Boosting
DIGITAL TRANSFORMATION
SHIPA DELIVERY, PREMIER LOGISTICS AND SHIPSY HEADS REVEAL HOW TECHNOLOGY IS RESHAPING THE INDUSTRY
SURGING AHEAD
Deepak Khushalani
The Founder & Chief Executive Officer of Premier Logistics tells us about his vision for the company, how technology is at the forefront and the newly launched verticals
20 INTERVIEW
SIMPLIFYING LOGISTICS
Soham Chokshi, Chief Executive Officer, Shipsy, talks us through the inception of the company and how technology is crucial to the success of logistics and supply chain
24 INTERVIEW
SURGING AHEAD
Deepak Khushalani, Founder & Chief Executive Officer, tells us about his vision for the company
28 INTERVIEW
SOLUTION ORIENTED
We sit down with Borhene Ben Mena, CEO Shipa Delivery, to talk about the challenges in the market, the solutions and how technology is an integral part of logistics
30 LEARNING & EDUCATION
KNOWLEDGE IS POWER
The logistics and supply chain sectors are undergoing substantial shifts. Here, we learn how professionals can be a part of that change by undertaking specialised courses to stay relevant and build on their expertise
34 OP-ED WINDS OF CHANGE
For an industry that stubbornly stayed away from digitisation for decades, the turnaround has come quite quick thanks to the pandemic
36 E-COMMERCE
THE ECOMMERCE CATCH 22
Consumers have well and truly begun to embrace the selection and convenience of eCommerce, but at what cost, writes Niranjan Gidwani, Consultant Director, member of UAE Superbrands Council and Charter Member Tie Dubai
40 EXPERT INSIGHT BOOSTING VISIBILITY IN AN INTERCONNECTED WORLD
Here, Maersk experts decode how FMCG corporations are reinventing their supply chains to get on with the times
42 MAINTENANCE
SANAD LAUNCHES NEW STRATEGY TO LEAD NEXT PHASE OF GROWTH The new approach will enable Sanad to become a national powerhouse of industrial services for Abu Dhabi and the UAE
RECOGNIZING THE ACHIEVING WOMEN OF MIDDLE EAST AND AFRICA
VIRTUAL EVENT
MARCH 29, 2022
As a celebration of women business leaders across the Middle East and Africa, Mastercard has partnered with Entrepreneur Middle East to present the first ever Women SME Leaders Awards 2022. We are inviting every women SME leader across all walks of lifeindividuals and organizations- to take part.
There are no costs for attending or nominating at this event. Good luck to all and let’s celebrate women SMEs together!
Yet another month has gone by so quickly with many exciting happenings in the logistics and supply chain sectors. There’s never a dull day in this industry and we’re witnessing how technology is revolutionising this field. For a sector that was slow to get on the bandwagon, now is reliant on tech to survive and thrive.
Digitising is the only way forward; we hear as we speak to three leaders of successful start-ups. They’ve led their companies to great achievements as they were early adopters of technology in this space.
Logistics and supply chain are complex functions that have proved to be critical to economies, and the was brought to light during the pandemic. While there’s a lot being done to get supply chain and logistics digitised, there’s a long way to go and we’re just starting this journey.
In this issue, we also learn how professional courses in supply chain management and logistics is helping build a more knowledgeable industry. Its important to have the most relevant and updated knowledge and expertise to thrive in today’s world.
For this reason, we’re hosting our first ever logistics forum on 29 March at Sofitel Dubai The Obelisk where industry experts will share their experience and talk about trends and challenges in the industry. We have a robust lineup of speakers, and we urge you, our readers, to come and listen to what they have to share with us.
For your free seat, visit our website or social media channels to find the registration link. See you all at the Logistics News ME Forum.
Jochebed Menon
Editor, Logistics NewsMiddle East jochebed@bncpublishing.net
CEO Wissam Younane wissam@bncpublishing.net
DIRECTOR Rabih Najm rabih@bncpublishing.net
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EDITOR Jochebed Menon
EDITORIAL DESIGN Christian Harb
MARKETING EXECUTIVE Aaron Joshua Sinanbam aj@bncpublishing.net
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Divetech Marine Engineering Services, a UAEbased topside-subsea solutions provider that offers a range of services including installation, inspection, repair and maintenance for ports and other maritime organisations, has been acquired by AD Ports Group.
The acquisition and integration of the company into AD Ports Group will extend the range of services offered by the Group’s maritime cluster, placing it in a strong position to generate significant commercial, operational, and financial synergies.
The 100% acquisition will be fully funded from AD Ports Group’s existing cash reserves. Divetech delivered revenue of Dhs87 million and EBITDA of Dhs20 million in 2021.
Captain Mohamed Juma Al Shamisi, Managing Director
and Group CEO, AD Ports Group, said: “Our acquisition of Divetech represents an important strategic opportunity for growth, enabling us to integrate a dynamic company with a significant pipeline of potential new business into our operations. This acquisition also enables our Maritime Cluster to provide a fully holistic service offering that includes undersea inspection, maintenance and repair.”
Capt. Maktoum Al Houqani, Chief Corporate Authority Officer and Acting Head of Maritime Cluster, AD Ports Group, said: “This acquisition provides a strong strategic fit for our existing portfolio of services and our plans for growth. Divetech is a leader in diving and marine services in the UAE, with a well-respected track record and diverse customer base. It has also delivered impressive top-line growth over the last three years.”
AUTONOMOUS SHIPPING VIRTUAL FORUM HIGHLIGHTS CHALLENGES AND FUTURE INSIGHTS
The Ministry of Energy and Infrastructure (MoEI) organised a virtual forum titled ‘The Future of Autonomous Vessels in Maritime Shipping’ as part of its activities during the Innovation Month, held under the theme ‘UAE Innovates 2022’.
Representatives from various sectors of the regional and global maritime industry such as A-Navigation, have tackled developing autonomous vessel technologies worldwide.
Speakers discussed the need to empower maritime operations and ensure efficient port management with Artificial Intelligence (AI) and new technologies. They also highlighted the advantages of autonomous vessels from the operations, environment and safety perspectives, the added value of such ships to the industry as well as the accompanying challenges, especially in light of the effects of the Covid-19 pandemic on the shipping sector.
Participants also underlined the importance of strategic partnerships in developing autonomous vessel technologies and automating marine operations to benefit the shipping sector worldwide.
Eng. Hassan Mohammed Juma Al-Mansoori, UnderSecretary for Infrastructure and Transport Affairs, MoEI said: “At the Ministry of Energy and Infrastructure, we promote the UAE leadership’s objective of adopting digital solutions and keeping pace with the latest global developments, especially in the maritime sector. These efforts have contributed to enhancing the UAE’s global competitiveness in the sector. The country ranks 3rd globally in transport services trade and the Bunker Supply Index.
“Our ports are among the top 10 internationally, in terms of container handling capacity. We were pleased with the
participation seen in this forum that discussed the latest developments and key challenges in autonomous and remote-controlled ship technologies, and their role in ensuring uninterrupted supply of vital goods, especially during global crises. The Ministry seeks to cooperate with the relevant bodies and organisations to develop legislation and laws that regulate the design, construction and operation of such vessels, while also ensuring their suitability for the marine environment.”
The UAE has over 20 leading international seaports and some of the largest oil export ports in the world. It is the headquarters of Abu Dhabi Ports Group, the developer of Maqta Gateway, the UAE’s first digital port community powered by blockchain.
The country is also home to DP World, the leading enabler of smart trade, which has launched several innovative platforms and products that have reshaped the international supply chain. These include Dubai Trade, a one-stop shop for cross-border trade and SeaRates, which provides instant and live rates for container shipping.
The company recently launched CARGOES.com, a platform that provides integrated solutions for financing and shipping goods around the world. Additionally, DP World has transported more than 10,000 containers through the BoxBay intelligent High Bay Storage (HBS) system and, in partnership with Hyperloop One, it is developing a highspeed ‘Cargospeed’ system to transport goods in pods that move inside vacuum tubes at a speed that is equal to planes but on land.
In a recent development concerning autonomous tugs, Abu Dhabi Ports is collaborating with Robert Allan Ltd., to develop the world’s first fully unmanned autonomous commercial marine tugs. These vessels, which will have greater capabilities to operate in adverse weather conditions, will join SAFEEN, Abu Dhabi Ports’ maritime service arm. This will help increase efficiency and enhance operational safety.
