Logistics News Middle East

Almajdouie Logistics

Logistica

tranzone

In the vanguard of the Supply Chain & Logistics sector

In the Top League of 3PL Services Providers

Hot on the Life Sciences-Pharma Cold Chain in the GCC

NOVEMBER 2014

Iain Rawlinson, Group Commercial Director, Gulftainer, on the accomplishments-laden voyage of the Sharjah, UAE-based and largest privately-owned port management and 3PL logistics company in the world

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Start 6 | NEWS SCAN: Roundup of Regional & International News 12 | IT Solutions:

Exactus extracts exact solutions

14 | UAE Logistics Landscape: Frost & Sullivan surveys the nation’s logistics scenario 18 | Kingdom Logistics: Almajdouie Logistics in the front lines of Saudi Arabia’s logistics domain

features 22 | Gulftainer in

high gear: UAEbased global port terminal operator in expansionist mode; makes monumental foray in the USA

22 44

30 | Listening Post: Mark Millar on China’s exponential e-commerce growth

36 | Professional

Perspectives: Industry thought leader Prakash PK Menon on the 9Ps

38 | Farm to Fork: Gulfood Manufacturing shines the limelight on food logistics

NOVEMBER 2014

continued 40 | 3PL in Three

Dimensions: An exclusive interview with 3PL services provider Logistica

32 | Honeywell

on high ground: Unleashing a new wave of scanning & mobility solutions for the logistics industry

Contents

14

44 | Twinning Trade Lanes: DHL’s UK & Ireland CEO, Phil Couchman’s take on increased GCC-UK trade surge 48 | Logistics & The Law: Joy Thattil debuts with easing the legalese related to the warehousing business 50 | Tranzone Turf: Hotting up services for the cold chain Logistics News me | november 2014 | 3 Logistics News me | november 2014 | 3

Editor’s note Logistics on a short leash Volatility in the GCC logistics landscape As Logistics News Middle East continues to make forays in the continuum of the region’s logistics and supply chain businesses, through engagement and reporting, we are at once confronted by both the immense potential and opportunities of the trade, as well as the increasing competition and threats that underpin the industry. The apparent dichotomy is at once evident, as we connect with industry professionals, listen to them and understand their take on issues on the frontlines of the industry.

Clearly, the all-pervading optimism and confidence that oozes out from industry veterans is also increasingly tempered by ground realities including intense competition, lack of logistics infrastructure in some quarters, escalating operational costs, difficulty in sourcing qualified and trained employees, stagnant or weak economies, the recession, lessening demand, trade restrictions as well as regulatory, legal, legislative concerns and instability and political upheavals and other external factors outside of the industry’s control.

No, all is not doomsday and pessimism. The industry continues to remain resilient and continues to take things in its strides. This for example is clearly manifest in the narrative of Sharjah, UAE-headquartered Gulftainer, our cover story feature, which has made inroads into the port operations and management business across ports around the globe including the recent signing of a 35-year concession with the Canaveral Port Authority in Florida marking Gulftainer’s

first venture in the United States. We speak exclusively to Iain Rawlinson, the freshly appointed Group Commercial Director to get the low-down on Gulftainer’s progress card.

Elsewhere we speak to a broad canvas of players in the region’s logistics arena from IT solutions provider Exactus’ Jinu Kumar Nair, the company’s Director, Projects & Technology Services and Khaled Abdullah Al Ghamdi, the Dammam-based General Manager, Freight & Project Logistics, Almajdouie Logistics on a recent visit to the UAE. Elsewhere, we have also interviewed Phil Couchman, CEO of DHL Express’ UK and Ireland operations on a brief and busy visit to Dubai to consolidate the international express industry market leader’s Middle East — UK trade lanes. Tranzone’s Business Development manager Roger Phillips on the latest in the company’s healthcare and pharma logistics.

Logistics News Middle East also welcomes Industry Thought leader Prakash ‘PK’ Menon for his professional perspectives on the industry as well as Advocate Joy Thattil, Senior Partner, Callidus UAE & India holding forth on maritime legal matters in our new section ‘Logistics & The Law’. These constitute just a sampling of what this edition holds for our readers.

Editor Malcolm Dias malcolm@bncpublishing.net

Marketing Mark Monzon mark@bncpublishing.net

Managing Director Walid Zok Walid@bncpublishing.net

contributers

Director Rabih Najm Rabih@bncpublishing.net

Mark Millar, Joy Thattil, Prakash PK Menon

Director Wissam Younane Wissam@bncpublishing.net

SU B SCRI B E

Group Publishing Director Diarmuid O'Malley dom@bncpublishing.net

PO Box 502511 Dubai, United Arab Emirates P +971 4 4200 506 | F +971 4 4200 196

4 | Logistics News me | october 2014

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Malcolm Dias Editor malcolm@bncpublishing.net

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jayant@bncpublishing.net T +971 50 1971200 All rights reserved © 2014.

Opinions expressed are solely those of the contributors.

Logistics News Middle East and all subsidiary publications in the MENA region are officially licensed exclusively to BNC Publishing in the MENA region by Logistics News Middle East.

No part of this magazine may be reproduced or transmitted in any form or by any means without written permission of the publisher.

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Logistics News me | november 2014 | 5

news

The News Emirates SkyCargo boosts Dubai’s Logistics Hub With the move of its freighters to DWC, Emirates SkyCargo has strengthened the link between Dubai International and DWC, through its trucking operations, reinforcing the city’s multimodal logistics capability as a growing and popular global cargo hub.

Emirates SkyCargo launched its trucking operations on 1 May 2014 in tandem with the start of its freighter operates at DWC and up until 1st September 2014 its fleet of 47

trucks has facilitated the transshipment of over 108,000 tonnes of various commodities from perishables to outsized cargo between Dubai International and DWC, recording over 17,000 round trips round the clock.

Dubai ranks sixth globally measured by air cargo traffic.

Cargo volumes reaching record levels in 2013 with 2,435,567 tonnes of air freight passing through Dubai International, up 6.8 % compared to 2,279,624 tonnes recorded during 2012.

Safmarine’s customer services lauded by INTTRA INTTRA, the world’s largest multi-carrier e-commerce network for ocean shipping, has lauded Safma-

rine’s ability to respond to customer bookings to provide a global benchmark for the time customers need to allocate to book a container shipment online.

“We constantly look for ways to improve the customer experience,” affirmed Niels Thomas Agner Hansen, Safmarine Head of Sales Excellence and Customer Experience.

DT handles 2 m containers at Khalifa Port Abu Dhabi Terminals (ADT), manager and operator of the first semi-automated and most technologically advanced container terminal in the Middle East, Khalifa Port Container Terminal (KPCT), recently celebrated handling 2 million TEU (20-foot-equivalent units) since the opening of Khalifa Port on 12/12/2012.

The 2 million TEU accomplishment surpasses the initial target and represents a 20% year-on-year increase in containers handled by Abu Dhabi Terminals at KPCT. ADT’s Chief Executive Officer, Martijn van de Linde attributed the increase of Khalifa Port’s container traffic to the efficiency and productivity at Khalifa Port and strong support from the shipping and logistics community that have made Khalifa Port as their hub.

2 million

units handled

US Regulator approves 2M East-West alliance between Maersk Line and Mediterranean Shipping Co Maersk Line recently revealed it will implement its 2M East-West alliance with Mediterranean Shipping Co. in January 2015 following its approval by the US Federal Maritime Commission in a 4-1 vote.

In a statement Maersk said, “The US 6 | Logistics News me | november 2014

was the only remaining jurisdiction where the parties had to obtain formal approval. Thus the parties can now implement the agreement as planned.”

The 2M alliance would control a 35% market share in the Asia-to-Europe trade loop and 15% and 37% of the cargo

moved across the trans-Pacific and trans-Atlantic routes, respectively. By sharing ships and ports and using the biggest and most efficient vessels in the business, the 2M partners expect to cut operational costs by a combined $1 billion annually.

news

4.5 %

Growth forecasted for the Middle East’s maritime cargo sector in 2014

$ 850 m Investment by DP World in Jebel Ali’s new Terminal 3 Facility

Etihad Cargo achieves 16% growth in Q3-2014 Etihad Airways recently reported total revenues of US$1.8 billion for the third quarter of 2014, an impressive increase of 29 per cent year-on-year, achieved on the back of accelerated passenger and cargo growth during the summer. Etihad Cargo outperformed the global market, carrying 144,498 tonnes of freight and mail during Q3-2014, a year-on-year increase of 9%. Overall, Etihad Cargo carried 415,000 tonnes of cargo between January and September 2014.

In the third quarter of 2014, Etihad Cargo launched new freighter services to Moscow and Hanoi and increased frequencies on its existing freighter route to Milan. A specialist equine service was also unveiled for the transportation of horses and other similar species by air.

Cargo revenue was US$284 million in the third quarter of 2014, a year-on-year increase of 16 per cent. Etihad Cargo remains on track to become a billion dollar business in 2014, having reported US$804 million in revenue during the first three quarters of the year.

4 million TEUs Top capacity for DP World’s new Terminal 3 Facility in Jebel Ali

Etihad, Avianca ink freighter deal Etihad Cargo will partner with Avianca Cargo, the cargo division of leading Colombian carrier Avianca to deploy a freighter flight from Milan’s Malpensa Airport, Italy, to Bogotá, Colombia and from Bogotá to Amsterdam.

The new service is scheduled to operate twice a week and will, according to the companies involved, provide an important cargo connection between Europe and South America.

Avianca Cargo will provide cargo services through its Bogotá hub at El Dorado International Airport. It will do this via its extensive network of passenger and cargo flights to and from some of the biggest countries and

economies in Latin America . The Avianca destination list includes Argentina, Brazil, Chile, Mexico, Venezuela, Peru, Ecuador, Uruguay and Paraguay.

The new route will commence with a Boeing 747-400 Freighter.

This aircraft will offer a maximum capacity of 105 tonnes.

The partners expect strong demand for transportation to come from a variety of sectors and industries. They expect to be engaged in the transportation of raw materials, perishables, machinery parts, equipment, industrial consumables and fashion goods.

The new deal further extends the reach of the Abu-Dhabi based Etihad Cargo.

Logistics News me | november 2014 | 7

news

$ 510 m

Suez Canal Shipping revenues for Egypt in September 2014

168 tonnes Weekly freight capacity offered by Emirates SkyCargo on Budapest sector

6%

Dubai’s Logistics sector GDP share in 2013

Etihad, SAP forge technology partnership with new deal

Air Arabia honoured by the WEF

flydubai expands in East Africa

Etihad Airways recently announced the selection of SAP as a strategic technology partner to deploy a range of key software solutions to deliver the latest best-in-class technology to the Etihad Aviation Group.

The airline plans to deploy the enterprise resource planning application SAP ERP

Air Arabia recently announced that it has been named among the World Economic Forum’s prestigious Global Growth Companies (GGCs) for 2014.

The announcement took place at the recently concluded World Economic Forum Special Meeting on Unlocking Resources for Regional Development held in Istanbul, Turkey.

Speaking about it, Adel Ali, Group Chief Executive Officer, Air Arabia, asserted, “With this distinction, Air Arabia joins an elite group of fast-growing industry leaders.

We have always been considered an innovator and pathbreaker in the field of aviation, and it is gratifying to be recognised for our efforts and contribution to the MENA economy.”

Dubai-based flydubai’s inaugural flights to Dar Es Salaam and Zanzibar recently touched down in Tanzania. The new routes further underline flydubai’s rapid expansion in Africa, which has seen the carrier’s network double to 12 destinations this year. flydubai entered the market in 2009 with flights to Djibouti, and in 2011 Addis Ababa became flydubai’s second East African destination. In 2014, flydubai added six new routes to the continent with the start of flights to Burundi, Rwanda, Uganda and three destinations in Tanzania.

Tanzania has emerged as a noteworthy trade partner for Dubai recently and ranked among the major non-oil trade partners in Africa last year topping US$1.86 billion in total annual trade, according to recent figures from the Dubai Chamber of Commerce.

only allows us to showcase Khalifa Port and KIZAD offerings as well as meet food experts from around the globe, but to keep ahead on food innovation by exploring new developments in the global agriculture and food industry,” observed Capt. Mohamed Juma Al Shamisi, CEO, ADPC.

This year, the UAE’s food consumption already grew by 5.5% compared with the same period in 2013, according to Business Monitor International (BMI). Brasil Foods (BRF) and the National Food Products Company (NFPC) are two prominent examples of investors at KIZAD.

together with a range of cloudbased products across its vital business functions.

The deal was signed recently at a ceremony in New York. The signing was attended by the President and CEO, Etihad Airways, James Hogan, as well as Bill McDermott, CEO and member of the Executive Board of SAP.

$1.86 billion

ADPC’s KIZAD is showcased at SIAL Paris Abu Dhabi Ports Company (ADPC) participated in the recently-concluded Salon International de l’Agroalimentaire (SIAL), the largest food exhibition and innovation market place in the world in Paris, France.

“SIAL is a significant exhibition that not 8 | Logistics News me | november 2014

NEWS

$23.4 bn $ 27 bn Dubai’s Logistics sector’s estimated value in 2013

Dubai’s Logistics sector’s projected value in 2015

Aramex announces 16% net profit growth in Q3-2014 Aramex recently announced its financial results for the third quarter of 2014, delivering another strong performance. Aramex’s revenues in Q3-2014 increased to US$251 million, up 12% compared to US$224.4 million in Q3-2013. Net profits increased 16% to US$18.93 million, up from US$ 16.3 million in Q3-2013.

Commenting on the results, Hussein Hachem, Aramex CEO stated: “We are very pleased to have international express and e-commerce, following our investment in last-mile infrastructure and innovative technology solutions.”

Aramex delivered broad-based revenue growth across its geographies for the third quarter, with the GCC the key driver of this growth, complemented by improved performance from its operations in Europe, Asia-Pacific and Africa, as volumes of international and domestic trade increased.

Emirates Group’s current employee strength comprising 160 nationalities

Kewill introduces new Supply Chain solutions Kewill, a leading provider of innovative software for supply chain execution, has expanded its Kewill MOVE on the Cloud-hosted multimodal transportation management software platform to more fully address the needs of shippers.

The platform now incorporates some extended transport management functionality for manufacturers, across a variety of industry sectors, who want to manage their own transportation planning and execution, automating the entire transportation management process and

providing complete supply chain visibility.

The Kewill MOVE on the Cloud for Shippers solution combines all of the key supply chain functions required by shippers and manufacturers, including multimodal transportation, customs compliance, warehousing, with end-to-end shipment visibility and integration.

