics connects people and firms to markets and opportunities, and helps achieve higher levels of productivity and welfare. Unfortunately, the logistics performance gap between rich and poor countries continues and the convergence trend experienced between 2007 and 2014 has reversed for the least performing countries.”

Challenges to be faced However, if the UAE is to continue on its upwards growth trajectory, two major issues must be addressed: that of the development of a GCC-wide rail network and the country’s telecoms capabilities.

Of the latter, while infrastructure and

Country Focus

Jebel Ali Port, Dubai

economic performance rank highly in multiple tables, The World Economic Forum’s 2015 Networked Readiness Index study placed the UAE 23rd in terms of telecom services and the International Telecommunications Union 2015 ICT Development Index placed the UAE 32nd worldwide.

Many attribute this huge disparity in performance indicators to outdated regulations in the telecoms sector, however the ability to impact connectivity for the logistics sector – especially as the IoT age dawns – will cause havoc further down the line In June this year, Mohamed Alabbar told a delegation at hosted by Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, that while the UAE has made significant progress, the work is far from done.

He was quoted as saying at the time: “The UAE has made huge progress in

this field and is way ahead of other Arab countries, thanks to the wise policy pursued by its leaders. The overall commercial value of trade in the country was AED600 billion and only a small portion of this is traded online. Those numbers are really low and we need to get into the opportunities that the digital revolution is providing” Others note the issue is that telecoms as an industry has grown on the back of other industries, rather than fostering its own innovation.

Writer, author, orator and Sharjah Royal family member, Sultan Al Qassemi wrote last year: “The likelihood is that the historic increase in profits and subscriber numbers that these telecom duopolies enjoyed was to a large extent because of the fast paced development of every other industry in the UAE — except the telecom industry.

In other words this growth in subscriber base and profits is not because of their service but is in spite of their service. Instead of adding value to the economy, etisalat and du are merely benefiting from the growth of other industries in the UAE. The more employees Emirates, Dubai Holding and Mubadala hire, the more subscribers Etisalat and du sign up” Another huge barrier for the country is the development of its highly anticipated 1,200km rail network. When launched in 2011 was planned to link up to similar, compatible networks, across the GCC, running through the UAE from the border of Saudi Arabia to the border of Oman. The network will run from Ghweifat to Abu Dhabi, Dubai and the Northern Emirates with major connecting points in between, including Al Ain and Madinat Zayed, taking in all major ports in the country.

Last year, the tender for the second phase of the project was suspended. The first phase continues operations after commercial activity for Etihad Rail commenced in December 2015. To date, Etihad Rail has transported more than 7.4 million tonnes of granulated sulphur for Abu Dhabi National Oil Company (ADNOC), the equivalent of 494,000 truck trips.

One train removes approximately 300 trucks from the road, producing 70%80% less carbon dioxide emissions than trucks required to transport the same tonnage. However, both Oman and Saudi Arabia’s plans have also faced delays and the official project deadline has now been pushed to 2021.

Fast Facts The UAE’s transportation and logistics segment accounted for around $29.08 billion in UAE’s GDP for 2015. Services sector will be the growth engine for the UAE economy. Dubai leads the Logistics industry in the UAE with around a 45% share in 2015, followed

by Abu Dhabi. The logistics industry constitutes more than 14% of Dubai’s GDP, the highest amongst all emirates. The strategic geographical position of Dubai and improved infrastructure facilitate a substantial share of international shipments directed to the UAE.

UAE infrastructure • • • • • • •

Khorfakkan Port Port of Sharjah Kizad Jebel Ali RAK Dubai South Abu Dhabi Port

“In principle we agreed on 2021 as a ceiling. Some countries might link before 2021 and some of them might even need a higher ceiling. The suspension was logical because you simply cannot build your part and wait for others,” said UAE Minister for Infrastructure Abdullah Belhaif Al Nuaimi, in a report released in Q3 last year.

The road ahead The UAE is built on a can-do attitude that dares to dream – no other country in the Arab world has achieved what it has economically and it is the attitude of those in the country, as well as those who lead it, which drives that. This is supported by a strong desire to lead future innovations and integrate the latest technological developments in all new projects, strategies and developments.

In addition, the UAE is home to multiple logistics mega-projects, Logistics News ME | January 2017 | 39

Country Focus

Instead of adding value to the economy, Etisalat and du are merely benefiting from the growth of other industries in the UAE. including Dubai South and Kizad. The problem remains however, that integration with its neighbouring nations hinders what can be achieved.

Without a common strategy for telecoms and rail development, the UAE – along with the rest of the GCC – could see its plans jeopardised.

While on one hand, this is a country that over recent years has demonstrated economic growth in the face of a global decline in the demand for goods, on the other the UAE’s capability as a transhipment hub can only account for so much growth.

David Harris, director of international logistics services, Dubai Department of Economic Development, comments: “The question then arises: How long will current stocks absorb existing economic growth and when will the inevitable upwards price pressure hit due to a shortage of supplies?