FarEye, a global SaaS platform provider transforming last-mile logistics, announced several new capabilities for more environmentally sustainable delivery operations, route optimisation, and consumer experience.
New capabilities across FarEye’s Intelligent Delivery Management Platform are designed to help customers boost delivery efficiency, enable green fleets, and gain visibility into outcomes of sustainability initiatives.
“We are partnering with our customers using our optimisation and visibility solution to optimise fleets and reduce emissions while delivering delightful experiences to their end customers,” said Suvrat Joshi, chief product officer at FarEye.
“In a world shifting towards prioritising environmental sustainability, we are dedicated to complementing and supporting our customers’ sustainability goals. In 2021, customers that used our platform collectively helped reduce
carbon footprint by 40,961 tonnes. We see this number continue to increase as our customers adopt and use these new capabilities across first, mid, and last mile in their delivery network.”
FarEye’s four new sustainability capabilities have been developed to help both shippers and carriers minimize CO2 emissions throughout their logistics operations, addressing end consumers’ desire to have their online orders delivered on time and with minimal or zero carbon emissions. These features include:
Green Vehicle Route Planning: Enables customers to design and plan last-mile delivery of products with an intelligent mix of green fleets (cargo bikes, bikes, and foot delivery), to achieve on-time delivery ultimately driving high consumer satisfaction with minimal or zero carbon footprint.
Long-Haul Truck Route Planning: Allows carriers to design optimal multi-day, long-haul trucking routes to minimize idling times, avoid roadblocks and reduce fuel consumption. FarEye’s algorithm facilitates long-haul deliveries with multiple drivers to swap driving shifts and meet the legal norms of on-road driving requirements. Carriers can not only achieve sustainable goals but also meet their OTIF targets.
Carrier Allocation System: Helps brands select suitable delivery partners for different types of shipments to improve their first attempt delivery rates, minimize delivery re-attempts and damaged goods deliveries, and avoid repeated transport and corresponding carbon emissions. This goes hand-in-hand with a strong focus on ensuring a higher percentage of first attempt delivery rates to build and sustain a loyal customer base.
Sustainability Dashboard: Provides a visual representation specifically measuring carbon footprint KPIs for the customer, helping them understand carbon emissions breakdown by mode, route and carrier. The dashboards are designed to scale to be granular enough to measure package-level emissions. The dashboard also provides the ability to track and control CO2 emissions across all modes of transportation (road, rail, ocean, and air) and benchmark thirdparty carriers and routes with the least CO2 emissions.
LEISURE MARINE INDUSTRY WELCOMES RETURN OF DUBAI INTERNATIONAL BOAT SHOW
Dubai International Boat Show 2022, the Middle East’s largest and most-popular leisure marine event, will take place at Dubai Harbour, its glistening new home, from 9 to 13 March.
The emirate’s nautical showpiece is celebrating its 28th edition and will mark the regional yachting industry’s first large-scale, in-person event since the COVID-19 pandemic. Organised by Dubai World Trade Centre, the five-day show will be the first to take place at Dubai’s ground-breaking new marina, reuniting the region’s maritime community.
Dubai International Boat Show 2022 is set to welcome over 400 boat, yacht and watercraft brands including the world premiere of Sunreef’s 80 Eco Line, a glimpse at the all-new Princess Y85, and a regional debut for San Lorenzo’s innovative SX88. A jaw-dropping line up of more than 50 floating mansions from some of the world’s leading marques, such as Feadship, Majesty, Nomad, Cranchi, and Lurssen, will also be on show.
With DIBS 2022 providing an iconic backdrop and meeting ground to rein-
vigorate the global industry, Trixie LohMirmand, Executive Vice President, Events Management, DWTC, believes the eyes of both the regional and international yachting communities will be fixed on the Emirate once more.
“As Dubai International Boat Show moves into its new home, Dubai Harbour, we look forward to enhancing Dubai’s status as an internationally renowned superyachting destination,” she said.
“The challenges of the last two years have sparked a desire for a more outdoor, spatial lifestyle, which in turn promise new growth opportunities for the industry. The leisure marine sector has continued to thrive in this period, while building on its ability to attract a wider and more diverse buyer base. Dubai International Boat Show offers that pivotal platform and opportunity for buyers and enthusiasts to finally appreciate the offerings of yachts, boats and accessories in their search for a creative and empowering passion.”
Next month’s show will feature an eclectic range of marine attractions, from the world’s biggest, most advanced superyachts to small fishing craft and rec-
reational water-sports equipment. With a host of networking activities designed to boost knowledge and foster business across the industry, the event is a unique platform for the global yachting and nautical lifestyle communities.
Dubai International Boat Show 2022 is set to enhance the maritime prospects of an already vibrant region for the global industry. The MENA region boasts the world’s second-highest fleet-to-billionaire ratio, while Dubai ranks among the top10 nautical capitals internationally with 15 marinas providing more than 3,000 berths.
Dubai Harbour is the emirate’s undisputed nucleus, boasting 700 berths and the city’s first dedicated superyacht marina, which can house craft up to 160m in length. The emirate’s maritime sector accounts for approximately 7% of its GDP, the equivalent of AED 26.9bn. Now, with Middle Eastern owners accounting for 12.6% of the world’s superyacht fleet, the show’s Superyacht Avenue has attracted a stellar flotilla of the world’s biggest, brashest, and most luxurious and technologically advanced vessels.
Numerous elite superyacht builders are set to unveil their latest craft and products – including SuperYacht Builders Association members Lurssen and Oceanco, who lead a cast that also features mainstream superyacht brands such as Azimut, Cranchi, Feretti, Gulf Craft, and Princess Yachts.
DIBS 2022 will include a ‘Proudly UAE’ initiative, designed to celebrate the best local talent from across the country. The initiative will increase the global brand exposure of local retail brands such as Al Rubban Marine, Julfar Craft, and Al Mazrooei Boat, among many others. Homegrown brand Gulf Craft will launch several yachts throughout the five-day show.
“Dubai has established itself as a globally renowned city, bringing the world’s attention to the UAE and the entire Middle East region,” said Mohammed Hussein AlShaali, Chairman, Gulf Craft. ‘As one of the world’s emerging yachting hubs, it is no surprise that the Dubai International Boat Show is one of the most sought-after industry events that has gained prominence on the international stage.”
FEDEX EXPRESS EXPANDS PRESENCE IN EGYPT TO BOOST GROWING TRADE REQUIREMENTS
FedEx Express announced its transition to a direct-serve presence in Egypt, to meet the country’s growing international shipping demands.
FedEx Express has been facilitating trade in Egypt since 1994, offering its international solutions and connectivity through local service providers, most notably through Egypt Express since 1998.
The company’s transition to a direct presence in the country will support a diverse range of customers from across different industries to trade with ease and expand their reach into the more than 220 countries and territories FedEx serves, while Egypt Express continues to provide the local infrastructure for ground operations.
With nearly 50 years of experience, specialized services, and advanced technology solutions, FedEx will support the trade requirements of the growing e-commerce and tech markets, as well as energy, chemicals, textiles and apparels, food processing, petrochemical, and other sectors.
Jack Muhs, regional president of FedEx Express Middle East, Indian Subcontinent and Africa, said, “Today, we are closer to our customers than ever before, offering direct access to a dedicated FedEx support team, an extended portfolio of international services, and digital tools that meet their needs. This strategic expansion in Egypt will help local businesses connect to more markets and customers around the world, supporting Egypt’s sustainable development goals under the country’s Vision 2030 to diversify the national economy.”
“With a GDP of USD406 billion in 2021, Egypt is the third-largest market in the MENA and Africa regions. Its strategic location in Africa, and proximity to the Middle East, Europe, and Asia, makes Egypt an ideal gateway for international trade. Thanks to the positive transformations in the country’s logistics sector, many companies have reported that they plan to shift their production line or expand their existing production line in the country, providing
logistics companies like FedEx a wide range of opportunities,” continued Muhs.
FedEx Express will continue to leverage the capabilities and infrastructure of Egypt Express who will provide pick up, delivery, and customs clearance services across the country.
Ahmed Shaheen, chairman of Egypt Express said, “There are several positive indicators towards the growth of the logistics industry in Egypt, contributing towards employment, investment, and overall economic growth in our nation.”