Logistics LogisticsNews Newsme me | | november november2014 2014 || 99

news

Dubai’s Logistics Market Segments by Revenue Contribution:

62% Freight Forwarding

18%

Transportation

16%

4%

Warehousing

Packaging & Labelling

Fluctuation in Suez Canal revenues Revenue gained through Suez Canal tolls in September 2014 rose 6.3 % year-over-year but fell 8 % from August, suggesting freight growth on the Egyptian waterway might be reducing. Peak containers shipping season to feed US and European retailers ahead of the winter holidays is showing signs of fading, potentially explaining the decrease in freight revenue growth gained from the Suez Canal. The canal generated US $442 million in September, compared to US $510 million in tolls collected in August, according to Egyptian media reports.

August 2014 highlights:

Revenues: US $510 million 562 vessels transit through canal

CEVA airlifts supplies for Ebola response CEVA Logistics recently airlifted more than 70 tonnes of urgent supplies to Monrovia, Liberia to assist in ongoing efforts to combat the West Africa Ebola outbreak.

The airlift was chartered by the US Agency for International Development, the lead government agency coordinating US Ebola response efforts, which has been working to expand the pipeline of medical equipment and supplies to the region.

The supplies were sourced by USAID, from multiple locations around the world and, delivered to CEVA Charter Services at Liege Airport (LGG) in Belgium. There, CEVA loaded the cargo onto a Global Africa Cargo MD-11 freighter aircraft for a direct flight to the Liberian capital of Monrovia.

10 | Logistics News me | november 2014

ALS Logistic Solutions wins Oman contracts for cargo handling centres ALS Logistics has won two tenders to build two Fully Automated Cargo Handling Centres in Muscat & Salalah International Airports. “For ALS, after finalising earlier this year two new Cargo Terminals for Emirates / dnata in Dubai International & DWC, these contracts represent a strong message to the World Cargo Market of our capabilities in building fully automated systems for any airport,” stated Walid Khoury, Managing Director of ALS Dubai.

ALS will provide within the centre two 20ft Fully

Automated ETVs (Elevating Transfer Vehicles), Truck Dock Interfaces to the Land and Air Sides, Fully Automated TV System (Transfer Vehicles) with a proven IT software and hardware system for the entire material handling with an easy to operate, state-of-the-art manmachine interface.

news

Upcoming Exhibitions, Events, Conferences, Conventions & Symposia I Gulfood Manufacturing Dubai World Trade Centre 9-11 November 2014 Aimed at becoming a dedicated platform for service providers and cold chain technology companies to access the rapidly growing regional sector, Gulfood Manufacturing will comprise a cache of segmented, niche shows, conferences and technical workshops, including Ingredients Middle East, ProPack Middle East, Logistics Middle East and the Food Logistics Summit, as well as Dubai Municipality’s highly-regarded International Food Safety Conference

III Supply Chain India Summit 2014— Mumbai, India 13-14 November 2014 Supply Chain India Summit will host global supply chain professionals while exploring opportunities in the fifth largest supply chain network of the world. The forum will emphasise infusing the global supply chain model into the Indian supply chain parameters and creating a new system of delivery. sresth.gaikwad@fleminggulf.com

V SAOGE 2014 - Damman, Saudi Arabia Dammam International Exhibition Centre 24-26 November 2104 The Leading Oil & Gas Event for Saudi Arabia SAOGE (Saudi Arabian Oil & Gas Exhibition) was launched in November 2008 as the premier event for the oil and gas industry in Saudi Arabia. It was established to meet the requirement for the largest oil producing country in the world to host its own focused oil and gas show a service, which it continues to deliver to the industry. saoge.org

II Abu Dhabi International Petroleum Exhibition and Conference 2014 (ADIPEC) Abu Dhabi National Exhibition Centre (ADNEC) 10-13 November 2014

IV IATA Aviation Fuel Forum-Dubai, UAE JW Marriott Marquis Hotel 18-20 November 2014

VI Saudi Transtec 2014 – Dammam, Saudi Arabia Dammam International Exhibition Centre 8-10 December 2014

Established as the largest conference programme globally, the ADIPEC 2014 Conference, under the theme of ‘Challenges and Opportunities for the Next 30 Years’, offers all professionals a large selection of world-class plenary and technical content.

The bi-annual IATA Aviation Fuel Forum is the premier industry meeting for the world’s aviation fuel community. The Forum is a unique platform allowing airline representatives, fuel suppliers and IATA Strategic Partners to discuss the industry’s priorities and agree on actions to enhance efficiency and productivity. iaff@iata.or

The longest running Saudi Arabian Transport & Logistics Exhibition & Conference, the 5th edition of this highly successful provides the ideal environment for local, regional and global companies to benefit from the continued growth and development of Saudi Arabia’s booming transport and logistics sectors. sauditranstec.com Logistics News me | november 2014 | 11

Professional Perspectives

exactus

primed for precision logistics solutions Exactus’ Jinu Kumar explains the company’s growing portfolio of solutions, clientele

E

xactus has worked with several blue chip companies in the Middle East, for over a decade now, in the region’s growing supply chain and logistics sector. There, its integrated solutions have been successfully harnessed by clients for warehouse management systems (WMS); fleet transport and freight management solutions; RFID; finance and HR; business intelligence; for processing customs documentation, third party interfaces and integrations; security and encryption; aviation safety reporting system (ASRS) and customer interfaces.

Exactus is a leading software technology development company that prides itself in providing world-class supply chain execution management solutions. Exactus is part of the Rockville, Maryland, USA-based Software Productivity Strategists, (www. spsnet.com), a leading software development and e-business integration company specialising in network, systems and services management since 1993. Exactus has a portfolio of tightly integrated and highly adaptable solutions, fully backed up with our best practices-based rapid application implementation and deployment (RAID).

Exactus products help customers realise operational excellence in warehouse operations by providing responsive and flexible distribution networks and deliver business advantage to users to enable them improve the bottom line. Exactus supply chain execution management solutions facilitate collaboration with customers, suppliers and trading partners and can enable businesses to deliver their customers the

12 | Logistics News me | november 2014

right products, at the right time, in the right place, economically and with a high degree of efficacy.

From his office in Dubai’s JLT Business Complex, Jinu Kumar, Director, Projects & Technology Services, Exactus spoke exclusively with Logistics News Middle East about a broad range of issues, the growth of the company since its inception in 2004 and how it is making the difference in providing sophisticated solutions to a demanding clientele, in the face of complexities and competition.

Logistics News Middle East: Talk to us about Exactus’ general portfolio of offerings within the supply chain & logistics space?

Jinu Kumar: Exactus offers an entire suite of supply chain software solutions for logistics companies. It is one of the few vendors in the industry who would offer endto-end solutions for logistics industry. Our Trade Mark Aware Enterprise application suite, integrates all the business components into a common platform seamlessly, which helps the end-user ease of use for daily activity and a 360 view of business for the top management. We offer back office support for the non-core logistics activities like data entries, accounts payables and receivables, payroll and related functions.

Logistics News Middle East: What sets Exactus apart from its peers?

Jinu Kumar: We have positioned ourselves as a monopoly in the offering of services. The scalability and completeness

of ‘Aware’ is something differentiates it from its peers and competitors. Being in the market for a decade, and incorporating the local requirements, it is a perfect suite for logistics firms in the region. The application is highly scalable and robust enough to handle enterprise business transactions.

With a strong support base from experienced consultants, we have solutions for all aspects of the industry.

Logistics News Middle East: Tell us about Exactus’ history and association with warehousing & distribution?

Jinu Kumar: With its core framework designed in US in the 90’s and locally customised for the Middle East, the product range is a sure fit for firms in warehousing and distribution. Being in the region for a decade, covering all the major verticals related to logistics, the solution is an instant return on investment for new firms and for those who would like to enhance their current systems. It has expertise in 3PL business and 2PL distribution across various verticals. The product range covers all aspects of business and the business intelligence layer for the top management.

Logistics News Middle East: Which industry verticals within the SC&L field does Exactus have the greatest bearing?

Jinu Kumar: Exactus’ core specialisation is in the activities related to 3PL and transportation business. With its strong architecture related to warehouse manage-

Professional Perspectives

“The majority of the business in the logistics sector is still being done traditionally.” multiple folds. The solutions helped customers to set processes in place, optimised their operations and enabled them to focus on their core expertise. We help to reduce the administrative cost for the firms. We help the organisations to concentrate only on core activity.

Logistics News Middle East: How is Exactus faring in the region and talk to us about your expansion plans?

Jinu Kumar: Being in the industry past ten years, we contribute to logistics sector as a technology partners enabling entities to grow and expand in the region. We have an aggressive plan for the coming years with a goal to establish itself as one of the top tier technology provider in supply chain and logistics sector. We are coming up with an ambition plan for the SME with our SAS platform for logistics. ment and its related components, Exactus provides a end-to-end software solution for 3PL firms.

The billing and invoicing component to Aware Enterprise suite covers all the complexities of 3PL Billing. Exactus transport management suite has a process driven architecture which helps transportation companies to manage and control their operations effortlessly.

Logistics News Middle East: Please identify some of your prized clientele?

Jinu Kumar: Sun and Sports is a classic example for sports and fashion distribution, with hefty transactions using our system for the past six years. Triburg Logistics, Thomsun and Al Madina Logistics, Muscat are ideal examples of complex 3PL operations.

Muscat Pharmacy with its 70+ outlets selected Exactus for its Pharma Distribution across Oman and neighbouring countries. Premier Logistics formerly known as TruckOman would be going live with the Aware Fleet Management for its complex oil field operations and local transport business.

Logistics News Middle East: Briefly what customised solutions does Exactus offer the SC&L industry, what has been the response?

Jinu Kumar: Exactus does regional customisation to suit local requirements for its clients. The interfaces of the customs portal and related documentation is an example. Tailoring to different verticals is very, very important when it comes to customisation. The process and procedures are not the same when you compare pharma logistics and electronics. Similarly FMCG and spare parts are different. The versatility of a solution is its ability to adapt and include different business processes for its clients. Through the journey Exactus applications have succeeded in their adaptability. We always succeeded with a ‘positive and make possible’ attitude.

Logistics News Middle East: How are Exactus’ solutions reshaping and empowering SC&L companies in the region?

Jinu Kumar: Over the decade all the Exactus customers benefited using the solutions they have invested and it has empowered entities, while they scaled up

Logistics News Middle East: Outline the opportunities and challenges confronting Exactus in the region?

Jinu Kumar: Considering the dynamic nature of the logistics domain, the industry is full of opportunities. The challenge is to provide the right solution to the entities to fit the budgets. The majority of the business in the logistics sector is still being done traditionally. Convincing clients to shift from traditional to technology driven, requires lot of effort. Real enterprise systems don’t come cheap, price justification and return on investment is at times a challenge.

Logistics News Middle East: What does the future hold for Exactus?

Jinu Kumar: With a strong pipeline and orders in hand, the next year is going to be a hectic year for current implementations.

Being in Dubai with its ambitions plans and the region gearing up for Expo 2020 and future events, we foresee bright potential across the entire GCC region.

Also, we are seriously studying the opportunities in the Indian subcontinent and the African market, which would be our next immediate targets for business expansion.

Logistics News me | november 2014 | 13

Frost & Sullivan

strategic insights on the uae logistics market Srinath Manda, Program Manager, Transportation and Logistics Practice, Middle East, North Africa and South Asia, Frost & Sullivan The rapidly growing UAE logistics sector, a major transportation hub in the GCC and the wider Middle East, is under the scanner in this special analysis by Frost & Sullivan. In this report, author Srinath Manda, examines the state of the industry in the country, its growth prospects and implications, the challenges and outlook for the future.

Overview of UAE Logistics Industry

The United Arab Emirates (UAE), ranked as the second largest economy next to the Kingdom of Saudi Arabia (KSA) in terms of GDP among the six-nation Gulf Cooperation Council (GCC), is a dominant provider to the global energy markets with its rich oil reserve base. However, the country’s economy is largely dominated by the non-oil sectors like manufacturing, construction, real estate, transportation and logistics and other industry segments, notably retail and tourism. The oil and gas sector contributes to just about one-third of the total GDP, thus making it one of the well-diversified economies within the entire Middle East.

The UAE occupies a strategic location in the Arabian Gulf, as the major cross-road for emerging international trade and commerce between the Eastern and Western worlds, with ports on both the Gulf and Gulf of Oman.

The country has gained high importance in terms of international trade and global logistics due to its advantageous geographical location and good accessibility by air, sea and road.

The transport and logistics industry in the UAE had gained from the country’s location, world-class infrastructure, and a progressive non-bureaucratic government that has played an active role in developing the industry. Extensive investments in state-ofthe-art transportation facilities and infrastructure, flexible clearing procedures at ports and inter modal options from the 14 | Logistics News me | november 2014

UAE, are the major advantages that the country has in attracting foreign trade as compared to the other GCC nations. A positive economic outlook, corresponding population growth, and increasing potential for per capita consumption within the GCC nations also foster the positioning of the UAE as a core market for logistics services.

The UAE Logistics Market Size and Segmentation

According to Frost & Sullivan, the total logistics market in the UAE for the year 2013 was estimated at about US$23.4 billion. This includes revenues from logistics services for domestic manufacturing, import-export trading, services and the agricultural sector.

This market represents approximately 6 per cent of the country’s gross domestic product (GDP) value for the year 2013.

In terms of functional segments, the total logistics market in the UAE comprises transportation services, warehousing services, freight forwarding services, and value added logistics services (VALS). Freight forwarding represents the largest share with about 62 per cent; transportation is the second largest contributor with about 18 per cent of total logistics revenues owing to significant distribution activity. The final two contributors to logistics revenue are warehousing at about 16 per cent and VALS, such as packaging and labelling, at about 4 per cent. Among end-users of logistics services, food and beverages, building materials, engineering equipment, and metals are indus-

tries with relatively higher logistics spend (higher logistics cost) than the other manufacturing industries, as a share of their revenues.

Freight forwarding is the mostly outsourced logistics function in the UAE with 80-90 per cent companies (end users) outsourcing this function to logistics service providers (LSP). Transportation is the next most outsourced function with 60-70 per cent companies across industries using LSPs for this function. Only 30-40 per cent of end users outsource the warehousing function and less than 10 per cent end users outsource value added logistics functions such as packaging, labelling, quality check and related operations.

