Global Supply Chain April 2018 Issue

April 2018 Issue 47

ENHANCING THE BUSINESS OF LOGISTICS

INFRASTRUCTURE

INSIGHTS HOW SHOULD GOVERNMENTS SPEND

Air ships

Air cargo disruptors

FedEx

On top of the game

Uber freight Shaking it up

New Destınatıon

BOGOTA

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                                                                  

         

Bespoke Logistics Project of the Year 2017

Domestic Logistics Service Provider of the Year KSA 2017

GCC Supplier Of The Year 2017 KSA Supplier Of The Year 2017

Investing in infrastructure SIGNATURE MEDIA FZ LLE P. O. Box 49784, Dubai, UAE Tel: 04 3978847/3795678 Email: info@signaturemediame.com Exclusive Sales Agent Signature Media LLC P.O. Box 49784, Dubai, UAE Publisher: Jason Verhoven jason@signaturemediame.com Manager: Brian Cordeiro brian@signaturemediame.com Managing Editor: Munawar Shariff munawar@signaturemediame.com Art Director: B Raveendran ravi@signaturemediame.com Production Manager: Roy Varghese roy@signaturemediame.com

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Like everything else when making a decision to move ahead with an investment, lots of factors need to be considered. Similarly, governments need to focus on the way the world is moving and progressing before spending heavily on something which might become obsolete even before it is completed.

Currently the West and the East are moving in opposite directions. While all of us are distracted with too much information, technology disrupting traditional business models and similar attention grabbers, the East is opening up, spending on infrastructure, attracting tourists, and enhancing trade relations with neighbours near and far. Also consider this, technology 10 years ago was vastly different than it is today and is poised to be vastly different 10 years from now. How then should investments, spending decisions by governments be considered and decided upon? Our cover article, a comprehensive report by KPMG International, sheds ample light on the topics to be considered and the direction thinking should take. A brilliant read, on page 25.

We also have a detailed interview with FedEx’s Jack Muhs, Regional President, Middle East, Indian Subcontinent and Africa, on how the company manages to be and stay on the top of the air cargo business.

Of course, that’s not all, we have an insightful article on air ships the cargo carriers of our very near futures.

We have the complete low down on how companies can operate in the country and region.

Thank you for reading and see you next month.

Munawar Shariff Managing Editor munawar@signaturemediame.com Contributor’s opinions do not necessarily reflect those of the publisher or editor and while every precaution has been taken to ensure that the information contained in this handbook is accurate and timely, no liability is accepted by them for errors or omissions, however caused.

Articles and information contained in this publication are the copyright of Signature Media FZ LLE & SIGNATURE MEDIA LLC and cannot be reproduced in any form without written permission.

APRIL 2018 3

GUEST COLUMN

April 2018 Issue 47

ENHANCING THE BUSINESS OF LOGISTICS

24 06 News 16 Country report Oman Oman expands its seaports Expanding its ports is a core part of Oman’s plans for diversification and economic growth

24 Cover Infrastructure trends Infrastructure development is integral to every economy around the world

32 Bosch develops safer cars Beginning March 31, Bosch connected vehicles with eCall will automatically call for help in an accident 4 APRIL 2018

35 FedEx - top cargo carrier An interview with Jack Muhs, Regional President of FedEx Express Middle East, Indian Subcontinent and Africa

40 The air ship Brian Cartwright, Managing Director, Top Management Resources Group (TMR) interviews Julian Benscher, President, Skyship Services

44 Uber Freight shaking it up Uber freight and the the freight transportation market, driver shortage, regulations, and truck capacity

48 Gulftainer port operator Gulftainer is to operate and develop the Port of Delaware for the next fifty years

52 Supply chain visibility Fareye recently launched Orbit - a supply chain visibility suite which promises complete transparency in the supply chain from start to finish

54 The digital dangerous goods supply chain IATA has initiated a change, a step ahead in the digitalisation of the supply chain of dangerous goods

58 Fishy cargo One and a half million fish recently flew from Turkey to Om

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Famco introduces Euro 5 emission standard Volvo Trucks in the UAE

Al-Futtaim Auto & Machinery Company (Famco), exclusive distributor of Volvo Trucks in the UAE, recently announced the launch of the Volvo Trucks that meets Euro 5 emission standards.