“We are proud to see FedEx expand its presence in Egypt. This expansion is a testament to the huge impact that Egypt Express’ operational excellence has on the FedEx international services in Egypt since 1998. Egypt Express will continue to support FedEx by providing the state-of-the-art infrastructure of its newly opened 13,000-sqm Egyptian Cargo Center in Cairo International Airport, operating 51 retail locations in 25 governorates, and utilizing more than 360 vehicles to serve its operations in Egypt,” added Shaheen.
DUBAI COMMERCITY LAUNCHES PARTNERSHIP PROGRAMME TO SUPPORT ECOMMERCE COMPANIES
Dubai CommerCity has launched a ‘Dubai CommerCity Partnership Programme’. The programme seeks to build strong partnerships at a global level to provide businesses established in the free zone with specialised services in diverse fields.
Dubai CommerCity’s programme comes in line with the free zone’s efforts to provide a first-of-its-kind system in the MENA region to support eCommerce companies in every stage and throughout their operations. The Program aims to provide the free zone’s customers with the required services through its partners, in accordance with the best technical specifications and the highest levels of quality standards.
Dubai CommerCity invites companies that provide specialised services for business setup, strategy consulting and business advisory, eCommerce platforms and services, warehousing and last mile delivery, digital marketing, and other services related to eCommerce, to apply for the programme via the free zone’s official website and present
their portfolio of services and relevant quality certificate.
On another note, Dubai CommerCity launched a new incentive package, which emphasises its strategic role in bolstering the growth of the eCommerce sector in the UAE and the region.
The package provides different types of businesses, in all shapes and sizes, with tailored services, which cover establishing a business, registering a company, reserving office space and warehouses, consultations, and more. Interested parties can contact the free zone via its official channels.
With an area covering 2.1 million square feet and an investment of around Dhs3.2 billion, Dubai CommerCity is uniquely designed to support new and existing ecommerce businesses across the MEASA region. Dubai CommerCity includes state-of-the-art offices, as well as warehousing and last-mile delivery services. With its world-class infrastructure, the free zone provides flexible office sizes and scalable fulfilment centres, which offer various dedicated solutions for eCommerce businesses.
TRADELING ANNOUNCES REVENUE GROWTH OF OVER 1200% SINCE INCEPTION TWO YEARS AGO
Tradeling, MENA’s e-marketplace focused on business-to-business (B2B) transactions, recently celebrated two years of being the main search and sourcing tool for business buyers across the region.
Tradeling has seen an exponential revenue growth of more than 35% month on month since its inception and its product selection increasing to over 700,000. Today, Tradeling has over 126,000 registered buyers and sellers from over 55 countries and has seen a notable 70,000 requests for quotations and inquiries.
The past two years have seen Tradeling partner with over 20 like-minded entities and trade associations around the world, reinforcing Tradeling’s offering to successfully connect global suppliers with MENA-based demand.
Its dominance has been a result of Tradeling’s non-stop advances that leverage the latest technology to optimise the supply chain and create economic value in addition to mitigating risks. Through website localisation, the Tradeling logistics system, and the release of the edukaan Mobile App
and Tradeling Buyer App, Tradeling has and continues to enable rapid growth and market dominance.
As Tradeling ventures into its third year, it boasts a growing team of over 200 tech and business enthusiasts that is set to reach 450 people by the end of 2022 as it expands to Egypt and Saudi Arabia.
This expansion will continue to see Tradeling support MENA-based buyers to find the right products and materials, engage with new suppliers, and deliver end-to-end services for business-to-business trade engagement.
Marius Ciavola, Chief Executive Officer at Tradeling, said: “We give our users what they never thought they needed, and this has been the backbone of our rapid success over the past two years. The future of trade is digital, and we are continuing to grow our team and expand our digital ecosystem in the most user-friendly and convenient manner by enabling businesses around the world to trade through a single, seamless and reliable digital platform.”
Tradeling ensures a reliable and smooth trade process in addition to providing logistics and financing solutions.
AD PORTS GROUP TO DEVELOP 3.3 SQ KM REGIONAL FOOD TRADING AND LOGISTICS HUB
AD Ports Group has partnered with multi-business conglomerate Ghassan Aboud Group to establish one of the region’s largest multi-category wholesale food trading and logistics hub in KIZAD in collaboration with Rungis.
The project was announced at the official project launch ceremony held on-site in KIZAD.
The ‘Regional Food Hub – Abu Dhabi, in collaboration with Rungis’, will bring together wholesale buyers, sellers, logistics players, consolidators, and distributors from across the world, enhancing the diversity of all food categories available for consumers in the UAE and wider region.
Rungis International Market is the largest wholesale fresh food market in the world. It currently hosts 1200 companies, serves 18 million consumers, and has a turnover of EUR10 billion.
The project will partner with the world’s leading wholesale market players to ensure the services, facilities and systems are world-class and the site is sustainable, hygienic and a zero-waste ecosystem to cater to post-pandemic requisites.
It will facilitate trade across proteins, seafood, pulses and rice, fruits, vegetables, dairy products, dry foods and fresh flowers.
Food companies from all countries can offer their products and buyers will have a selection of thousands of fresh items managed in a safe, clean environment positioning the UAE as an important part of evolving global food supply chains.
Covering a land area of 3.3 sq km in KIZAD, the Regional Food Hub – Abu Dhabi will be one of the largest of its kind in the region. Its ecosystem will feature trading pavilions, logistics services, refrigerated and ambient warehouses, critical government services, waste Recycling facilities and various other support amenities and services.
The project is designed to accelerate the government’s National Food Security Strategy and enhance food trade flow through Abu Dhabi. By lowering the overall supply chain costs of food products, the food hub will provide a competitive ecosystem for both local and global players.
Ghassan Aboud Group is an international conglomerate engaged in several key business sectors, including FMCG Distribution, logistics, supermarkets, catering and businessto-business digital platform for food and FMCG distribution. Its food and retail businesses have pioneered a range of key sustainability and food technology processes in recent years. With its participation across the food value chain, the Group is committed to facilitate uninterrupted supply of quality food products to the UAE’s and regional consumers.
KIZAD provides a fully integrated trade and logistics platform for food companies looking to expand in the region. Located near Khalifa Port, KIZAD enables multimodal connectivity via sea, air, road and rail networks in the future, with world-class infrastructure as well as water and electrical power at a competitive rate.
Its integrated service offerings include aluminium, paper and packaging, and food processing providers, enabling companies that use the food hub to benefit from significant economies of scale in the preparation and transport of their products.
The ‘Regional Food Hub – Abu Dhabi’, in collaboration with Rungis will also leverage cutting-edge technology to offer a digital marketplace that will provide a range of services for tenants and customers to increase adoption and ensure continuity while easing business by supporting key synergies between Abu Dhabi’s government entities and trade enablers.
SIMPLIFYING LOGISTICS
Soham Chokshi, Chief Executive Officer, Shipsy, talks us through the inception of the company and how technology is crucial to the success of logistics and supply chain
Tell us about Shipsy and the idea behind this platform.
Shipsy, founded in 2015, is a SaaS company focused on the logistics tech space. We work very closely with retailers and logistics and manufacturing companies. The platform helps all these companies get visibility of all their shipments, reduce costs, and au-
tomate a lot of the manual processes, leading to much superior customer experience.
In a world where each of us as endconsumers really want our deliveries to happen quickly, even in 10 or 15 minutes, the expectations have gone high. This has put a lot of responsibility on all the players, whether it be
“The big driving factor for us was the size of the opportunity and the value we could create.”
the logistics company delivering the goods, or the retailer selling it, or the manufacturing company supplying the goods. What technology does is meet these expectations, but at a reasonable cost.
And that is where a company like Shipsy comes in. What sets us apart is our ability to merge different scenarios such as stocking, warehousing, and delivery of goods, especially right from 10-minute delivery to three-to-fiveday delivery, on to one platform. The other differentiator is the fact that we also combine information on container space, helping retailers manage shipments across both shipment legs.
Ever since the pandemic hit, there’s been this huge push towards direct-toconsumer and faster deliveries. This has had let to high expectations. And this has been really fuelling our growth in a big way.
In terms of the company itself, we have offices across Dubai and India, we have a large customer base across the Middle East mainly in Dubai, Saudi Arabia, Egypt, and Kuwait. We also operate in Southeast Asia. Financially, we’re backed by Sequoia Capital. Pan Emirates, Aster DM Healthcare, Gulf Marketing Group, Zajil, Flow Progressive Logistics, Saab Express, and Sun & Sand Sports to name a few are our clients in the Middle East.
Why logistics?