“Aligned to this are longer decision cycles concerning new investments in the logistics infrastructure.

Multinationals are less inclined to make such investments due to reduced liquidity and also the lack of multi-year contracts that would normally stimulate investment decisions,” he continues.

While on one hand, this is a country that over recent years has demonstrated economic growth in the face of a global decline in the demand for goods, on the other the UAE’s capability as a transhipment hub can only account for so much growth moving forwards.

While there is evidence of a significant growth spurt in the retail industry – driven by the continued development of malls and an increase in disposable income, not to mention the infiltration of smart devices to drive e-commerce and m-commerce – rail and telecoms 40 | Logistics News ME | January 2017

Dubai Airport Free Zone

KIZAD, Abu Dhabi

infrastructure are still required to hit even modest targets.

Harris explains: “Overall, the investment prognosis looks positive.

The population in the Middle East is currently growing at a rate of over 1.5% annually. This represents more than 6 million people per year in the region who will become future consumers and drivers of current demand, according to the UN. MENA’s encouraging report of GDP figures is another indicator of sustained growth.”

Al Mansouri adds: “All indicators currently confirm the stability of the

UAE economy and its potential to thrive even as our country becomes a major economic centre for the region and an international maritime and aviation hub that connects the East to the West.

“The successes we are witnessing are the result of a number of integrating factors – political stability, security, advanced infrastructure, and an enabling legislative environment. All these factors have made our country a desired destination for businesses and helped the UAE build the second largest economy in the Arab world achieving truly remarkable growth rates.”

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Vi e w p o i n t

Sailing The Ocean What may have worked in the past, may not prepare you for the future. Prakash Menon writes on the importance of adaptation

A

s retailers, we need to have the competitive edge. Now, if you simply continue to do what you’ve always done in the past, there is hardly a chance of survival. The idea is not to survive, but to thrive.

The perfect example is Cirque du Soleil. Cirque du Soleil is a classic example where circus was, once upon a time, the place for entertainment.

There used to be tents where a lot of customers took their children for a nice weekend affair. However, one of the challenges the circus had was the fact that the tents were quite ordinary when it came to ambience, plus the seating 44 | Logistics News ME | January 2017

was not very comfortable. The other challenge was the disagreeable temperature inside, depending on certain seasons. Nonetheless, the excitement around the animals still attracted the crowd. Plus, there was no other medium of entertainment, as we have today: now we have paid television, internet, YouTube and so many other channels for free.

Slowly, the circus became a bit of a challenge for the owners. One issue was around the maintenance of the animals, because animals are not cheap to maintain. Another thing was that a lot of animal owners didn’t like how

animals were treated in the circus, so they rose against this form of entertainment and influenced others to abandon the circus. Very soon, the people patronizing the circus found that the numbers are reducing, so it was very difficult, both financially and commercially, to run the circus.

At the same time, theatres were becoming a novelty, as they were providing better ambience in nice hotels, leather seating and drama.

Hence, people started going to theatres instead of circus, even though the theatre was more expensive.

So when Cirque du Soleil first came

Vi e w p o i n t

up, the idea of a circus was still applied, just that they introduced trapeze artists as the main performers. Soon after, these trapeze artists began to be seen as the so-called heroes within the circus arena. This is how Cirque du Soleil thought of combining the drama and the circus and come up with a novel strategy that differentiated them from the other competitors in the market place.

Retailers are finding themselves to be in a similar scenario. For example, department stores try to bring in the ambience from the theatre and also provide the wow factor. Many retailers tried this even with the grocery supermarkets – some of the supermarkets have come up with the wow factors, such as the ones in Australia, where they hang a lot of fake animals from the ceiling.

The Cirque du Soleil came up with the concept of combining the circus, which was about the trapeze artists and the gimmicks of clowns being the centre of attention, magically intertwined with the drama of theatre.

Thus, they took the circus from the tents into a proper hotel and provided

every retailer needs to be nimble and must come up with his own blue ocean strategy to stand out, depending on what the market demands leather seating and made the whole place more expensive, but not as expensive as the theatre and operas were. But they enabled an entertaining, relaxing and great ambience, with no animals included - a completely

different strategy, which we call the blue ocean strategy.

Even if competitors tried to copy and emulate this strategy, there were too many hurdles for them to cross. And of course, being the ‘first-mover’ in a market always has its upside.

Hence, every retailer needs to be nimble and must come up with his own blue ocean strategy to stand out, depending on what the market demands.

There are a lot of new concepts stores, such as the one from Apple – the Genius Bar store, where you’ll find all staff dressed in one color. Not only is the staff knowledgeable about servicing their client, but they also have a fantastic area where you can just walk in with your laptop or Mac and they can teach you, provide tutorials and run mini workshops within the shop itself. No other competitor came anywhere close to it, because they have a very unique strategy, the product is fantastic because the design is amazing and the service is even better. Shopping with Apple is not an errand, its an experience.

The idea is to not just keep up with the times, but to stay way ahead of them.