Key Challenges for Logistics Industry Low Levels of Local Manufacturing in the UAE Limiting the Scope of Growth of the Logistics Market:

The UAE has very limited levels of domestic manufacturing activity, as the industry is largely characterised by trading and re-export activity. Due to this scenario industries need just freight forwarding services from LSPs in most cases, leaving very limited scope for using end-to-end logistics services.

This restrains growth potential of the logistics market in the long run. Also, despite the revival of the economy and global trade, the UAE is anticipating a significant growth only in trading rather than showing signs of improvement in local manufacturing, which is

Frost & Sullivan discouraging for current and potential logistics service providers in the country.

Total Logistics Market Revenue Share by Segment (UAE), 2013 Source: Frost & Sullivan

Freight Forwarding-62%

Transportation-18%

VALS-4%

High Reliance on Manual Labour and Low Usage of Technology affects Logistics Market:

As of 2013, overall level of technology usage in logistics functions by companies in the UAE was found to be significantly low; except among a few multinationals. Many logistics companies, as well as end-user companies, rely mainly on manual labour to get things done. Less than 10 per cent of the end users reported using some form of technology solution to support their logistics functions. These solutions included basic inventory management packages and barcode systems. Further, the limited availability of technology partners in the region, especially in the area of supply chain software, limits the adoption of logistics technologies among both LSPs and end-user companies. This is considered to be a major challenge in improving the domestic logistics market in the country.

Competition Overview for Logistics Service Providers

Warehousing-16%

The logistics market in the UAE is highly fragmented with several thousands of unorganised participants holding the dominant share of the market. These include unregistered transporters, storage providers, and freight forwarding agents. In addition, foreign logistics service providers definitely need to have a local partner in order to effectively penetrate the domestic logistics market.

The leading 3PL service providers in the UAE continue to be those with strong capabilities in freight forwarding, international transportation and domestic distribution services. Multinational LSP such as DHL and Agility have a very strong presence, especially, in the freight forwarding market segment.

Leading regional (Middle East-based) or domestic logistics players such as Aramex, GAC Logistics, Al Futtaim Logistics and Swift Logistics have strong position in domestic transportation and warehousing segments.

Government owned or supported entities dominate the market in their respective segments - such as Emirates Airlines & Etihad in Air Cargo; Abu Dhabi National Tanker Company (ADNATCO) in oil and gas cargo, and Jebel Ali Free Zone (JAFZA) in warehousing infrastructure.

Logistics News me | november 2014 | 15

Frost & Sullivan

Share of Outsourcing by Logistics Function (UAE), 2013 Transportation 80 - 90% Freight Forwarding 60 - 70%

Warehousing 30 - 40% VALS 5 - 10%

Outlook for the UAE Logistics Market

Logistics services offer significant benefits and wider opportunities for the UAE economy. Overall, the nation is on a growth trajectory and is witnessing developments that would help establish it as a prominent logistics hub. The UAE logistics market is likely to benefit from strong growth of trade volumes between Europe and Asia, and also steady growth and development of manufacturing activities in the country and its neighbours like the KSA. Transportation practices in the UAE are likely to change with upcoming transport infrastructure developments in the region such as the GCC wide railway network with tracked freight lines, and road networks across the Emirates anticipating transformation into freight lines, both expected to be operational by around 2017-2018. Such projects are most likely to drive down transportation costs to a commendable extent.

Warehousing and VALS practices are also expected to improve with improving logistics infrastructure.

The country is expected to witness healthy growth in import and export trade levels in the coming few years with improving growth of major developing economies such as China and India. Capitalising on the availability of world-class port infrastructure, a surge in import and export trade volumes and steady upward trend of local manufacturing, the total logistics market is expected to reach US$27.0 billion in 2015.

Significant growth opportunities exist for LSP in areas such as logistics infrastructure development, integrated global supply chain solutions, multimodal transport and specialized warehousing services. The increasing economic integration of GCC nations coupled with evolution of supporting logis16 | Logistics News me | november 2014

tics infrastructure is likely to result in progressive fortunes for the UAE logistics industry.

With billions of dollars being invested in fast-track development of transportation infrastructure, the UAE, a dominant provider to global energy markets, faces unprecedented opportunities and challenges to retain its position as a world-class logistics hub. The logistics fraternity is in for interesting times, as railways become the game changer in GCC transportation and its consequent impact is seen on the UAE logistics market.

Conclusion

The UAE’s strategic geographic location in the Arabian Gulf and its superior logistics infrastructure in the Middle East have consolidated its position as a key logistics and transshipment hub for international trade between the manufacturing nations in the Asia Pacific and leading consumer markets in Europe and Americas. In addition, the country also acts as a key logistics hub for regional distribution to countries in Middle East and Africa. With a strong recovery in the global trade volumes as well as a steadily growing domestic market, the logistics market in the UAE is set to witness impressive growth in the next decade.

However, LSPs need to improve upon their capabilities in technology usage and also address emerging challenges such as shortage of skilled professionals, so that the growth momentum is not retarded. The Government on the other hand should actively focus on rapidly improving railway infrastructure for domestic cargo movement so as to provide an alternate mode of transport.

Srinath Manda manages the Transportation and Logistics research and consulting practice of Frost & Sullivan for Middle East, North Africa and South Asia region.

He is responsible for planning, executing and delivering client-defined consulting engagements and strategic market reports.

He has worked on various market consulting projects in the transportation and logistics sector involving, market analysis, competitive benchmarking, market mapping, and end-user analysis. Some of the key assignments include market entry strategy, market penetration and expansion strategy, new product acceptance assessments, location analysis and recommendation, industry benchmarking along with customer needs and satisfaction studies.

He has closely worked with leading domestic and international clients like APL, FedEx, IFC, Allcargo, Infosys, Hitachi, CEVA Logistics, NEC Corp and Yanmar, 20 Cube, and MJ Logistics among others covering the transportation and logistics markets. In addition to the MENASA transportation and logistics market, Srinath has also worked on research and consulting assignments for regions like ASEAN, China, Japan and Australia. Prior to joining Frost & Sullivan, Srinath was a Project Manager with a management-consulting firm. With over 13 years of industry experience, Srinath brings a strong understanding of market, economic and business dynamics.

Logistics News me | november 2014 | 17

LNME E x c l u s i v e :

almajdouie logistics:

In the forefront of the SC&L business in Saudi Arabia Kingdom’s largest logistics company inextricably linked with the country’s burgeoning energy sector

I

t had its unpretentious origins as a land transport and trucking company founded by Sheikh Ali Ibrahim Almajdouie in 1965 in Dammam, the capital of Saudi Arabia’s large Eastern Province and home to its burgeoning energy resources. Today, Almajdouie Logistics, the flagship company now part of the larger, multi-faceted Almajdouie Group — comprising 14 associate companies, is the largest logistics service provider in the region with its own assets — comprising equipment, machinery and other material resources, more than 6,000 employees and a total area of 2 million sq. m. of terminal and storage facilities in the Kingdom.

As the largest and one of the oldest provider of comprehensive logistics services and solutions in Saudi Arabia, GCC and other global points, Almajdouie Logistics offers a wide spectrum of project logistics and supply chain management solutions including transport, freight forwarding, heavy lifts as well as terminal and

Services Offered By end of the 1990’s, Almajdouie Logistics had formed many independent logistics companies leading to further expansions in 2000s and 2010s in the form of joint ventures with international market leaders.

Almajdouie Logistics clients span the petrochemical, offshore, power, water and civil / structural industries. The company owns and operates state-ofthe-art equipment and employs a team of experts with the knowledge and capability in offering value added services.

These services include general transportation, heavy / oversized cargo transportation and engineering including lifting and erection, project forwarding, terminal handling, petrochemical logistics, silo management, warehousing and distribution management, and a logistics education institute.

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warehousing. Dedicated teams of project management, business development as well as fleet service centers support the company’s core services. With seven offices around the Kingdom as well as associate offices in GCC, North America, Europe, Far East, Middle East and Africa, Almajdouie Logistics has capably handled more than 12 million freight tons of petrochemical, project cargo and FMCG annually.

Privately-owned Almajdouie Logistics has become a powerhouse in the Project Logistics and Supply Chain Management holding a Guinness World Record for moving the ‘Heaviest Item Moved by Road Freight’.

On a recent official visit to the UAE, Khaled Abdullah Al Ghamdi, General Manager, Freight & Project Logistics, Almajdouie Logistics, spoke exclusively to Logistics News Middle East.

“Almajdouie Logistics has formidable strengths in all segments of the supply chain and logistics arena across Saudi Arabia, but we have a particularly strong footprint in the

Kingdom’s energy sector where we account for up to 80% of the logistics business thanks to our expertise, unique capabilities, flexibility, long experience, ownership of machinery, assets and trained and qualified human resources,” said the Saudi Arabian national who has had a long career in the country’s oil and gas profession. “As a one-stop logistics services provider, we can offer all-inclusive, multiple services from the point of manufacture to its intended project venue.”

“Almajdouie Logistics has evolved considerably and come a long way to take the number one spot in Saudi Arabia’s growing but challenging and now competitive logistics field thanks to the vision and foresight of our founder-chairman Sheikh Ali Almajdouie and now under the stewardship of our president, Sheikh Abdullah Ali Almajdouie representing the second generation of the Almajdouie family to grow the company exponentially over the years,” he asserted. “We have a culture of professionalism and meritocracy, we are very

LNME E x c l u s i v e :

Almajdouie Logistics offers an integrated logistics and supply chain management solutions by the following four business units: Transportation This business unit, the largest fleet owners in the Middle East, provides trucking as well as logistics and distribution services in Saudi Arabia operating more than 1,500 multipurpose trucks and 1,800 various types of trailers.

Heavy Lifts This business unit provides abnormal and heavy lift services to EPC contractors in Saudi Arabia and the GCC operating the largest fleet of Self-Propelled Modular Trailers (SPMTs) and Hydraulic Trailers in the region.

Freight Forwarding This business unit coordinates all of the company’s fleet of trucks and warehousing facilities & project freights whether by land, sea or air.

Almajdouie Logistics has specialist skills in the transportation of heavy objects as part of its services to the energy sector..

Terminal and Warehousing This business unit operates 2 million sq. m. of terminal and storage facilities across Saudi Arabia and provides warehousing management services (WMS) to clients’ in their own facilities.

Logistics News me | november 2014 | 19

LNME E x c l u s i v e :

Khaled Abdullah Al Ghamdi, General Manager, Freight & Project Logistics, Almajdouie Logistics.

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committed and focused and are and aspire to be the preferred logistics services provider of choice in much of the mega projects and infrastructural activities in the Kingdom. These constitute the key to our success,” he further affirmed.

As a case in point Khaled Al Ghamdi cited the recent example when on 22 May 2014, Almajdouie Logistics transported an Evaporator weighing 5,736.8 tons (gross weight during transportation) and believed to be the world’s heaviest, to the Yanbu 3 Desalination Project in the industrial city of Yanbu on the Kingdom’s West coast.

Given his exposure to the nation’s energy sector, Khaled Al Ghamdi seems himself in a pivotal role in his current position. “My extensive experience in the various aspects of the oil and gas business in Saudi Arabia and overseas has given me unique insights into the business, which I can now harness as Almajdouie Logistics seeks to expand internationally and explore new commercial ventures,” he stated.

“Furthermore, having been on the other client side of the equation, I am convinced of Almajdouie Logistics’ core competencies and better equipped to advise professionals requiring these and related services,” he added.

Opportunities abound and the economy still appears bullish. “The Saudi Arabian Government is committed to modernising and upgrading infrastructure projects across the Kingdom which bodes well for the logistics industry. Seaports, airports, road networks and rail corridors are being developed or receiving a facelift across the country and this can only imply great business opportunities ahead and we can look to the future with hope,” remarked Khaled Al Ghamdi optimistically.

What are the challenges facing the logistics industry in the Kingdom? “The advent of rail is expected to be the big game changer not only in Saudi Arabia but the entire GCC,” he explained. “Long haul road transportation will then be a thing of the past and the focus will then be on short-haul feeder services around the local areas adjoining the rail hubs. Rail will open new vistas for the better with heavy tonnage conveniently carried on rail cars with huge implications for the ecology, environment and the entire transportation network.”

The future holds much promise as Al Majdouie Logistics sets its sights firmly on international growth. “We are committed to international expansion, joint ventures, partnerships and acquisitions globally as we test waters and explore potential in other regions of the world.

We will examine opportunities globally and fly the Almajdouie Logistics corporate flag in many other countries in the world in the near foreseeable future,” he proclaimed confidently. He was coy to provide specifics, but watch this space for future announcements.

Jointless SFRC ground bearing floor slab Jointless SFRC ground floor slab suspended on piles Jointless SFRC external yard

Jointless SFRC high tolerance floor slab

www.twintec.co.uk Contact the Twintec Middle East business team by email r.waugh@twintecgroup.com for further information Logistics News me | november 2014 | 21

gulf tainer

Gulftainer’s capcity as an operator has grown significantly since it was established in 1976.

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gulf tainer

no containing

gulftainer Buoyed by strong all-round growth, Gulftainer on a roll By malcolm dias

Logistics Logistics News News meme | november | october 2014 | 23

“The terminal attracted more than 20 new consignees and organically grew its market share�

presently Gulftainer manages around 40% of all Middle East ports.

Logistics News Middle East met exclusively with Iain Rawlinson, Group Commercial Director, within weeks of taking office, to get the low-down on Gulftainer.

Logistics News Middle East: The Gulftainer-operated Sharjah Container Terminal (SCT) at Mina Khalid attained a vigorous double digit growth in container volumes during H1-2014 over the corresponding period last

1976-established and Sharjah, UAE-based global port terminal operator and total logistics solutions provider, Gulftainer, a subsidiary of the 42-year old multi-faceted Crescent Group conglomerate, has created waves with its remarkable 38-year voyage of success.

New port and non-port facilities were added to the Gulftainer portfolio in Iraq (Umm Qasr) in 2010, Brazil (Recife), Lebanon (Tripoli) and Russia in 2012 and in June 2013 it acquired a 51% stake in Gulf Stevedoring Contracting Company (GSCCO), based in Jeddah, Saudi Arabia. Gulftainer now operates 11 terminals including 8 in the Middle East, more than any other operator in the region.

Gulftainer, which unveiled a new vision and brand identity in late 2013, aims to grow its global portfolio to reach 35 terminals across five continents to handle approximately 18 million TEUs during the next six years.

In addition to its port facilities, Gulftainer operates freight and transport services at inland container depots (ICD) and logistics cities, through its third-party logistics (3PL) subsidiary, Momentum Logistics, along with joint venture interests across international territories including Pakistan and Turkey.

