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Setting standards & regulations for Middle East Road Safety

Buoyed by good Q4 performance, carrier priming for take-off

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Contents Start 6 | News Scan:

Roundup of regional & international news

10 | : Tram Trimmings:

Travel in Dubai’s Southern enclave made easy

11 | WMS Wonder:

Swisslog’s magic robot helps increase warehousing efficiency

Features 12 | Desert Dynamism: A newly-constructed highway in the Empty Quarter is a wonder in the wilderness

12 10

18 | BSI: Charting the route to good road traffic regulations

22 | Food Logistics:

Logistics: SC&L guru Alex Borg on how to make smart logistics work

26 | Cathay Pacific

28 | Energy

Logistics: How ADIPEC 2014 has energised the O&GLSP equation

32 | Flooring

Solutions: Twintec’s flooring solutions making ME inroads

Solutions: Storall’s ‘Store-all-you-can’ solutions help individuals and industry

38 | Intelligent

On food security and examining the ‘Farm to Fork’ supply chain Cargo: James Woodrow, Director, on the carrier’s lift-off

34 | Storage

26

42| Logistics &

The Law: Adv. Joy Thattil examines the proposed port ‘congestion charges’ threatened by US West Coast carriers

44 | Case Study:

How SSI SchaeferStockmann partnership is proving mutually beneficial

Logistics News ME | December 2014 | 3

Editor’s Note STREAMS IN THE DESERT A new desert highway livens up the Empty Quarter It is probably one of the planet’s greatest road construction feats. A brand new, 256-kilometre highway linking GCC neighbours, the Kingdom of Saudi Arabia and the Sultanate of Oman, must easily qualify as a major engineering undertaking for its sheer size, complex and compound logistics, intricacies, geography, terrain, topography, remoteness, extremes of inclement weather and now its economic, commercial, social and even cultural impact.

Indeed, legendary British explorer and travel writer Major Sir Wilfred Patrick Thesiger, CBE, also called Mubarak Bin London, is probably turning in his grave to know that today, high speed motor vehicles and trucks laden with heavy containers, their engines roaring, are traversing the quiet, remote wilderness, which he loved dearly and which he and his close band of local companions explored on foot in the simmering desert heat several decades earlier.

It must be said to their credit that Volvo equipment supplied by FAMCO was instrumental in constructing this road. Our cover story examines the consortium, including lead contractors Al Rosan of Riyadh, Saudi Arabia, who worked tirelessly and in tandem with the other partners, to literally make inroads into this forbidding, inhospitable terrain. The famous classic ‘Country roads, take me home’ by noted American singer-song writer John Denver echoes in my mind as I write this piece.

Staying with the roads, we examine issues concerning road safety and regulations with BSI’s Theuns Kotze and

Shahm Barhom, to discuss BS ISO 390001 and its implications for the logistics and transportation operators, as well as other road users in the region.

Logistics News Middle East also met with James Woodrow, the Hong Kong-based Director, Cathay Pacific Cargo, on a whistle-stop visit to the region about the carrier’s performance to date and future plans and vision for the region.

We look up close and personal at two companies offering flooring and storage solutions. UK-based Twintec offers a technological breakthrough for construction of industrial flooring, while Dubai-based Storall, as the name suggests, offers storage space for all-individuals and industries alike.

Our regular column ‘Logistics & The Law’ assesses the possible implications of the proposed ‘congestion charges’ threatened by carriers to the US West Coast. Clearly, it opens the proverbial can of worms and has wide-reaching repercussions for an industry already reeling under the effects of declining demand, over-capacity, dwindling margins and enhanced competition. All in a day’s work for the editorial team at Logistics News Middle East. Lest we forget, let’s bring a little levity to the weighty world of logistics. This is December and a season for good cheer and conviviality!

Editor Malcolm Dias Malcolm@bncpublishing.net

Group Sales Manager Jayant Dey Jayant@bncpublishing.net

Managing Director Walid Zok Walid@bncpublishing.net

Marketing Mark Monzon Mark@bncpublishing.net

Director Rabih Najm Rabih@bncpublishing.net Director Wissam Younane Wissam@bncpublishing.net Group Publishing Director Diarmuid O'Malley Dom@bncpublishing.net

4 | Logistics News ME | December 2014

CONTRIBUTORS Mark Millar, Joy Thattil, Prakash PK Menon Rana Husam Shiblaq

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Logistics News ME | December 2014 | 5

NEWS

The News Record for truck turnaround time reaches new low; terminal most efficient in region Khalifa Port has hit a milestone for port productivity: the truck turnaround time at the port’s container terminal has now dropped to just 12 minutes, making the terminal the most efficient in the region.

Khalifa Port’s container terminal started off with a truck turnaround time of around 40 minutes at the beginning of commercial operations in September 2012. The current

turnaround record of 12 minutes marks a 70% time reduction in just two years.

ADPC has introduced optical character recognition (OCR), as well as RFID (radio frequency ID) tags for truck drivers to make their entry to and exit from the port faster and more convenient, according to Ahmed Al Mutawa, Director, Container Terminal Operations, ADT.

Air Arabia in financing deal with Dubai Islamic Bank Air Arabia and Dubai Islamic Bank recently announced the signing of an aircraft financing deal to facilitate the delivery of six new Airbus A320 aircraft in 2015. The signing ceremony was held in the DIB head office in the presence of senior executives from both parties. The US$230 million Ijara facility will finance the delivery of a new aircraft every two months starting January 2015.

Adel Ali, Group Chief Executive Officer, Air Arabia, said: “Two key elements of Air Arabia’s successful business model are our modern fleet of aircraft and our efficient use of financing to support capital expenditure requirements. The facility will ensure we have the necessary infrastructure in place to serve our ever growing customer base across the region.”

SITA transforming global network SITA, an air transport communications and IT solutions specialist, delivers solutions to airlines, airports and governments over the world’s most extensive communications network.

The development of the hybrid airline business model, the entry into service of e-enabled aircraft and the adoption of cloud-based solutions are some of the major air transport industry trends calling for a new generation of global network services. By working with its strategic partner, Orange Business Services (OBS), as well as expanding its communications capabilities at airports, SITA has strengthened the reach; focus on operational excellence and relevance of its network services for the air transport industry.

ADPC wins Lloyd’s List again Abu Dhabi Ports Company (ADPC) has won two awards at the Lloyd’s List Middle East and Indian Subcontinent Awards – the most important maritime industry event for the region – which took place in Dubai.

For the second year running, ADPC 6 | Logistics News ME | December 2014

has won the “Port Operator Award” and, this year for the first time ever, has received the “Training Award”.

“Most recently, our flagship Khalifa Port reached the 2 million TEU benchmark after just two years of commercial operations and celebrated a

record turnaround time for trucks which has dropped to 12 minutes, making the port’s container terminal the most efficient one in the region”, said Sultan Al Jaberi, VP – Regulations, Health, Safety and Environment (HSE) and Security, ADPC.

NEWS

$12.9bn

12% increase Emirates Group’s H1-2014 performance

in Emirates Group’s H1-2014 revenues over H1-2013

DHL expands UAE presence DHL Express has recently opened a DHL Express station in Abu Dhabi. Located in Abu Dhabi at the Logistics Park – Express Cargo Zone, the office is spread across 4320-square meters and will house over 60 staff.

Furthermore, the new express station will enable customers to benefit from enhanced levels of service and optimised delivery and pick up facilities.

The office was launched at an exclusive ribbon cutting ceremony that was attended by senior executives from DHL Express and Abu Dhabi Airports, including Frank-Uwe Ungerer, Country Manager, DHL Express UAE, and Tony Douglas, Chief Executive Officer, Abu Dhabi Airports.

“The new Abu Dhabi facility is another crucial step in our aggressive expansion plan that will ensure we remain the best at what we do,” commented Frank-Uwe Ungerer, in a statement released at the event.

23.3 million Passengers carried by Emirates in H1-2014

Sohar Port hosts first agricultural terminal; boosts foodstuff capacity Sohar has taken another step towards diversifying its business offering and creating a world-class hub for handling agricultural goods, according to Executive Commercial Manager, Edwin Lammers.

Having recently announced that Atyab Investment and Oman Flour Mills will build Oman’s first terminal dedicated to grain and other foodstuffs at Sohar, there are plans for a set of grain silos with a capacity of around 200,000 tonnes, as well as a sugar refinery, which is projected to generate one million tonnes of raw sugar imports alone.

“The importing of vegetables, animal products, and foodstuffs into Oman are worth US$2.7 billion to the economy and with our new agricultural terminal, storage facilities, and transport links, Sohar is perfectly positioned to become a distribution centre for these products in the Gulf region,” explained Lammers.

An additional factor influencing growth will be the relocation of all commercial traffic from Port Sultan Qaboos, in Muscat, to Sohar. The previous traffic of 200,000 teu is forecast to grow by up to 300,000 teu, to a total of half a million teu.

Logistics News ME | December 2014 | 7

NEWS

$175 m

$514 million

dnata’s HI-2014 cargo revenues

Profits of Emirates Group in H1-2014

Crane Worldwide Logistics recognised at award event Crane Worldwide Logistics, a UK-based full-service air, ocean, trucking, customs brokerage and Logistics Company was named the ‘Global Freight Awards 2014 Employer of the Year’ by Lloyds Loading List.

The Employer of the Year award comes on the heel of Crane Worldwide being named the 2014 Customer Choice Global Freight Forwarder of the Year by Payload Asia.

13

CEVA leads the way on e-AWB implementation

New aircraft procured by Emirates in H1-2014

Aramex Signs JV in Thailand

CEVA Logistics has reached 20.4% e-AWB penetration across its global business, placing it firmly among the leaders in e-AWB implementation.

In September 2014, CEVA achieved the fastest e-AWB growth of any logistics company.

CEVA took a major step forward in the 100% paperless eFreight initiative in the summer of 2013, when it signed the IATA multilateral agreement for the use of electronic Air Waybills.

This laid the legal ground, by replacing the terms and conditions printed on the paper AWB. “With many of our stations still looking to cut-over to full eAWB usage before the end of the year, we are well on target to meet the IATA target of 22% by the end of 2014,” states Peter Baumgartner, CEVA Vice President, Global Air Operations and Compliance.

Aramex recently announced its joint venture with Leo Global Logistics, a prominent logistics service provider in Thailand.

Leo Global Logistics is one of Thailand’s foremost logistics firms, offering a wide range of worldwide services including air, sea and land freight forwarding as well as door to door small parcel delivery. Leo Global Logistics will provide Aramex with important import and export logistics capabilities in Thailand and South East Asia.

Commenting on the joint venture, Hussein Hachem, CEO, Aramex said: “I am delighted to announce this joint venture in Thailand, which sets the stage for Aramex Thailand to play a key role in continuing our expansion into the Asia Pacific market and to benefit from our established global network.”

Owned by Ports Development Company (PDC) at King Abdullah Economic City, KAP is the first port in the Kingdom to be developed and managed by the private sector. PDC is equally owned by Huta Marine Works Ltd. and Emaar the Economic City.

KAP will become within the top 10 global ports upon completion of port construction works. The port will cover about 15 square km, and have a depth of 18 meters and an annual capacity of 20 million TEUs. KAP is designed to become one of the most globally connected ports in the Middle East.

Crane Worldwide has more than 1,500 employees in 107 global locations, all dedicated to helping their clients improve their supply chain inefficiencies.

