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BREAKBULK MIDDLE EAST DIGITAL SPECIAL COVERAGE
BREAKBULK MIDDLE EAST DIGITAL SPECIAL
KNOWLEDGE HUB: TECHNOLOGY & INNOVATION
Time to Embrace Digitalization
Pandemic Gives a Push, Industry Must Add Momentum
BY GARY BURROWS
Nearly 36 years ago, then U.S. Customs Commissioner William von Robb delivered an ultimatum to the shipping industry: “Automate or perish.”
Von Robb’s infamous pronouncement in 1985 was about customs brokers adopting U.S. Customs’ nascent steps to automate Customs filing processes.
Pronouncements weren’t quite that dire during an executive roundtable on industry digitalization efforts. But the message was shared among the executives, with decades of industry experience, that companies that fail to embrace that future would be swept out of business by those companies that do.
“Our industry is still in the stone age when it comes to digitalization,” said Dominik Stehle, chief commercial officer of United Heavy Lift. “We like to do our part and change that whenever we can. It remains a challenge to be honest.”
Dennis Devlin, Maersk’s senior director – special project logistics, said the container line “has been very involved in digitizing logistics. However Maersk doesn’t cover the entire project supply chain, which still has not even been close to having been accomplished.”
Cyril Varghese, global logistics director – strategy and commercial, Fluor, warned that “organizations will need to invest in digitalization and move forward to gain a competitive edge. It may sound extreme, but if you don’t embrace it, you’re out of business in a few years.”
COVID CURE?
A number of roundtable participants agreed that, like many digital functions that have grown in the past year, the Covid-19 pandemic is pushing the project cargo industry to embrace digitalization.
Covid-19 has “taken logistics and supply chain on an extremely accelerated growth that is forcing organizations to jump into digital transformation faster than ever,” said Carlos Hernandez, partner – global lead business and digital transformation, Avasant, a global IT consulting company.
Mohammad Jaber, vice president for project logistics, Agility, and COO of Agility Abu Dhabi, said the pandemic “was a wakeup call,” though he said: “We are using and investing in technology to drive more efficient and effective customer and business processes.”
Industry wide, Jaber said investment in blockchain in the industry was US$1 billion in 2018 and is expected to reach US$23 billion by 2023.
Stehle doesn’t feel the pandemic initiated the digitalization push, but it “may have accelerated the whole process. What the pandemic taught us was a completely new way of communicating and discovering the benefits and also cost savings associated with that.”
Regardless, the industry is awakened, and there’s no turning back.
“We’ve been excited with the leaps and bounds in technology and innovation, affordable access to technology and innovation over the last few years. We’ve seen that the digitalization priority in global corporations and in smaller companies has jumped quite a bit,” Varghese said.
Digitalization is happening at different paces and different times, with varying investment capabilities. The pandemic has pushed it to a “critical mass” culminating in a need to “create one universe and one family similar to SAP, Android or iOS tech platforms,” said Dharmendra Gangrade, head of logistics, L&T Hydrocarbon Engineering, the oil and gas arm of engineering, procurement and construction giant Larson and Toubro.
Hernandez said Avasant research found that 87 percent of people surveyed believe the acceleration towards digitalization is going to continue and force organizations to change their overall business models.
Companies that accelerate and make investments in technological change are not only going to survive, but take a competitive advantage that will take them well into the future.
“I don’t think this is going to stop, even after Covid,” Hernandez added.
SILO MENTALITY
While there is mounting enthusiasm, real progress faces daunting challenges towards true integration, roundtable participants pointed out. Regardless of participating companies’ intentions and technological advances, the major barrier remains silo mentalities.
Varghese noted a LinkedIn post from a colleague who said, “Supply chain is a vision and supply silo is a reality.”
“I found that simple statement extremely profound,” he added.
He believes Fluor is at the cusp of reinventing the supply chain, building it through a range of “homegrown relationships.”
“Now we are at the stage where we have the opportunity to amplify the effectiveness multiple times over through the proper use of technology,” he added. “The acceleration and adoption of industry-wide digitalization is the need of the hour.”