Logistics News ME | January 2017 | 45

The insider view: Growth drivers for the year ahead

SOHAR Port and freezone has named 2017 its Year of Logistics. In the first of two part series, CEO Mark Geilenkirchen, shares insight from an exclusive report by MEED on the trends that will shape 2017

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CC governments have identified logistics as one of the key sectors to support their diversification strategy, with huge infrastructure spending laid out over the near future.

A focused approach towards the development of free-trade zones by the GCC nations has been a major contributor to the development of the logistics sector. Also, the promotional policies of free-trade zones have attracted multinational corporations to setup continent-level distribution centres for air and sea modes, thereby boosting the logistics services market.

Saudi Arabia Saudi Arabia’s General Authority of Civil

46 | Logistics News ME | January 2017

Aviation (GACA), with the support of other government agencies, is planning to set up free-trade zones at Jeddah and Riyadh airports as part of the long-term plan to diversify the Kingdom’s economy.

The free-trade zones would be set up to attract foreign businesses through relaxed licencing, visa and taxation rules across industrial and services sectors.

UAE Free-trade zones are an established phenomenon in the UAE. Jebel Ali, the UAE’s first free-trade zone, was setup in 1985, and has helped the country to significantly boost its industrial base and diversify its economy. Well over 20 freetrade zones now exist in the country, offering a range of benefits to businesses,

such as 100% foreign ownership, import and export tax exemptions, repatriation of capital and profits, corporate tax exemptions up to 50 years, no personal income tax, and assistance with labour and support services. One of the latest free-trade zones is Umm Al-Quwain, set up primarily for SMEs and micro businesses; however, it is also attracting larger businesses.

Oman To diversify its non-oil revenues, Oman began setting up free-trade zones in 2000.

Oman currently has three functioning free-trade zones: at Salalah, Sohar and Al Mazunah. Salalah and Sohar are the larger and more important free-trade zones, and operate major projects. Oman is now

Vi e w p o i n t building its fourth free-trade zone at the port city of Duqm, which when completed is planned to cover a mammoth 1,777 square kilometres, to serve the tailored needs of heavy manufacturing, tourism, logistics, food packaging, education and fishery industries.

Kuwait Kuwait plans to build free-trade zones on five of its islands: Boubyan, Failaka, Warba, Miskan and Awha. The planned zones would serve as economic and cultural gateways between the northern Gulf region and Kuwait. These are slated to boost regional and international competitiveness. The proposal includes involving the private sector to finance, execute and operate the free-trade zones.

Governments across the GCC are leveraging existing and constructing new free-trade zones to offer a competitive edge to businesses and to help diversify their economies.

Qatar Ras Bufontos free-trade zone spans 4.1 square kilometres of land close to the new Hamad International Airport and is specialised for companies operating in the technology, energy, construction, infotech, and transportation sectors. Two other special economic zones include Um Alhoul and Al Karaana. Um Alhoul will be a 33.5 square kilometres lightmanufacturing cluster adjoining the new port project, south of Al Wakrah, while the 38.4 square kilometre Al Karaana, located halfway between Doha and Abu Samra, targets businesses involved in building materials, machinery and fabrication, specialised spill-over industries, as well as safety, maintenance, and specialised warehousing and logistics activities.

Bahrain Bahrain boasts three main free-trade zones: Bahrain Logistics Zone, Bahrain International Investment Park, and Bahrain International Airport. These are suitable for foreign companies intending to use Bahrain as a regional manufacturing or distribution base.

These free-trade zones enjoy a robust infrastructure and offer significant investment opportunities for logistical expansion, to help overcome existing trade bottlenecks.

POPULATION GROWTH In 2015, the population of the GCC region was about 50 million, with expats making

up more than 40% of the total. The region’s growing population, compounded by a high proportion of expats along with a large working-age demographic, increases travel frequencies and makes further investment in transportation and logistic imperative.

The growing population also increases trade demand, stimulating all industries from retail to automotive, enhancing the attractiveness of the GCC region for investment across sectors, leading to the further expansion in logistics.

Between 2014 and 2019, the GCC’s population is expected to increase at an annual rate of 2.5%, much higher than the aggregate global population growth rate of 1.2%, further driving demand in the sector.

Growth in the retail sector and the expansion of logistics networks across the GCC region share a cause and effect relationship, as each has been driving the development of the other. There has been a boom in the construction of refrigerated warehousing facilities, especially in Dubai, Oman, Kuwait and Saudi Arabia, with significant levels of investment in cold chain logistics.

This has been due to the rapid growth in the FMGC retail markets, fresh foods market, and the growing preference for frozen and chilled foods. Due to the growing opportunities and promising prospects, private players are also investing in logistics. In late 2013, Spinneys, the Middle East supermarket chain, expressed its willingness to invest in constructing cold storage facilities worth $15 million in the logistics cluster of Khalifa Industrial Zone in Abu Dhabi, UAE. The GCC retail market was valued at

$221 billion in 2015, driven by steady economic growth; rising disposable incomes; a growing, young and affluent population; increasing penetration of international retail players; and mega events such as the 2022 FIFA World Cup, and Dubai Expo 2020.