Twenty five years ago Gulftainer operated just four ship-to-shore (STS) gantry cranes and by the end of 2014 will have the potential to operate over 75. Current employee numbers have swelled to over 4,000 and 24 | Logistics News me | november 2014

year. To what do you attribute this rise and how did Gulftainer accomplish this?

Iain Rawlinson: Gulftainer was very pleased

to announce that it had recorded a 14% yearon-year growth in container volumes in the first six months (January to June) of 2014 at its Sharjah Container Terminal (SCT).

The terminal has been growing at a fast pace recording a sustained increase in cargo volumes over the last 12 months and is now wellpositioned to meet the growth in traffic and will continue to maintain its high productiv-

Gultainer recorded a 14% year-on-year growth in container volumes the first six months of 2014, at its Sharjah Container Terminal. The introduction of an online application system to automate information exchange has reduced delivery times for consignees.

ity standards thereby ensuring its customers have an efficient and quick turnaround of services at the port.

The terminal has added value for its customers by introducing new services; to enhance existing customs procedures and ensure a more rapid and seamless movement of containers through the port, SCT has introduced an online application system to automate information exchange between the Sharjah Port Authority, Customs and Gulftainer. The new feature has helped to reduce delivery times for consignees.

Logistics News Middle East: Where is the increment coming from and what product lines contributed to the surge in volumes?

Iain Rawlinson: SCT’s strong performance

was underlined by a steady growth in the import volumes of textiles, electronics, spare parts and tyres, and also by improved export trades, specifically between the UAE and African nations. The port continues to be a popular choice for shipping lines as it offers a flexible and cost-efficient alternative to access the UAE hinterland.

The terminal attracted more than 20 new consignees and organically grew its market share during the first half of the year, putting it on track to exceed targeted throughput by the end of the year.

Reviewing last year’s commercial data, 85% of Sharjah’s laden traffic flow came predominately through consumer goods

from the Far East. These goods are carried by many of the main global shippers, such as APL and MSC, or local common feeders via Jebel Ali. The remaining 15% was the reverse with exported goods destined for Iraq, Ethiopia and the major East African ports.

The Iraq volume is carried by Sharjahbased Mag Container Line, with national carrier Ethiopian Shipping Lines operating combo vessels to Djibouti and Maersk Line’s Masika Express service connecting Dar Es Salaam (Tanzania) and Mombasa (Kenya) with trans-shipment from Salalah (Sultanate of Oman). In September, shipping line UASC commenced its new Gulf India Service (GIS) calls at SCT, which offers direct connection to Mundra (Gujarat, India), Karachi (Pakistan) and Sohar (Sultanate of Oman) in a much sought after regional loop, adding a renewed dimension to the supply chain possibilities from Sharjah.

Considerably smaller in terms of volume, yet a significant and highly profitable trade, is that of the refrigerated containers handled in the terminal. One dedicated line, operated by NYK Cool, carries these units direct from the Philippines, while additional reefer volume is shipped from South America. To keep in line with this rising trade, additional reefer capacity was added recently, with 300 plug points now available, plus back up provided by diesel generators if required.

From the above it becomes apparent that there are enormous import and export potential for any consignee and shipper from Sharjah to Africa, the Indian Subcontinent and the European markets.

Logistics News Middle East: Generally speaking, how have the other ports in your current portfolio, both nationally and internationally, fared during this H1-2014 period?

Iain Rawlinson: Khorfakkan Container

Terminal, based on the East Coast of the Emirates is the only fully fledged operational container terminal in the UAE located outside the Strait of Hormuz. Due to its unique geographic location, it is one of the most important transshipment hubs for the Arabian Gulf, the Indian Sub-continent, the Gulf of Oman and the East African markets.

The unique positioning of the port offers a cost-effective and time-saving option for today’s mega-containerships, which can save valuable transit time by calling at Khorfakkan and enjoy a quick turnaround to continue their onward journey. KCT has been ranked as the number one most productive terminal in the EMEA region and number three globally, by the Journal of Commerce productivity report during 2013. The world’s largest container vessels call at the terminal Logistics News me | november 2014 | 25

A multi-million dollar investment in new equipment at Khorfakkan Container Terminal, including ship-to-shore (STS) cranes; reachstackers and tractor / trailer combinations, will be completed in Q4 2014.

26

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“ KCT was first container terminal in ME to handle the 16,000 TEU CMA-CGM Marco Polo” where productivity rates regularly exceed 200 moves per hour.

Exceptional growth in recent years saw expansion plans at the Khorfakkan Container Terminal brought forward to accommodate this rise. A multi-million dollar investment in new equipment: ship-to-shore (STS) cranes; reach-stackers and tractor / trailer combinations will be completed in Q4 2014.

The terminal layout has been reviewed and revised to ensure the best use of space and facilities, and a new container freight station (CFS) has been created for additional container packing and unpacking services, with additional handling equipment to support these activities.

KCT was first container terminal in ME to handle the 16,000 TEU CMA-CGM Marco Polo, at the time the largest container vessel in the world. The terminal has shown steady growth during H1 of 2014 and in August 2014 registered a 14% increase in throughput.

GT’s Saudi facilities are performing well

with increased volumes over the corresponding period last year, with Jubail currently an impressive 27% ahead of the same period in 2013. Two lines, Wan Hai and APL, both introduced direct calls at Jubail Container Terminal, strengthening the terminal’s position as the export gateway in the Eastern Province of KSA for the rapidly growing petro-chemical industries.

In March 2014, COSCO transferred its Jeddah service back to Northern Container Terminal (NCT) after an absence of three years in recognition of the superior service provided by NCT within Jeddah Islamic Port.

GT’s terminals in Iraq continue to flourish, registering a massive 79% increase in year to date throughput as they continue to offer the full spectrum of terminal services to customers. One notable recent event is the opening of the Umm Qasr Logistics Centre, an inland container depot attached to the port by a bonded corridor. This new facility offers secure warehousing, offices and cold

stores as well as customs clearance and inspection services on site and a controlled and regulated access to and from the main Basra highway.

Likewise, civil works are on-going to develop facilities within the port of Tripoli in Lebanon and we aim to start handling vessels in H1 2015.

Operations in Brazil are expected to grow in the coming months as investment and expansion plans will result in GT Brazil expanding their operating base into other port facilities in North East Brazil.

Logistics News Middle East: The newest prize deal for Gulftainer is your recent foray in the USA with the sealing of a long-term, 35-year concession at Port Canaveral in Florida. Please elaborate?

Iain Rawlinson: The Port Authority of

Canaveral is one of the most respected ports in the country and has a reputation for Logistics News me | november 2014 | 27

“Gulftainer plans to invest in the region of US$100 million in facilities at the terminal” professionalism that matches the values of GT USA. The proactive nature of the team at the Port of Canaveral attracts a partner like GT USA, who is continuously looking for ways to improve the current process and deliver more value to the customer.

By bringing Gulftainer’s UAE-grown expertise and global relationships to Port Canaveral, we aim to create a new efficient and secure gateway for goods entering and leaving the southern Atlantic coastline of America.

GT USA will work with the Canaveral Port Authority to provide opportunities to the local economy by investing in infrastructure, processes and people. Together, we will work to improve the processes and deliver outstanding value to our stakeholders.

Gulftainer plans to invest in the region of US$100 million in facilities at the terminal including new infrastructure, equipment – cranes, heavy container handling machinery, office and storage buildings, pavement and storage space, and people.

We will be employing directly from the local community and will provide the necessary training to ensure that the Port of Canaveral delivers the best product to its customers. This will then further encourage additional local indirect employment driven by the increase in business in the region.

38-year old Gulftainer is now clearly more than just a port operator—it has evolved into a comprehensive supply chain & logistics services provider.

Logistics News Middle East: Talk to us about the role of your subsidiary Momentum Logistics and other entities in offering a full suite of solutions?

Iain Rawlinson: Momentum Logistics is fo-

Gulftainer aims to grow its global portfolio to reach 35 terminals across 5 continents to handle approximately 18 million TEUs during the next 6 years 28 | Logistics News me | november 2014

cused on delivering efficient and cost-effective supply chain solutions, including freight forwarding, transport, bonded container depots, container repair, warehousing and container sales and trading.

Momentum is based at the Sharjah Inland Container Depot and Warehousing Division.

This facility was opened in 2004 and provides for 1 million square feet of bonded cargo storage and 180,000 square feet of warehousing. With demand growing rapidly, Momentum has commenced development of the 7.5 million square foot Emirates Logistics City (ELC) strategically located at the cross roads or the 611 trunk road running North to South through the length of the UAE and the Al Dhaid road which connects the West and East coast of the UAE. The first phase of civil development has witnessed the completion of the site’s boundary fencing, internal road networks, warehousing, gate house and offices. Momentum plans to offer their full scope of facilities and services at ELC, Al Sajaa creating another unique proposition to UAE businesses.

The Momentum transport division now operates over 100 vehicles and 240 trailers, strategically located at depots throughout the UAE. The distinctive green livery of the vehicles is prominent on the UAE road networks and continues to grow. All trucks are equipped with GPS tracking devices ensuring the timely delivery and collection of all cargo. The division has recently launched

their online booking application, allowing customers to book their transport requirements quickly and in real time.

Gulf Container Repair (GCR), Momentum’s container repair division also provides full container washing and cleaning facilities from three locations within the UAE and also offers ship repair and maintenance services to shipping lines and NVOCC fleets.

All container inspections and subsequent work are carried out to IICL 5 standards.

GCR are also to offer full container conversion services … creating everything from simple secure mobile stores, to sophisticated offices suites and mobile showrooms from 10’, 20’ and 40’ containers.

GCR Container Trading Division holds a comprehensive stock of used containers and are able to supply all types of units from 10’ dry vans to special equipment such as open top and reefer containers. All units are CSC plated and are also available for leasing.

Momentum Logistics Freight Forwarding Division has offices throughout the UAE able to offer import and export services in conjunction with their international network of agents. As members of NAFL & FIATA, Momentum is careful to select agents personally to ensure service standards are consistent whether dealing with Momentum Head Office or their agent in Australia. At the Sharjah Container Depot, the Container Freight Stations allow Momentum to offer consolidation and container packing services.

Outside the UAE, Momentum Logistics have offices in Umm Qasr, Erbil and Istanbul.

The offices in Umm Qasr service the groups recently opened Umm Qasr Logistics Centre, UQLC. This 7.5 million square foot development is adjacent to Umm Qasr North Port and is connected by a bonded corridor directly to Gulftainer’s Iraq Container Terminal (ICT). The UQLC allows importers to have their containers/cargo moved under bond from the Port to Logistics Centre, Customs Clearance for onward distribution away from the bottleneck of the port gates.

Logistics News Middle East: Please outline Gulftainer’s expansion plans and how do these reconcile with your 2020 Strategic Vision? Where is your growth expected to come from and what part will the creation of future subsidiaries, mergers, acquisitions and JVs play in that growth process?

Iain Rawlinson: Gulftainer is primarily

concentrating on developing growth markets such as Africa, India, and South America etc. but we are also looking at mature markets including the US and Western Europe. We have set ourselves an ambitious target over the next decade of tripling our volume and we

Gulftainer says its future growth into international markets has been made possible by building a strong base from its facilities within the Middle East.

expect to achieve this through generic growth within our existing businesses, through new green field opportunities, as well as mergers and acquisitions.

Logistics News Middle East: Gulftainer operates more ports in the Middle East than any other port operator. How significant is the region for the company?

Iain Rawlinson: Gulftainer’s history has

deep roots in the United Arab Emirates. The company is immensely proud to call Sharjah its home, it’s where we have learned our strong business values and operational efficiency, the ethics our industry thrives on.

It’s from these strong foundations that we have been successful at exporting our expertise and professionalism across the region and now globally. Gulftainer’s future growth into international markets has been made possible by building a strong base from its facilities within the Middle East.

Logistics News Middle East: What are opportunities for Award winning Gulftainer to seize upon and what are the challenges you counter going forward?

Iain Rawlinson: There are still many regions

around the world that fall below the global benchmark for container penetration and terminal efficiency. These regions offer good potential for GT to showcase its record breaking productivity skills. GT are not afraid to enter into regions that other port operators may want to avoid and by working with the local Port Authorities and partners we aim to show our ability to prosper in partnership.

These locations provide the challenges upon which GT thrives and by utilising our experience and flexibility we are confident that we can succeed where others may not.

Iain Rawlinson, Group Commercial Director, Gulftainer With two decades of international experience in the shipping, logistics and ports industry, Iain Rawlinson is the new Global Commercial Director of Gulftainer. Since assuming office in August 2014, he has been responsible for overseeing the company’s commercial strategy and growth, as it transitions into a top global container terminal operator.

A qualified barrister in the United Kingdom, Iain was previously the Chief Liner Commercial Manager at the Port of Salalah in the Sultanate of Oman, responsible for all commercial relationships for the container liner business for the port.

Earlier, he worked as Chief Commercial Officer with APM Terminals Bahrain, responsible for the sales, marketing and commercial strategy of the company, which manages and operates the Bahrain Port and had developed a purpose-built port handling containerised and trans-shipment cargo.

Rawlinson has extensive experience in the Middle East working for Sea-Land, Maersk and a UK-based freight forwarder.

Logistics News me | november 2014 | 29

mark millar

Asia Supply Chain Insights China Logistics stretched by exponential growth in e-commerce

China has always been the big elephant in the global supply chain and logistics space.

Recently, when the Chinese internet juggernaut Alibaba raised the world’s largest IPO at US $25 billion on the New York Stock Exchange, it was a testimony to the speedy and unparalleled growth of e-commerce in China. The world’s second biggest economy by GDP, with its expanding elite upper rich and burgeoning middle classes with considerable disposable incomes, have been increasingly gravitating towards e-commerce, which is growing by leaps and bounds even in the rural and remote areas in the world’s most populous country. In this contribution Mark Millar our Hong Kong-based industry expert, thought leader and regular columnist for Logistics News Middle East, examines China’s unstoppable, phenomenal e-commerce growth in recent times—Editor

C

hina’s direct-to-consumer ecommerce sales grew to US $305.5 billion in 2013, registering a 42% increase over the 2012 total of US $214.8 billion, according to iResearch.

Driven by an upwardly mobile middle class with a taste for Western brands coupled with massively expanding rates of internet access, China’s e-commerce market is experiencing exponential growth that McKinsey forecast could generate online sales of US $650 billion by 2020.