Maersk’s Devlin noted many project cargo companies have moved towards digitalization by developing in-house tools and systems.
While the tools are valuable, the broader issue is the project cargo industry needs “a tool to see an entire global project logistics and supply chain and have visibility to that,” he said. “Purchase order to packing, cargo weights and dimensions, where
Roundtable participants (Clockwise from upper-left):
Dominik Stehle, United Heavy Lift; Carlos Hernandez, Avasant; Dennis Devlin, Maersk; Adolph Colaco, e2Log; Dharmendra Gangrade, L&T Hydrocarbon Engineering; Mohammad Jaber, Agility Abu Dhabi; Cyril Varghese, Fluor; (center) Urs Schaerer, Orkestra SCS
the cargo is at any given point in time. That would allow the construction managers who are really the end customers to make important decisions.”
“Compared to other industries, I think our segment is really still way behind what is possible,” Stehle said.
There are particular challenges for a heavy-lift carrier like UHL, which faces complexity of a diverse fleet with varying lifting capacities and modes of loading, each load requiring sophisticated engineering and matching up right cargo with vessels at the right time.
“It’s very challenging to integrate all of that into one system because we have many moving parts that constantly change until the very last minute,” he added.
Devlin noted that, while logistics is moving towards digitalization, it’s less true on the breakbulk side, “but it also may be less necessary.” But for EPC projects, it’s “still done rudimentally.”
Adolph Colaco, founder and CEO of e2Log, a cloud-based logistics technology platform, said: “No. 1, almost every organization worth their salt have started the process of digitization in some shape or form. No. 2, the level of maturity relative to that digitalization process varies depending on when the journey started and what momentum they have going.”
In a multibillion-dollar project there are multiple freight forwarders, carriers, customs brokers, transporters, each investing and developing their own technologies, he said. “But at the end of the day it all has to come together in one single layer or platform so the end customer gets that seamless experience – the future therefore is digital platforms to run global logistics programs.”
He agreed that much of the application of digitization is problem solving logistics and supply chain processes, “but it’s being addressed in a siloed manner.” While supporting your own customers is the logical first step, “the next step is how do you weave all of this together so that it becomes one seamless, orchestrated process for the end customer?”
OVERCOMING BARRIERS
Along with silos, barriers to integrating can be the difference in budgets, and different levels of each company’s digital development, L&T Hydrocarbon’s Gangrade said.
Gangrade embraces a common platform, but “no matter how much best technology I have, I still need to talk to all stakeholders, who won’t necessarily adapt to my technologies.”
“I think it requires all parties to see the value of technology first and foremost,” Stehle said. “It has to be easy and once a solution is implemented, it should then be embraced and seen as a benchmark. People in general are resistant to change.”
Stehle and Urs Schaerer, head of industrial solutions, Orkestra SCS, believe the next generation of project professionals are wired to embrace technology and lead the industry to embrace digitalization.
As an example Stehle said a team of engineers at UHL decided its ways of doing business could be improved. So they developed a 3D simulation tool “where we can virtually assimilate any load we take on a vessel,” he said, showing a short video presentation. “We can show the client how we secure the module down the smallest detail.”
HOW WILL THE FUTURE LOOK?
Roundtable participants waded lightly into how collaborative digitalization might shake out in the coming years, whether the winners will be technology in the cloud, platforms in the cloud, a single or handful of platforms – similar to what developed in the supply chain industry during the dot-com boom/bust near the turn of the century – or shared integration among partners. The lengthy session left the door open to pick up that topic in the near future. But, like the group of engineers Stehle referenced, a key development will be in visualization.
Schaerer alluded to his background in engineering and how he saw the evolution from 3D CAD design to full models – “they (virtually) walk through the plant; they check everything three times.”
He referred to a comment from Hernandez about digital twin, which is a virtual replica of physical devices to run simulations before actual devices are built and deployed. Such systems, if available within the cloud, would allow collaborative simulations among stakeholders.