MANUFACTURING SECTOR BOOM The GCC manufacturing sector, expanding at a CAGR of 5.2%, is one of the primary factors driving the demand for logistics in the region. Factors driving manufacturing industry growth include low setup and running costs, duty-free access to manufactured goods in the GCC, the Greater Arab Free Trade Area (GAFTA), the US-GCC Framework Agreement for Trade, and favourable tax regimes.

In 2015, the GCC region had 16,842 manufacturing units, and the sector is projected to witness a CAGR of 4.8% from 2015 to 2020. Logistics, an integral part of the supply chain, is essential for the procurement, production, distribution and handling of raw materials and finished goods.

Moreover, the capital-intensive nature of GCC industry makes it imperative to have a robust logistics infrastructure.

The growth in the manufacturing industry has been supporting strategic initiatives such as import substitution.

E-COMMERCE GROWTH High Internet penetration and the changing buying habits of consumers in the GCC have been the main drivers of a five-fold jump in e-commerce demand, from $3.3 billion in 2010 to $15 billion by Logistics News ME | January 2017 | 47

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2015. About 54% of the population in the GCC is young, below 25 years of age, and mostly tech-savvy, further driving online retail demand. Lured by growth volumes, private equity and venture capital firms are also investing in the GCC’s burgeoning e-commerce sector.

Swift logistics is indispensible in order to manage inventories, billing, packaging, shipping, cash on delivery, product return and exchange, tracking, and much more. But as an emerging economy, operational gaps on the GCC’s logistics front are posing significant bottlenecks to growth.

Nonetheless, e-commerce is still one of the top megatrends to boost business in the GCC and is therefore expected to climb 40% by 2020.

GCC TRADE Trade with Asia and Europe is likely to remain the major driver of freight forwarding and transportation companies in the region. The booming GCC trade results in huge demand for port services. Between 2012 and 2014, the region’s total imports increased by 5.3%, while total exports decreased by 2.9%, mainly due to falling oil prices.

The major trade partners of the GCC region include the twenty-eight countries of the European Union, China and India, which together account for nearly 40% of its total trade. As the GCC develops itself as an important global trade hub, demand in its logistics sector will rise strongly. Typically, the UAE and Qatar have been the most active trading nations in the GCC, while the much larger economy of Saudi Arabia has todate been slightly inward facing. But that is changing now, with all the GCC nations becoming more focused on 48 | Logistics News ME | January 2017

diversification and strengthening trade relations with other nations.

Trends in Logistics Contract Logistics The dominance of integrated service providers is a major trend in the GCC market, with the sector slated to expand by 33% in the MENA region by 2017. By outsourcing the logistics part of their operations to 3PL or 4PL providers, companies can focus on improving their core competencies while saving time and money. Moreover, increased competition has necessitated outsourcing to help companies maintain their position in the market. 4PL is the next step in the evolution of the logistics industry, as more customers require partners to share risks and gains.

IoT & Smart Logistics The Internet of Things (IoT) is rapidly gaining ground in the logistics sector in the GCC, with companies implementing enhanced connectivity technologies to increase efficiency in port and road logistics. IoT offers traders a mobile, round-the-clock application platform that gives them real-time information from any geographical location. This in turn leads to better traffic management in and around port areas, and reduced waiting times at the docks. As an example of a successful IoT implementation in Dubai, part of a “Smart Port” initiative, active RFID (radio-frequency identification) tags have been issued to trucks transporting cargo to and from Jebel Ali terminal. The UAE and Qatar will also invest significantly in the development of IoT, with the GCC’s cloud market set to grow from $118.5 million in 2014, to $668.5 million by 2020.

Autonomous Vehicles Autonomous vehicles are capable of sensing their environment on the basis of global positioning systems (GPS), radar, sensors and software, and navigate without human input. The technology of autonomous trucks holds great promise in the GCC as it can infuse a lot of efficiency in the road freight industry by reducing a large number of low-value expat jobs and creating high-value digital technology jobs for GCC nationals. Most of the freight in the GCC moves by truck, with more than one million trucks currently in operation, and this number has been growing at 5%–9% year-on-year since 2012. Experts believe that this trend would change the face of the GCC logistics industry, providing great cost savings and technological advantages to trucking companies in the region.

Development of Rail Network The Gulf region’s railway landscape is set to transform due to the vast number of projects in planning and already underway. The need to balance out excessive dependence on roadways, save on fuel costs, and lower environmental impact has necessitated huge investment towards the development of railways in the GCC region. Over $200 billion have been earmarked for investment in constructing thousands of kilometres of new railway lines across the GCC. Saudi Arabian Railways is building a massive rail network of 5,000 kilometres to strengthen its existing road connectivity. ________________________________ Next issue, Mark challenges ahead

writes

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2017: The good, the bad and the rest Saxo Bank head of macro analysis, Christopher Dembik, predicts that 2017 will bring one piece of good news and two pieces of bad news for the global economy

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ormer British prime minister Sir Alec Douglas-Home, said: “There are two types of problems in life, political problems that are insoluble and economic problems that are incomprehensible.”