Logistics is a multi-trillion-dollar market and is still largely under penetrated. When we launched our platform in 2015, eCommerce was on the rise
in India, and we saw the expectations customers had from this sector. Our research revealed that most of the systems that these companies used were in-house platforms not really made for the new age customer.
So, we built a platform for the supply chain and logistics sector that integrates all the essential processes into a single system – a programme that connects the retailer with the logistics company, the manufacturer, the driver, and the end consumer all together on one single technology platform.
The big driving factor for us was the size of the opportunity and the value we could create.
How has your journey been so far?
It’s been extremely fulfilling. What we really pride ourselves in is that large enterprises have trusted us with their logistics. Especially in India, the country’s largest retailer – Reliance Retail
has its entire distribution powered by Shipsy. Other customers include, DTDC, Domino’s Pizza and Zepto, a 10-minute grocery delivery app in India.
Similarly in the Middle East, especially Saudi Arabia, conglomerates have entrusted us with their distribution. A crucial change we’re witnessing is how large enterprises are putting their trust and faith in start-up companies, like us, for something as critical as logistics.
If you’re a company that is selling goods, a very large portion of your responsibility is to get those goods to customers in the best possible manner. We are glad to be part the shift where large firms are entrusting start-ups with critical responsibilities, and to be educating customers to explore platforms like ours and see the benefits of implementing software company platforms.
“The pandemic has further accelerated our business. Companies who were unsure about digitisation prior to the pandemic have now fully digitally integrated their business.”
Compared to India, what makes the Middle East a key market for Shipsy?
While India is our large market, the Middle East comes pretty close in terms of revenue contribution. We entered this market in 2019 when a few our clients began dealing with firms in this region. Through that network we got introduced to customers in the region. As a start-up we’re grateful for the business we’ve received from the region and the trust customers have had in our product.
Retail has been one large area of interest for us. When we started it was more around furniture, apparel, and electronics, however over the last year or so the whole hyperlocal logistics has come to the fore. Food, grocery, and medicine companies are adopting these platforms for quick and hyperlocal deliveries.
The pandemic has further accelerated our business. Companies who were unsure about digitisation prior to the pandemic have now fully digitally integrated their business.
How has the supply chain crunch impact your business?
Here’s where visibility has become crucial. When container supply starts getting scarce, every container coming in becomes very valuable. As a customer,
From L to R: Soham Chokshi, CEO and Co-founder; Dhruv Agrawal, COO and Co-founder; Himanshu Gupta, CTO and Co-founder; and Sahil Arora, VP and Co-founder.
you would want to know exactly where the container ship is, when it is going to arrive, if it is delayed, how long is the delay going to take, and how those feed into your supply chain, etc. So, essentially as supply becomes limited customers want more visibility. Additionally, because of the high freight rates and the variation in rates a digital platform is required to provide price comparison and visibility in real time. The past two years has been a great learning curve for us, and we’re extremely thrilled to have served our customers well.
The larger driving force, post the pandemic, has been this massive need for all retailers and logistics companies to build their direct-to-consumer practice. They’ve realised that they need be able to do flexible and deliveries. Two-year plans soon turned into a two-month plan as soon as a pandemic came in.
What’s next for the last-mile delivery sector?
While the deliveries times have reduced to same day and within four to eight hours, consumers are also getting a lot more discretionary. They are looking at sustainability very seriously. Customers want their items delivered in a more sustainable manner whether it be via bicycles or electric vehicles/ bikes. Eco-friendly packaging is another area of focus.
Cost will become a natural driver of push towards sustainability. We’re begin to club orders to reduce the distance travelled, we offer adaptive clubbing, the system automatically starts matching orders that are in the same direction and allocating it to optimise the routes in real time. This really helps one: from a cost and two: from a sustainability perspective. I personally see this going away from our big focus on speed to sustainability.
Is this an opportunity as well as a challenge?
Sustainable practises are always going to be challenging for business. Companies across the globe are focusing reducing their carbon footprint. And logistics happens to be a big contributor to carbon footprint. So how do you measure it, how do you choose
“Sustainable practises are always going to be challenging for business. Companies across the globe are focusing reducing their carbon footprint.”
better options that are more sustainable in real time and how to deliver to customers in a more sustainable way are some of the questions.
Here’s where a sustainability dashboard comes into play that depicts real time reduction in distance travelled by clubbing orders, type of vehicle used, etc.
Compared to India, I think the Middle East is a little behind in its journey towards sustainability. In India, we see a lot of options in last mile delivery vehicles. Electric vehicles and bicycles are being used for a shorter distance, and a lot more focus on packaging. Having said that things are changing fast. I didn’t think it would have transformed that quick, but they have. Even in terms of adoption of technology. Companies we thought would take five to six years to onboard latest technologies have done it within a sixmonth period.
What’s on the horizon for Shipsy?
We have a strong presence in Saudi Arabia, Egypt, and the UAE. We’re looking to expand to the rest of the Middle East – namely Oman, Bahrain, and Qatar. Europe and Southeast Asia is on our radar too. Shipsy will set up an office in Indonesia in a couple of months to serve Indonesia, Philippines, and Thailand.
cleaner future
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DEEPAK KHUSHALANI Surging Ahead
The Founder & Chief Executive Officer of Premier Logistics tells us about his vision for the company, how technology is at the forefront and the newly launched verticals
What’s the year 2021 been like for Premier Logistics?
The year was challenging for all businesses. COVID-19 and the economic fallout have highlighted the weak points in companies’ strategy, inventory, marketing, and transportation. If the pandemic has taught us anything, it is how to be agile. Companies are learning to adapt and innovate to meet these new challenges.
Anticipating future trends in the face of so much uncertainty is more vital than ever. For Premier Logistics the first half of the year was quite challenging, the uncertainty due to the prolonged nature of the pandemic and continued disruption in businesses for our customers made planning for the year quite difficult. However, in the second half, we seemed to observe momentum of inbound and outbound cargo for the larger clients, and an increasing lead pipeline for SME’s resuming their business orders and cargo movement.
Since the firm’s establishment in 2016, you’ve grown leaps and bounds, was this how you envisioned Premier Logistics? Where do you see the company in the next 10 years?
Over the last few years, we at Premier Logistics have moved towards an agile and asset-light strategy proving ourselves more resilient during the pandemic. Our asset-light model helps us serve numerous customer segments through numerous logistics networks that are based on shared assets and that leverage partners and digital tools to foster large-scale agility and responsiveness.
The last few years was primarily to establish our foundation within the industry and to introduce various verticals within the organization which we have successfully achieved. Premier Logistics successfully established a Finished Vehicles Logistics (FVL) division in collaboration with a leading vehicle distributor in the Middle East.
Moreover, we have also developed an inhouse VAS department currently catering to over 70 brands within the Middle East, providing services such as co-packing, shrink-wrapping, labelling, barcoding, repackaging and much more. Due to the rapid expansion of our business, we have also managed to secure additional storage
“FOR PREMIER LOGISTICS THE FIRST HALF OF THE YEAR WAS QUITE CHALLENGING, THE UNCERTAINTY DUE TO THE PROLONGED NATURE OF THE PANDEMIC AND CONTINUED DISRUPTION IN BUSINESSES FOR OUR CUSTOMERS MADE PLANNING FOR THE YEAR QUITE DIFFICULT.”
facilities (open yard and bulk storage) for project logistics with services such as lashing and crating for bulk items.
The strategy for the first five years of our journey has been accomplished to a great extent, but the next 10-year goal is to grow our profile substantially in terms of our employee base, turnover, and expansion into the wider GCC. These next few years are crucial in the sense of expansion and growth of technology in the business, where we are looking to be a major player in supporting the eCommerce sector as well as agency agreements where we see great growth with larger players globally.
Tell us about your newly developed Finished Vehicles Logistics (FVL) division
We have been offering dedicated logistics services for an automotive major in the UAE. Service offering includes collection from the manufacturing plant in China, inland movement, freight (between 50-100 cars every 45 days), customs clearance
at Jebel Ali Port and carriage to yard for storage. Thereafter managing the local deliveries to their showrooms.
This project continues to grow and develop as we expand our footprint in terms of the space that is utilised not only for new cars but classic cars as well. This includes customs clearance, car maintenance (regular start etc.), delivery to local market to distributors as well as export clearance mainly to Africa.
What are some of the new verticals you’ve launched in 2020/2021?