“The future is immersive,” he said. “The future is you see your plant building up in virtual reality, immersive, to see where the problems are … That’s where we need to come to in logistics.” BB
RELATED STORY: Companies’ Steps Towards Digitalization, https:// www.breakbulk.com/Articles/companies-steps-towards-digitalization
BREAKBULK MIDDLE EAST DIGITAL SPECIAL
KNOWLEDGE HUB: ENERGY
Oil, Gas Projects Mainstay of Middle East
Alternative Energy Projects Still a Way Off
BY CARLY FIELDS
While a transition away from oil and gas is underway in the Middle East, the pace of change will be more gradual than in Europe and the U.S., as regional state-owned oil companies continue to pursue mandates to maximise profit from natural resources.
Therefore, agreed regional experts taking part in the Breakbulk Middle East Digital Special, project cargo movers serving the region can expect to see O&G related work dominating until at least the end of the decade.
This contrasts with the aims of international oil companies that are already diversifying and transforming their businesses. In December 2020, energy companies BP, Eni, Equinor, Galp, Occidental, Repsol, Royal Dutch Shell and Total announced they had agreed on six joint principles to drive their participation in the energy transition. “They are now optimizing their operations, process and procedures to become green,” pointed out session moderator, Rafael Vicens, head of global projects and industry solutions MEA at DB Schenker.
Speaking as part of an exclusive roundtable hosted by Breakbulk, Moataz Hussein, regional manager – project and energy services (MENA) at Expeditors, saw a big role for renewables in the Middle East region in the future. However, he caveated that with his expectation that O&G projects will still be important through to 2030. He did add that project cargo movers operating in the region are starting to see different types of projects, such as entertainment and country-program driven projects, and that there were fundamental shifts taking place in sourcing. “Our region was always looked at as an inbound region, but that may change with local content and the local cargo production,” he said. “People are not looking at this, but the market is changing.”
Yasser Al Yassin, logistics director at Petrofac, saw a strong global drive to shift from O&G in the region, but agreed that it was difficult for the Middle East to adopt the same energy transition policies as other regions. “We are very much dependent on O&G still in this part of the world,” he said. “While I do not think O&G will continue to be as profitable as it used to be 5-10 years ago, it will continue to be the main economic driver until governments and other stakeholders decide to adopt an alternative energy business model.”
ALTERNATIVE OPTIONS
That said, investment is being committed to alternative sectors, such as wind, solar and water recycling. Solar is particularly suitable to the Middle East region, and is where the panel expects the most interest in the coming years.
Javier López, senior logistics manager at Abengoa, confirmed that his company is not only involved in renewal energies with 2.3 gigawatts built, but is also a leader in construction of thermal solar plants with 34 percent of worldwide output in this “key” area. Expeditors’ Hussein described solar projects as a “fit for our region.”
Vicens, meanwhile, reported seeing a rising number of desalination plants in the project pipeline, while López added that Abengoa is constructing the world’s largest reverse osmosis desalination plant and the biggest desalination plant in Saudi Arabia using the same technology. He saw water as a “a key element regarding renewable sources and how we manage water in the region.”
However, because of the immaturity of the renewables sector in the Middle East it is difficult for project cargo handlers to build up experience and to be successful in tenders, the panel noted.
Whether O&G, renewables or desalination, Omar Yacoubi, GCC procurement manager for Tecnicas Reunidas, said that logistics companies in the region will “still have a job.”
Vicens raised the question of whether project specialization is in danger of being lost with a shift away from the more complicated O&G sector into other sectors where components can move by conventional means. “From the project forwarding side before we were moving a huge number of breakbulk and heavy-lift cargos for refineries and chemical plants. Now with renewable projects especially solar and desalination plants, most of the cargo is containerized,” he said. “I am concerned that in 30 years there may be less O&G to build and there will be more desalination, solar and carbon capture, and the pure project forwarders as is will disappear. This could go against our specialisation.”