Research from Alibaba, China’s biggest online commerce company, reported that consumers in remote areas with no large shopping malls and consumers in small cities spend a larger proportion of their disposable income via e-commerce than those in the large cities where brand-name stores are plentiful.

This massive growth in online sales in turn drives the need for comprehensive nationwide B2B and B2C logistics networks,

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stretching China’s express logistics sector capabilities like never before.

China’s express delivery industry has over eight thousand companies, some offering nationwide deliveries and many others offering a one-man delivery service to a city area. In total, the express delivery providers delivered 9 billion pieces in 2013, up 61.6% year-on-year.

In their recent report, Deloitte project that by 2015 this will become a RMB 280 billion industry, with average annual compound growth rate of 39.4%. Their report said the total operating income generated

by China’s express enterprises reached RMB 144.22 billion in 2013, up 36.6% yearon-year.

By business volume, the market was dominated by private express companies, which accounted for 78.9% of market share in 2013, versus 19.9% for state-owned companies and 1.2% for foreign enterprises.

With their respective strengths and weak-

nesses, this broad mix of service providers is complementing each other to support the healthy growth of the express market.

At the recent Post Expo Conference in Hong Kong, I was privileged to moderate the e-commerce panel discussion, where we discussed how stringent customer expectations are driving fierce competition amongst service providers.

The panel discussed how the multinational service providers have more sophisticated technology systems and provide online track and trace with end-toend visibility, but are typically at a cost disadvantage when competing with the many thousands of local providers that make up this particular supply chain ecosystem.

Ms. An Chiem from Nike shoemaker Convers, shared how they use multiple different service providers and said that “there are some regions where we work directly with the provider and some regions where we contract a company and let them

mark millar

“ Logistics in China is still developing, but consumers are really spoiled because they already expect good service and free delivery” handle the service providers”.

She also commented on the varying levels of consumer expectations – another factor driving the use of a range of service providers. “Some of our consumers are prepared to pay anything for their products, they don’t care how long the parcel takes as long as it arrives undamaged and is delivered to their door. However, by contrast we also have consumers that don’t care what it is and how it comes, they just want it the same day and they want the parcel delivered for free,” she said.

Federico Manno, eBay Enterprise head of e-commerce in Asia, commented that their strategy in China is also to use many different players, quite different to how they operate in USA and Europe.

“Logistics in China is still developing, but consumers are really spoiled because they already expect good service and free delivery, which means that the brands have to improve their P&L in order to subsidise most of the shipping costs,” he said.

Also on the panel was Andrew Eldon, COO of Hong Kong based Strawberry Cosmetics who offer a range of 30,000 products from 700 different brands. Andrew shared that Strawberry Cosmetics subsidises all shipping and uses the postal service networks to service markets all over the world from their main DC in Hong Kong.

In such a crowded market, the fierce competition amongst express delivery service providers is resulting in volumes growing faster than revenues, reflecting price pressure that is reducing revenue per piece. This is impacting profitability for the service providers with expectations amongst market watchers of some impending consolidation.

Paul Vogel, director of global postal and logistics at Deloitte Touche Tohmatsu, said “the top 10 companies are vibrant, they are getting their technologies inline, investing, understanding the Chinese consumer and how they do business. The other 7,990 companies are primed for mergers and acquisitions. The business is growing so tremendously fast that without a broad reach, they won’t be able to compete.”

For Logistics in China we can expect continuing exciting developments, embracing both challenges and opportunities in this rapidly growing sector of e-commerce and logistics solutions.

Logistics News me | november 2014 | 31

interview

honeywell

boosts product offerings Innovation-driven Honeywell unveils its new suite of industry specific products at GITEX 2014

T

he Europe, Middle East, Africa (EMEA) market is one of the fastest growing regional markets for Honeywell, a Fortune 100 diversified technology and manufacturing world leader.

One of its key businesses, the Scanning & Mobility Productivity Division, is represented in the region. Honeywell Scanning & Mobility is a leading manufacturer of high-performance image, laser and voice-based data collection hardware, including rugged mobile computers and barcode scanners.

Honeywell S&M showcased its latest scanning and mobility products during GITEX Technology Week 2014, including high-performance image, laser, and voice-based data collection hardware, rugged mobile computers and barcode scanners. Also on display was the company’s mobile computing, printer and radio frequency identification solutions (RFID). Honeywell has significantly extended its innovative offerings in this area to help address business enhancements in key industries including distribution centre, retail, healthcare, field service, and transport and logistics.

Tony Nasr, Territory Director, Middle East, Africa and India, Honeywell Scanning & Mobility, spoke exclusively to Logistics News Middle East at GITEX 2014 as Honeywell unveiled its new suite of services and solutions customized for the Supply Chain & Logistics industry.

With an increasingly global workflow of goods and services, supply chain resilience and efficiency are business-critical. We work with enterprises around the globe to analyse and transform their fundamental business processes – helping customers gain competitive advantage and increase operational performance to realise the full potential of their mobile workers.

Logistics News Middle East: What is Honeywell’s Scanning & Mobility presenting at GITEX 2014 specific to the logistics & supply chain industry?

Tony Nasr: In the DC (Distribution Centre) / Warehouse, Honeywell transforms workflow performance and delivers unmatched accuracy and productivity. Every day DC operations deal with the challenge of managing the ups and downs of daily work flows, meeting service level expectations and managing

ever increasing cost pressures. And typically up to 60% of operating costs are labor related.

Our innovative, voice-enabled, and purpose-built products, as well as our solution expertise and lifecycle services reduce total operating cost and drive customers’ business growth.

At GITEX 2014 we showcased Honeywell’s recently launched Granit 1280iFR scanner as it joins Honeywell›s broad portfolio of scanning solutions for warehouse workers and offers the ability to easily read barcodes from short and long distances, improving worker productivity in the distribution center and cold storage environments.

In a competitive marketplace, warehouse operators need solutions that can withstand harsh environments and provide supreme performance.

Honeywell has integrated multiple solutions and products from scanners, to vehicle

Logistics News Middle East: What is Honeywell’s Scanning & Mobility’s mandate and how do you fit into the wider corporate canvas?

Tony Nasr: Honeywell Scanning & Mobility is focused on improving our customers’ workflow. Our products and solutions give customers the ability to capture more and better data faster and across a wireless landscape, improve productivity, safety, and security, drive better decision making, and reduce costs.

32 | Logistics News me | november 2014

Hedwig Maes joined Rockwell Automation in 2007 as Regional Sales Director for Central Europe.

Since December 2008, he has held the position of President - Europe, Middle East and Africa.

interview

“In Transport & Logistics (T&L), we increase mobile visibility every step of the way.” mount computers, to voice devices, to software to help customers solve their most pressing business challenges in distribution centers.

Logistics News Middle East: What sets Honeywell’s Scanning & Mobility division apart?

Tony Nasr: Honeywell Scanning & Mobility is focused on improving our customers’ workflow. We analyse business processes relentlessly to meet and exceed customer goals and gain advantage with advanced technology solutions – we have been on the forefront of innovations in barcode, RFID, voice and optical character recognition (OCR) technology for the last 40+ years and continue to deliver advanced technology solutions to meet the evolving demands of customers.

Only Honeywell can provide a complete suite of interoperable hardware, software and services to empower mobile workers with the information they need to make better decisions, increase customer satisfaction and redefine business operations.

Logistics News Middle East: Briefly what solutions does Honeywell’s Scanning & Mobility’s offer the trans-

portation and logistics markets, what response has these elicited in the marketplace?

Tony Nasr: In Transport & Logistics (T&L), we increase mobile visibility every step of the way. T&L operations are in a very tough competitive market – challenged to increase revenues, improve revenue assurance and control spiraling operating costs, while customers demand new services and government forces new regulations.

Our purpose-built hardware and workflow performance software solutions, along with our global services capability increase productivity, accuracy and transparency while reducing operating cost by eliminating costly error prone manual steps.

By focusing on the mobile user and their workflows, our productivity and cost saving solutions directly impact bottom line business results and increase customer satisfaction.

A testimonial of our leadership in the T&L space would be many courier firms across the world deploying Honeywell Mobile Computers, such as Deutsche Post, DPD, Exapaq, UPS, ChronoPost.

Logistics News Middle East: How are Honeywell’s Scanning & Mobility solu-

tions reshaping POS and empowering multi-channels in the SC&L system in the region?

Tony Nasr: Today, retail workers use tools that allow them to quickly and accurately carry out routine tasks, manage inventory and move customers quickly through the checkout process.

Retailers are focused on retaining existing customers and attracting new ones, while operating under pressure to implement costsaving efficiencies across operations.

However, to serve and meet the expectations of the new informed and connected shopper, retailers need to empower their employees with innovative productivity tools that can transform store employees from simple task workers into veritable knowledge workers equipped to provide a new level of service and information. Retailers need tools and technologies that allow store associates to engage with their customers so that staff gets mobile access to real-time information about product features, stock availability, pricing and promotion at the point of decision, guiding the customer buying decision and increasing the average market basket size.

We need to interact at every opportunity.

Staff uses new tools to serve customers with Logistics News me | november 2014 | 33

interview

“Honeywell solutions are designed to help retailers compete in an increasingly competitive environment.” relevant knowledge and services tailored to their shopping preferences (for example redeem 2D mobile coupons or e-gift cards to get quick discounts, offer mobile point-of-sale (POS) options to minimise checkout time, and scan 2D bar codes from electronic loyalty cards on shoppers’ smartphones to get new tailored offers) and shoppers is becoming more effective, thanks to the massive adoption of electronic 2D bar codes, known as mobile bar codes, in mobile marketing applications.

Mobile bar codes are being used by retailers

to replace paper coupons, gift cards, loyalty cards and money, just to name a few applications.

They can be received and stored on the shopper’s mobile phone to be used and redeemed when needed. The personalisation and portability of 2D bar codes allow retailers to get higher redemption rates in their mobile marketing campaigns. According to Juniper Research, the redemption rate for mobile coupons is 5%, compared to an average of 1% for paper-based couponing. Mobile bar codes are

the symbol of the new Retail 2D and will help retailers adapt to the challenges posed by the new connected customer.

Honeywell solutions are designed to help retailers compete in an increasingly competitive environment by helping to increase store associate productivity, reduce operating expenses and increase customer loyalty.

Honeywell’s innovative solutions are primed for many key retail applications including store Operations, fixed Point of Sale, Omni-Channel Fulfillment, In-Store Mobile and Warehouse.

Logistics News Middle East: Outline the opportunities and challenges confronting Honeywell’s Scanning & Mobility in the region?

Tony Nasr: Only Honeywell can provide a complete suite of interoperable hardware, software and services to empower mobile workers with the information they need to make better decisions, increase customer satisfaction and redefine business operations.

Logistics News Middle East: What does the future hold for Honeywell’s Scanning & Mobility?

Tony Nasr: With an increasingly global workflow of goods and services, supply chain resilience and efficiency are business-critical.

We work with enterprises around the globe to analyse and transform their fundamental business processes – helping customers gain competitive advantage and increase operational performance to realise the full potential of their mobile workers.

We deliver technology leadership and customer-centric innovation. We address customers’ IT infrastructure and business workflow process needs from an early prototype stage to post deployment analysis, along with our valued customers.

We invest in the latest technology advancements with access to over 23,000 Honeywell engineers and concept and testing labs worldwide to deliver the solutions both large and small customers need to keep up with the pace and competitiveness in today’s market and well into the future.

Tony Nasr, Territory Director, Middle East, Africa and India, Honeywell Scanning & Mobility.

34 | Logistics News me | november 2014

Healthcare Logistics Services:

Air Freight Sea Freight We deliver for your health Land Transportation Value Added Services Warehousing & Distribution P.O. BOX 262955, Jebel Ali - Dubai, U. A. E. Tel: +971 (4) 811 0000

Web: www.tranzone.ae

Tranzone FZCO

Member of Banaja Holdings Logistics News me | november 2014 | 35

Professional Perspectives

transforming

the breaks

Logistics News Middle East welcomes the Wharton educated and multifaceted Prakash ‘PK’ Menon—supply chain& logistics industry thought leader, acclaimed professional, former practitioner, author & regular columnist, motivational & keynote speaker, consultant and mentor to our elite hand-picked panel of regular writers. With his rich background in this field, Prakash Menon is eminently qualified to provide us his observations, insights, analyses and solutions to the many issues confronting the industry. In this contribution PK reiterates the need develop efficient and effective supply chain & leadership strategies—Editor

T

oo many business owners dismiss supply chain and logistics as nothing more than the unglamorous ‘grunt work’ of bean counters. But the fact is, almost 90% of business failures today are not the result of poor customer service or overpricing, but due to inefficient and ineffective supply chain and leadership strategies across the chain. In other words, failure to focus on processes and people has resulted in the downfall of more businesses than failure in any other business function.

Buy, Move, Sell

There are an alarming number of CEOs still think of supply chain as simply a glorified term for warehousing and transportation. But the reality is, an organisation’s supply chain is the end-to-end (cash to cash) operation of the entire business, from planning and buying goods to how those goods leave the company. It’s about consolidating, simplifying and streamlining your operations in order to buy, move and sell goods more efficiently and effectively.

36 | Logistics News me | november 2014

Combine this with the delivery of exceptional customer service resulting from a strong, collaborative workplace culture, and you have the key ingredients for 21st century business success.

The world has changed

Gone are the days when it was enough to just be good at what you do. In the 21st century, where life revolves around speed, convenience and choice, your business’ survival relies on two key strategies: 1. Transforming your end-to-end supply chain from weak link to core strength.

2. Your ability to sell, manage and execute the change by engaging the entire team to get on board for the ride.

The illustration (right) demonstrates how a business’ supply chain is fundamentally about how its resources (people, partners and products) integrate with the mechanisms in place (presentation, processes and pricing) to create an outcome in which profitability is maximised. It is

Professional Perspectives

“Today’s most successful businesses are 100% focused on what their customers value most.” simply a matter of integrating the 9 P’s in order to buy, move and sell for maximum, sustainable bottom line results and optimal talent attraction and retention strategies.

In other words, an efficient and effective supply chain combined with optimal leadership strategies ensure your business becomes THE place to shop or do business with and the best place to work.

The customer will always be King

Whether you run a B2C or B2B company, optimal supply chain management will always be consumer-driven as opposed to price-driven, no matter how far technology advances. So if you’re not serving a customer directly, serve someone that does.

Today’s most successful businesses are 100% focused on what their customers value most. And it’s no coincidence that their supply chain strategy follows the same rule.