Our continued focus has been to strengthen our value-added service division, which includes car lashing services. The expertise we have has expanded our volumes both inside and outside the free zone. Additionally, a new vertical as part of the value-added division has been packing and segregation of FMCG goods and Textiles, this is a specialised job that requires packaging adhered to certain specific standards. >>>
The automotive logistics sector has been booming in the past quarter. How has this impacted your business?
We have seen major operational limitations due to the Covid-19 pandemic, leading to shipment delays, port congestion, and higher freight rates. Supply chain issues impacted inventory wherein demand exceeded supply in the H1 of the year 2021, however, we work very closely with our clients and have seen an improvement in the movement due to our meticulous supply chain planning program along with their supply chain teams to ensure timely delivery and a uninterrupted supply chain.
What have been some of the key challenges you’ve encountered in the past two years?
The current health pandemic (COVID-19) has created quite a few challenges – urgent measures that had to be put in place, paramount being the safety of our staff, operational hurdles that had to be conveyed to our clients and how the organisation would work around new ways of doing things but ensure that we continue to operate as efficiently as possible.
We, at Premier Logistics, have seen major operational limitations which have led to delivery delays, congestion, and higher freight rates. However, not all segments have been impacted equally—companies that serve e-commerce are seeing increased activity as consumers opt for online shopping of essentials, while those that serve other sectors (such as retail consumer goods and automotive) are seeing a downturn in their business.
We realized that strength & resilience of employees was our key to overcoming obstacles posed by COVID-19 in the last 2 years.
The logistics sector is undergoing a major revamp with technology at the core. What role does technology play at Premier Logistics?
Premier Logistics’ primary focus is to put our efforts towards creating value for all our clients and being able to build innovative solutions to ensure the highest quality in warehousing and distribution. With our recent focus primarily on digital transformation of the age-old Logistics industry, Premier Logistics has been consistently moving towards providing innovative solutions within the industry. With the pandemic, we all realized the
changes in consumer behavior and the quick adaptability of the consumer towards technology - primarily Ecommerce and online shopping. These shifts in consumer behavior caused by the pandemic are expected to be the “new normal”.
As demand has spiked massively following the Covid-19 outbreak and social distancing measures are being taken by governments around the world, the ability for retailers to make products accessible to consumers is affected by two major factors: stock availability and delivery capacity. We at Premier Logistics feel that last mile delivery has always been an important element of the eCommerce customer experience.
What major changes do you see taking place in the logistics and supply chain industry?
The last two years were challenging for all businesses. COVID-19 and the economic fallout have highlighted the fragile points in companies’ strategy, inventory, marketing, and transportation. If 2020-2021 has taught us anything, it is how to be agile. Companies are learning to adapt and innovate to meet these new challenges.
Anticipating future trends in the face of so much uncertainty is more vital than ever, and some future trends according to me are as follows:
Warehousing
Companies are looking towards better digital integrations of their supply chain. Now, trade flows are at the highest from across the globe - thanks to digitization. The transition of offline to online and larger inventory levels held by e-commerce
players in the region, will speed up the warehousing demand further.
Managing Customer Expectations:
Due to a sudden surge in technological advancements, information can now be easily accessed by customers, resulting in higher expectations from companies within the logistics industry. Customers are now turning towards companies with a digital footprint and logistics companies have to embrace this digital change immediately or risk going out of business.
Collaboration
Premier Logistics primary belief has always been of collaboration, and we feel that it is the perfect time for an assetlight approach and collaboration-heavy approach. Companies with heavy assets on their balance sheet will face difficulties for the next few years to recoup from the costs sustained during the pandemic. We all know that several sectors will continue to grow amidst the new normal - sectors such as e-commerce, last mile delivery, warehousing services for basic needs and retail goods will see continuous growth. Therefore, it is time to collaborate and synergize with organizations that can utilize each other’s strengths.
Risk Management
Risk management will be of utmost priority for all logistics companies. While shippers and 3PL’s are learning to adapt and innovate, they will also need to plan their readiness for any contingencies and business continuity as areas in most need of strengthening post-pandemic.
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SOLUTION ORIENTED
We sit down with Borhene Ben Mena, CEO Shipa Delivery, to talk about the challenges in the market, the solutions and how technology is an integral part of logistics
Tell us about Shipa and your journey with Agility.
Shipa helps businesses, startups, and consumers manage their supply chain online. Our story begins in 2015, when we were investing in start-ups across the globe. We were looking into companies related to logistics and eCommerce. As we dug deeper, we kept hearing how eCommerce was stable but the logistics behind it, especially delivery, was a major issue.
While there have been traditional players in the market, the region battles with ePayments. Customers have preferred cash on delivery and international players didn’t want to play in that game. We were left with just one or two companies and that didn’t offer much flexibility to eCommerce platforms.
The industry was in a dire need for new players in the market and that’s when we launched Shipa. The genesis was to
really to build a technology platform with enough capacity in the market to match demand and supply. We started the platform to make it easy to move goods. Initially, we started small - moving goods between towns and cities, and then between countries in the Middle East.
Technology takes centre stage of our business as eCommerce is tech driven. So, we had to create a player that spoke the same language and the same culture.
Shipa Delivery is a vision of this digital reality that makes it easy to move stuff with just three clicks and is user-friendly, quick, and simple. The idea is to try and do something similar to eCommerce for the physical part of what’s behind the digital part of the business.
Basically, we created all these tools and interfaces to make it easy for merchants to get onboarded on the platform, upload their orders, and off they go into our network. On the other side of the platform, we have the consumer who wants flexibility and visibility on what’s happening with their goods. We give both the parties all of that directly on this platform.
What makes your offering a unique proposition in the market?
The differentiator is the delivery of our service. It really goes down to performance and experience. If do a parallel with eCommerce, what makes an eCommerce business successful? It’s usually that front-end experience, and the back-end execution. It’s not that different in our industry, we give our merchants that front-end experience with a dashboard that displays all the information and the experience which is the execution behind it.
We take ownership of the delivery process and ensure our clients’ customers are satisfied with the service provides. For last mile deliveries we have a hybrid model where we have capacity committed to us and for additional capacity, especially during peak periods, we get it from the market. This ensures we never under-deliver while still staying profitable.
In the past five years how much has the last mile sector evolved?
A lot has changed. When we began our business five years back the norm was to deliver products in two to three days.
Today, that doesn’t work. We’re now focused on delivering products within a 12 to 24-hour period. People want faster deliveries and two to three days doesn’t cut it anymore. Additionally, there is a large variety of goods that are being shopped online today. Electronics were 60% of the items we delivered, and the rest were fashion and apparel items. This has undergone a tremendous change. Today, we’re delivering a wider product range from groceries to medicines and everyday home items. Consumer buying patterns have changed completely in the last five years because there are new players in the market. And we’re loving this. We love to start fresh with customers. We are always on the lookout for those newcomers in eCommerce because the best the most exciting part is to build a solution with them.
How do you see last mile deliveries further evolve?
There’s a limit to what speed can do. Last mile delivery will be about developing extra convenience. Pickup spots and lockers will become more common and convenient. Today, many companies are putting up these boxes so customers can pick their items at their convenience. In many cities, governments are driving this initiative, as it’s sustainable and cost efficient. For instance, Saudi Post is putting up these lockers across the cities. So, our role to partner
“FOR US, IT’S VERY IMPORTANT THAT CUSTOMERS SEE US AS AN EMPLOYER OF CHOICE AS WE TRY OUT BEST TO MAKE IT SAFE FOR OUR DELIVERY AGENTS OUT THERE.”
with all of them. However, we’re going to be completely agnostic, so customers have the choice of how they want their items delivered. We’re very flexible. At the end of the day, customer is king.
With regards to sustainable measures, there’s a lot of discussion going on with city planners and governing bodies on
optimising infrastructure for deliveries and making it safer for delivery bikes. Then there’s electrification of the supply chain – both on the ground and in the air, whether its hybrid vehicles or drone deliveries. We’re going to see a lot happen in this space.
What are some of the challenges you currently face?
The biggest issue we are facing is eCommerce returns and refunds, which is also an opportunity for us. Cash On Delivery has been a pain point for a lot of merchants as the return rate is high, but once we get past the trust factor customers start using their cards to make payments. Customer confidence is critical. The point is not to make them go away, the return and refund policy is to make it more ubiquitous and more efficient. So that the percentage drops. While reserve logistics is a challenge, once it’s handled properly it can be done efficiently.