“To receive two awards of this stature in less than a month is a tremendous accomplishment for us,” John Magee, Crane Worldwide Logistics’ President and CEO, remarked on this occasion.

King Abdulla Port in finance deal Arab National Bank (ANB), as mandated lead arranger, signed a credit finance package worth SR2.683 billion with Huta Marine Works Ltd. to help finance further the construction and development works of King Abdullah Port (KAP) project on the Kingdom’s Red Sea coast.

8 | Logistics News ME | December 2014

NEWS

835,979 tonnes Freight Forwarding

$ 1.2 bn

$92 m

dnata revenues in H1-2014

dnata’s H1-2014 net profits

Jebel Ali Port most productive DP World’s flagship Jebel Ali Port is the world’s most productive according to the latest productivity report from the US-based Journal of Commerce (JOC). The rankings are based on the average moves of containers per ship, per hour.

In 2013, as reported by the shipping lines themselves, representing more than 75 % of the global vessel capacity, Jebel Ali Port led the industry with an average of 138 moves per vessel per hour (MPH).

According to the report, Jebel Ali Port beat 483 ports worldwide and topped the list of the world’s top 25 ports after analysis of more than 150,000 port calls. Jebel Ali also topped the list of ports handling ships with a capacity of more than 8,000 TEUs with an impressive 163 MPH. In the first 9 months of 2014, DP World terminals in the UAE handled 11.4 million TEUs representing a growth of 12.6% year-on-year. Yet another record was created with 4 million TEUs handled in the third quarter.

DC Aviation AlFuttaim to participate in MEBA DC Aviation Al-Futtaim (DCAF) a company specialized in Business, Corporate and Executive aviation has announced its participation at the Middle East Business Aviation event (MEBA) in its 2014 edition to be held in Dubai from 8—10 December.

DCAF is a joint venture between Dubai-headquartered AlFuttaim and Germany’s DC Aviation, one of the leading European business jet operators.

Holger Ostheimer, General Manager at DCAF remarked: “The event will be a good platform to showcase DCAF as the only fully integrated business aviation facility currently at DWC offering business jet owners and operators a premium facility to base their assets and the highest degree of convenience and comfort exceeding the expectations of our VVIP guests.”

Etihad expands freighter fleet Etihad Cargo has expanded its fleet of freighter aircraft with the placement of a third Boeing 747 freighter from Atlas Air Worldwide Holdings Inc. USA as part of a multi-year Aircraft, Crew, Maintenance and Insurance (ACMI) agreement.

The 747-400 freighter is the third aircraft to be operated

by Atlas Air Inc. on behalf of Etihad Cargo. Scheduled to come into service this month, the Etihad Cargo Boeing 747400 freighter aircraft has a payload capacity of 115 tonnes and a range of more than 8,000 kilometres.

The delivery will take Etihad Cargo’s freighter fleet to 10 aircraft, consisting four Airbus A330-200F, three Boeing B777F, and three Boeing 747F aircraft.

10—Etihad Cargo fleet 115 tonnes—747-400 freighter capacity Logistics News ME | December 2014 | 9

DUBAI TRAM

dubai’s tram trimmings

Dubai’s Tram Way Length: 10.6 km Number of Stations: 11 Initial Capacity: 27,000 passengers / day Unit Tram length: 44 m Unit Tram Capacity: 408 passengers Number of hours open daily: 19

Alstom’s Dubai tramway system starts operation on the world’s first 100% catenary-free line

D

ubai’s 11-station, 10.6 km long, catenary-free tram route, the first Tramway in the entire Gulf region connecting large neighbourhood projects both — commercial, residential and mixed, in the vicinity, recently went functional on 12 November 2014. The system is expected to serve about 27,000 passengers per day and is anticipated to hit about 66,000 by 2020. The Dubai Tram Project is the brainchild of HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President & Prime Minister of the UAE and Ruler of Dubai.

This full system project, assigned to Alstom by Dubai’s RTA was launched to foster multimodal transportation use and to reduce traffic congestion and pollution. The Dubai Tramway includes many Alstom’s technologi-

A close-up of Dubai Tram.

10 | Logistics News ME | December 2014

cal breakthrough. It is the first tram in the world able to run in temperatures of up to 50°C and to withstand harsh climate conditions such as humidity and sandy atmosphere. It is also the first line to be equipped with air-conditioned stations and automatic platform screen doors.

Dubai’s tramway is the first in the world able to run in temperatures of up to 50°C and to withstand harsh humidity and sandy atmos-

phere. The comfortable Citadis tram is 44 metres long and can accommodate 408 passengers in ‘Gold’, ‘Silver’ and ‘Women & Children’ classes. The tram is equipped with real-time passenger information and video broadcasting. The Dubai Tramway is the eighth system delivered by Alstom in a decade and was completed ahead of schedule.

WMS UPGRADES

robots boost warehousing operations

AutoStore Robots sit atop an aluminum grid as part of the innovative storage and retrieval system.

I

nnovations in Warehousing Management Systems (WMS) are as legendary as they are legion.

Ingenuity is driving the industry as it powers on with a slew of new product introductions, including robots that are redefining standards of efficiency and performance. Plainly put, the industry is in a state of flux, with inventiveness and robots leading the way.

As a recent example, global automation business Swisslog is celebrating the sale of its 1,000th AutoStore robot to Competec, a leading Swiss electronic retailer.

According to Swisslog’s Product Manager Michael Heidu, the company’s ‘Click&Pick’ solution system has been developed to provide optimal space usage, in both existing and new installations.

The workstations, tailored to match customer‘s business processes, allow them to increase pick rates and virtually eliminate the chance for picking errors, while also providing a more reliable system.

Swisslog’s ‘Click&Pick’ solution integrates the company’s proprietary AutoStore technology with additional e-commerce focused software and workstations. AutoStore uses autonomous robots to access products stored in plastic containers, which are stacked directly on top of one another.

Jebel Ali Industrial Area 2 P.O. Box 79775 Dubai Tel: +971 4 880 3644 Fax: 04 880 3643 info@storall.ae www.storall.ae Logistics News ME | December 2014 | 11

COVER STORY

A new 256-km highway linking GCC neighbours Saudi Arabia and Oman blooms and rises Phoenix-like across inhospitable, forbidding and remote terrain 12 | Logistics News ME| ME |December December2014 2014

COVER STORY

Logistics News ME | December 2014 | 13

COVER STORY

“ With extreme temperatures and sand blowing continuously, it was very difficult for both operators and the machines.”

The greater part of its length comprises a single-lane carriageway in each direction, although in sections where there are steep inclines, there is a secondary lane for trucks and slower-moving traffic. The last 30 km stretch of road at the Omani end is now lit and functional.

Currently, there is no direct road link between these two largest GCC states, except via the UAE. When finally completed, the Saudi portion of the project will link to the Khorais-Bathaa Road, via Shaybah and Umm Zamoul. Oman’s interior Dhahirah region t nearly 650,000 km2, the, barren, inhospitable, sandy wilderness of the Rub’ Al Khali, or the Empty Quarter, the second largest desert in the world after the sprawling Sahara in North Africa, covers a huge tract of the southern Arabian Peninsula and is comparable in size to the whole of France.

The terrain is covered with active sand dunes that can rise to 250m in height, as well as areas along the eastern edge which are marked by salt flats. This is one of the world’s hottest (day time temperatures can soar to 50 degrees Celsius), coldest (night-time temperatures can dip down to below freezing), driest and most unforgiving environments.

Now, like streams in the desert, a newly constructed road has emerged and bloomed, bringing life and the sound of thundering, trundling vehicles, zipping rapidly past, through this harsh and austere territory. This new direct link highway, a major engineering feat, has irretrievably changed the barren, desolate landscape, thanks to the initiative and foresightedness of the governments of the two neighbouring GCC states — the Kingdom of Saudi Arabia and the Sultanate of Oman. It is also a tribute to the co-operation and fraternal bilateral relations between the two countries.

In 2010, the Riyadh-based Saudi company Al-Rosan Contracting (established 1976) was contracted to construct a 256 km-long highway link project connecting the adjacent GCC states, through remote and virtually inaccessible territory.

14 | Logistics News ME | December 2014

through which the highway will pass, will also boost the region’s economy. The dualcarriageway will eventually stretch from Sohar to the Saudi Arabian border via Ibri, providing a vital link for cargo coming from the Port of Sohar and also the capital Muscat.

According to Fahad Hazza Aba Alros, General Manager of Al-Rosan Contracting, the project presented unique obstacles. “The entire project was a challenge from day one.

The first challenge constituted the building of numerous sand bridges across the sabkha (salt flats) between moving high sand dunes

COVER STORY was singled out as the construction equipment supplier because of its reliability and dependability. The plant machinery was sourced through FAMCO (Al-Futtaim Auto & Machinery Co. LLC) which has provided full support.

“Al-Rosan is one of our important contractors and a loyal customer of Volvo CE,” explained FAMCO Saudi Managing Director Amal Almizyen. “When they were awarded this contract, we were left with the challenge of supporting them logistically as the closest city was nine hours away by road.

More challenging than that was the reliability of the machines. With extreme temperatures and sand blowing continuously, it was very difficult for both operators and the machines.

However, from the very beginning Al-Rosan said on-site support was crucial and so we had to gear our services up to meet that challenge.”

Paul Floyd, FAMCO Group Senior Managing Director says FAMCO was proud to be a part of such an important project, vital to the infrastructure development of Saudi Arabia.

SUPPLY BRIDGE

and constantly changing landscape.

Furthermore, the harsh climatic conditions, the shifting sands and fluid topography of the area, the vastness and impenetrability of the desert, the sheer size and scale of the logistics involved, the lack of telecommunications networks, the distance from the nearest inhabited city, the procurement of spare parts and services all posed serious engineering challenges. None of the usual factors that are generally associated with success were present in this project,” he admitted.

CONCEALED HINDRANCES

The highway starts at a site in the Rub’ al Khali basin at the eastern edge of Saudi Arabia’s vast Empty Quarter deep-desert region near the Shaybah oil well, the supergiant oil field owned by ARAMCO, located in the Kingdom’s energy-laden Eastern Province. It then runs up to the border of the Sultanate of Oman. One of the many challenges facing the Rub’ al Khali project is that the road passes through the Shaybah petroleum field, requiring special care in dealing with existing services there.

Within the field there are pipes and power cabling, telephone lines and electrical towers.

All the road construction has had to be planned to avoid causing any disruption to the Shaybah operations.

Summer daytime temperatures in the desert can rise to as high as 50ºC and then drop to below 1ºC at night. With such extreme conditions to overcome, Volvo CE

From its Riyadh branch, FAMCO established a logistics ‘bridge’ to supply Volvo equipment to a remote and isolated area in one of the most barren deserts in the world. “With a distance of 1,000km from the nearest inhabited city, we were determine to rise to the occasion and prove that we are worthy of our reputation,” asserted Almizyen.

“The road through Rub’ al Khali is a fine example of how service, product support, customer engagement and on-site maintenance all came together for the contractor,” reiterated Paul Floyd, FAMCO Group Senior Managing Director. “This is a project that is extremely important to Saudi Arabia’s infrastructure development and we are extremely proud of being part of this iconic but ambitious project, and rising to the challenge.”