However, Hussein saw this as an opportunity for project freight forwarders: “Project cargo freight forwarders need to look differently at the market and consider the types of project cargo moves associated with renewables, energy storage and entertainment projects, which could present opportunities and future potential.”
López explained how some Abengoa Projects are managed with “just in time” supply chain processes and share similarities with car assembly factories. He said that the industry could learn a great deal from those lean processes to improve fulfilment and cash flow.
But, at the end of the day, Al Yassin said that as engineering-driven companies, they should be able to take any diversification in their stride. “Companies serving the highly complex O&G sector are very much equipped to transition into alternative projects.” BB
KNOWLEDGE HUB: BUSINESS OUTLOOK
Panelists (from left): Guillermo Cobelo Fernández, Técnicas Reunidas; Mohammad Jaber, Agility; Capt. Mohammad Al Ali, ADNOC Logistics & Services; and Khalid Al Marzooqi, Khalifa Industrial Zone Abu Dhabi.
UAE Mines Post-Covid-19 Opportunities
Collaboration, Technology Keys for Moving Forward
BY CARLY FIELDS
This is not the time for complacency, business leaders in the UAE told a Breakbulk Middle East Digital Special opening day session.
While the Covid-19 pandemic has “changed everything around us,” according to Khalid Al Marzooqi, commercial director at Khalifa Industrial Zone Abu Dhabi, finding opportunities from the pandemic’s challenges continues to be a driving force for change in the region.
“In the UAE we have shown a model for the world of how to face such pandemics and how to convert those challenges into business opportunities,” Al Marzooqi said.
Taking part in a panel on Navigating the Middle East Projects and Business Landscape in a Post-Covid World, panelists spoke of how their respective companies have risen to the challenge of the changed operating environment.
Capt. Mohammad Al Ali, senior vice president, ship management, at ADNOC Logistics & Services, explained that in the short term, ADNOC has prioritized ramping up projects that were deferred as a result of the pandemic. Longer term, Al Ali said ADNOC will be examining how demand has been reshaped and how those changes will inform its services going forward. The pandemic prompted a sizable drop in projects in the Middle East, led by the two biggest economies: the UAE and Saudi Arabia.
Mohammad Jaber, chief operating officer and regional director of project logistics Middle East and Africa at Agility, said that the pandemic has driven home the urgency and the importance of working remotely, as well as the importance of digital tools. Agility started its digitalization journey before Covid-19 struck. That digitalization became an “important part of Agility’s business continuity plan” in dealing with the pandemic.
“Agility has used digital tools to keep trade flowing,” Jaber said. “The pandemic separated digital leaders from laggards; leaders have tools and make data driven decisions quickly. It’s an obvious lesson learned from the pandemic that digital capabilities, such as predictive modeling, big data and digital capabilities, provide a lot of stability to decision-making.”
Khalifa Industrial Zone Abu Dhabi, saw tremendous uplift in warehousing demand during the pandemic, leading it to develop a 5 millionsquare-foot warehousing solution. Al Marzooqi told the panel: “Definitely the pandemic has changed everything around us. Some changes are positive, but some were definitely negative. We see more competition in supply chain management channels, especially when we speak about international companies.” He added that e-commerce is now mandatory for survival.
Further development of technology ranks high on Agility’s wish list for 2021, with Jaber noting four critical technologies for the supply chain to focus on: blockchain, Internet of Things, robotech and process automation, and data science. “These will help all over the market to reduce cost and increase efficiencies. Stop using the data to alert exceptions; start using the data to prevent exceptions,” he said.
But for Al Ali, technology alone will not pull the breakbulk sector out of the pandemic’s grips. For him, collaboration is key: “This is a time where we really need to partner with each other, grow our businesses, learn from each other, share technology and get through this pandemic safety.” BB
The session was moderated by Guillermo Cobelo Fernández, regional CEO of Técnicas Reunidas.