Another challenge is last mile delivery itself. In the supply chain, last mile deliveries are the most complex part of the business, and probably about 50% of the cost of bringing something from origin to destination. As mentioned earlier, the locker system is one of the solutions and the other is to club orders for delivery. It’s being worked upon and soon we’ll see the best possible solution.
Health and safety are a constant challenge. There are a lot of good ideas out there to make it safe for the drivers. For us, it’s very important that customers see us as an employer of choice as we try out best to make it safe for our delivery agents out there.
KNOWLEDGE IS POWER
While hands-on experience is the best teacher, classroom learning can’t be overlooked. It’s crucial to start a career with learned knowledge from experts in the field.
Universities and colleagues across the world now offer specialised courses in every technical field and steam including logistics and supply chain management. These courses help learners gain more expertise, improve their supply chain and warehouse functions, and prepare themselves for higher positions and responsibilities.
One such institute that has been a pioneer in delivering specialised programmes in domains of Supply Chain and
The logistics and supply chain sectors are undergoing substantial shifts. Here, we learn how professionals can be a part of that change by undertaking specialised courses to stay relevant and build on their expertise
Logistics Management offering MBA and post graduate diploma courses, is Westford University College.
The flagship programme offered at Westford University College is the MBA in Supply Chain and Logistics Management awarded by UCAM Spain.
The career accomplishments of supply chain professionals who graduated with MBA in Supply Chain and Logistics Management from the college and the awards conferred are hallmarks of its journey.
MARKET RECOGNITION
In 2021, Westford University College was awarded ‘The Educational Provider of the Year in Supply Chain
Management and Logistics by BNC Publishing at the Logistics and Transport Awards 2021. The award ceremony acknowledged the future strategies of logistics and supply chain companies from around the region. The awards catered to individuals and companies from a variety of sectors — from transportation, cargo, and warehouses, to eCommerce, supply chain, and technology.
Hanil Das, executive director, Westford University College, said; “It was a great honour to receive this award. We are the leading education provider in logistics in the region with over 1,000 students who graduated from Westford at the Master level programmes in logistics and supply chain. We are also the pioneers in logistics training programmes in the UAE and Middle East with clients from government, semi-government and the private sector.”
Supply chain management has grown over the years from a transactional unrecognized function to a key contributor to the boardrooms across the globe, establishing key alliances with strategic vendors and adopting largely disruptive technology that has transformed its very complex and
unpredictable sourcing cycle.
Supply chain professionals of this century are required to procure intelligently and anticipate global disruptions beforehand. Negotiation skills and contract management knowledge is also crucial in bringing about product and service value to the end user.
TECHNOLOGICAL ADVANCEMENTS
Luckily, the advent of Artificial Intelligence platforms with the capability
to provide 360-degree business intelligence, buyers and logisticians are provided with information on demand and sourcing capabilities that can advise professionals with an entire suite of information - from vendor compliance data to port congestion and container availability trends.
Machine learning, arguably a subfield of Artificial Intelligence has created the space for supply chains to shift to omni-channels, an integrated network >>>
that connects social media platforms that track consumer activities and consistently and asynchronously, support their demands. Amazon has adopted the strategy, enabling product interaction on social media platforms once the customer purchases and or views the said product on Amazon’s website.
Louis Columbus, former contributor to Forbes, in his article ‘10 Ways AI and Machine Learning Are Revolutionising Omnichannel’, observed that both technologies were partnering to enhance the customer experience and providing deep learning insights to the customers’ preferences and needs. But that’s not all.
With global warming and major concerns being raised on its impact on biodiversity, headlining in most media, supply chain management has seized the opportunity to play their part in making a difference.
IMBIBING SUSTAINABLE PRACTISES
Organisation’s such as Adidas, known for their leading role in promoting sustainability, has made a commitment to achieve climate neutrality by the year 2050. In order to achieve such an ambitious milestone, supply chain management implications could not be ignored.
Starbucks have strengthened supply chain accountability by recently adopting blockchain technology, supported by Microsoft. The technology allows Starbucks to trace the origin of coffee beans, mainly to identify unethical
products, suppliers and any other entity associated with unethical practices.
Looking ahead, supply chain management will continue to be relevant even as it adopts the technological disruptors of today. In fact, it is the understanding by the profession that change requires the adaptation to the new environment and the adoption of new skills and innovation that has brought the field of study and the profession to new heights
STUDENT TESTIMONIALS
“Supply Chain Management is the control mechanism that will make the impossible possible in terms of movement. Effective SCM centrally links acquisition, production, shipment, and distribution. By effectively managing supply chains, organisations can avoid or reduce excess costs and make products available faster without compromising quality. Westford has been instrumental in harnessing my potential with their challenging MBA in Supply Chain, Shipping and Logistics Management, to look at the entire picture of international supply chain planning, economic environment, HR-related requirements, core leadership and to implement strategic change management processes to each different segment when dealing internationally to capitalise on collaborative centralised working
Xavier Treasurer, Senior Category Specialist (Electronics Procurement), Al Tariq LLC (Member of the EDGE Group of Companies)
Mohomed Fereen Kuthubdeen, MBA - Supply Chain Management and Logistics, H.K Al Sadiq Sons Cont. Co. Ltd. Saudi Arabia
models. All faculty members have been extremely knowledgeable and supportive throughout my learning experience, which makes it even more memorable. Proudly Westfordian!”
Xavier Treasurer, Senior Category Specialist (Electronics Procurement), Al Tariq LLC (Member of the EDGE Group of Companies)
“As the business world is evolving with new technology and innovative ideas applied in all dimensions, supply chains are getting busy in parallel and getting to manage those chains are a present-day challenge for all the business organizations, especially to be competitive and to stay healthy in the business. Since I work as a procurement manager, I was very interested to learn, in depth, the aspects related to supply chain management to increase my expertise and to apply it in my organisation. I chose Westford University College to enhance my knowledge as they have distance learning options and vastly experienced lectures and stationed in Gulf. I have successfully completed my MBA getting successful marks for all my assignments thanks to the guidelines provided by subject lectures.”
Mohomed Fereen Kuthubdeen, MBA
- Supply Chain Management and Logistics
H.K Al Sadiq Sons Cont. Co. Ltd. Saudi Arabia
“In today’s fast paced world effective supply chain management plays a significant role in ensuring smooth workflow, operational cost reduction, improved customer satisfaction and overall efficiency of an organisation.
The MBA course in Supply Chain, Shipping and Logistics Management at Westford University college has not only provided vast information on the subject but also helped me to grow both, professionally and personally. The classes, professors, study materials and the experience has been extremely rewarding and fulfilling.”
Sobin Abraham, Dispatch Manager, Lafarge Emirates Cement LLC (member of HOLCIM GROUP)
“I am thrilled to have learned and interacted with students from different countries and enjoyed a great camaraderie with professors and fellow-students at Westford. The Supply Chain Management programme has broadened my view on how the similar issues are resolved in unique ways in other industries.”
Samantha Rutendo Kadamuto, Mineral Resources Trading, Regional Procurement Manager, Southern Africa
SUPPLY CHAIN PROFESSIONALS OF THIS CENTURY ARE REQUIRED TO PROCURE INTELLIGENTLY AND ANTICIPATE GLOBAL DISRUPTIONS BEFOREHAND.
Xavier Treasurer, Senior Category Specialist (Electronics Procurement), Al Tariq LLC (Member of the EDGE Group of Companies)
Xavier Treasurer, Senior Category Specialist (Electronics Procurement), Al Tariq LLC (Member of the EDGE Group of Companies)
WINDS OF CHANGE
Last year was a year of unprecedented disruption for the logistics industry, global network interferences, sharp increases in freight costs, dramatic shifts in demand patterns and consumer behavior.
Despite these gyrations, the logistics industry is core to the global economy and the market remains vast. It was valued at USD7.6 billion in 2017 and is forecast to reach USD12.9 billion by 2027, according to Allied Market Research.
As 2022 approaches, Omar Hagrass, CEO of Trella, examines how and why the logistics industry is entering a new era - driven by the adoption of digital solutions by new industry entrants, and incumbents.
POST-PANDEMIC DEMAND
The pandemic severely impacted the logistics industry with international travel restrictions and limited workforce capacity causing major supply chain congestion. As consumers were forced to stay at home, demand for transported goods soared and delivery orders surged across the value chain.
The eCommerce boom will continue its exponential growth in 2022 and beyond. Global research company, Gartner, predicts 80% of B2B sales interactions between suppliers and buyers will occur via digital channels by 2025. The logistics industry is core to fulfilling this demand and businesses with the agility to adapt to the new market conditions, will benefit.