In all, some 95 pieces of Volvo CE equipment have been used on this project – a range of articulated haulers, excavators and motor graders. In spite of the extreme desert conditions, no modifications were needed to the equipment and FAMCO expressed complete satisfaction with their operation.

“With 95 machines on site, a demanding round-the-clock construction schedule, 1,000 feet [305m] high dunes and unimaginable terrain, this was not a simple task,” affirmed Ahmad Halwani, FAMCO General Manager, Construction Equipment Division.

“We had a few competitors whose machines stopped functioning after some time as they couldn’t keep up with the uptime, or their nearest support was hours away. The star of this project was the maintenance support we could provide, but what was seen was real durability in one of the most barren places on Earth.”

Logistics News ME | December 2014 | 15

COVER STORY

Special units were required for the maintenance of equipment as the nearest facilities were 40 km away from the construction site.

Fuel and spare parts, along with food and water for the workers, all had to be shipped in.

16 | Logistics News ME | December 2014

“ It is no secret the project had its own unique challenges, especially when it came to the after sales support and maintenance.”

COVER STORY

“We are proud that Volvo CE has played a part in making one of the most iconic, possibly the longest road in the Middle East.”

With no local settlements or safe drinking water, desalination plants have had to be set up and temporary accommodation constructed for the nearly 600 drivers, excavator operators, technicians and auxiliary staff needed for the three-year project. Special units were required for the maintenance of equipment, too, as the nearest facilities were 40 km away from the construction site. Fuel and spare parts, along with food and water for the workers, had all had to be shipped in.

“It is no secret the project had its own unique challenges, especially when it came to the after sales support and maintenance,” commented Mark Johnson, FAMCO General Manager, Aftersales Division. “Never before, has the region witnessed such a remote

construction site, so we at FAMCO had to build our own modular maintenance facility to support the contractor. Taking into consideration the remote project location, the difficult area topography and extreme environment, as well as no phone and telecommunications coverage, FAMCO’s aftermarket support division played a major role in the success of this project. We established 24/7 on-site workshops operated by experienced technicians to ensure smooth and reliable service and maintenance of the Volvo machines.”

DIRECT IMPACT

The region’s strong winds shifted sand from one area to another, creating a frequently changing landscape. In addition, marshes

created by ground water on the surface are common and necessitate specialist construction, including the creation of a fabric mesh shield to protect the road from rising water levels.

Every day, sand was excavated and then compacted using the naturally salty ground water to construct sand bridges across the salt flats and between the high-rise dunes.

The volumes of sand are enormous, commented Fayez M. Subbaheen, Project Manager at Al-Rosan Contracting. “The amount of sand transported in this project to construct the bridge of the road was a staggering 130 million cubic metres,” he remarked.

“At the same time, another 12 million cubic metres of selected material had been used to protect the sand embankments from erosion by wind or water. To give some sense of the volumes and proportions involved, 130 million cubic metres are equivalent to 26 of Egypt’s giant pyramids,” he added.

The new road is set to have a huge impact on passenger and freight transportation as well as trade and commerce between Saudi Arabia and Oman.

Until now, goods shipped by land between the two countries have had to make a circuitous journey via the United Arab Emirates on the existing road network. The direct route across the Rub’ al Khali will reduce the journey times dramatically.

For such an important project, Essam AlMalik, FAMCO Saudi Regional Manager (Central Province) has no doubt why his company was chosen for the work. “Al-Rosan selected FAMCO because of its reputation, the quality of its products and the continuous technical and logistical support which we provide for our clients,” he reiterated.

FAMCO’S Ahmad Halwani paid tribute to Volvo CE: “We are proud that Volvo CE has played a part in making one of the most iconic, possibly the longest road in the Middle East,” he said, while FAMCO’S Paul Floyd added: “The strategic importance of this project represents a key addition to both FAMCO’s and Volvo’s record of achievements.”

Logistics News ME | December 2014 | 17

ROAD LOGISTICS

standardization vital for Road Safety BSI has presented BS ISO 39001:2012, a new standard for road traffic safety management

18 | Logistics News ME | December 2014

ROAD LOGISTICS

“ Companies should go the extra mile, overseeing driver’s on-the-job behaviour.”

A

recent report by the British Standards Institution (BSI), highlights the need for having ‘safer roads’ as road traffic accidents worldwide reaches a staggering 1.3 million deaths each year and 50 million serious injuries every year according to the World Health Organisation. In response to this nagging issue that has bedevilled authorities and regulators in virtually every country in the world, BSI presented BS ISO 39001:2012, the standard for Road Traffic Safety Management System that aims to encourage organizations to actively contribute to road traffic safety (RTS).

BS ISO 39001 is a new international standard designed to help fleet operators manage road safety risks. It is a best-practice management framework that helps organisations actively reduce the risk of death and serious injury from road traffic in areas directly within their sphere of influence. The standard aims to help save lives, support social responsibility programmes, improve road traffic safety results beyond compliance and subsequently cut accident-related costs and downtime. This applies to both public and private organisations that use the road traffic system to conduct their businesses.

Logistics News Middle East met exclusively with the tag team of Theuns Kotze, Regional Managing Director, BSI Middle East & Africa and Shahm Barhom, General Manager, Training & Professional Services, BSI Middle East & Africa, to discuss BS ISO 390001 and its implications for the logistics and transportation operators and other road users in the region.

“The objective of the standard is to be implemented by employers, since they are the major user of the roads and the products they transport. Traditionally we thought that the police and road traffic authorities are the ones to be responsible for road traffic safety but that is not enough, employers and employees need to get involved in order to bring those accident statistics down,” stated Theuns Kotze, urging employers and employees to take individual responsibility for road safety which in turn would collectively ensure that our roads will be reactively safer and less menacing.

Elaborating on this advocacy, Kotze en-

couraged employers and companies to take upon themselves the task of equipping their drivers and employees with timely training, briefing, assessment, monitoring and even taking responsibility for their health, physical well-being and conducting periodic medical tests. “Companies should go the extra mile, overseeing driver’s on-the-job behaviour and assessing them on simulators to determine how they will perform on the roads,” adding that being adequately equipped and empowered enables drivers to perform better, more efficiently,” asserted Kotze.

In Kotze’s estimation, the availability of sophisticated and intelligent technologies implies that driver’s behaviour on the roads can be monitored. Drivers must be encouraged to eat at periodic intervals, not too stretch driving times on the roads and ensure they get the desired rest. Smart driving and the optimum conditions will not only increase efficacy but also help the company’s bottom line insisted Kotze.

So what factors determine safety or otherwise? Kotze enumerated these as road design and safe speed; especially considering separation of on-coming traffic ad vulnerable road users, side areas and intersection design. The use of appropriate roads, depending on vehicle type, user, type of cargo and equipment are also important determinants of road

Theuns Kotze

Logistics News ME | December 2014 | 19

ROAD LOGISTICS

“The worrying statistics have a major impact on the economy.” restraints and helmets for motorcyclist couriers are an important consideration.

Furthermore, adhering to safe speed limits, adaptation to weather conditions, the fitness of drivers especially considering fatigue, distraction and substance abuse can also affect driving performance. Kotze also exhorted drivers to plan safe journeys and to ensure the safety of their vehicles.

In a disturbing development, Barhom remarked that commercial vehicles are involved in a disproportionately high number of road deaths on the world’s roads including the Middle East. To this end, road haulage providers have a Road Transport Safety responsibility to their employees, third parties and others they come in contact with.

Barhom stated that Road Transport Safety performance factors included driver selection; how drivers are managed and motivated to guarantee appropriate skills and behaviours, particularly in terms of speed management and driver fitness. Barhom further said that the selection and use of vehicles best suited to the task, designed and equipped to reduce the risk of death and serious injuries to the vehicle occupants and other road users and inspected and maintained to ensure roadworthiness.

Loads according to Barhom, should be properly managed to ensure no overloading and the safe securing of the cargo. He also recommended safe journey planning to ensure the most appropriate routes, speeds and working / driving hours and provision for emergency preparedness.

The UAE had the world’s 7th highest road death rate relative to its population, with a ratio of 6.5 per 100,000 in 2013. That according to Shahm Barhom is a worrying statistic, both from a loss of life perspective and the impact it has on the economy. He advocates that road users follow a standardised approach to make roads a safer place for everyone.

“The worrying statistics have a major impact on the economy. A way of helping the UAE is by getting more road users to follow a standardised approach to make the roads a safer place for everyone’.

The standard is an invaluable tool for an organisation that recognises the advantages of implementing an occupational road safety management system, both for itself and its stakeholders.

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Shahm Barhom

BSI Established in 1901, BSI is the world’s first national standards body.

• The original BSI committee met for the first time on 22 January 1901.

One of the first standards it went on to publish was designed to reduce the number of sizes of tramway rails.

• Together BSI clients account for 78% of the FTSE 100, 53% of the Nikkei and 44% of both the Fortune 500 and Hang Seng-listed companies.

• BSI is one of the world’s largest independent certification bodies for management systems, with over 70,000 registered sites across the globe.

• In 2011, BSI provided practical training for approximately 66,000 people worldwide on how to implement and operate standards.

• BSI has been independently voted a UK Business Superbrand every year from 2003 to 2012 and its Kitemark® from 2008 to 2012.

• The quality management systems standard, ISO 9001 – which started life at BSI in 1979 as BS 5750 – is now recognized as the world’s most successful standard having been adopted by more than one million organisations in 178

BSI FACTS 2,591 14,909 150 members of staff

Operating in

Subscribing Members

countries

9,548

Committee Members

7,145

standards projects

34,634

current British Standards

FACILITY INAUGURATION

tfi opens new

Logistics Centre

TFI holds the unique distinction of being the first SME and the first 3PL Services Provider from Dubai Cargo Village to move into DLC

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otal Freight International (TFI) recently inaugurated its brand new, state-of-the-art Freight Logistics Centre, a state-of-the-art logistics facility in Dubai World Central, the world’s first purpose-built aerotropolis. The warehouse will facilitate cargo warehousing and distribution as well as a number of value added services including co-packing, re-packing, re-labelling and assembly to service various verticals of the logistics business.

Spread over 6,500 m2 within the Logistics District of Dubai World Central, the logistics centre is equipped to accommodate 8,500 pallet positions. Its designated temperature controlled space has an initial capacity of 600 pallet positions that can be further expanded based on requirement.

The high standards of technology implementation throughout the facility will enable Total Freight International to deliver enhanced levels of service to clients. The fully wi-fi integrated warehouse will additionally provide customers with access to real time information on the status of inventory.

Saajin Salim, Director-Business Development, Total Freight International, remarked: “The inauguration of our new facility at Dubai World Central will not only serve to improve our sea-air operations but will also facilitate speed of delivery and enhanced services to our partners. I am confident that we are well on our way to achieve our targeted 25 percent business growth over the next year.”

A pan-shot of the new Total Freight International facility in Dubai Logistics City.

The Total Freight Logistics Centre was inaugurated by Esmail Salim, Managing Director, Total Freight International, in the presence of Yousef Al Khaj, Director, IPR Department, Dubai Customs; Khalid Mohammed Al Hinai, Vice President, Cargo Commercial (EK), Middle East, GCC and Iran; Esmail Kasim, a logistics expert having formerly held various senior positions at Dubai Customs since 1965; and Mohsen Ahmad, Vice President, Logistics District, Dubai World Central.