The introduction of the new Euro 5 engines supports the UAE Government’s Vision 2021 to provide a safer environment and to work towards providing a sustainable future.

As part of the Government’s efforts, Emirates Authority For Standardization and Metrology (ESMA) recently mandated that all trucks imported starting this year must meet Euro 4 emission standards.

Famco and Volvo Trucks Middle East have taken a step further and introduced the Euro 5-compliant trucks.

Vladimir Knezevic, Managing Director of Famco UAE, said,“As the whole industry is shifting its focus to decreased fuel consumption and increased fleet efficiency, Volvo Trucks with its advanced safety features and Euro 5 emission standards

6 APRIL 2018

is in a class of its own. The new trucks in addition to supporting the government’s efforts to lower pollution levels also ensure our customers drive environment-friendly trucks that are more fuel-efficient and provides greater productivity and returns.”

The new Volvo Trucks are equipped with On-Board Diagnostics (OBD), which helps monitor the level of AdBlue liquid that together with Selective Catalytic Reduction (SCR) technology helps lower emission levels. The OBD also easily provides authorities with information regarding the emission levels of the trucks during inspection.

Alongside the launch of the Euro 5 models, Famco also launched the Globetrotter cab for the Volvo FH. In addition to being more advanced than existing sleeper cabins in its class, the Globetrotter cabs provide a very high level of safety and comfort for drivers and a newer driving experience which directly reciprocates into better productivity.

Energy Recovery awarded water projects in KSA Energy Recovery, Inc recently announced it had signed contracts totalling US$10.1 million to supply its PX®Pressure Exchanger®, and pump technologies for water projects in Saudi Arabia. The orders are expected to ship in the second and third quarters of 2018.

Energy Recovery will supply its PX-Q300 Pressure Exchangers, VPXPTMcirculation pumps and AquaBoldTM high pressure pumps for multiple desalination facilities, which will produce up to 470,000 cubic meters of water per day. Energy Recovery estimates the PX devices will reduce the facilities’ power consumption for all projects by 50 MW, saving over 431 GWh of energy per year, and helping the facilities avoid over 258,000 tons of CO2 emissions per year.

Energy Recovery’s President and CEO Chris Gannon stated,“Megaprojects and the Middle East remain key indicators as to the health of the overall water market, and we see continued strength throughout 2018 and into 2019. Rodney Clemente, Energy Recovery’s Vice President, Water, added,“Historically, the Saudi Arabian market was difficult for membrane desalination technologies to penetrate as low-cost, local power enabled technologies such as thermal desalination to initially gain majority market share. Due to advancements in seawater reverse osmosis technologies and increased awareness in energy preservation, there has been a shift from thermal desalination to seawater reverse osmosis solutions. We first deployed our PX Pressure Exchanger Technology into Saudi Arabia in 2013, and over the past 5 years we have captured 8 mega project references. Energy Recovery is positioned to unlock emerging market opportunities and remains focused on maintaining market position in critical countries like the Kingdom of Saudi Arabia.”

Etihad Airways successfully eliminated around 195,000 tonnes of carbon dioxide emissions in 2017, thanks to a wide range of fuel-saving initiatives across its network.

Following a number of improvements aimed at enhancing operational efficiencies, Etihad was able to reduce the amount of fuel consumed by its aircraft by over 62,000 tonnes. The result represents a 3.3 per cent improvement from the year before, and is the equivalent of 850 flights between Abu Dhabi and London.

For instance, flight plan adjustments across the network reduced approximately 900 hours of flying time, leading to a saving of 5,400 tonnes of fuel and eliminating approximately 17,000 tonnes of carbon dioxide emissions.

Last year, Etihad Airways also retired several older aircraft in favour of the Boeing 787, one of the most fuel efficient commercial aircraft in operation due to its lightweight composite structure. Etihad currently operates 19 Boeing 787s in its 115-strong fleet of passenger and cargo aircraft, which is one of the youngest in the skies at an average age of 5.4 years.