Watch a replay of Business Briefing: Middle East Business
Project Outlook, at https://youtu.be/dXEAbB7087U
RELATED STORIES
GCC Roars Back in 2021 – MEED Predicts Project Spending to Double from 2020, with Edward James, director of content and anlysis, MEED Projects, at https://www.breakbulk.com/Articles/gcc-roars-back-
in-2021
Replay the briefing at https://youtu.be/qycmEImvhog
‘Great Opportunities’ for MENA in 2011 – Digital Special Helps ‘Accelerate’ Project Recovery, at https://middleeast.breakbulk.com/Articles/
great-opportunities-for-mena-in-2021
BREAKBULK MIDDLE EAST DIGITAL SPECIAL
KNOWLEDGE HUB: EDUCATION
A Day in the Supply Chain Life
Education Day Advice from MENA Industry
BY GARY BURROWS
One of life’s greatest challenges is choosing a career, and often a most valuable determiner is to be able to learn what industry veterans experience in a day of their professional life.
Breakbulk Middle East’s Education day, held virtually during the event’s Digital Special, offered a glimpse through three Middle East-based veterans during the session: Keys to Success: Insights from Across the Supply Chain.
“The key advice I have for the students and the young generation is always look for a challenging job that will make you reach your potential, that will challenge you enough to bring the best out of you,” said Yasser Al Yassin, logistics director, of Petrofac, an international oil and gas industry engineering, procurement and construction company, or EPC. “You’ll learn and you’ll learn more until you reach your potential, and then the sky is the limit.”
The supply chain industry means exposure to global trade issues, rules and regulations, and the intricacies of logistics in different countries, he said. “You have to learn this information so you can execute your job. The more you know, the better you can execute and achieve for your international stakeholders and clients.”
The logistics industry brings great variety and different life skills, along with the elements of the job, said Sue Donoghue, managing director of DHL Global Forwarding, Kingdom of Saudi Arabia, and CEO Arab Cluster, DHL Global Forwarding.
There are multiple paths within the industry, including temp-to-perm, which was Donoghue’s experience. From receptionist, to freight forwarder, operations director, managing director and project management, she climbed the ranks.
She joined DHL and helped relaunch its industrial projects division, then moved to country management, global head of business processes, leading operations. In Saudi Arabia she climbed from managing director to her current CEO role, responsible for Bahrain, Saudi Arabia and Kuwait.
Donoghue’s motto is “expect the unexpected. That’s really what I live by.” It requires multiple hats: accountant, project manager, referee, salesperson – “some days you put them all together,” she added. “But the variety, the excitement, the passion of my team and meeting the people I do is second to none.”
Likewise, Al Yassin loves the challenges of his job, that each day is different and requires creative thinking and teamwork to find innovative, out-of-the-box solutions.
“This keeps the job alive; it keeps you excited for the next day, what sort of troubleshooting you’ll have to do, what sort of solutions, how much you can reach your potential,” he added.
For Al Yassin, a typical day starts with the plans, what to execute that day, week or month. “I verify these plans with my team … and the stakeholders for each product,” he said.
True throughout the industry, information is key. A normal day may see plans fall into place and all stakeholders aligned and everything goes smoothly. Due to the dynamic environment of the EPC business, however, plans change on the fly.
“We face different last-minute changes and we have to react quickly and realign ourselves and our stakeholders to execute the job,” he said.
There are many benefits of working in the maritime field, said Capt. Marwa El Selehdar, chief mate and business development coordinator, for the International Forum for Maritime Transport, of the Arab Academy for Science, Technology and Maritime Transport.
“It has allowed me to travel more,” she said. “It makes me more responsible and I started managing everything in a better way, even in my social life.”
The field also carries the weight of its role within worldwide trade and the depth of experience that builds there. “We have the ability to deal with different countries and mentalities and this is something very useful.“
El Selehdar has a unique role, in that she’s starting in her career, and with her work on a training vessel with AASTS, she’s dealing with and mentoring cadets while aboard.
The breadth of supply chain industry operators also presents a wide spread of talents and skills required.