He was not entirely wrong. In recent years, the way in which the financial markets have moved and the emergence of negative rates do not match anything that is taught in the economics textbooks. Fortunately, 2017 should confirm the return to normal that began at the end of this year. That’s the good news.

50 | Logistics News ME | January 2017

The good news…

Ultra-low interest rates, cheap oil and “lowflation” are about to end. Since last summer, inflation expectations in developed countries are once again on the rise due to higher global commodity prices and, also, the confirmed exit from deflation of China. After years of decline, inflation within the G7 reached an average of 0.8% by the end of 2016 in comparison with a low point of 0.35% in May of the same year.

Global sovereign bond yields (all maturities included) have dropped to a floor of 0.6% in early summer but are now getting up again. By early 2017, they

should reach an average of 1.5% although this level remains quite low by historical standards. Finally, oil prices have started to increase in the wake of the recent OPEC agreement, even though it has little chance of being fully enforced by member states of the cartel. In fact, history teaches us that they have systematically pumped more than their targets, especially over the period 2000-2007.

This new economic paradigm confirms that economic conditions are getting back to normal. Negative interest rates, resulting directly from ultra-accommodative monetary policy of central banks, were an anomaly. On the contrary, oil price around

Vi e w p o i n t

$40/barrel was much more “normal” considering that the average oil price from 1862 to 2016 is around $34.20. From this point of view, the anomaly is not so much the recent period but rather the period prior to mid-2014 when oil prices was above $100 per barrel.

The first bad news…

The first bad news is that 2017 should confirm that sluggish global growth is here to stay longer. Once again, growth will be below the average level of the period prior to the financial crisis of 2007-2008. Since 2011, the continuous reduction of the share of international trade in world GDP (less than 22% expected in 2016 versus a peak at 25% in 2008) is a symptom of this long-lasting slowdown of growth that has been noticed since the GFC. The main economic drivers at the global level – the United States, China and Europe – are currently in a slowdown phase. Nevertheless, a new crisis has little chance of happening next year, especially when taking into consideration business and economic cycles. In the United States, the continued process of policy rate normalisation (that has started in December 2015) should have a marginal direct economic impact. It is hard to imagine that households and companies will change their behaviour because of a half-point or three-quarter point increase in short-term interest rates.

Even if interest rates reach 1.5% to 2% by late 2017, they will still be set at very low level by historic standards, both in absolute terms and relative to inflation.

The possibility cannot be ruled, however, that the Fed might adopt a more hawkish stance than expected in order to offset the economic impact of the building fiscal push decided by president-elect Trump. In such a case, the market will have to get used quickly to this change of tone.

Our vision for China remains positive.

Growth rate should be around 6 to 6.2% next year. Our optimism is based on three main arguments: 1) the fast incorporation of new technologies into the production process, thus increasing productivity, 2) the constant increase in the contribution of the service sector to GDP (40% in 2005 versus more than 50% in 2016) and 3) a prudent and more effective monetary policy. In this respect, we can mention the better

The countries that fit this rule should abandon the currency peg to the USD, when it exists, in order to implement real monetary reforms management of foreign reserves since they only fell by -5.5% in 2016 versus -16% in 2016 and the stabilisation, yet to be confirmed, of the CNYUSD around the level of 7.00 by next year.

Europe will be the real loser since the continent has not really experienced a strong economic recovery (with the exception of the United Kingdom). In the Euro area, growth is expected to reach 1.3% in 2017 versus 1.6% this year (considering that growth in Q4 will be identical to Q3) and 2% in 2015. If the 2017 forecast is confirmed, it will, obviously, increase the pressure on the ECB to take additional measures during the course of the year. Political risk in Europe, linked to the forthcoming elections in the Netherlands, France and Germany, and the UK triggering Article 50, remains in the foreground. Investors, whose have been caught off guard by the outcome of the UK referendum and of the US presidential election, are now getting used to this new normal. The reaction of the financial market in the aftermath of the Italian constitutional referendum is the best proof that investors are more resilient to political risk in developed countries than a few months ago. It can thus be wise to assume that the economic and financial repercussions of the upcoming political events will be quite low (or at least manageable). Even Poland, whose risk premium spread has increased strongly in 2016 due to the unorthodox economic measures taken by the ruling PiS (for the first time since 2002, Poland’s spread is higher than that of Hungary!), should see its financing conditions improving.

The second bad news The second bad news is the strengthening of the US Dollar resulting both from the policy rate normalisation in the United States and the recycling process by emerging countries of their surplus in USD in the US market. A strong US Dollar is the fear number one

of investors and policymakers because it means that global growth is likely to get down further.

According to a study published by the BIS in November 2016: “a one percentage point (aggregate) appreciation of the Dollar is associated with a 49 basis point decline in the growth rate Dollar-denominated crossborder bank lending.”