An important consideration is how trucking companies navigate driver shortages. In MEA, driver safety has deteriorated in tandem with upward mobility for truckers. Future winners will find ways to offer more generous packages to retain workers. One solution is business models that reduce costs by efficiency gains, realized via digital solutions. Expect to see this trend consolidate in 2022.
“TRUCKING-AS-A-SERVICE” 2022 will be the year innovative “Trucking-as-a-Service” and fourth party logistics platforms replace legacy business models.
Trucks do not increase in size and fuel does not get more efficient. Legacy business models cannot keep up with rising transportation costs and hinder the industry’s wider development.
Efficiency gains in the trucking industry can only be achieved by embracing new business models with digitisation at their core. “Trucking-as-a-Service” addresses
the problems of fragmented supplier markets and excessive mileage in dead legs - two efficiency-diluting factors.
Advanced platforms can use digital solutions to identify patterns and address problems at their root. 2022 will see more companies employing such technologies to solve unreliability and inefficiency due to fragmented truck ownership and addressing poor working conditions and low transparency.
Digital value propositions such as marketplace platforms, managed software and service provision - will soon replace legacy players who fail to adapt business models. “Trucking-as-a-Service” is part of fourth party logistics – or 4PL.
Building out the standard business model known as third party logistics (3PL), 4PL businesses typically do not own assets, such as trucks, themselves, but are focused solely on optimizing supply chains, while liaising with subcontractors and acting as the client’s single point of contact for all operations.
2022 will see platform-based logistics companies go mainstream and 4PL business models will become more prevalent. This will consolidate businesses and prevent them being outperformed by ‘neutral’ platforms not acting as intermediaries.
CURBING ENVIRONMENTAL DAMAGE
2021 saw electric vehicle (EV) sales soar, inspired by major industrial nations’ net-zero targets. 2022 will see a tangible effect on the logistics industry.
In the US - the world’s largest trucking market - the Electric Truck market is set to grow at a CAGR of 60% during 202126. The Egyptian government has also promoted green solutions by announcing plans to manufacture $20,000 electric vehicles.
EV trucking will continue to mature in 2022 with car makers bringing new models to the market. However, greening the trucking industry via low-emission vehicles is expensive and impossible to realize without major efficiency gains in other business areas.
Replacing trucking fleets is time-consuming, gradual and requires immediate emission reductions via a more efficient deployment of existing fleets and workforce management. Having tested
their agility, cost-saving capabilities and high-performance delivery during the pandemic, digital business models are best equipped to rise to the climate challenge.
The logistics industry faces opportunities and challenges in 2022. The pandemic’s prolonged impact and economic uncertainty affected profit margins and sparked renewed environmental debate. It also accelerated a wider acceptance and integration of innovative, digitally driven business models.
This year will be when the logistics industry finally parts ways with its legacy issues and moves into a new phase of smarter, tech-driven growth.
The efforts of 4PL platform solutions to drive efficiency in the supply chain, and the electric vehicle movement, promise an exciting next chapter.
“LEGACY BUSINESS MODELS CANNOT KEEP UP WITH RISING TRANSPORTATION COSTS AND HINDER THE INDUSTRY’S WIDER DEVELOPMENT.”
THE ECOMMERCE CATCH 22
Consumers have well and truly begun to embrace the selection and convenience of eCommerce, but at what cost, writes Niranjan Gidwani, Consultant Director, member of UAE Superbrands Council and Charter Member Tie Dubai
Since the onset of the pandemic, consumers intent to purchase goods through eCommerce channels has increased significantly across categories - from everyday essentials to clothing, beauty products and accessories, and to electronics, and now appliances. These
shifts in consumer behavior are likely to stick over the long term as individuals become more accustomed to purchasing online.
More than half of consumers are expected to continue their online shopping habits even after we see the end of this pandemic. This pattern is likely to further fuel the growth of
online sales. Forecasts made by top consultancy firms suggest that online sales could account for nearly half of all retail revenues within the next four to five years.
CAUTIOUS VIEW
Having informal chats with several key executives of organisations and
retailers, the general feedback received is that those that have initially viewed eCommerce as a lifeline now take a slightly more cautious view.
While current online operations may look promising for quite a few, many have realised that skyrocketing online sales have also been accompanied by costs that have risen just as fast.
Fulfillment costs can now be as high as for 10 to 18% of eCommerce revenues, depending upon the category and industry segment. Digital marketing and customer acquisition costs, which could be in the region of 6-8%, sit on top of these.
Furthermore, frequent investments in updates to software, anti-hacking, more user-friendly and AI based websites will be recurring costs which will progressively squeeze margins and may end up making profitability a distant mirage.
Retailers are already, or if not, will soon recognize that all growth is not the same, and that unprofitable growth could end up destroying value, while they would need also to ensure that the brick-and-mortar model is still sustainable and profitable.
Retailers that give too much of emphasis to investing in building up their e-commerce models and revenues could end up causing more harm to their organisations. The thumb rule needs to be - digital growth is not enough; only profitable digital growth will create value. Since eCommerce is a significant contributor to growth for most retailers, they must ensure that their strategy creates long term value for the organisation as a whole.
MARGINS AND DIGITAL LITERACY
It’s a known fact that higher item value and basket size in categories such as electronics incur lower shipping costs as a percentage of sales. In comparison, a fast-fashion retailer with a low threshold on the free-shipping amount may need to absorb a large number of negative-margin sales. Such retailers can have better control on margins by introducing their own inhouse brands. Retailers that offer a unique or custom product or service via online are more likely to protect their margins.
Retailers in this region, whose traditional strength has been brick-and-mortar operations are likely to have many employees who lack the necessary digital knowledge. As eCommerce and digital technologies become larger parts of the business plan of many organisations, developing this knowledge will be critical to foster effective collaboration—not only
in digital and eCommerce teams but also across the organisation.
A baseline of digital fluency will become an additional cost to be factored in but will enable retailers to achieve true cross channel coordination. And while investing in training for digital literacy, organisations and their HR will need to find ways to ensure greater retention of their tech savvy staff.
The massive increase in e-commerce over the past two years has led retailers to focus on capturing growth, but with not too much of focus on real online profitability.
To win in the years ahead, retailers will have no choice but to scale their digital channels while maintaining a relentless focus on costs. The increasingly complex matrix of customer engagement creates friction points that can cloud or confuse decision making.
The past two years have tested many companies to the limit. And while supplychain issues have commanded the world’s attention, supply-chain shocks are becoming increasingly common. By investing in supply-chain resilience now, organizations have an opportunity to build critical speed and agility into their supply chains, which will help them withstand not only the current crisis but also those to come. Ultimately, the online and ecommerce business is all about speed and the last mile delivery experience for the end consumer.
One thing is certain: the pace of change and operating rhythm is only accelerating. Retailers are no longer in the world of monthly or fortnightly reviews. The model has shrunk to on-the-go review of retail operations and supply chain processes which have got even more interlinked.
TRUKKER CLOSES USD96 MILLION FUNDING ROUND
TruKKer will deploy the fresh funds to deepen its presence across all existing markets and launch several new products and features
TruKKer, a digital freight network that currently operates in eight MENA and Central Asian countries, has completed a US$96 million funding round comprising a combination of Series B equity and debt funding. The Series B equity funding round was led by Abu Dhabi-based investment and holding company ADQ and Riyadh-based venture capital fund STV, along with the participation of Mubadala Investment
Company, and TruKKer’s existing investors Riyad Taqnia Fund, Shorooq Partners, and others.
TruKKer has also raised a $50 million venture debt from Mars Growth Capital, a Singapore-based joint venture between Mitsubishi UFJ Financial Group (MUFG) and Israeli financial tech firm Liquidity Capital, and Partners for Growth, a San Francisco-based fund backed by the Silicon Valley Bank.
In a statement, TruKKer noted that it will deploy the fresh funds to deepen its presence across all existing markets and launch several new products and features.
“TruKKer’s growth has been exponential, both in our home markets of KSA and UAE, and in new markets across North Africa and Central Asia,” said Gaurav Biswas, founder, and CEO, TruKKer.
“We are constantly improvising on our launch playbook that allows us to rapidly launch new markets followed by scaling our offering in each of them. At the same time, the core market teams are becoming more data and analytics driven in business processes to ensure improving user experience, setting standards, and leading the sector’s direction.”