The first company out of Dubai Cargo Village to build its own facility at Dubai World Central, Total Freight International is part of the World Freight Group and has a global presence in 120 countries serving more than 400 ports and airports across the world.

Logistics News ME | December 2014 | 21

EXHIBITION REPORT

sustainable food logistics Food security fears continue to haunt many parts of our planet. The need of the hour is improved food logistics and distribution systems, plus increased security in developing countries in the light of the current food crisis

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he dramatic rise in food costs and dwindling availability and stocks over the past several years has raised serious concerns about food and nutrition security across the world. The situation has been compounded by shaky political situations, instability, wars, internecine conflicts, uprisings, rebellions, mass displacement of people, inclement weather and climactic conditions. More recently the outbreak of pandemics, such as the Ebola virus, have added to the strain, threatening not only the food chain, but also disaffected populations.

In recent times the Middle East has also been wracked by volatile political situations and as a consequence, the displacement of a very large number of people from hot spots across the region.

While a coordinated response is urgently needed at international and regional levels, the effectiveness of country level response is critical for dealing effectively with crises as they emerge.

Clear action is needed to help vulnerable populations cope with the hikes in their food bills, to assist developingcountry farmers to swiftly respond to the opportunity posed by the rising demand for their products, and to provide information for evidence based related macroeconomic policies.

Since the implications of high and fickle food prices have been radically different across countries and population groups, the appropriate policy responses, as well as their scale, prioritisation, and sequencing, must be developed and adapted to meet country-specific needs and conditions.

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Food security fears continue to haunt many parts of our planet. The need of the hour is improved food logistics and distribution systems, plus increased security for the poor and marginalised in developing countries. These changes would help individuals and organisations to deal with the current food crisis.

There is also need for enhanced resilience of food systems against future crises and to develop a comprehensive framework for action on the global food crisis. More concrete measures and planned strategies are called for to formulate, ensure and sustain longer-term global food security.

That sums up the crux of the concerns expressed as delegates converged at the recently concluded first 2014 edition of Gulfood Manufacturing, the largest dedicated food processing trade event in the Middle East, Africa and South Asia (MEASA) region.

In an exclusive conversation with Logistics News Middle East, Mark Napier, Director Exhibitions at the Dubai World Trade Centre, spoke of the success of the inaugural edition of Gulfood Manufacturing.

“It has been a fantastic start to a debut event and the response has been truly overwhelming. The show attracted over 1,100 exhibitors from 52 countries, 24 country pavilions, across 27,000 m2 of exhibition space,” he remarked.

“Gulfood Manufacturing is the onestop-shop to source process machinery, packaging equipment, logistics, warehousing, and cold-chain solutions,” he affirmed.

Food security has become an issue of global concern.

Food security remained at top of the summit agenda when a five-person keynote panel debated methods to drive stakeholder alignment, the drive to improve sustainable outsourced agriculture and inherent challenges relating to food imports and price volatility. The panel comprised Dr. Saad A. Khalil Essa, Director, King Abdullah Initiative for Agricultural Investment Abroad, Ministry of Agriculture – Kingdom of Saudi Arabia; Cyrille Fabre, Partner, Bain & Co.; Vishal Tikku, Vice President and Area Director Middle East, Mondelez International; Amar Zahid, President, Greater Middle East & Africa, Tetra Pak, and Rushdi Siddiqui, CEO, Zilzar, the world’s first global muslim lifestyle marketplace platform for information.

EXHIBITION REPORT

GCC’s burgeoning food imports Due to the climactic conditions and land use restrictions, 90% of the Gulf’s current food demands are met with imports, an over-reliance, which will see the value of GCC food imports reach US $53.1 billion by 2020 according to the Economist Intelligence Unit (EIU).

Contrastingly, regional imports far exceed demand and the GCC’s position as a major logistics hub for the global food industry is aided by significant re-export trade.

Food-specific logistics remain a core component of a UAE logistics industry anticipated to reach US $27 billion in 2015 (Source: Frost & Sullivan), while Dubai Multi Commodities Centre (DMCC) figures show the UAE currently re-exports nearly 50% of its imported food products to other GCC countries, Russia, India, Pakistan and East Africa.

One of the world’s biggest re-exporters of goods such as coffee, tea, sugar and rice, the UAE was responsible for approximately 90% of global rice re-exports in 2010.

With regional food demand set to grow – the World Bank projects the Middle East and North Africa (MENA) region’s food market could exceed US $1 trillion by 2030.

Other sessions included ‘Transforming Halal Agro Food into an Asset Class’ with Zilzar’s Siddiqui; ‘Home Grown Concepts Transforming the F&B Business in the UAE’ with Salem Khalifa Bin Dasmal, Founder, Silver Spoon Investments; ‘Franchising for Success – Take Your Business International’ with Fadi Malas, Board Member, of the UAE-based major street food chian - Just Falafel; an ‘Innovation Case Study’ with Talzoon Khowakiwala, Founder & CEO, Switz Group, a food processing and packaging company in Dubai; a keynote presentation by Rayan Qutub, CEO, Industrial Valley, King Abdullah Economic City, in western Saudi Arabia; and a ‘Strategic View on the GCC Food & Beverage Industry’ with Chaitanya GRK, Consultant, Frost & Sullivan.

The summit’s second day featured sessions linked to the theme of ‘Operation and Best Practises in Food Manufacturing’, including a keynote government speech by Fahad Al Gergawi, CEO, Dubai Investment Development Agency (FDI), the foreign investment and promotion agency of the Department of Economic Development (DED).

Following a keynote presentation on ‘Powering Innovation in Food Processing and Packaging’ by Dennis Jönsson, President and CEO, Tetra Pak, a four-strong panel debated ‘Best Practices in Food Manufacturing and Packaging’.

The panel comprised Jönsson; Dharnesh Gordhon, Managing Director and CEO, Nestle Nigeria; Monther Al Harthi, CEO, Al Rabie and Johann Vorst-

er, CEO, Clover, the 116-year old Johannesburg, South Africa-based company and the largest producer of dairy products in Africa.

Other day sessions included ‘Free Zones as the Driving Force in the Middle East’s Manufacturing Future’ with Adil Al Zarooni, Senior Vice President, Global Sales, Economic Zones World, JAFZA; a case study on ‘Innovation as an Enabler of Successful Halal Product Development ‘ presented by Jalel Aossey, CEO, Midamar Corporation, North America’s pioneer and oldest Halal food company; a second case study on ‘Developing Food Factories: Food Processing Engineering and Planning Best Practises’ presented

by Werner Muller, Head of Business Development, United Food Technology Logistics News ME | December 2014 | 23

EXHIBITION REPORT

Vishaal Shah, CEO, Panache International.

(UFT) Germany specialists in food technology. Following these sessions a closing round-table discussion focused on the successes and achievements of some of the Middle East’s most pioneering regional manufacturers.

Other challenges that came up for discussion concerned regional food security, ensuring sustainable food supplies, the future of the halal food industry, and the role of Free Zones in facilitating food manufacturing growth. Panelists and delegates also talked about various cuttingedge innovations relating to food processing, packaging and machinery best practices. All of these issues were discussed by a high-calibre cadre of influential food and beverage industry specialists at the Food & Beverage Industrial Investment Summit.

The two-day summit witnessed keynote presentations, multi-speaker discussions and case studies to provide attendees with a better understanding of the financial, legal, logistics, cold chain and technology benefits of locating or expanding existing operations in the region.

Package Deals The food and beverage (F&B) sector contributing 59% of a MENA packaging industry predicted to be worth US $41.1 billion in 2014 according Smithers Pira, the worldwide authority on the packaging, paper and printing industry supply chains, which also forecast a CAGR of 5% to US $52.4 billion by 2019.

Dubai’s packaging industry continues to thrive on the Emirate’s flourishing F&B trade, according to Dubai Exports, the export promotion agency of the Department of Economic Development (DED).

Dubai’s total foreign trade in packaging was around US $1.65 billion in 2013 of which US $700 million was exports while re-exports accounted for US $137 million. Since 50% of all packaging is used for food and a further 18% for beverages, the growth in the packaging industry is directly linked to the food logistics industry.

24 | Logistics News ME | December 2014

The current global packaging market is valued at US $800 billion and growing at 3% in real terms, driven mainly by hygiene concern, increased urbanisation and move towards convenience foods.

“The Middle East, Africa and South Asia already contribute more than 30% of Serac’s annual turnover and we are reinforcing our presence in the region through Gulfood Manufacturing,” remarked Olivier Chevreteau, Sales Director, Serac SAS, EMEA, a French leader in the design and manufacture of packaging solutions.

“The Middle East and Africa are important markets for Pattyn and we are aiming to explore further food packaging opportunities in the region,” commented Gregory Van Dijck, International Sales Manager, Pattyn Packing Lines, the Belgian maker of fully automatic bag-in-box solutions to pack bulk products.

Award-winning Panache International, founded in 2005 is among the leading

manufacturers, distributors and exporters of disposable products in the UAE. Panache, which adopted the Japanese Kaizen manufacturing systems for all its implementations and management techniques, produces a wide range of disposable plastic and packaging products in manufacturing facilities in Dubai.

According to Vishaal Shah, CEO, Panache International, in an exclusive interview with Logistics News Middle East, the company has tripled its production capacity since inception and revenues have grown six-fold. Shah is keen to debut in the aviation sector and is on an expansion spree. The mega packaging company has its own distribution centre in the UK and its ergonomic, convenient to use, nontoxic, microwaveable and recyclable products are currently present in 27 countries.

The brand will also shortly introduce a new range of disposable airline unique product concepts to the UAE.

AVIATION BUSINESS

dubai’s aviation sector

on a new high Aviation to contribute $53.1 billion to Dubai’s economy, 37.5% to its GDP and support over 750,000 jobs by 2020

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he latest Oxford Economics Report has examined the impact of aviation sector on Dubai’s economy and growth beyond 2020.

Emirates Airlines, Dubai Airports and the holistic aviation sector contributed US $26.7 billion to the Dubai economy in 2013, which was almost 27% of Dubai’s GDP and supported a total of 416,500 jobs accounting for 21% of the emirate’s total employment.

Core impact of aviation: It is estimated that the aviation sector, including the Emirates Group, Dubai Airports, and other aviation businesses had a core impact of US $16.5 billion Gross Value Added (GVA) in 2013. This includes direct, indirect and induced contributions and is equal to 16.5% of Dubai’s GDP, supporting over 259,000 Dubai-based jobs.

Moreover, for every US $100 of activity in the aviation sector, a further US $72 is added in other sectors of the local economy from supply chain connections and expenditures.

The aviation sector is set to become a huge contributor to Dubai’s economy as 2020 approaches.

elling projections based on current expansion plans for Dubai International (DXB) and Al Maktoum International at Dubai World Central (DWC), it is estimated that the overall economic impact of both aviation and tourism related activities will rise to a robust $53.1 billion in 2020. This will be equivalent to 37.5% of Dubai’s GDP, supporting over 754,500 Dubai-based jobs.

By 2020, it is estimated that Emirates will fly 70 million passengers, and the airline and its partners are already progressing plans for the right infrastructure to be in place to support and capitalise on passenger growth.

In that same year, Dubai expects to welcome over 20 million visitors for Expo 2020 Dubai. Dubai expects to service 90 million passengers by 2018. By 2020, Dubai International is estimated to receive 126.5 million passengers, almost 30% higher than its original 2010 assessments.