Obviously, emerging countries are the most vulnerable, especially those that have the specificity of being heavily dependent on foreign financing and that are subject to a high level of political risk.

This is, especially, the case with Turkey.

Its financial system depends on financing in USD due to its low foreign currency reserves, low level of domestic savings and high external debt. Furthermore, its currency could experience greater instability next year due to the risk of government takeover of monetary policy.

Turkey’s issues are exacerbated by the consequences of the failed coup, which continues to destabilise the democratic institutions and weigh negatively on economic sentiment. The case of Turkey, however, raises the question of the exorbitant economic cost supported by many countries that are dependent on transactions indexed in USD (and, at some extent, in EUR).

This system is unsustainable in a strong Dollar world. The risk is to trigger the collapse of several EM currencies as was the case last June when Nigeria had to abandon the currency peg to the US Dollar or last November when Egypt did the exact same thing on the advice of the IMF, which resulted in a depreciation of almost 100% of the Egyptian pound.

The basic rule of economics is that a country with weak political institutions and a weak economy must have a weak currency. The countries that fit this rule should abandon the currency peg to the USD, when it exists, in order to implement real monetary reforms. They can either adopt floating exchange rate, or establish a currency board (with the immediate advantage of reinforcing monetary policy credibility) or implement a hybrid system by fixing the currency exchange rate based on a basket composed of the US Dollar and oil price, when it concerns oil-exporting countries.

This last solution would be particularly timely for Venezuela which could default by the end of next year unless it receives a new financial package from China.

Logistics News ME | January 2017 | 51

5 minutes with

Food for thought Qusai Kankazar, CEO, Massar Solutions, speaks to Logistics News ME about reducing waste and outsourcing solutions

What are the main trends currently influencing supply chain management in the UAE? There are a number of trends that have influenced supply chain management, specifically the advances in technology that are being tailored and applied to the industry. This is particularly apparent in the F&B industry to look at cutting food waste during the transport of goods.

Monitoring and measuring technologies are fitted to trucks to monitor everything from routes, driving methods and the freshness of the food or beverage that is being transported.

How much have you invested in fleets, technology and storage, to drive the development of new solutions?

We have continually looked to expand our product offering to give our existing and new customers comprehensive solutions to all their logistical or fleet 52 | Logistics News ME | January 2017

operations, in the various sectors they work in. One of our main objectives in our diversification is our committed to adopting smart solutions for every aspect of our business in line with the UAE vision to be a centre of innovation and Smart Cities worldwide. Within our industry we have actually taken a leadership role within several areas, this in turn will benefit our customers.

For example, we have acquired the sole distribution of ARVENTO tracking and telematics products in the UAE. These services provide our customers with costeffective, technology-enabled tracking: keeping client fleets safe, mobile and controlled. The software gathers information giving us detailed data on both the driver and vehicle that we can monitor from any location via a computer or mobile device. The analytics gathered enables our clients to improve on various elements making all processes more streamlined.

What are the primary benefits to a business wishing to outsource its logistics requirements?

Outsourcing will help companies looking to cut costs and streamline their businesses. With fixed assets like small and large trucks being outsourced to organisations like ours, we are able to support them to reduce constraints on their core business, while allowing us to create sustainable revenue streams through acquisition, long-term leasing, rental and utilisation of their vehicles and mobile capital equipment. In addition to this we always look to determine where we can provide further value added services within the same product life cycle in order to help streamline our clients’ businesses.

How can better logistics solutions cut food waste from the supply chain?

There are three main elements that we believe will drastically reduce food waste

5 minutes with

during transport, firstly as mentioned, using technologies to ensure the goods are being transported in a efficient and timely manner. Secondly the vehicles being used have to be tailored to the goods that are being transported, for example we have a fleet of trucks that are suitable for goods that need to be refrigerated or frozen. In addition to this we have warehousing for chilled goods starting from 5°C as well as reaching ambient temperatures ranging from 1825°C depending on the requirements.

Thirdly driving a truck specifically for F&B requires advanced skills to ensure both the vehicle and what is being transported is done so safely and efficiently.

This is also why we go above and beyond to continually train our drivers how to operate and drive the trucks.

How is Massar Solutions helping the industry to achieve this?

We conduct ongoing research into ways to reduce food wastage, maximising the efficiency of our fleet and increasing profitability for our customer. This is done through various software that monitor the vehicles, drivers and routes. We also insure continual training of our drivers. This is not an

industry standard unfortunately, and results in many companies operating with drivers who are not trained to operate light trucks and monitor the products they are transporting. This

often results in wear and tear to the vehicle as well as endangering the products they are transporting which is critical when delivering food or beverages.

Logistics News ME | January 2017 | 53

Supplier news

SUPPLIER NEWS

Mai Dubai accounces $21m automation partner Mai Dubai, the Dubai-based bottled drinking water company, has commissioned Swisslog to automate its storage and distribution logistics at its new mega expansion project in Dubai in order to reach its 2020 goals, in a project valued at $21m.