But it’s important to understand that there is no ‘one size fits all’ rule when it comes to determining the right supply chain strategy for your business. Why? Because what consumers value can differ markedly from one industry to another. For instance, in retail, consumers are generally price and convenience driven. In the food and beverage sector, speed to market and adherence to safety regulation are paramount to the consumer, while in the building game, delivery on demand is generally more desirable than price. Strategic, collaborative supply chain performance ensures that the right product hits the right markets in the right way and at the right time, based on

what your consumers and key stakeholders (partners) value most.

At the end of the day, the secrets to achieving a world-class supply chain come down to the following basic principles: • Understanding what your customers value (Product, Price, Present, Place) • Ensuring your company strategies, objectives and processes align with those customer values (Partner, Process, Plan) • Getting buy-in from everyone in the business (People, Partner) • Flawless execution through a collaborative business-wide effort (People, Process) • Measuring your results for continual improvement (Profit, Plan) Ultimately, a world class supply chain is one in which your Resources (People, Partners and Products) and Mechanisms (Presentation, Process and Price) integrate to produce your desired Outcome (Profit, Plan and Place).

To attract, retain and build customer loyalty, you must deliver the ultimate customer experience, which takes a combination of outstanding people management and operational planning skills. You simply won’t get cut through unless you have both. Once you start adding millions to your bottom line as a result of making improvements in these two crucial areas, you will understand that supply chain is the real game changer for 21st century business success.

Prakash 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.

As the former Director of Supply Chain for Australia’s leading department store, Myer, Menon is renowned for having delivered an unprecedented $25 million increase to the retail giant’s bottom line within just 12 months and transforming the supply chain landscape on a global scale. He is also renowned for achieving extraordinary results for India’s Taj Group of Hotels, where he climbed through the ranks in record time to head the food and beverage team.

Today, the Wharton-educated Menon is regarded as one of the world’s leading authorities on career acceleration, thought leadership, career transitioning and retail supply chain management. An internationally acclaimed corporate leader, Menon is a dynamic, engaging and refreshingly down-to-earth speaker, writer and educator. He shares relevant, ‘warts and all’ personal stories and unique, proven success methodologies together with game changing, immediately actionable ideas.

As a global partner with Thought Leaders Global and founding partner, Thought Leaders UAE, Menon is an accredited Thought Leaders mentor and keynote speaker. The success of the global Thought Leadership movement is founded on its primary focus on packaging and delivering clever ideas for optimal commercial success!

In today’s extremely competitive landscape, it is essential to play the positioning game. Menon’s expertise in helping leaders and their organisations position themselves as Thought Leading enterprises gives them an undisputed edge over their competiLogistics News me | november 2014 | 37

LNME E x c l u s i v e :

food logistics

at Gulfood Manufacturing GCC food imports to reach US $53.1 billion in 2020

F

ollowing decades of multi-billion dollar investments in the GCC’s aviation and maritime infrastructure and Free Zone trade hubs, shaping an economicallysustainable regional food logistics infrastructure will top the agenda at this year’s inaugural Gulfood Manufacturing to be held at the Dubai World Trade Centre (DWTC) from 9 to 11 November 2014.

Due to 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

MENA Packaging Industry set to reach US$ 52.4 billion by 2019 Increasing regional food production and the need for sustainable, flexible and cost-effective packaging solutions catered to regional consumers’ tastes will see a host of leading global packaging technology providers converge on next month’s inaugural Gulfood Manufacturing – the region’s only dedicated F&B processing exhibition.

The F&B sector contributes 59% of the MENA packaging industry estimated to be worth US $41.1 billion in 2014 according to Smithers Pira, the worldwide authority on the Packaging Industry supply chains. Major players from across the international packaging industry will display their latest packaging technologies in a variety of F&B-related sectors at ProPack Middle East, a core component of Gulfood Manufacturing.

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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 reexports in 2010.

“As the operators of the world’s largest stand-alone sugar refinery, Al Khaleej Sugar Refinery’s participation at the inaugural Gulfood Manufacturing serves as the perfect platform to interact and foster increased trade opportunities with our customers, partners and leaders in the fast moving consumer goods, F&B and ingredients industry,” said an Al Khaleej Sugar spokesperson. “Gulfood Manufacturing will welcome a record number of ingredients buyers and trade professionals from all over the world and Al Khaleej Sugar is aiming to attract additional, long-term investments through to World Expo 2020.”

With regional food demand set to grow – the World Bank projects the Middle East and Nort Manufacturing will prioritise the food logistics debate with a dedicated forum highlighting current trends and solutions for effective implementation across the multi-sector sphere.

Food Logistics Middle East, a specialised show within Gulfood Manufacturing, will bring together global industry experts to tackle challenges such as connectivity, demand and supply, transportation, storage, commercial vehicles, facilitators and service providers, IT and technology, warehousing, materials handling and logistics suppliers and operators.

“Even in the recession resistant and inelastic food industry, the challenge of hyper-efficient and cost-effective logistics affects every component of the supply chain, from production to consumption,” observed Trixie Loh Mirmand, Senior Vice President, Exhibitions & Events Management, DWTC. “With growing

demand set to add further pressure to the global food logistics infrastructure, Gulfood Manufacturing will provide a dedicated platform for manufacturers, suppliers and service providers from across the region and beyond to improve international connectivity, handling and supply chains.”

The region’s largest-ever trade show debut, Gulfood Manufacturing will feature more than 1000 global food manufacturers, suppliers and service providers, including a world-class lineup of international brands including IFFCO, Cargill Europe BVBA, Markel Bakery Group, Multivac, TNA Packing Solutions, Ishida Europe Ltd., Döhler Middle East and CSM Deutschland GmbH. The industry heavyweights will participate in themed sectors or within more than 24 national pavilions including Egypt, Turkey, Jordan, Lebanon, Iran, Switzerland, Taiwan, China, Thailand, India, Italy, Austria, France, the USA, the UK and Germany, also the show’s Official Country Partner.

In addition to the core exhibitions, Gulfood Manufacturing will host a Food Safety Conference highlighting issues related to regional food safety. A host of internationally-acclaimed speakers and key industry figures will be confirmed in coming weeks.

Gulfood Manufacturing is the new home for ingredients, processing, packaging and food logistics providers who service the rapidly growing food and beverage production industries established in the Middle East, Africa, Far East and Sub-Continent. The event provides food manufacturers with the ingredients, equipment and business improvement tools that enable more efficient production and distribution. Gulfood Manufacturing has three focused sectors namely Food Logistics Middle East, ProPack Middle East and Ingredients Middle East.

Members of the USA’s Bakery Equipment Manufacturers Association (BEMA) and other leading international producers of high quality

LNME E x c l u s i v e :

Gulfood Manufacturing will feature more than 1000 global food manufacturers, suppliers and service providers, including a world-class line-up of international brands.

food manufacturing equipment from 50 countries are also poised to descend on the inaugural Gulfood Manufacturing.

As the region’s bakery sector continues to flourish, with Saudi Arabia alone accounting for more than US $4.3 billion worth of bakery products according to Global Industry Analyst – a contingent of international associations and companies are aiming to capture a lion’s share of the growing regional requirement for state-of-the-art bakery equipment.

“With Gulfood Manufacturing so focused on manufacturing, we knew it would be an excellent gateway to growing markets for our members,” said Kerwin Brown, BEMA President & CEO. “In particular, the quick-serve restaurant growth and much-needed bakery support in the Middle East, Africa and Indian sub-continent are of interest to our members, who can bring the required automation and quality equipment to regional wholesale producers,” he said.

Among the companies showcasing products, ingredients and solutions at the BEMA Pavilion are American Pan, Bettendorf Stanford, Burford Corporation, Hansaloy Corporation, KWIK LOK Corp., LeMatic Inc., Unifiller Systems, Topos Mondial and Shaffer Mixers & Processing Equipment. In addition to selling direct to GCC markets, BEMA members are looking to expand their business by engaging new agents and distributors that can sell and support their machinery and products.

Stewart Macpherson, Owner, Unifiller Systems, said the company will leverage Gulfood Manufacturing to highlight its product line-up of depositors, filling machines, transfer pumps, cookie extruders, decorating equipment and automated production lines.

“This exhibition presents a unique opportunity to partner with key food producers in a lucrative market. With food safety, rising commodity prices and a focus on reducing waste always at the forefront of food producers’ business strategies,” he said.

Logistics News me | november 2014 | 39

interview

Logistica ahead at the League Table New opportunities for trail-blazing company on the horizon

I

t all began in Kuwait in 2004 when Logistica, Al Rai Logistica Company, was conceived with a vision to be the leader in contract logistics, freight management and integrated supply chain solutions in Kuwait, the wider GCC and Middle East.

In 2008, in a master strategic move, Al Rai Logistica acquired the well-known and well-rooted freight forwarding company Enkay Express, established in 1981 in Kuwait under the name Naqeeb & Khattar (NK). The merger between Enkay and Logistica, a good fit, has been mutually beneficial to both companies and brought synergies, resources, consolidation and strengths to the new entity. It has integrated all the freight management activities under one roof. Logistica now has Middle East operations with dedicated offices in Kuwait, UAE and Bahrain with a team of dedicated professionals and strong team

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members with years of experience, expertise and capabilities in logistics and freight forwarding.

Logistica owns the state-of-the-art cold storage facility at Al Rai area in Kuwait located at the middle of the trading zone equipped with the latest technology of mobile racking systems and the most advanced electrical loading equipment, reach trucks and pallet conveyers which is environment friendly. Logistica, now part of global network with over US $2.2 billion net sales and offices across all six continents, has the resources, competencies, experience and muscle to provide the most challenges supply chain and logistics services to an equally demanding clientele.

Logistics News Middle East met Andrew Granger, Middle East Regional General Manager, spearheading Logistica’s big push in the region, at the sprawling offices in

Jebel Ali, Dubai for an exclusive interview.

Granger heads the company’s operations in the Middle East and brought us to speed on a diverse range of corporate topics, the merger-acquisition, its current performance, new developments, growth plans and his designs for the future.

Logistics News Middle East: How did Logistica’s acquisition of Kuwait-established Enkay Express in 2008, a major milestone in the company’s history, mark a turning point in the relationship between the two companies? Describe the synergies between the two entities?

Andrew Granger: The acquisition was a perfect fit, allowing the desired growth and financial strength of Logistica to help Enkay Express move to the next level with new cash investments in brand new

interview

“ I think it is clear to everyone that the Middle East economy will show continued growth year-on-year for at least the next 10 years growth. ” vehicles and purpose built air conditioned warehouse in Jebel Ali.

Services: Logistica’s services includes – Air Freight; Sea Freight; Land Freight; Project Cargo; Warehousing & Distribution; Customs Clearance Services; Cargo Insurance; Fairs & Exhibition services.

Logistica offers weekly Ocean import consols from all major global ports / combined with twice weekly Airfreight consols from Europe, Far East and China.

Logistics News Middle East: What are Logistica’s strengths, USPs, specialties in this region?

Andrew Granger: Our strengths are in our values and professionalism, being one of the oldest freight forwarding / logistics company in the region our customers know that when something special is required or a solution to be developed or found, we have the qualified, out the box thinking, professional staff to seize upon this challenge and ensure we meet where physically possible all and every demand of our customer’s requirements.

This is why our top customers have been relying on our quality of service for many years and year on year we just keep adding to our customer base on recommendations and true and professional sales team that are mature and up for any challenge that is laid down to them.

Distribution: Logistica compliments customers’ business by ensuring safe handling and delivery of shipments.

Its own fleet of more than 25 trucks are all fitted with GPS track and trace availability. The range of road transportation services includes–Distribution, Container Transportation, Groupage, Full Truck Load, specialised road transport vehicles.

Logistics News Middle East: How significant is the Project Cargo division for Logistica and can you identify three top projects in the Middle East?

Andrew Granger: Project forwarding has become a major division within Logistica, whether it’s the movement of wind farms, turbines or energy equipment to the full Logistica project management of fit outs of hotels and shopping malls which we are currently doing in Kuwait. We have built up a very strong project team and are now dealing with global projects, break-bulk, ship chartering to and from GCC regions and beyond. We are specialised in moving abnormal loads, over weight cargo and outof-gauge consignments.

Logistics News Middle East: What is your assessment of the state of the GCC / wider Middle East logistics sec-

Logistica started out in Kuwait back in 2004..

Logistica now has Middle East operations with dedicated offices in Kuwait, UAE and Bahrain.

tor and Kuwait, Bahrain & the UAE specifically in terms of business opportunities, potential and future growth?

Andrew Granger: I think it is clear to everyone that the Middle East economy will show continued growth year on year for at least the next 10 years and especially leading up to Dubai 2020 and with the added values of Al Maktoum Airport at

DWC (Dubai World Central) and the new rail networks within the region, sets us up again to be the global hub for all logistics world-wide not to mention the massive increase in visitors which have been helped with the investment shown by Emirates airlines and others in new aircraft to help support the logistics field.

Logistics News Middle East: Where (in Logistics News me | november 2014 | 41

interview

“I personally feel that our growth will come from markets such as pharmaceuticals, oil and gas, food products and retail.” which sectors) do you expect future growth for Logistica to come from?

Andrew Granger: I personally feel that our growth will come from markets such as pharmaceuticals, oil and gas, food products and retail. For sure as more and more hotels and shopping malls are built and developed and with the added increase in visitors and people coming to the UAE to work we see continued.

Growth in the market where we feel we are well situated with our experience in high end fashion, cosmetics and food items where we are storing, packing, labelling and delivering to the malls on a daily basis.

Logistics News Middle East: What challenges does this region pose for the logistics industry and how is Logistica equipped to meet them?

Andrew Granger, ME Regional General Manager, Logistica Andrew Granger has more than 25 years of rich experience in logistics & freight forwarding industry and had worked in his previous company for the 14 years in UK / Middle East prior to settling in Dubai 10 years ago.

He has been associated with Al Rai Logistica/ Enkay Express for the past five years and above, by taking up new challenges of being responsible for the company’s Middle East operations in UAE (Dubai Cargo Village and Jebel Ali), Bahrain, Kuwait and global agents.

With an original niche market of high-end fashion, and now diversified with an established professional experience in charters for projects for oil & gas and pipe industry, the company has shown double digit growth over the last two years under his guidance and the management support.

Logistica has achieved this through increased professional sales management with 100% focus on customer service by understanding the customer requirements/ needs through Global Connections and Regional Solutions.