Looking further ahead, the total economic impact of aviation by 2030 is projected to grow to $ 88.1 billion and will support 1,194,700 jobs.

For every 100 jobs created in aviation, an additional 116 jobs are created elsewhere in Dubai.

Tourism benefits: Aviation has proved to be an indispensable catalyst for the growth of Dubai’s tourism industry. Tourism and travel activities in 2013 had an economic impact of US $10.2 billion GVA supporting a further 157,100 jobs. In 2013, Dubai welcomed nearly 10 million non-UAE visitors who spent US $ 13 billion, accounting for around 1% of foreign visitor spend globally that year.

Connectivity: One of Dubai’s greatest assets is its enhanced connectivity. Overall, Dubai had direct passenger flight connections to 149 cities with populations of over 1 million people, creating potential export markets of over 916 million people, or 13% of the world’s population. Cargo tonnage handled between 1990-2013 in Dubai has grown on average of 13.5% per year, compared to global average trade volumes of 5.6% per year.

Using industry growth forecasts and mod-

Aviation business on a flyer • Dubai’s aviation sector contributed US $ 26.7 billion or 27% to the emirate’s economy • Supported a total of 416,500 jobs accounting for 21% of the emirate’s total employment • By 2020, it is estimated that Emirates will fly 70 million passengers • Dubai expects to service 90 million passengers by 2018 • Overall, Dubai had direct passenger flight connections to 149 cities with populations of more than one million people • By 2020, Dubai International is estimated to receive 126.5 million passengers

Logistics News ME | December 2014 | 25

AIR FREIGHT LOGISTICS

freight

take off

Cathay Pacific Cargo’s dedicated fleet of 22 freighters fly to 45 global destinations

26 | Logistics News ME | December 2014

AIR FREIGHT LOGISTICS

“We are now poised for growth as is evidenced from our current pipeline order of 81 new mixed-use aircraft.”

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stablished in 1946, Cathay Pacific Airways has grown to become one of the world’s leading international air cargo carriers. The airline is Asia’s biggest by passenger numbers. Cathay Pacific’s cargo business currently accounts for around 21% of its annual revenues and has helped to build Hong Kong into the world’s busiest air cargo hub. It currently flies to 45 freighter destinations around the world.

Cathay Pacific Cargo has been honoured with prestigious awards such as ‘Cargo Airline of the Year, 2012’ and ‘Air Cargo Airline of the Year’.

In an exclusive interview with Logistics News Middle East, on a brief whistle-stop visit to the UAE, James Woodrow, Director Cargo, spoke on a range of issues facing the air freight industry, the importance of the Middle East in Cathay Pacific’s wider global canvas, the potential of the region and the new dedicated Cathay Pacific Cargo Terminal.

“Even as we speak Cathay Pacific has commenced freighter specific flights to Phnom Penh, the Cambodian capital, post recent editions to Calgary in Canada and Mexico City and Guadalajara to strengthen our operations across the North American continent. We increasingly use the 777s which boast cargo capacity of 20 tonnes to fly five times daily to London Heathrow and four times daily to Los Angeles,” remarked Woodrow. “The global air cargo market has been fairly dormant lately but we have seen a resurgence in the last quarter when business has really been taking off. More cargo is coming and as new routes open up, these also bring us new opportunities. We are now poised for growth as is evidenced from our current pipeline order of 81 new mixed-use aircraft in anticipation of increased business both in passenger traffic and cargo, making us one of the largest freight carriers in the world,” he added.

Woodrow was also upbeat about the plummeting oil prices which he said would work for the benefit of the global airlines.

“High oil prices are put tremendous pressure on airlines operations and a drag on profitability worldwide, so we welcome relatively low oil prices. This augurs well

at a time when airlines are squeezed for profitability,” he affirmed.

“The Middle East ranks fairly high our pecking order and we are very buoyant in the region. We see good business potential come out of the region and have recently appointed Ashish Kapur, a Cathay Pacific veteran as our new Country Manager for UAE and Oman. We also foresee fierce competition from established and dominant GCC carriers, so we must strategise well and face up to the competition. It is all part of the challenging business ambience,” he stated.

Another serious contender for the freight network is the belly space on passenger aircraft. Belly hold cargo is also an important component of the cargo liftoff.

According to Woodrow a sizeable chunk, almost 55 % of the Cathay Pacific’s cargo, is moved by the passenger fleet of the airline.

He sees that constituent further growing in the foreseeable future as airline manufacturers design newer and better planes with larger belly-hold capacities. “We will continue to use our fleet of 22 freighters and complement that with the use of passenger aircraft for cargo movement,” he observed.

Cathay Pacific flies its freighter services into major manufacturing cities in China and other parts of Asia including Chengdu where Apple’s iPad’s are made.

CATHAY PACIFIC CARGO TERMINAL The new Cathay Pacific Cargo Terminal at Hong Kong International Airport (HKIA) commenced operations on 21 February 2013. The HK$5.9 billion facility will be one of the biggest and most sophisticated terminals in the world, providing additional air cargo handling capacity and facilities that will help to further reinforce Hong Kong’s position as the world’s premier international airfreight hub.

The airline’s wholly owned subsidiary, Cathay Pacific Services Ltd (CPSL), was awarded a franchise to invest in, design, construct and operate the new air cargo terminal at HKIA under a 20-year agreement.

The new terminal has been designed for an annual air cargo throughput capacity of 2.6 million tones and will be a common-use facility open to all airline customers.

The Cathay Pacific Cargo Terminal will set new standards in operational efficiency, environmental design and service levels.

CATHAY PACIFIC GROUP OPERATING SUMMARY 2013 Aircraft departures: 160,000 Length of scheduled route network: 576,000 km Revenue passengers carried: 29,920,000 Cargo and mail carried: 1,539,000 tonnes Turnover: HK$100,484 million Logistics News ME | December 2014 | 27

ENERGY LOGISTICS

lsp-energy interface at adipec Logistics Services Providers (LSPs) showcase flexibility and scalability issues to energy majors

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emand for energy is increasing globally. Even in the current context of falling oil prices, there is no dimming of the insatiable appetite from producers, who continue to pull out all the stops in their enduring quest. The oil and energy industry is inextricably linked with geopolitics and economies of the world and on the operational side there is a continuing emphasis on the environment, sustainability, security and energy efficiency. Safety is also a primary concern.

In this framework, oil majors hunt for logistics leaders and service partners in the supply chain that can keep step with the rapid pace of change in the global energy marketplace. The burgeoning energy industry is always on the lookout for operators and services providers who can make operations more streamlined, more effi-

28 | Logistics News ME | December 2014

cient and provide the guidance to improve the utilisation of equipment, facilities, and resources. After all, supply chain assessment solutions improves plant congestion, productivity, inventory accuracy, and material tracking, among others. Oil and gas related logistics technologies are also in a constant state of flux and evolving, thereby making it challenging for all players involved in the energy business.

The role and importance of the energy logistics industry was clearly evident at the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC 2014) where an estimated US $8.5 billion worth of business was generated, according to preliminary figures revealed by the organisers of the landmark energy event.

Held under the patronage of His Highness Sheikh Khalifa Bin Zayed Al Nahyan,

President of the United Arab Emirates, ADIPEC 2014 was hosted by the Abu Dhabi National Oil Company (ADNOC) and supported by the UAE Ministry of Energy and the Abu Dhabi Chamber of Commerce & Industry.

Christopher Hudson, Senior Vice President, Energy at dmg events, remarked “Valuable insights were shared and important decisions were made during this year’s edition that will undoubtedly lead to positive changes in the energy sector.”

According to sources, more than 70,000 visitors attended the 30th anniversary edition of ADIPEC this year, an increase of more than one-third compared to 2013.

ADIPEC 2014 also welcomed 1,868 exhibitors, 6,323 delegates, and in excess of 600 speakers, bringing the world’s decision makers, industry leaders, and experts un

ENERGY LOGISTICS

ADIPEC is a massive annual energy industry event.

der one roof to address the most critical issues surrounding the ever-growing global energy demand.

According to HE Abdulla Nasser Al Suwaidi, Director General, ADNOC, such initiatives said: are able to bring the best and brightest minds to share the most sophisticated technologies, latest research, and expertise. Al Suwaidi said that the dissemination of knowledge plays a pivotal role in the development and progress of the energy sector and ADNOC is determined to stay the course.

This year’s edition of ADIPEC hosted 16 national oil companies and 17 international oil companies, with 20 international pavilions including major market players US, China, and Canada, and emerging markets Indonesia and India, marking the largest global participation in ADIPEC’s history.

NPCC, an engineering, procurement and construction (EPC) company that provides total EPC solutions to both the offshore and onshore oil and gas sector, is a major provider of direct and ancillary logistics services to the energy sector. It provides engineering, procurement, project management, fabrication, installation and commissioning to project owners and operators.

“We have over 800 engineers based at our engineering centres to provide a full range of engineering and energy solutions to support its offshore operations,” affirmed Ousama H. Takieddine, Vice President, Engineering, adding that ADIPEC provided the right venue to network and connect with principals, service providers and the generic energy industry fraternity.

United Energy of Pakistan (UEP) was upbeat at its presence at ADIPEC 2014.

According to Shabbir Jan Mohammad, Head of Procurement Supply Chain Management. The complexities of logistics in the energy sector implies a rigorous process of evaluation and assessment of the concerned service providers. “Fortunately, there are very capable, efficient and experienced partners available and ADIPEC is a good platform to source them,” he added.

Rockwell Automation showcased PlantPAx, its advanced process automation system designed to address the need of modern production facilities in the oil and gas industry, which require much higher flexibility through modular design and higher levels of integration. PlantPAx provides just such a system in the form of a modern DCS that allows users to optimise their production, while helping to reducing risk and lower total cost of ownership.

Logistics News ME | December 2014 | 29

ENERGY LOGISTICS

“As process control systems provide more and more options, information is key.”

“It provides a scalable and modern DCS that allows the smaller systems used for small skids to be easily integrated. Using the same programming tools and faceplates for small, medium and large process control systems significantly reduces engineering and commissioning, while optimising the operator experience,” affirmed the visiting Alain Hermans, Manager, EMEA, Process Automation Solutions at Rockwell based in Brussels, Belgium.

“As process control systems provide more and more options, information is key to translating this to meaningful information for the operators. PlantPAx also helps users to extend their systems to match their precise needs, without paying for extra licenses. What is more, you can make changes or additions without interrupting your production,” he affirmed.

In addition to highlighting its portfolio of solutions and skills, Rockwell Automation presented a paper: ‘The Implementation of Model-Based Predictive Emission Monitoring System for Reducing Fuel Consumption and Emissions Output’. This paper highlighted another core element of PlantPAx’s capabilities, namely its ability to help reduce energy expenditure. PlantPAx helps users to quickly react and adjust key process control loops, by reporting the correlation between gas, steam, electricity a fuel consumption at a production facility, in real time. The energy sector is very important for Rockwell and accounts for approximately 10% of its corporate revenues.

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Logistics News ME | December 2014 | 31

FLOOR TALK

twin technologies from the floor

When is a floor not just a floor? Talk to any industrial flooring solutions provider about the right flooring for a particular industry and the likely response will be – it’s all about what you want it to be. Modern-day warehouses have a long laundry-list of specifications and criteria

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he UK-based Twintec Group is the global market leader in designing and building ‘jointless’ steel fibre reinforced concrete (SFRC) industrial floor slabs. The company derives its name from the twin technologies of concrete and steel fibres and, as a specialist flooring contractor, designs and builds in excess of 6 million m2 worldwide each year. Logistics News Middle East spoke to Ruth Waugh, International Business Development Director, Twintec to get the lowdown on the company’s industrial flooring systems.