“The variety and the wide spread of talent and tasks that you cover is phenomenal,” Donoghue said. “The key skill that we’re looking for from new people coming into the company is a passion for the industry.”
“Logistics, like many fields, has its own kind of difficulties,” Al Yassin said. “But if you don’t have passion for your job, and you’re not enthusiastic, you can easily drop the ball and eventually you’ll not succeed in this line.” BB
Watch a Replay of the webinar, Education Day: Empowering the Next Generation of Breakbulk Professionals
at https://youtu.be/fUrxwrhF-zo
RELATED STORIES
Logistics of Your Horizon – Education Day Session Details Career Opportunities at
https://www.breakbulk.com/Articles/the-logistics-of-your-horizon
KNOWLEDGE HUB: WOMEN IN BREAKBULK
Women’s Unique Leadership Roles Benefit Industry
‘Pragmatism, Patience and Practicality’ Among Key Skills
The growing leadership role of women in the project cargo and logistics industry is fueled by unique characteristics that have proved particularly key during the recent Covid-19 pandemic.
Industry leaders detailed those skills and provided encouragement for growing women leadership during the Women in Breakbulk sessions during the Breakbulk Middle East Digital Special.
Two industry veterans kicked off the session with an overview of key industry topics impacting women, followed by sessions covering The Many Paths to Female Leadeship: A Career Blueprint and How Women are Contributing to a Post-Covid Business Recovery.
ACHIEVING PARITY
positions will build the pipeline towards equality globally, she explained.
“It’s not a country-specific project; it’s the same things affecting us. We’re a global sector and we have global issues.” Sue Terpilowski is striving to “create an attractive, smart and sustainable working environment for the EU shipping sector” for women, in her Sue Terpilowski roles as president of WISTA UK; WISTA director of Imageline; and co-chair of the Diversity in Maritime Taskforce, Maritime UK.
“We’re going to do an intensive research campaign into enhancing recruitment to retention of women in the industry,” she said.
Despite cultural advancements, there remains a lack of gender-friendly legislation and policies that provide women equal opportunities across all sectors, she said.
Increasing retention and progression of women into middle and senior
Henadi Al-Saleh started her career with Agility in 2007 and rose to chairman. She acknowledges her corporate stature is unique. Women represent less than 20 percent of management board members of top companies in the logistics, while women serving on management teams rank from 17 percent to 30 percent.
“This is largely because of the history of the logistics industry,” she said, noting certain sectors such as road freight and warehousing are “predominantly male.”
Ecommerce in the Middle East is working towards a gender balance, Al-Saleh maintains, as small and medium-sized enterprises are utilizing technology to growth cross-border trade. “From our own research and research echoed by the World Economic Forum … one of every three businesses are led by a woman, and that is fabulous news.”
Al-Saleh offered three key pieces of advice for women’s success in the industry. First is to make sure you have a strong network, both personally and professional, to make sure you’re plugged in and are supported in your leadership. Second, “speak up and participate. As (author) Sheryl Steinberg would say, ‘lean in.’ “
Lastly, her advice – for men as well as women – “don’t just be good, be awesome.” BB
Watch a replay of Women in Breakbulk Leadership Forum at
https://youtu.be/0DQ0tVFZVrw
RELATED STORIES
https://www.breakbulk.com/Articles/how-women-are-contributingto-post-covid
Panelists: Jasmine Fichte, Fichte & Co.; June Manoharan, Lukoil Marine Lubricants DMCC; Nicola Good, Lloyd’s Register; Noura Al Shamsi, Arab Academy for Science, Technology and Marine Transportation; and Rania Tadros, Ince & Co. Middle East.
https://www.breakbulk.com/Articles/many-paths-to-female-leadership
Panelists: H.E. Eng. Hessa Al Malek, The UAE Ministry of Energy and Infrastructure; Ghazalah Moloobhoy, Moloobhoy Marine Service LLC; Rania Tadros, Ince & Co. Middle East; Kateryna Yakunchenkova, Al Safina Security; and Parisa Kaveh, Nostrac Shipping Co.