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Andrew Granger: I think that everyone in logistics working within GCC movements is aware of the headaches and additional paperwork that is required at each border for each individual country and the time wasted at each border has to get better and more efficient.

We are not saying that it should be as fluid or as open as say the European borders but certainly think that we need to work better and closer with customs to help develop a much quicker, simpler and more efficient way of moving goods to and from each country by road.

Logistics News Middle East: What are your expansion plans / investments for the region / UAE?

Andrew Granger: In January we acquired another 12000 sq. metre plot

in Jebel Ali, which we have turned into an all-purpose temperature controlled warehouse. This has been a great added advantage to our customers and we are now looking again to grow in warehousing in Jebel Ali and in Bahrain. This will help to protect our business and give the added advantage to our customers who require temperature controlled warehousing; whether it be fashion goods, cosmetics or food stuffs, we have an in-house purposebuilt solution.

Logistics News Middle East: How has Logistica fared in the region during 2014 and what are your expectations for the remainder of the year?

Andrew Granger: We have shown NP growth year on year now over the last 5 years and 2014 has been no exception and see no reason why we cannot go from strength to strength going forward and we are always looking to develop our customer service and qualified sales people to ensure we have the correct people doing the correct job and enhancing their knowledge through internal and external training to help enhance their career path and that in turn will be shown in our daily service to all customers.

Logistics News Middle East: Describe your partnerships with your overseas associates?

Andrew Granger: We are part of a very elite network, www.htfn.com , this allows us our global coverage. The Hi Tech Freight Network (HTFN) has now allowed independent, reliable agents to come together in a Global Alliance to be able to compete against the multi nationals.

We now exceed US $3 billion in global net sales, with 350 offices world-wide and in excess of 8,500 staff.

Logistics News Middle East: What is Logistica’s vision for the future?

Andrew Granger: Going forward, LOGISTICA will deliver more customer solutions to its existing portfolio with expansion of our freight forwarding services in Kingdom of Saudi Arabia and Qatar and continue to provide ‘Global Connections … Regional Solutions’.

9 - 11 November 2014

RE GIS NO TER W

DUBAI WORLD TRADE CENTRE WWW.GULFOODMANUFACTURING.COM

MIX

INGREDIENTS MIDDLE EAST PROPACK MIDDLE EAST FOOD LOGISTICS MIDDLE EAST

THE BIGGEST FOOD AND BEVERAGE PROCESSING EVENT FOR THE MIDDLE EAST & AFRICA If you are looking to buy ingredients, find new equipment, or source the best logistics solutions, Gulfood Manufacturing is the show to visit this November.

Gulfood Manufacturing features over 1,000 suppliers who deliver world class food and beverage processing industry solutions. See the future of food and beverage manufacturing - faster, cheaper, safer, better.

Ingredients 4 Process Control & Equipment4Packaging Machinery4Supply Chain Technologies4Cold Chain Solutions.

Sector solutions in focus: Bakery. Beverage. Confectionery. Dairy.

Fruit and Vegetables. Meat and Poultry.

See the market leading food and beverage manufacturing technologies.

Conference & workshops programme sharing production best practice and investment strategies.

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Logistics News me | november 2014 | 43

dhl to boost middle east—uk trade lanes Phil Couchman, CEO, DHL Express, UK & Ireland, upbeat about growing two-way trade

D

HL Express, the market leader in the international express industry, is now part of the German logistics company Deutsche Post DHL, one of the world’s largest logistics companies operating around the world. Together with DHL Global Forwarding, Freight and DHL Supply Chain, DHL Express completes the trinity of divisions in DHL. Founded in San Francisco, California in 1969, DHL is represented in 220 countries around the world.

Logistics News Middle East met exclusively with Phil Couchman, CEO, DHL Express, UK & Ireland, for an interview at the Meydan Hotel, while on a brief official visit to the UAE. “I began my career with DHL in the Middle East in Jeddah, Saudi Arabia in 1979 and subsequently worked in the other regional DHL offices including the UAE and Bahrain, then the acknowledged business and logistics centre in the GCC,” reminisced the 30-plus year DHL Express veteran, currently based at the DHL, UK logistics hub at Orbital Park just outside of Heathrow.

“The Post Office system back then was stretched and inadequate to meet the express delivery requirements and demands of the many international companies that were gravitating to the region. In fact, prerevolution Iran was the biggest country destination for DHL shipments worldwide at that time. DHL was the pioneer that moved into this region very early on so we have long-established roots in the Middle East,” he fondly recalled.

“The UAE has done remarkably well in very sphere of economic activity since that time thanks to the vision and farsightedness of HH Sheikh Rashid Bin Saeed Al 44 | Logistics News me | november 2014

Maktoum, then the Vice President and Prime Minister of the UAE & Ruler of Dubai and ably brought to fruition by HH Sheikh Mohammed Bin Rashid Al Maktoum, the Vice President and Prime Minister of the UAE & Ruler of Dubai. The economic progress and stupendous developments in the UAE and the wider GCC are truly outstanding and DHL Express is proud to be present in this region and we look to the future with renewed hope and expectation,” he stated.

The UK has historically enjoyed close and good bilateral relations, both politically and in trade, with the Middle East generally and specifically the GCC. Couchman is confident about the present and upbeat about future commercial relationships between the UK and the region.

“The two-way economic and governmental relationships between the UK and the GCC states are very good. Clearly, the close UK-GCC ties are expected to stay that way, given the UK’s historical presence in the erstwhile Trucial States, in the region, in the past and even at this present time.

There has been a resurgence in the UK’s economy, the express and freight forwarding divisions are doing well and we foresee growth in trade. This has been borne out and also reflected in the consistent yearon-year increase in shipments on our trade lanes,” affirmed Couchman.

In reply to a question on how that might impact the supply chain and logistics arena and DHL Express in particular Couchman was very optimistic about the future. “I am here on an official visit to the UAE to confer with Frank-Uwe Ungerer, DHL Express’ UAE Country Manager and his team on how we can bring new energy and closer in-

DHL is represented in 220 countries around the world.

tegration into the system and synergise our inter-company co-ordination. The history and legacy of UK-GCC ties is well documented and I look forward to meeting some of our customers in the region to engage with them, to listen and to examine how we could serve them better and optimally. We have recently invested over AED 100 million (over US $27 million) into modern infrastructure developing a brand new, state-of-the-art, iconic logistics facility in Dubai’s Meydan district that will help to further consolidate our product offerings, reinforce efficiency — late pick up and early deliveries, thereby taking the quality of our services to a new, higher level. Coupled with a strong portfolio, a wide range and full suite of services we can align other divisions and leverage these for the benefit

of our customers. We are constantly innovating and customizing services to give our customers the best options on offer, this is our constant endeavour,” he explained.

Couchman further affirmed that the key banking and the financial sectors, law firms and the legal community and consultants — architects, services providers, have traditionally been loyal DHL Express customers. Bullish on growth, he anticipated increased business to come from the automotive, engineering, retail, on-line deliveries, energy, life sciences, oil and gas and importantly the SME sector, a subject close to his heart. Couchman’s focus on export and supporting small business has generated business results: since becoming CEO in 2011, DHL International (UK) has secured a dominant market share of 50% and has achieved double-digit revenue growth in each of Couchman’s three years in post.

The UAE is the biggest destination for DHL in the UK in terms of the number of two-way shipments to the region, but there is also considerable business coming out of the other GCC countries and the wider Middle East. “Products ordered online from UK retail chains and lifestyle brands and British franchises now constitute a significant percentage of shipments inbound to the UAE and the region. Likewise, as a major trans-shipment hub, we also get a lot of finished goods and items from elsewhere in the Far East and the Indian subcontinent inbound to the UK.

Express profile Phil Couchman, the CEO of DHL Express UK & Ireland, oversees the strategic development of the UK & Ireland operations to strengthen and grow market share in the region.

A self-confessed champion for small businesses, Couchman calls upon over 30 years of industry experience at DHL, leading operations in the Middle East, Latin America and South Africa, and now in the UK, to develop strategies to improve the customer experience. Couchman’s commitment is driven by his underlying vision of an export-

led recovery in the UK that brings new and growing SMEs to the international stage.

This is borne out at an industry level, where Couchman has successfully forged ties with industry bodies such as the British Chamber of Commerce and UKTI, to determine how best the logistics industry can meet the needs of new exporters.

Couchman has been with DHL for over 30 years. He joined DHL Middle East in Jeddah, Saudi Arabia in 1979 and was General Manager in various countries including Saudi Arabia and the UAE over the next

seven years. He moved to London in 1987 to set up DHL Aviation and the UK hub which became part of the large DHL European network of aircraft and hubs. Five years in the UK was followed by a brief Hong Kongbased Far East posting and three years as Operations Manager, Latin America. He then returned to the Middle East to lead as Regional Director for over 10 years. In early 2007, Couchman moved to South Africa where he was responsible for seeing the business through double-digit shipment and revenue growth in 2007 and 2008.

Logistics News me | november 2014 | 45

DHL

“ People have been an integral part of DHL and they are the engine fuelling our growth.”

There is a strong cultural affinity between the UK and the region which translates into closer business affinity and new business opportunities,” he asserted.

DHL Express UK & Ireland has consistently fared well, year-on-year and did particularly well in 2011, 2012 and 2013 when the company performed remarkably with growth into the double digits. In 2014 growth is hovering around the 10 % level (over 2013) and hopes to close strong by the year end.

Couchman revealed that volumes are up and investments have been made for upgrading and upsizing many of the depots across the UK. Expansion and upgrades have planned for the East Midlands hub and gateway for the UK—it will double in size, fully automate the operations and in-

Phil Couchman, CEO, DHL Express, UK & Ireland is a veteran of the company, with more than 30 years service behind him.

46 | Logistics News me | november 2014

corporate the service and distribution centres. DHL Express UK & Ireland has grown its market share to around 52% of the current levels, up from about 45% five years earlier. Couchman also stressed that growth is not restricted only to the UK and the Middle East but that has been a pattern with DHL worldwide.

“People have been an integral part of DHL and they are the engine fuelling our growth. Providing the right in-house devised and customised training, the right working ambience, investment in new infrastructure facilities, appropriate remuneration and empowering our employees are all key to our future growth. Our CEO, Ken Allen initiated and prioritised the empowerment process to make every DHL employee a

CIS—Certified International Specialist.

Our training programmes have enormous integrity and we see how beneficial this is in the performance of our employees,” Couchman emphasised.

“Focus is the buzzword at DHL. We have our own offices in about 98% of the countries we operate in across the globe with a handful of agents and joint ventures in largely remote areas. These are our strengths. If we continue to focus on or business, focus on our resources and capabilities, doing what we do and doing it well, we will deliver on our promises,” vowed Couchman. Delivery, after all, is at the core of DHL International’s success story since its inception four and half decades and from all indications, deliver it will.

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Logistics News me | november 2014 | 47

L o g i s t i c s & Th e La w

beware

WAREHOUSE –

Potential Legal Implications Storage and warehousing are an integral part of logistics, but they too must be covered by legal protection

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hough we like to think that freight is always on the move, from end to end, the reality is that freight is always in transit. There are several factors for the movement of freight to be stalled or delayed during the movement process, some of the reasons may range from the consignment awaiting transportation for the next leg of its journey, disputes between the owner and prospective buyer or that the owner has simply not found a suitable buyer.

Hence it means that the consignment will have to be stored or warehoused till it is finally in motion to the next destination.

Storage and warehousing thus are an inte-

In the first of a series under the banner ‘Logistics & The Law’, Logistics News Middle East’s legal eagle Advocate Joy Thattil puts the issue of warehousing & storage, a vital logistics & supply chain function, under the scanner. The potential legal, para legal and extra legal implications are examined from the strictly legal-system perspective. Joy Thattil wades through the legalese, the legal maze and the labyrinth of legal processes to sieve the truth on the ‘warehouse’ front. Adherence to acceptable legal processes and procedures and incorporating the appropriate fine-print on a well-worded and mutually acceptable document may be the best protection operators in the trade have to safeguard and immunise their business interests—Editor 48 | Logistics News me | november 2014

gral part of logistics. Today logistics service providers apart from catering to transshipment of consignments through air, road and sea also provide for storage and warehousing facilities. In fact some logistics providers go further, to offer one-stop services ranging from the entire package collection, packaging, transporting, forwarding, compliance with customs formalities, storage and related services all under one roof.

Though this leads to convenience at optimal prices, it definitely attracts legal propositions. There are various acts and legislations by individual countries to govern transportation and storage of different kinds of goods,

their regularisation and licensing, the aspect of cargo liability, insurance liability, compliance with tax requirements and much more.

The matter is further complicated with the service provider trying to compound all transactions from end-to-end, in one single document. These issues definitely raise several legal questions, some complex enough to even baffle judges and lawyers alike.

As such an important warehousing document is the warehousing receipt. This is a kind of agreement or contract for a commercial transaction between the service provider, namely the warehouse and the owner of the goods, whose relationship is in fact governed

L o g i s t i c s & Th e La w by the law of bailment. The warehouse receipt is a receipt; a document of title; it entails storage terms, including storage fees and other legal and non-legal aspects, limitation of liability, duration of agreement, law and jurisdiction, force majeure and related issues.

Most importantly it must designate whether the warehouse will release the stored property to the bearer, a named person, or to order, quite similar to what is seen in the bill of lading.

To protect warehouse interest and to secure payment it is paramount that the warehouse receipt defines the existence, nature and extent of a warehouses lien on the goods and consignments. There must be a clause containing not only the charges for storage or transportation, but must also including demurrage and terminal charges, insurance, labour or other charges, present or future, in relation to the goods, and for reimbursement in case auction procedures are instituted in accordance with law.

Another point to be noted is that the liability under bailment is greater than that of a carrier under Carriage of Goods by Sea Act, with regards liability for lost/damaged/destroyed property as a bailee, where the warehouse has an obligation to take reasonable care of the goods in his possession. More often than not, the courts take a view that the degree or reasonability of care is equal to that of a reasonable prudent man, this interpretation sets the bar pretty high on the warehouse.

Despite this warehouses have been able to limit their liabilities to a great extent by carefully wording clauses in the warehouse receipt whereby maximum liability can be capped. In case of high value of goods the

Warehousing must be subject to careful legal protection to ensure the safety of goods and the companies moving and storing them.

warehouse can also insist on additional insurance to cover the value of the goods or for a full liability cover, this can be provided at a premium rate higher than the normal warehouse charges. Carriers in the US also adopt the practice of including the Himalaya and Paramount clause in the bill of lading which extends the rights enjoyed by the carrier to their subcontracting service providers which technically includes limitation of liability for lost/damaged freight.