The automation project will see Swisslog Middle East deliver a new automated raw and packing material warehouse, extend its production capability as well as build a high bay warehouse to store finished goods. With a height of 25 metres and a storage capacity of 17,560 pallet locations, the finished goods warehouse will provide sufficient storage space for Mai Dubai’s high volumes, while the raw material/ packing material warehouse has a height of 14 metres and 5,592 pallet locations.

The Swisslog Vectura pallet stacker 54 | Logistics News ME | January 2017

cranes, connected with a conveyor system, will provide highly efficient storage and retrieval and a monorail system, with 44 Swisslog trolleys and a transportation length of 1,000 metres, will link all areas together, including the existing production lines.

“We are delighted to be working with Swisslog to reach our 2020 goals,” said Jay Andres, CEO of Mai Dubai LLC. “Aside from significantly improving the efficiency of our operation, the project will enable us to remain competitive in the market long-term, and will open up opportunities to grow our business further in the future.”

“In our mission statement we talk about maintaining an innovative, safe, efficient and happy work place, and we’re confident Swisslog is the right partner to support us with this mission.”

Frédéric Zielinski, General Manager of Swisslog Middle East, said: “We

are extremely proud to have Mai Dubai as a customer. What makes this partnership special is the synergies between the vision and values of Swisslog and Mai Dubai.

“At Swisslog, we have many more projects in the pipeline and we are continually receiving requests from local businesses. Swisslog is fully committed to supporting the growth of regional businesses.”

Mai Dubai’s commercial operations began in March 2014 and the company has been growing exponentially ever since.

In 2015, Mai Dubai was the only bottled water company to be given the highest rating in food safety by the Dubai Municipality. The company is the official drinking water supplier for Emirates Airline and has already exported its products to more than 13 countries. Swisslog designs, develops,

Supplier news

GAC adds centralised cargo declaration service to aid clients through Brexit GAC has introduced a new centralised service to help ship owners navigate the paperwork required for the import of cargoes to European Union (EU) ports from outside the Union.

Operators of vessels carrying such cargoes must declare cargo information to the customs authorities in advance of the vessel’s arrival.

According to a statement, GAC is now helping ease the administrative burden with a dedicated team of fiscal experts formed to offer clients information and guidance on the process, and to handle customs paperwork on their behalf.

This new value added service allows operators to delegate Entry Summary Declarations for all EU member states where their vessels call to GAC, regardless of whether or not it is the nominated agent handling the port call. Customers can take advantage of this service either as a stand-alone solution or as part of a package through the GAC’s Global Hub Services.

Wynne Raymond, GAC UK’s tanker manager, said: “Recent events including the Brexit vote in the UK have highlighted the need for expertise to help clients navigate the paperwork when dealing with the EU. By drawing on the GAC global network and regional specialist expertise, we are offering customers the option to channel their EU Cargo Declaration matters through a single point of contact, simplifying the process and giving peace of mind that there will be no delays due to customs requirements.

“As an added advantage, economies of scale mean that we are able to offer this valuable service at a very competitive fee.”

Rockwell Automation introduces drive solutions ESET business solutions scores perfect 10 ESET Endpoint Security has registered a perfect score in the latest comparative test of business security solutions conducted by AVComparatives and MRG Effitas.

The flagship ESET Endpoint Security product generated zero false alarms and registered 100% detection in three tests of anti-malware protection, a False Alarm Test and a test for protection against exploits, which are chunk of data or sequences of commands that take advantage of a bug or vulnerability to cause unintended or unanticipated behavior to occur on computer software, hardware and devices.

Palo Luka, ESET’s Chief Technology Officer, said: “The test showed it’s possible for organisations to enjoy strong protection without spending scarce resources on false alarms. ESET Endpoint Security allows customers to do more with their systems.” On top of effectively blocking threats, ESET has been also been recognised as the most lightweight solution on the market in a recent special Network Performance Test.

“Customer safety and protection are fundamental to ESET and the test results echo our commitment to create and offer best-in-class products offering at the same time detection accuracy and low impact on performance,” added Dimitris Raekos, ESET Middle East GM (pictured).

Rockwell Automation has introduced a suite of drive solutions that will help users reduce energy costs and increase machine uptime for assets running in high-demand applications.

The Allen-Bradley PowerFlex 755T drives provide harmonic mitigation, regeneration and common bus system configurations.

The latest PowerFlex drive offering marks the introduction of TotalFORCE technology from Rockwell Automation. This new drive technology delivers high quality motor control through precise, adaptive control of velocity, torque and position for electric motors.

TotalFORCE technology incorporates several patented features that are designed to help optimise a user’s system and maintain productivity.

“AC drive technology is an important investment for our customers, and they want their application up and running every possible minute,” said Brad Arenz, product manager, Rockwell Automation. “The PowerFlex 755T drives have been designed to provide savings from installation, through operation and maintenance with advanced features that allow you to optimise use of your assets.”