Please tell us more about Twintec’s SFRC and its advantages?

It has long been acknowledged that the concrete floor slab is one of the most important components of a modern warehouse facility, day-to-day operations and efficiencies depend on it. End users need to invest in the best for their specific requirements.

It is well documented that reducing the number of joints in a floor slab will have a major impact on operational efficiencies as well as floor and MHE (Materials Handling Equipment) maintenance costs and Twintec pro-

Ruth Waugh, International Business Development Director has worked for Twintec Industrial Flooring for 15 years since it commenced operations in the UK and now heads up new market expansion.

An experienced Business professional with a proven track record of generating revenue through planned business development & marketing strategies and implementation of targeted marketing plans for existing and new markets.

Current target markets include the Middle East and the Far East.

32 | Logistics News ME | December 2014

vide in-house design and experienced construction teams, backed up by PI insurance and warranties.

A ‘jointless’ SFRC floor slab will contain no mesh or rebar and the concrete is reinforced entirely with steel fibres throughout the depth of the floor slab and contain no sawn induced contraction joints but only steel armoured construction joints at the edge of days panel. A ‘jointless’ slab will improved MHE operational efficiency and significantly reduce ongoing floor and MHE maintenance costs.

Please expand on the ‘Design-Build-Insure’ concept as part of your total service guarantee?

Offering a unique Design-Build-Insure service, Twintec understands clients’ needs and provides optimized designs to meet specific requirements on a project-by-project basis.

Twintec advocates value engineering as an integrated and detailed planning process that considers techniques and materials that could provide better performance and better value over the life of the project. Design concepts, materials and methods of construction should be carefully considered by all parties without compromising functionality and operational requirements of the client.

Please identify some of your top projects and accomplishments in the recent past.

Twintec has a growing portfolio of completed projects within the Middle East region including Dubai, Bahrain, Oman and Saudi Arabia, working for well know clients such as Panda supermarket, Caterpillar and Al Madina Logistics. Twintec will be working on the new Convention Centre and for the Ministry of Defence (MOD) in Oman in 2015.

What challenges do you foresee for the future?

Twintec is not alone in having faced challenges

FLOOR TALK globally over the past few years but have continued to invest in key areas of the business including research and development, introducing new construction joints and recycled fibres into floor slab design and construction.

Why are joint installations so crucial in floor construction?

The correct installation of a quality armoured construction joint is essential and on-going innovations in this area will ensure that the end user reaps the benefits of a truly ‘jointless’ floor slab.

One such example is the HC Sinus-slide® expansion joint that provides continuous support for passing wheels, enabling vibration free crossings and smooth and optimal load transfers.

To gain optimal performance of mechanical handling equipment, it is crucial to minimise the contact pressure of the wheels on the floor slab/construction joint. Contact pressure is exacerbated by transporting heavy goods and MHE with small diameter hard tyres. The sinus profile of the joint ensures continuous support for passing wheels regardless of the direction of travel, size or form of the wheel. The permanent contact between wheel and concrete floor across the joint creates a smooth and noiseless load transfer.

What is the purpose of steel fibres in building floors?

Steel fibres used to reinforce concrete have traditionally been manufactured from new high carbon steel wire. However, steel wire of a

much higher quality is used in the manufacture of truck tyres and a significant volume of this material is recovered each year when endof-life tyres are recycled.

The innovative nature of the technology has been recognised by the award of a number of worldwide patents. Recycled fibres and hybrid blends have been extensively tested and verified by the University of Sheffield in a GBP £2 million programme of on-going laboratory testing and full-scale field trials.

Where is the growth coming from—what sectors are contributing most to the growth?

Large logistics warehouses, particularly in Dubai, are emerging as key growth areas with companies investing significant sums in expanding and updating their distribution facilities.

These facilities can benefit from the technology of a Twintec ‘jointless’ slabs to improve their operational efficiencies, future proof their building and significantly reduce their year-on-year maintenance costs compared to traditional slab construction alternatives.

How important is the Middle East for Twintec?

Twintec regards the Middle East as a key target growth region and have now established a local company based in the UAE to be able to respond to clients’ needs more efficiently. The local company upholds all the values of the Twintec Group with a local presence.

What opportunities do you foresee in the Middle East for Twintec?

Twintec are able to offer a unique proposition to clients in the Middle East with a total responsibility package, quality and fast track production. Superflat floor slabs laid without remedial grinding is the norm for Twintec’s skilled and experience production team, coupled with on hand technical and design advice from the in house engineers – a truly total package concept.

What are Twintec’s expansion plans for the region?

Expanding operations within the Middle East and opening a new branch company in Thailand have been key focuses for Twintec, while continuing to maintain high quality production output and value engineered designs.

What are Twintec’s short & long-term goals for the region?

To provide value engineered, designed for purpose high quality floor slabs constructed efficiently and leaving the client with the optimal operating platform for his business, today, tomorrow and into the future.

Logistics News ME | December 2014 | 33

STORAGE SOLUTIONS

storage

solutions in store STORALL was conceived to meet the needs of UAE’s new settlers, long-time residents and growing businesses, by offering cost-effective storage solutions for personal and business requirements under one roof

R

unning out of room? Grappling with space for storage purposes? Storage of physical products has always been a vexatious issue for individuals and the industry. Where and how do you put up with surplus inventory that you may need in the near future and how do you effectively retrieve the same when you need it speedily?

Enter STORALL, the pioneering solutions providers to the industry. STORALL was conceived to meet the needs of UAE’s new settlers, long-time residents and growing businesses by offering cost-effective storage solutions for personal and business requirements under one roof. The concept is relatively new in this region but one that is proving increasingly popular given the paucity of storage areas and high costs for maintaining warehouses.

34 | Logistics News ME | December 2014

STORALL has carefully considered every immediate storage need and anticipated every potential future requirement and every facility that their clientele would require to make their storage experience useful, cost-efficient and rewarding.

Ghassan Abughazaleh, General Manager, STORALL, in conversation with Logistics News Middle East reiterated that the mission of the company, a leading storage solutions provider in the UAE and indeed the region, is to provide customers innovative, secure, economical and convenient storage solutions customized to their needs and expectations.

According to Abughazaleh, STORALL offers a spectrum of storage solutions conveniently located in the Jebel Ali Industrial Area under one roof at affordable rates and gives

its clients a large choice of different secure storage solutions to choose from, such as: climate-controlled and non-climate controlled ‘self-storage’ rooms of various sizes; large drive-up access general storage rooms; as well as palletized rack space. STORALL also has a self-storage facility in Abu Dhabi.

In reply to a question on STORALL’s performance, Abughazaleh stated that the company’s performance has continued and sustained in 2014 as a fall out of the positive increase in cargo storage and movement in 2013. Throughout 2013, STORALL experienced a favourable increase in cargo storage and movement. “This trend has continued for 2014 – indicating that the logistics market is steadily improving on a realistic basis,” he emphasised.

STORAGE SOLUTIONS

Due to the niche market we operate in and our differentiating one-stop-shop formula, we have been operating at near-full capacity since last year.

“There has been a reasonable amount of elapsed time for the market in our industry to correct itself as far as pricing is concerned.

Storage rates have improved for the type of cargo we handle at STORALL. Due to the niche market we operate in and our differentiating one-stop-shop formula, we have been operating at near-full capacity since last year.

This has encouraged us to expand our operational capacity even further by putting into effect plans to double our intake by the second half of 2015,” he affirmed in assessment of the current situation.

With opportunities and near-capacity performance also comes concerns and challenges and there is no denying the fluidity and volatility of the market situation and

factors that may adversely influence industry growth. “The challenge is to keep matters reflective of the actual market dynamics – that goes for those on both sides of the logistics industry: for the service providers not to overreach and create an over-supply of storage capacity that we witnessed about 6 or 7 years ago; and for the those clients who seek those services to accept that the market rates are no longer at the plummeted levels of the past,” he counselled.

Abughazaleh is also an advocate for reforms and would like to see consistency and uniformity in the wider GCC in the leasing and warehousing arena. “It would be nice to see a more comprehensive and standardised zoning system (and leasing regulations) across

the GCC region that would take into account multi-purpose warehouse / storage operations (like ours) to facilitate the ease of obtaining operating licenses similar to what we have here in the UAE,” he averred.

What about expansion plans and what does the future hold for STORALL? “Since its inception the company’s strategy has been geared towards meeting its stakeholders’ expectations underpinned by a customercentric focus, top-tier technologies, and international best practices. Accordingly, STORALL has consistently been increasing the storage capacity of both its primary storage offerings namely 3PL / Warehousing & Self Storage. Plans are underway to set up at least two additional corporate facilities within the next 12-18 months,” remarked an upbeat Logistics News ME | December 2014 | 35

PROFESSIONAL PERSPECTIVES

tips for inventory

humming

Striking the right inventory balance, the fine, optimum equilibrium between demand and supply has been sought after by retailers as they grapple and struggle to maintain and reconcile the stocks—sales equation

I

n an ideal world, the last customer who wanted a particular product would buy the last unit you had in stock. And there would always be a perfect balance between supply and demand. But we don’t live in an ideal world. As retailers, we must continually make educated judgments on what, when and how much to buy.

Every retailer knows that inventory management is a crucial part of running a retail business. But the fact is, inventory can be an asset or a liability. Too much (or the wrong inventory) can slow your cash flow and reduce profits, while too little results in missed sales opportunities and reduced profitability. But get the balance right, and your inventory will play a big part in ensuring your cash flow and profitability are maximised.

No matter what products you sell, how you sell them, or the size of your business, you must ensure you stock the right number of the right products at the right time. Treating visible symptoms alone is never enough.

36 | Logistics News ME | December 2014

The tragedy of the Titanic highlighted how easily a major problem can be dismissed when the full extent of the problem is not immediately apparent. In the case of the Titanic, only 10% of the iceberg was visible above the waterline. It was the unseen 90% that caused her to go down.

Aged inventory, like the 10% of the iceberg, is a symptom of a much larger and much deeper problem. Therefore addressing aged inventory alone without recognising its root cause is like putting out fires without addressing why the fires are breaking out in the first place. In other words, simply addressing aged inventory every time you’re faced with it does nothing to prevent the problem from reoccurring.

5 KEY STRATEGIES TO KEEP YOUR INVENTORY HUMMING 1) OPEN-TO-BUY

An Open-To-Buy strategy based on previous sales figures is one of the keys to

PROFESSIONAL PERSPECTIVES

“Buying decisions that rely on previous buying behaviours and gut feelings alone are fraught with problems sound inventory management. The use of common metrics allows you to maximise profits by phasing in merchandise to improve stock turns. Without an Open-To-Buy plan you are simply guessing your inventory needs. This can lead to many problems including overbuying, markdowns, cash flow problems and poor productivity because everything’s coming in at once.

2) The Bullwhip Effect Buying decisions that rely on previous buying behaviours and gut feelings alone are fraught with problems. Because consumer demand changes constantly, retailers must forecast demand to make the right inventory and other resource decisions. The Bullwhip Effect refers to a trend of increasing swings in inventory in response to changes in consumer demand. Without feedback from sales, the wrong buying decisions can create situations in which stock is either severely under or overstocked.