The current deal follows a USD23 million equity raise by TruKKer in 2019. Since its inception in the B2B space in 2018, TruKKer has brought together a fleet of more than 40,000 trucks and 700 enterprise customers across eight countries in the Middle East and Central Asia region.
Other notable investors in TruKKer include PIF-backed Riyad Taqnia Fund, IFC (World Bank Group), Shorooq Partners, Endeavor Catalyst Fund, Oman Technology Fund, Middle East Venture Partners, Iliad Partners, 500 Startups and others.
BOOSTING VISIBILITY IN AN INTERCONNECTED WORLD
Here, Maersk experts decode how FMCG corporations are reinventing their supply chains to get on with the times
According to a report published by Allied Market Research, the global FMCG logistics market is expected to grow at a CAGR of approximately 4.6 from 2020 to 2027.
This growth is being driven by multiple factors — the end consumer’s increasing adoption of eCommerce, changing consumer buying patterns like the renewed trust in big FMCG brands rather than private labels, and improvements in last-mile deliveries, to name a few.
However, growth is currently coming at a cost, and FMCG corporations are looking for ways to ensure that their supply chain outcome is greater than the sum of its parts.
EVOLVING FOR THE OMNICHANNEL MARKET
FMCG giant Unilever, for example, had to radically alter their supply chain operations as the Covid-19 pandemic changed the way people shop. As consumers went online to purchase the most basic of necessities, Unilever was faced with the challenge
of delivering to an omnichannel market. Effective 2022, the company signed a four-year international freight supply chain management partnership with Maersk to develop and manage Unilever’s control tower, which centralises its ocean shipping and air transport. The partnership will boost Unilever’s visibility and operational efficiency across their supply chain and cut down emissions so that they can reach their goal to become carbon neutral by 2039.
Through digital supply chain management solution Maersk NeoNav, Unilever will be able to break down silos and connect people, processes, and technologies to have access to end-to-end visibility, real-time intelligence, and the confidence to make smarter decisions.
Additionally, the Maersk Emissions Dashboard – a digital solution to provide enhanced carbon footprint analysis – would support the FMCG brand’s sustainability goals by providing relevant emissions reporting and optimisation insights.
“We’re delighted to be working with Maersk to unify our global ocean and air logistics operations. Not only does this end-to-end approach ensure better service for our customers and reduce business waste, but the added visibility will also help us mitigate risk, increase agility and help us achieve our company-wide target of becoming carbon neutral by 2039, says Michelle Grose, VP global logistics and fulfilment at Unilever.
TODAY’S FMCG SUPPLY CHAIN
Through the era of globalisation, FMCG multinationals have developed partnerships with local suppliers and third-party logistics service providers around the world, resulting in supply chains that are highly interdependent.
Additionally, continuous consumer demand for high-speed delivery of lowcost, multi-SKU products has pushed these supply chains to prioritise leanness over everything else. This has led to highfrequency purchasing, fluctuating volumes and the need to constantly evolve.
With the rise of DTC (direct to consumer) e-commerce, supply chains –previously built for bulk orders delivered to a single or few locations – are having to pivot to keep up with the current surge in demand.
Now, FMCG brands are compelled to strengthen their supply chain, with a primary need for visibility, to recognise changes in demand and deliver on fulfilment and inventory flow.
Consequently, FMCG supply chains are looking to re-design their ecosystem into one that can bounce back quickly and prevent disruptions from affecting the end consumer.
FUTURE OF FMCG SUPPLY CHAINS
FMCG companies have now begun to think long-term and invest in their supply chains. They know that they need to expect the unexpected, and for that reason, have ranked ‘Overall Supply Chain Visibility’ as their No. 1 focus when it comes to mitigating risks in the supply chain, according to the IDC 2020 Supply Chain Survey.
After all, if you don’t know that a problem exists, you cannot come up with a solution, let alone one that enables you to recover quickly.
In addition, visibility can play a crucial role in improving efficiency, reducing operational costs, smarter inventory management, and increasing speed to market. To achieve this, logistics teams will need to accelerate their digital transformation, implement technologies that continuously monitor systems and processes, and glean meaningful insights from this new data-driven approach.
While FMCG companies realise that the days of annual health and due diligence reports are over, they must change their mindset and create a culture of continuous improvement.
When Unilever partnered with Maersk, they understood the benefit of collaborating with a global logistics solution provider that could manage the new market demand and provide visibility and sustainability solutions to not only support their immediate requirements but also reach their sustainability goals.
SANAD LAUNCHES NEW STRATEGY TO LEAD NEXT PHASE OF GROWTH
THE NEW APPROACH WILL ENABLE SANAD TO BECOME A NATIONAL POWERHOUSE OF INDUSTRIAL SERVICES FOR ABU DHABI AND THE UAE
Sanad, a wholly owned subsidiary of Mubadala Investment Company (Mubadala), announced the launch of a new strategy to expand business beyond the aerospace sector.
The company has also appointed Mansoor Janahi, currently Deputy Group CEO of Sanad, as the new Group CEO to lead the growth stage under the new strategy. He assumed his position on February 1, 2022
The strategy and leadership announcements follow the launch of ‘Operation 300bn’ last year, which aims to more than double the industrial sector contribution to GDP in the UAE to AED300 billion by 2031.
Under its new industrial services strategy, Sanad will contribute to the economic diversification agenda and help position the UAE as a global industrial hub. Its future offering will be focused on providing technology-driven and integrated industrial services.
Ready for the next step
Badr Al-Olama, the Executive Director of UAE Clusters at Mubadala and Chairman of Sanad, said: “Sanad stands on the cusp of a major transformation underpinned by the Fourth Industrial Revolution. Building on our track record of more than three decades of experience in the commercial aviation sector, Sanad is ready to take the next step forward and become the source-to-go, one-stop shop for the broader industrial services sector.
“MANSOOR’S KNOWLEDGE AND WEALTH OF EXPERIENCE WILL BE INVALUABLE IN THIS DECISIVE PHASE FOR THE COMPANY AS IT BUILDS ON ITS STRONG PERFORMANCE TO PROVIDE INNOVATIVE SOLUTIONS TO SUPPORT THE GROWTH OF SANAD OVER THE NEXT DECADE.”
“Mansoor’s knowledge and wealth of experience will be invaluable in this decisive phase for the company as it builds on its strong performance to provide innovative solutions to support the growth of Sanad over the next decade. This is also in line with UAE Investments strategy to accelerate the diversification of the UAE’s economy and grow our national champions in multiple sectors.”
Commenting on his appointment, Janahi said: “The UAE has an amazing track record of industrialization to build on, and a strong footprint in industrial services. These capabilities and prominent market presence have been developed in record time. If we look at the aerospace industry, and Sanad specifically, we have managed to create a truly homegrown success story and a globally recognized industry leader.
“In line with its new strategy, Sanad will continue leveraging synergies with international partners, we will develop new and innovative service concepts that combine both our industrial and financial knowledge. Ultimately, our vision for the future is to develop profitable and sustainable industrial service offerings to address the ever-changing needs of clients across multiple sectors. I look forward to continuing working with the team at Sanad, our clients and partners in such exciting times and contributing to efforts to make the industrial sector a main driving force of the UAE’s ‘Next 50 years’ journey.”
DRIVE THE NEW WAY
NEW IVECO T-WAY: HIGH PRODUCTIVITY AND SAFETY ON OFF-ROAD TERRAINS
With a complete line-up of AWD and PWD versions and the the 16-speed HI-TRONIX automated gearbox, the IVECO T-WAY features a host of functionalities such as Rocking Mode, Off-road Mode, Creeping Mode and 4 reverse gears to tackle with ease the toughest off-road conditions. The new architecture of the EBS system, combined with disc brakes on all wheels, greatly improves the vehicle’s performance and the driver’s safety in the most demanding applications.
NEW IVECO S-WAY: HIGH TECHNOLOGY AND EFFICIENCY FOR ON-ROAD MISSIONS
The new IVECO S-WAY, with a completely redesigned and reinforced cab, offers a wide choice of Euro III/V diesel engines, a delivering class-leading power from 360 HP to 560 HP Euro III / 570 HP Euro V and superior fuel-saving devices, such as anti-idling feature, Ecoswitch, Ecoroll and Smart Alternator. 12-speed HI-TRONIX automated transmission with the most advanced technology in its category, electronic clutch and best-in-class torque-to-weight ratio.