The expanded Allen-Bradley drive portfolio now includes the PowerFlex 755TL low-harmonic drive, PowerFlex 755TR regenerative drive, and PowerFlex 755TM common DC bus drive system, all compliant to the IEEE 519 specification. These new drives offer the additional advantages of a world-class footprint, comprehensive diagnostic and maintenance features, and simplified startup and installation.

PowerFlex 755TL drive: The PowerFlex 755TL drive uses active, front-end technology and an internal harmonic filter to reduce harmonic distortion. The drive is available from 250 to 1,800 Hp (160 to 1250 kW).

Logistics News ME | January 2017 | 55

Supplier news

Almajdouie Logistics Company moves MD90 aircraft Last month, Almajdouie Logistics Company (MLC) planned, executed and managed the complex move of a retired MD90 aircraft from Jeddah International Airport to Riyadh.

In collaboration with the Saudi Arabia Airlines, MLC technicians and engineers; specialising in the field of heavy transport, designed the transportation plan for its final destination at the Saudi Special Forces Training Centre.

The twin-engine, short- to medium-range, single-aisle commercial jet airliner, travelled along approximately 1200km of roads over five days.

Mohamed Ashfaq, heavy lift manager in the Eastern Region explained: “We had to redesign the trailer by removing the beams and fabricating a special saddle, to reduce the height of the cargo to less than 5.5M to meet the bridge maximum clearance of 5.5m.“

Swisslog announces contract wins of €150m Swisslog Warehouse and Distribution Solutions has been awarded the contract to automate a new distribution centre Michelin in North America and a second, large-scale contract with an unnamed Asian corporation. The order value of the two projects amounts to around €150m in total.

Michelin North America, Inc. will see its new distribution centre supplying passenger and truck tires throughout North America, allowing the company to meet its ambitions for responsible logistics. Swisslog has been engaged to automate the warehouse operation including receiving, tire selection and sequencing, shipping, Warehouse Management Software and controls software. The project is expected to be fully operational in 2019.

“Our expert warehouse automation design team was able to provide an exceptional solution to help Michelin achieve unparalleled customer service with low operating cost.

This is another example of how Swisslog develops and delivers solutions that create outstanding customer value”, commented Dr. Christian Baur, COO of the Swisslog Group and CEO of the WDS Division. “The United States is a very important and rapidly growing focus market for Swisslog,” he added.

A major Asian corporation has also selected Swisslog to install fully automated warehousing systems for pallets at its facility.

“This is an exciting time for the business These major milestones in our business growth show that leading players recognize Swisslog as an innovative provider of best-in-class warehouse automation solutions, and they are willing to step into the future with Swisslog’s robot-based and data-driven intralogistics solutions,” Baur added.

56 | Logistics News ME | January 2017

THINKING AHEAD – MOVING FORWARD ...in Dubai.

Hellmann Worldwide Logistics is a family run business with offices in more than 150 countries around the world. Our proximity to our customers is what allows us to build long-lasting partnerships and tailor made solutions for all your logistic needs.To learn more go to: www.hellmann.net

Diary

The month ahead

The key exhibitions, conferences and seminars coming up this month

Reverse Logistics Association, CES

6 – 9 January, Las Vegas Convention Centre

The Reverse Logistics Association is pleased to announce that for the fifth year it is partnering with the Consumer Electronics Association as a Media Sponsor for the 2015 International CES. This partnership gives members of the RLA a unique opportunity to showcase their company’s RL capabilities to the world’s leading electronics manufacturers, retailers and distributors.

Multimodal West Africa

24 – 26 January Landmark Centre, Lagos, Nigeria

At Multimodal West Africa, shippers, cargo owners, manufacturers and retailers attend to improve their businesses by finding ways of moving their products more efficiently and meeting new suppliers. The event is characterised by key vertical sectors including: manufacturing, retail, agribusiness, chemical, automotive, electronics, FMCG, F&B, fashion, pharmaceuticals, construction, aerospace, energy, oil and gas, real estate, recycling, paper/print and perishables and more. Horizontally, the show covers all modes of transportation including: sea, road, rail, air and in-land waterways.

58 | Logistics News ME | January 2017

Arab Health

30 January – 2 February Dubai World Trade Centre

The 42nd edition of the Arab Health Exhibition and Congress 2017 expects to welcome more than 120,000 healthcare and trade professionals attending from 70 countries. The Congress includes 14 conferences with international speakers on topics such as emergency medicine, oncology and workforce empowerment. The conferences offer CME accreditation and will be attended by more than 8,000 delegates from around the globe.

The Cargo Show MENA

7 – 8 March Dubai International Convention and Exhibition Centre

Cargo Show MENA is the event that brings together the entire cargo and transport logistics supply chain to improve efficiency in the movement of cargo across road, rail, sea and air. It’s all about innovation. Innovative supply chain management strategy, IT and infrastructure coming together to support transparency and efficiency for the entire logistics value chain. The Cargo Show MENA is the meeting point for an industry thats evolving and developing at an unprecedented rate.