Furthermore, if the decision-making period is excessively lengthy, the extremes of under or over-stocking can be even greater, making course-correction decisions even more difficult to make and causing detrimental problems in the stock pipeline.

The solution to this issue is two-fold.

Firstly, it is vital to integrate your sales results with your buying strategy in order to make your buying decisions.

Secondly, the time to make a decision must be reduced, so that when incorrect buying decisions are made, their effects are reversible.

3) No Quit Cycle As discussed, talk around aged inventory merely addresses the symptoms of the problem, but never the underlying causes. So what is the solution if there is no formal company-wide process in place to address those underlying issues?

The solution is to address aged inventory before it becomes a problem.

How? By understanding that each Stock Keeping Unit (SKU) must have a finite life cycle, which is mapped out at the time of acquisition. By being proactive rather than reactive, you will reduce the likelihood of aged inventory problems occurring in the future.

4) Missing Forecast Inventory is only one part of the puzzle.

Sales forecasts determine the resources that are allocated to your stores, including staff, transport, allocation time and, of course, inventory. If the sales forecasts are not rigorously planned, holding a ‘sale’ event could in fact be detrimental to the business.

There’s the extra wages that would need to be paid and the issue of unsold stock clogging the pipeline.

Forecasting is paramount in the

PRAKASH PK MENON Internationally acclaimed speaker, thought leader, author and mentor Prakash ‘PK’ Menon is the Executive Director, Thought Leaders Middle East, and one of the world’s most respected supply chain experts and leadership authorities.

Menon, a regular contributor to Logistics News Middle East, has authored three bestselling books, ‘Driven’, ‘Fail Smart’ and ‘Supply Chain is Sexy’, all of which continue to inspire both neo-entrepreneurs and established business leaders.

decision-making processes of a retail company in the longer term, as shorterterm forecasts directly impact longerterm strategies that extend well into the future.

5) Working your turns Stock turn is a measure of sales divided by average stock. The resulting figure is universally important in retail, irrespective of whether you own a corner-store or you’re a global player.

Why? Because it forms the basis of all buying, merchandise planning, allocation and inventory management at store level, to ensure that inventory is always maintained at an optimal level.

Logistics News ME | December 2014 | 37

INTELLIGENT LOGISTICS

making smart logistics work

The four pillars of Intelligent Logistics, embedding ‘intelligence’ into logistics processes and systems, involve building four robust pillars of integrated planning and execution, visibility, collaboration and analytics

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hat does the word ‘intelligent’ connote when used in conjunction with logistics? It connotes ‘smart’, foresight-driven, sensory, responsive, adaptive logistics.

How can one equip logistics to have foresight, be able to sense changes, respond to those changes and be adaptive to changes in the environment? These are hot topics in the supply chain and logistics world today. This article does not profess to address all components of creating ‘intelligent logistics’. However, it provides an introduction to the logisticians of the current thoughts and trends in the arena and opens avenues for enthusiasts to explore further.

The four pillars of intelligent logistics, embedding ‘intelligence’ into logistics processes and systems, involve building four robust pillars of integrated planning and execution, Visibility, collaboration and analytics.

Intelligence in Planning and Execution The foresight and responsiveness are essentials at all levels of the logistics – strategic planning, tactical planning, operational planning as well as execution. It is equally important to build strong linkages between planning and execution processes and systems to embed ‘smartness’ into logistics.

Strategic planning addresses such issues as network design in terms of plant, warehouse, partner facility locations and capacity planning based on the customer demand, supplier positions, transportation and other fulfillment costs. The periodicity may range from six months to five years. By its very name, strategic planning is supposed to be intelligent.

However, in reality most strategic planning exercises neither embed foresight, nor create responsive networks. In the dynamic world of constantly escalating oil-prices (and hence fuel and transportation costs) and increasing

38 | Logistics News ME | December 2014

demand-side and supply-side pressures, network planning needs to be almost continual; and create an adaptive network that can quickly respond to market changes.

Tactical planning addresses how best to use the existing facilities and assets for optimal customer service at least cost. It also includes ‘what-if’ sensitivity analysis and simulation techniques to sense the effects of delta changes in demand, supply, or network and helps respond better to changes.

Operational planning generates realistic inventory and shipment plans either based on constrained-optimisation or heuristics. Historically, most operational planning engines have been batch-oriented. Then the transactional systems execute the plans generated by the batch engines.

However, in the real world, orders keep changing, carriers reject tenders, inventory is not found in the warehouse due to discrepancies, or equipment breaks down on the road and so on. The uncertainties in the logistics network are increasing both on the demand side and the supply side. On the demand side, orders would change more dynamically based on the real customer demand.

On the supply side, logistics networks are also lengthening with global supply chains. A key ingredient of ‘smart’ logistics is to have a tightly integrated planning and execution.

Batch-oriented optimisation and transactionoriented execution must be give way to ‘realtime optimisation’ and ‘responsive execution’ with a closed loop feedback linking planning and execution.

Visibility Visibility refers to true understanding of the customer demand, real-time track and trace of inventory at item level, and track and trace of shipments as well as alerting when events deviate from expectations. This visibility into orders (demand), inventory and shipments

INTELLIGENT LOGISTICS (supply) help sense the changes in demand and supply in near real-time and respond quickly to these changes. This will help reduce safety stocks and hence costs, improve customer service and make the logistics network more adaptive. They will also help execute such best practices as cross-docking, in transit inventory merging, and delayed allocation strategies.

The key tools of visibility are: 1. Track and trace within the enterprise through event monitoring engines.

2. Track and trace across partner network by receiving partner messages through EDI, XML or Web.

3. Integration hubs mange connections among heterogeneous systems located in multiple enterprises.

4. Exception detection and alerting compares status messages with predefined metrics and workflows, sending alerts when pre-defined tolerances are violated.

Collaboration Intra-enterprise and inter-enterprise collaboration is closely related to visibility. It also extends beyond visibility into multiple levels of collaboration, particularly for inter-enterprise collaborations. At the lowest level of Transaction Automation, inter-enterprise

collaboration involves data and document exchange through EDI or Web. Coupled with track and trace functions, these can help introduce some intelligence into the network by monitoring events and generating alerts.

At the next level of collaboration, demand, inventory, schedules and other parameters are shared, enabling better planning. This can help make all the parties ‘smarter’ through better decision-making. True collaboration involves re-engineered business processes across the partner network with closed loop planning and execution. The integration of systems, processes and people across the network creates a high velocity network that is lean, agile and adaptable to respond quickly to the changes in the environment.

Alexander Borg is a chartered trainer and consultant in Logistics, Transport and Supply Chain Management. Alex is an active member of CILT and support a number of different public and private firms in the North Africa & Middle East Region through his office and facilities in UAE. Borg has spent six years (2008 -2013) as Regional Director for CILT (www.ciltinternational.org) for UAE & GCC Region based in Dubai. During his term in office at CILT UAE, Borg has achieved a lot of success through growth of membership, education, events, awards and expansion of CILT in the GCC region.

Alex Borg graduated in Purchasing and Supply Chain Management from the Chartered Institute of Purchasing and Supply (C.I.P.S.) in Stamford and in Stores and Inventory Management from the College of Professional Management in Jersey, UK. He also holds an international Qualification in Logistics & Transport Management awarded by CILT International.

With over 20 years working experience, today Borg is involved in various consultancy projects and assignments after being entrusted by various public and private organizations in different European Countries, North African Countries, Middle East / Gulf Region and South East Asia. Borg is also a member of the Chartered Institute of Purchasing and Supply (UK); the Chartered Institute of Logistics & Transport and The Malta Institute of Management.

Logistics News ME | December 2014 | 39

INTELLIGENT LOGISTICS Network. Real-time capturing of logistics metrics enables a performance-driven, responsive logistics network. 360 degree score cards, logistics dashboards, performance reporting, and ad hoc queries are some of the tools in this category. Six Sigma methodologies are also increasingly used in the supply chain and logistics domain creating goal oriented, performance driven, intelligent networks.

Near real-time analytical tools that provide incisive service and cost metrics help intelligent decision making. Analytics combined with six sigma methodologies also enable root cause analyses to address the core issues.

Conclusion Injecting intelligence at all levels of the Logistics network has never been more critical than in today’s demand-driven, globalised supply networks. Affordable tools are available today for making the logistics networks ‘smarter’ through collaboration, visibility and analytics. There are still challenges in tightly integrating the planning and execution processes in a closed-loop, but that is clearly the direction for the logistics industry.

Employee Incentive Programme in Supply Chain Management If you want to improve your operations in 2015 onwards, implement an employee incentive programme. The New Year is the perfect time to take a fresh look at where you are in your operations and where you want to go. At the end of the year, most companies go through their budgeting process and ask their divisions, including, sales, import and export, production, marketing and distribution, how they are going to be more cost effective. That is why the New Year is the time to start thinking about how you will meet the goals you face in the coming year.

Where do you start to become more cost-effective?

A good suggestion will be to begin with those areas of your operation that will make you look good when your superiors compare what you did versus your budget.

Here are three ideas that are worthwhile exploring: Idea 1: Implement an incentive program: If you want to get more productivity from your employees, an incentive programme is the first step. There are a lot of different ways to run an incentive programme. You can put in a team-based approach, an individual program, or some combination in conjunction with a labour management 40 | Logistics News ME | December 2014

programme.

Whichever flavour you choose, almost all work. A recent survey indicated that 200 logistics professionals remarked how they used incentive programmes. Over 63% had achieved productivity gains between 10 and 30% over a two-year period, while 13% had gains of over 30% over that same period.

One tip: do not trade performance for quality. If you are getting pick errors because your operators are working faster, you are not gaining anything. That is why the best programs include a quality component to their programmes.

Idea 2: Re-slot your warehouse: Given the fast pace of business today, it is a good idea to re-slot your warehouse at least once a month. But who has the time to move all that inventory? The idea is that goods that are picked more often should be in a more central location to reduce travel time to the

loading dock. But while most firms, re-slot as part of the process when they implement a WMS (Warehousing Management Systems), most do not keep doing it on a regular basis.

The latest Tier 1 WMS systems combine slotting and labour management programs that allow you to run a ‘what-if’ scenario: that allows you to figure out what it will cost from a labour standpoint to re-slot compared to what you are going to save from having inventory better positioned for picking. But even without the software, most warehouses have down times, that is a great time to re-slot.

Idea 3: Get OSHA (Occupational Safety & Health Administration) ready: Almost all companies have safety programmes. And all report incidents, like a lift truck damaging a rack as OSHA incidents. Most companies will talk about the incident at a weekly

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Logistics News ME | December 2014 | 41

LOGISTICS & THE LAW

the port

Congestion charges conundrum

Faced with labour-related terminal delays, shipping companies have decided to publish and implement the controversial port container charges

42 | Logistics News me ME | December november 2014 2014

LOGISTICS & THE LAW

I

n order to cover up labour related terminal delays, container lines decided to publish and implement port congestion charges of up to $1,000 per 40 feet container for the cargo en route US West Coast ports. Carriers would assess and collect the respective charges on an individual basis for eastbound and westbound cargo commencing 17 November 2014. Letters to shippers announcing the surcharges vary from carrier to carrier.