Yet another important clause to be taken into account as regards warehouse receipts is the termination clause. The warehouse must have the right to terminate storage If there is a reasonable belief that the stored goods in its possession may have been abandoned, or are subject to deterioration, or harmful effects to the facility, or other stored property, thus ending the storage as soon as commercially feasible.

It is also recommended that an auction clause is inserted in the agreement, so that in the event of the goods being abandoned the warehouse can initiate the auction procedure to sell the consignment and recover cost and/ or avoid further loss. This will also ensure the freeing up of space unwarrantedly taken up by the consignment.

There can be some genuine instances wherein the original warehouse receipt may have been lost in transit and hence the owner of the goods may not be able to take delivery of the goods from the warehouse. In such instances the warehouse service provider must insist on the owner/claimant furnishing a bank guarantee and indemnity to the warehouse for releasing the goods. The usual practice is to execute the bank guarantee equal to twice the value of the goods, the validity of the bank guarantee and indemnity being for three years, or appropriate time frame, as per the respective countries limitation act for filing a claim against the warehouse for such a release.

Though the legal aspects and implications in relation to just a simple warehouse receipt can be endless, through this article we attempted to convey a message that what appears simple need not be necessarily overlooked.

As the various facilities and services, offered by the logistics service provider, become intertwined and the documents involved in transport, become combined; it is increasingly important for the service providers and their counsels, to pay attention to detail; to make certain that all legal aspects are covered; documents are not overly simplified and clauses are not watered down, merely for the sake of convenience. In an industry where timing, convenience and efficiency are critical, service providers need to be conscious and prudent of their rights and liabilities in equal measure.

Advocate Joy Thattil Ittoop is a Maritime Lawyer by profession and a partner at Callidus with offices in Dubai, Singapore and India. He specialised in Maritime Law from the University of Southampton UK. Adv. Joy was appointed as a Notary Public by the Government of India. He is the present Secretary General of Indian Institute of Maritime Law (IIML).

Logistics News me | november 2014 | 49

tranzone

tranzone’s

hot solutions for the cold chain Tranzone makes inroads in region’s healthcare logistics sector

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ranzone FZCO, established in the UAE in 2006, is a fully owned subsidiary of Saudi Arabia based Banaja Holdings. The UAE operation runs a state-of-the-art 3PL warehouse in Jebel Ali Free Zone. Tranzone has partnerships with leading and big pharma companies around the world. Utilising a unique one-stop approach, Tranzone centralises logistics, provide storage, provide inventory management, as well as purchasing and re-invoicing to the distributors, all at one convenient location. With a clutch of certifications and awards from ministries, governmental and regulatory institutions, Tranzone, headed by supremo and logistics industry veteran Juergen Hirsch, the company’s General Manager, has been in the forefront of the region’s healthcare logistics sector.

Tranzones’s capabilities and knowledge are based on six decades of experience by Banaja Holdings in healthcare logistics and distribution in Saudi Arabia. Logistics News Middle East recently visited the Tranzone offices and facilities and engaged with Roger Phillips, the suave, amiable, ebullient business development manager, to get the low down on how Tranzone dominates the transportation and distribution of pharma products in a region known for its hot, torrid and harsh weather conditions.

“Tranzone was founded sixty years ago with the objective of improving pharmaceutical distribution in the MENA region.

Tranzone, as an integral part of Banaja Holdings a Jeddah, Saudi Arabia-based

50 | Logistics News me | november 2014

Healthcare specialist, has gone from strength to strength over the years. Taking Tranzone in Dubai for example, it is a concept that our parent company in Saudi Arabia decided to invest in,” began Phillips as he sets the tone for the company’s forays in this niche sector.

“From ground breaking to build the foundations to the present day, our team has worked hard to build the product and brand in the market place. We started as a storage only provider and now we offer the full range of logistics activities. We started off with a medical device client, then acquiring a pharmaceutical company and now other pharmaceutical companies want to partner with us for logistics activities.

All of these clients are still with us to this day, working in collaboration with us as a unit to ensure we service their distribution requirements.

“Some clients intend to outsource activities of their core supply chain functions to Tranzone, thus showing trust and commitment from the client, as well as strengthen the collaboration approach that Tranzone values itself on,” explained Phillips.

Today, eight years on, Tranzone offers, and is not limited to providing, a full suite of logistics services comprising air-freight, sea-freight, road-freight, customs clearance, insurance, clinical trial logistics, contract logistics, supply chain consultancy, inventory management, controlled drugs, return logistics, cross-docking and various value add services.

“We have a purpose-built temperaturecontrolled facility that meets and exceeds

the pharmaceutical requirements with a robust quality management system in place, managed by a Ministry of Health (MOH)-registered pharmacist. We operate cold chain products, room temperature products as well as product at -190oC. Our facility is MOH approved with the respective GSP licence as well as ISO 9001, ISO 27001 and ISO 13485.

“We operate a fleet of 3T trucks for local deliveries and 40T lorry for cross border movements. All trucks have been validated to meet the GDP requirements of the industry. Behind all of these services are individuals who have been working in the healthcare industry for a number of years.

All the staff are trained on a continuous basis to ensure we are abreast with industry regulations as well as impacts on internal business processes. Needless to say, that Tranzone’s service portfolio will grow and change with the requirements/needs of our current and potential future clients,” stated Phillips.

The life science sector is very different to other industries as the end customer is the patient. “The utmost must be done to ensure our company meet the patient’s requirements to ensure the product maintains its integrity and efficacy. The regulations are very strict, whether you are a drug manufacturer, service provider, doctor, we all have a duty of care to the patient. If I compare us to other industries, our quality requirements are far higher than FMCG for example. The specification of our life science warehouses have to meet certain requirements, the equipment have a fine

tranzone

“The utmost must be done to ensure our company meet the patient’s requirements.”

line of tolerance, security is tight for controlled drugs, calibration and validation is very strict. Behind all this we have to “sign off” documents by approval personnel only.

In other industries they do not require such strict procedures, processes, protocols in place. I understand industries like aviation manufacturers operate to the same levels as the pharmaceutical industry,” clarified Phillips.

What sets Tranzone apart? People. “We all know your greatest asset to any company is its people. In the life science sector, we all operate to the same guidelines. If you compare us to the competition, we all have the same racking and equipment to carry out our daily activities. The management, training and planning skills of our employ-

ees people is what separates us. This will start at the recruitment process and ensuring Tranzone provides the necessary tools and education for that person to do the job to hand. Our staff retention is in the 95% range. This is a testimony to management style and treatment of our staff. Tranzone is a family unit and as a unit, we operate as one,” added Phillips.

What accomplishments stand out in Tranzone’s corporate history since inception? Since Tranzone’s inception we have gone from strength-to-strength, starting off as a small family run business to one of the largest healthcare providers in Saudi Arabia and the region. Tranzone not only invests in logistics and distributorships, we also manufacture drugs in Saudi Arabia for

the region. Tranzone also partners with several global pharmaceutical and healthcare companies in Saudi Arabia.

Tranzone partners with some of the biggest names in the pharmaceutical industry in Saudi Arabia and the UAE. The company provides 3PL services for GlaxoSmithKline. “For our clients we provide, port to warehouse delivery, customs clearance, storage. On the outbound we manage, road distribution (with our own trucks), air freight, sea-freight and courier services.

For some clients we have an IT integration to have visibility. This is a collaborative approach to the partnership we have with our clients. Some clients we operate supply chain activities as well as value add services for promotions. We provide con Logistics News me | november 2014 | 51

tranzone

sultancy services to our clients to drive out inefficiencies and in situations of product recalls, we also manage return logistics. Once a year we conduct a physical stock count, however every month we provide a cycle count. Inventory management is essential to all supply chain managers, to which we provide a number of tailored reports detailing them about their business and inform them where necessary of any shelf-life issues. We also operate a full range of cold chain solutions but active and passive only from approved client validated equipment/packaging,” elaborated Phillips.

Tranzone has the vision to expand in the region for sure. “We are currently evaluating to establish Tranzone as a premium service provider in the wider region as well inside the UAE and outside of JAFZA. The planning is progressing quickly forward,” asserted Phillips.

What challenges confront the industry in the region? “The main challenge is the environmental conditions that is not kind to some of the products we store and transport. People are also a factor, within Tranzone each person is trained to 52 | Logistics News me | november 2014

handle the respective products, however outside of Tranzone, how do we know the persons handling life science products have a similar understanding of what is required. Education and training is also limited in the region. There are no short courses reflecting the industry requirements, guidelines for the average person.

There is a limited number of trained and qualified sub-contractors that have a solid understand of good distribution practices (GDP). There have been times where we had to reject lorries at our warehouse door as the scent of fish odour was coming out from the vehicle. If drivers and companies understand GDP, they will know this is not allowed. Another challenge is given by the non-unified regulatory frame work,” cautioned Phillips.

What does the future hold for Tranzone—say three, five, or possibly even 10 years from now? “For the coming years the Tranzone Brand will be expanding in the MEA region and beyond. For the bigger picture over the years we will be setting our eyes on the wide Europe and Asia continents to keep pace with the requirements of the producers.”

Tranzones’s capabilities and knowledge are based on six decades of experience by Banaja Holdings in healthcare logistics and distribution in Saudi Arabia.

Retail Logistics

DWC hosts IKEA’s mega-logistics center New IKEA distribution center to handle 50K TEUs expanding to 70K TEUs in three years

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he world’s first purpose-built aerotropolis, Dubai World Central, has opened its doors to Swedish furnishing giant IKEA Group’s regional distribution center in its Logistics District as the company continues to expand its retail operations in the GCC. This is IKEA Group’s first direct investment in the region. Scheduled for completion in September 2015, the centre will initially employ 230 people and have the capacity to handle 50,000 twenty-foot equivalent containers (TEUs) per year, increasing to 70,000 TEUs per year within three years.

The new distribution center in DWC will enable IKEA to deliver fast-moving products more efficiently to stores across the GCC, cutting distribution costs as well as shipment times.

“It is only fitting that a venture of such significance and proportion happens in DWC,” said Rashid Bu’qaraa, Chief Operating Officer of Dubai World Central.

“We are more than a gateway to the

MENASA, we are a gateway to the world.

Being selected as the future logistics platform for global companies such as IKEA and partnering with experienced developers such as GRDI is how we plan to step into the future,” he added.

The first of its kind at DWC, this build-tosuit facility is being developed through a joint venture between DWC and Abu Dhabi-based Gulf Resources Development & Investment (GRDI), a real estate development and investment company that provides property solutions for global firms in Europe, Africa, the Middle East and Asia Pacific.

“We are delighted to be working on this major project in a joint venture with DWC,” said Jim Osborne, Chief Operating Officer, GRDI. “Our active involvement in building one of the largest distribution centres in Dubai fully demonstrates our strength in developing such large-scale ventures. All initial planning has been completed. We will bring to this partnership our expertise and experience in modern, state-of-the-art

Hedwig Maes joined Rockwell Automation in 2007 as Regional Sales Director for Central Europe. Since December 2008, he has held the position of President - Europe, Middle East and Africa.

property developments to exceed both DWC and Ikea Group’s expectations,” Osborne affirmed.

DWC has a unique multimodal platform with a highly integrated and an efficient sea, road and air network. Its unmatched speed, connectivity and flexibility in logistics are a major advantage. With its ability to move passengers and freight seamlessly through its logistics corridor, it is the only place in the world that allows goods to be transported from sea to land to air in less than one hour.

IKEA has a store each in Dubai Festival City and in Yas Mall in Abu Dhabi. It also has outlets in the Saudi Arabian cities of Riyadh, Jeddah and Dhahran with one more in the pipeline that is to be located in the upcoming Al Diriyah Festival City in Riyadh, Saudi Arabia. Elsewhere in the GCC, the Swedish furniture chain also has a presence in Qatar and Kuwait with plans to expand to Oman.

Logistics News me | november 2014 | 53

l a s t pa g e - f i r s t p e r s o n

The Evolution of the Logistics Executive Group headhunters for the industry brian cartwright, managing director, mea regional operation

Brian Cartwright, managing director of the MEA operation for the Logistics Executive Group.

L

ogistics Executive Group was founded in Australia in 1999 and has since become the acknowledged industry leader for talent management services to the Supply Chain and Logistics sector and the organisation continues to evolve.

I and my business partners Kim Winter (Global CEO & Founder) and Darryl Judd (Group Chief Operations Officer & MD Asia) agreed that in order to continue to add significant value to our clients, in a business landscape which is inherently different today than it was just a few years ago, we needed to increase our portfolio of specialised services, develop new partnerships and offer something truly unique to the global supply chain and logistics sector.

Initially providing executive recruitment services, Logistics Executive Group has continually evolved in response to client needs and today three pillars outline our core services — corporate advisory, executive search, and logistics academy.

Our sorporate advisory services include supply chain consulting projects, human capital performance, executive performance coaching, logistics and supply chain knowledge bank, research and industry white papers, international conferences and events and Jebel Ali Free Trade Zone (JAFZA) representation.

For executive search, we reviewed and revamped our services creating a model which enables us deliver process and deadline driven executive search assignments, partnering closely with our clients on a retained consulting basis where we become an extension of our recruitment function during the course of each search assignment.

Logistics Executive Group has reached significant milestones to date and

54 | Logistics News me | november 2014

continues to innovate. We partner globally with a large number of conference and event organisers supporting them through our vast networks introducing speakers, panellists and sponsors as well as promoting events via our in-house global database of over 130,000 supply chain and logistics professionals and through our close connections with industry media.

Our management team is also regularly involved as speakers, panellists and moderators at various events throughout the world.

The group is improving the quality of industry research and reports we provide which until now has been our eagerlyawaited annual Supply Chain & Logistics Employment Market survey report, but a recent global partnership with Transport Intelligence, the foremost providers of industry research to the sector, ensures we can provide clients with a wider range of indepth industry reports across all facets of the supply chain and for specific markets when required.

The Logistics Executive Group is also expanding its global reach on an ongoing basis with a number of new business units opened since 2013 in the UK & Ireland, Australia (Victoria) and three offices in India.

A key member of the Logistics Executive Group global management team and the main driving force behind the company’s operations in the Middle East and Africa, Brian Cartwright is an executive search and leadership development professional specialising in the supply chain and logistics sector.

He is a regular contributor to industry media and events providing thought leadership for best practice talent acquisition, engagement, retention and development. Brian has lived and worked in the Middle East since 2008.

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