Etihad also strengthened its collaboration

Etihad’s fuel saving initiatives with air traffic control providers at many of the major airports to which it operates, in particular in Abu Dhabi, in order to improve the efficiency of many of the descent and approach profiles. The most fuel efficient descent manoeuvre is known as a ‘continuous descent approach’, whereby the aircraft reduces height gradually, rather

than in a stepped manner. Thanks to an increase in the number of continuous decent approaches in 2017, a total of 980 tonnes of fuel was saved over the course of the year.

By combining key fuel saving projects with operational improvements, the efficiency per passenger kilometre improved by as much as 36 per cent on some of Etihad’s routes.

SITA wins Service Provider of the Year SITA has been named Service Provider of the Year in the prestigious annual Air Transport Awards held in Dubai. The winners are voted for by the readers of Air Transport News and a jury of international aviation experts, chaired by Henrik Hololei, Director-General for Mobility and Transport at the European Commission.

The Service Provider of the Year award was given to SITA in recognition of its role in

providing IT and communication solutions globally to the air transport industry. SITA’s unique role as the community provider – being owned by the industry – means it has an unprecedented understanding of the industry’s requirements, combined with dedicated teams around the world which deliver services needed to keep people flying.

In recent months, SITA has taken the lead in the development of biometric solutions.

This has included innovation solutions for airlines and airports as well as looking to the future uses of biometrics as the technology develops. A key innovation is SITA’s Smart PathTM solution which allows passengers to use their biometric identity every step of the way.

APRIL 2018 7

JAFZA and South Korea explore business opportunities Jebel Ali Free Zone (Jafza) is partnering with the Small & Medium Business Corporation (SBC) of South Korea to support investment opportunities and industrial cooperation for small businesses.

The two organisations have agreed to work together to support SME business development programmes and to foster closer trade ties between the two countries As part of a memorandum of Understanding (MoU),

Jafza and SBC will exchange information on investment between industries in both countries in an effort to attract and assist more South Korean SMEs to set up in the UAE. The MoU was signed by Mohammed Al Muallem CEO & MD of DP World UAE Region CEO of Jebel Ali Free Zone,

Intertek provides top packaging certification to Obeikan Rigid Plastic Intertek recently certified Obeikan Rigid Plastic (ORP) with an ‘A’ grade conforming to the latest British Retail Consortium (BRC) Global Standard for packaging and packaging Materials. The BRC guarantees the standardisation of quality, safety and operational criteria of manufacturing practices.

ORP operates a 50,000 sq metre, state-of-the-art plant, established in Riyadh in 2010. It is a leading supplier of plastic packaging, including caps, preforms, tubes, high-density polyethylene (HDPE) and polyethylene terephthalate (PET) bottles in the Middle East and Africa.

8 APRIL 2018

ORP underwent a thorough audit

by Intertek and has successfully completed its assessment under the BRC Announced Audit Programme.

The globally recognised standard assists manufacturers in the production of safe packaging materials, assuring they manage product quality to meet their customers’ exacting requirements.

The BRC certificate, accredited by the United Kingdom Accreditation Service (UKAS), was presented by Samir Ahmed, General Manager of Business Assurance at Intertek, to Saber Atiyeh, General Manager of Obeikan Rigid Plastic at its Riyadh facility in Saudi Arabia.

Mohammed Al Muallem CEO & MD of DP World UAE Region CEO of Jebel Ali Free Zone, and Lee, SangJik, President Small & Medium Business Corporation signing the MoU

and Lee, Sang-Jik, President Small & Medium Business Corporation.

As part of the agreement, Jafza’s role extends beyond free zone facilities to helping investors identify potential business partners, nurture technology transfer, joint ventures and strategic alliances. Trade between the two countries reached was USD 5.435 billion (AED 19.963 billion) in 2016. Jafza accounted for 47.48 per cent (USD 2.581 billion (AED 9.48 billion).