Most of the motor carriers opine that market conditions don’t permit them to impose surcharges, however, they will still have to consider it due to the winter crisis at the port.

They have no other options other than to impose added charges. Motor carriers are determined to recoup costs and are experimenting with various methods and approaches. Some motor carriers, with mixed success, manage to get away with the demurrage charges when the containers cannot be moved from the terminal before the expiry of the free time.

Shortages of rock salt, long shore labour and intermodal chassis, further add to this crisis. The present climate has disrupted ship schedules resulting in bunching of ship calls.

Most of the container lines still operate on very low margins. However, this may not be recommended considering recovery on a long-term basis. It would be too a dangerous task to add on the surcharges. At Seattle and Tacoma, terminal operators report up to 60% productivity reductions in loading and dis-

FMC to review new US West Coast Port Congestion surcharges As labour negotiations between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) continue, several major ocean carriers have implemented ‘port congestion’ surcharges that have captured the attention of the entire shipping community, including the Federal Maritime Commission (FMC). On November 17, the Transpacific Stabilization Agreement (TSA), a discussion group of carriers, announced that a number of its 15 carrier members have or will soon implement the port congestion surcharge, taking immediate effect.

For import cargo, the surcharges will be $800 per 20-foot container, $1,000 per 40-foot container, $1,125 per 40-foot high-cube container, and $1,256 per 45-foot container. This week, the FMC stated that it will review these congestion surcharges for compliance with the Commission’s rules and regulations.

The ILWU has been working without a contract since its previous agreement with the PMA expired on July 1. While cargo-handling productivity was not affected for the first four months,

charge of vessels. This in fact, lead to interrupt the schedules and also delay receipt and delivery of cargo, which in turn affects the economy that mostly, depends on such international waterborne trade.

Carriers are concerned about the potential impacts of added charges on the customers.

However, in order to recoup the money, they may have to impose the congestion charges as the business is all about time. If you don’t bill for time, all the money is lost.

Carriers are supposed to give 30 days notice for hike of their tariff rates; however, it would not apply to cargo that is already in California or in transit. Also, if a container is on a ship in the middle of the Pacific Ocean, the surcharge would not apply to the cargo.

If anybody appealed the surcharges, the question about whether there was actual delay or slowdown would be considered. To be clear of any ambiguity, the tariffs need to be clear and definite and the tariffs allowing congestion charges should meet the standards.

If any cargo related disruption occurs at any port after the cargo is tendered by a shipper, a carrier may only lawfully charge the rates in effect on the day the cargo is tendered.

In fact, carriers are responsible for the congestion, the chassis shortage, and other factors which are in their control and are the root cause of this congestion. Nevertheless, port congestion charges remain a significant problem.

recent issues have caused tensions to rise. Last week, the PMA issued a press release alleging that the ILWU was intentionally slowing down traffic at the ports, leading to congestion. The ILWU quickly responded, denying the charge and citing other factors contributing to the slowdown, including a shortage of chassis and truck capacity.

Regardless of the cause, the impact at West Coast ports has been severe. A November 3 survey by the Journal of Commerce found that 97% of shippers said they were affected by congestion at the ports of Los Angeles and Long Beach, with nearly 70% saying they will reroute cargo. The TSA has stated that terminal operators at Seattle and Tacoma have seen 40-60% productivity reductions in loading and discharge of vessels, while 14 ships were at anchor in Los Angeles-Long Beach harbour awaiting a berth.

The FMC is now receiving numerous inquiries regarding the congestion surcharges, and whether they are permissible under the Commission’s rules. Pursuant to the Shipping Act of 1984, as amended, and FMC regulations, unless done pursuant to a waiver or exemption, any tariff rule (including surcharges) of a common carrier that results in an increased cost to a shipper may

not be effective earlier than 30 days after publication.

Earlier this year, many shipping lines published congestion charges to cover labour-related service disruptions. According to the TSA, this publication satisfies the FMC’s 30-day notice requirement. In its press release, the FMC cautioned that all such carrier tariff rules must be clear and definite as to the implementation and termination of the surcharge based upon specific criteria related to ‘labour unrest’. The FMC further advised that it will continue to review congestion surcharge rules published in carrier tariffs and is gathering information from carriers regarding implementation of these surcharges.

Shippers have also spoken to FMC about the amounts of the surcharges, but FMC Chairman Cordero said the reasonableness of the surcharge is secondary to the analysis of whether the surcharges meet the Commission’s requirements of being ‘clear and definite’.

Should the labour unrest continue, US West Coast ports will likely continue to face congestion, with damaging effects on all members of the shipping community.

(Ashley W. Craig, Elizabeth K. Lowe and Matthew R. Rabinowitz from the Venable Law Firm) Logistics News ME me | December 2014 | 43

CASE STUDY

warehouse automation raised to new dimensions German juggernaut SSI Schaefer’s unique & customised 3D-matrix storage solutions for long-established Finnish retailer Stockmann’s Departmental Stores and Fashion

Prelude An innovative combination of automated storage technology will bring Stockmann’s new distribution centre into a brave new future. The centre will open in 2016 in the Greater Helsinki Region, and will serve Stockmann’s Finnish and Baltic department stores as well as handling the company’s e-commerce orders.

The advanced 3D-MATRIX Solution® from SSI Schaefer, combining diverse functions into a multi-functioning whole, will increase efficiency, flexibility and lead to substantial cost savings.

A multi-functioning whole 1862-established Finnish Stockmann, with 16 department stores in Finland, Russia, Estonia and Latvia, has chosen to streamline their distribution with one automated and multifunctional distribution centre in Tuusula, the Greater Helsinki region, which will have significant impact in terms of service, functionality and economy.

The project’s technological focal point is the patented 3D-MATRIX concept, which consists of automated storage modules that work together as a highly dynamic whole.

Upping Stockmann’s Standards “We expect the new warehouse automation technology to significantly strengthen Stockmann’s competitiveness in the years ahead, while we are expanding our e-commerce offering both in the Finnish market and in the Baltics”, affirmed Logistics Director at Stockmann, Björn Höglund.

“The system will enable us to provide a far better service, and the efficiency im44 | Logistics News ME | December 2014

provement will result in savings of millions of Euro.

“In addition we will achieve a significant operational advantage by integrating into one building varied product groups such as flat garments, hanging garments, and small and large home products. An important feature of the solution is the fact that it enables us to simultaneously handle the rapidly growing e-commerce orders, which makes heavy demands on distribution systems.”

State of the art technology Elina Laine, Logistics Manager from Stockmann, explains that the SSI Schaefer solution was chosen because of its flexibility and high operator efficiency compared to other goods-to-person systems. In order to achieve this reliably, the whole site, including the manual operations, the hanging garment system, and the Matrix automation, will be managed by the SSI Schaefer inhouse logistics software WAMAS®.

In addition, it is an advantage that SSI Schaefer as supplier is present locally, with Finnish-speaking expertise and support.

“In a major project like this, it is of great importance that we can maintain a close and continuous cooperation with the supplier. This will ensure a smooth continuation of compliance with budget and schedule, during which we shall get professional and innovative input”, remarked Elina Laine, who expects a good cooperation and has high expectations for the selected option in the form of cost savings as well as increased efficiency and quality.

“With SSI Schaefer as our partner, I am sure we are going to serve our customers better and faster in the future.”

Flexible dynamics The Stockmann project is SSI Schaefer’s largest project in Finland and it will come to mean a lot to the warehouse automation supplier who has implemented many large systems worldwide.

“For us, the Stockmann project is exciting in several ways,” stated Automation Sales Manager for SSI Schaefer in Finland, Rami Syrjä.

“Technologically, we are implementing our latest innovation for high efficiency distribution systems.

“In terms of marketing, the project will become a significant reference within Europe, but especially in the Finnish market where we at one stroke become one of the market leaders.”

CASE STUDY

Expertise SSI Schaefer’s leading designer on the Stockmann project, Stephen Baker, supported this statement, adding: “The 3DMATRIX Solution has already proven to be a popular choice for new goods-to-person distribution centres around the world and we believe that it is going to show the way for many customers in the future.

“Because of its innovative design, automation technology and integrated IT, the 3D-MATRIX Solution offers the flexibility that is required by multi-channel retailers in an increasingly demanding and uncertain sector.

“A unique feature of the design is the ability to store, buffer, and sequence products to the pickers in a single system. This is done by coordinating the product movements in the warehouse in the x, y, and z axes consistently and in parallel.”

Phased Development The project is divided into phases that will be gradually implemented over the next 2-3 years. Cost-wise the savings are planned to come as a result of a more efficient flow, lower transportation costs and a lower number of staff in the process. The distribution centre will be built with extensive consideration for the environment.

Stockmann’s new distribution centre is due to open in 2016..

Logistics News ME | December 2014 | 45

FORMULA 1 LOGISTICS

Logistics in

top gear the preparation for the formula 1 weekend at the abu dhabi yas marina circuit included transporting 750 tonnes of f1 gear, applying 8,550 litres of paint to the track and serving 42,000 meals

Paint played a big part in the preparations for racing at the Yas Marina Circuit in Abu Dhabi.

Y

as Marina Circuit staff and contractors worked frenetically to prepare and plan schedules to ensure the smooth running of races at the Yas Marina Circuit’s Formula 1 Etihad Airways Abu Dhabi Grand Prix.

Since the conclusion of the Brazilian Grand Prix just a fortnight before the commencement of the Abu Dhabi Grand Prix, six charter flights, each carrying 90 tonnes of gear, airlifted all the Formula One team equipment to Abu Dhabi. Around 140 sea freight containers also landed at Khalifa Port by the weekend, bringing the remaining team kit for the Formula 1, GP2 and GP3 races.

More than 400 logistics contractors, using 60 forklift trucks at Yas Marina Circuit alone, coordinated this huge operation – a combined air and sea freight totalling 750 tonnes.

This year’s race weekend saw the largest crowds attending in the circuit’s history, and feeding 60,000 attendees each day in the public and corporate hospitality areas was an uphill task.

The circuit employed 1,924 catering staff, serving around 29,670 meals in the corporate hospitality suites and Grandstand (not including the Paddock), in addition to 12,250 staff meals for Yas Marina Circuit employees across the weekend.

Guests enjoyed more food and drink options than in previous years, with 56 outlets – a mix of mobile kitchens, concessions and bars – and two new clubs, as well as the new after-party venue, North Star.

Maintenance of the circuit had been in progress for months. A team of 59 gardeners worked constantly to lay 75 acres of grass and planted a total of 715 palm trees and 150,000 flowers in preparation for the event.

Painting the track was one of the final 46 | Logistics News ME | December 2014

maintenance jobs and this painstaking work was carried out by six specialist contractors experienced in painting race circuits around the world. They applied a staggering 8,550 litres of specially commissioned paints to the circuit, including pantone 321 a blue colour which is actually unique to Yas Marina Circuit.

Chosen as the colour most closely resembling waters of the Arabian Gulf, the paint is most suitable for Abu Dhabi’s dry conditions.

To achieve the final finish in line with the ex-

tremely high standards required, the contractors used 4,500 litres of ‘Yas Blue’ paint, 720 litres of ivory, 1,440 litres of red and 1,440 litres of white paint.

The track’s distinctive white edging was the last part of the painting process.

These lines were painted four times, implying the painting contractors had to cover a distance of 26 kilometres, including pit lane lines, applying about 450 litres of white paint.

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48 | Logistics News ME | December 2014