Jafza been an attractive hub for larger South Korean companies looking to establish offices in the MENA region, especially in the automotive, electronics and chemicals sectors. 58 major South Korean companies have regional offices in the free zone including Fortune 500 firms such as Samsung, Hyundai, and LG.

Update on the progress of UAE’s first nuclear energy plant Philips Lighting accelerates leadership in lighting for IoT at Light + Building 2018 At the Light + Building 2018 trade show, Philips Lighting, the world leader in lighting, further underlined its position as the lighting company for the Internet of Things (IoT), announcing an IoT platform and connected lighting systems and services.

The company’s flagship announcement is a new IoT platform called Interact, which is a launch pad for generating data-enabled services for customers.

Consumer highlights include a range of stylish decorative LED lamps, luminaires, as well as new partners and an outdoor range to its popular Philips Hue smart lighting system for the home.

“Our reputation for innovation is unrivalled in our industry and this year we’ve raised the bar even higher. Our latest LED innovations range from beautiful vintage-looking lamps to equipping some of or our most popular office luminaires to provide LiFi, a game-changing technology that allows broadband Internet through light waves,”said Eric Rondolat.“And as lighting becomes truly smart, our Internet of Things platform will create data-enabled services for customers that deliver benefits beyond illumination.”

The Emirates Nuclear Energy Corporation (ENEC) is building the UAE’s first nuclear energy plant at Barakah in the Dhafrah Region of the Emirate of Abu Dhabi.

To verify that Unit 1 at the Barakah Nuclear Energy Plant meets the highest international standards of quality and safety, ENEC is conducting a comprehensive testing program known collectively as the Initial Test Program (ITP). ENEC will also conduct these tests on the remaining three units at Barakah as they near completion.

The ITP takes Barakah Unit 1 on a journey of testing and confirming that the Unit’s systems are able to operate in accordance with the highest industry standards. The ITP testing is inspected by the Federal Authority for Nuclear Regulation (FANR), the UAE’s independent regulatory body.

Phase 1: The first phase of the ITP is pre-operational testing designed to evaluate the plant’s systems and ensure they operate as designed before loading nuclear fuel assemblies. Each test represents an important milestone in Unit 1’s journey toward achieving its mission of delivering safe, clean, efficient and reliable electricity to the UAE. Phase 2: The second phase of the ITP can only be initiated once Nawah Energy Company (Nawah), the subsidiary of ENEC that will operate and maintain the Barakah Plant, has obtained the Operating License from the independent regulator, the Federal Authority for Nuclear Regulation (FANR) to operate Unit 1. When FANR issues the Operating License, Nawah may begin loading nuclear fuel assemblies into the reactor, which takes several days.

Phase 3: The third phase of the ITP is the initial reactor startup and low-power physics testing.

Phase 4: The fourth phase of the ITP is Power Ascension Testing (PAT).

Once personnel successfully complete power ascension testing, operators will conduct a complete shutdown and restart of the reactor.

Once the reactor returns to full power, it will operate for a number of days, and is then declared as ’substantially complete’.

APRIL 2018 9

Emirates named ‘Airline of the Year’ at the 2018 Air Transport Awards Emirates Airline has been named ‘Airline of the Year’ at the 2018 Air Transport Awards.

Emirates won the prestigious accolade based the evaluation from a jury comprised of executives and experts from different sectors within the aviation industry.

Thierry Antinori, Executive Vice President and Chief Commercial Officer for Emirates received the award on behalf of the airline.

Commenting on the win, Mr Antinori said, “We are honoured to be recognised by the Air Transport Awards for our commitment to excellence. We have a strong customercentric focus across the airline to deliver the best possible experience both in the air and on the ground by continually investing in a modern fleet, product innovations and service enhancements. We are also embracing technology across our operations to meet and exceed evolving consumer preferences. This award is a testament to the hard work and efforts of staff across the airline that make a difference everyday by taking care of our customers and keeping our service levels high.”

With a network that spans 159 destinations in 85 countries, operating one of the world’s youngest wide-body fleets made up of Boeing 777 and Airbus A380 aircraft, Emirates is the world’s largest international airline.

Thierry Antinori, Executive Vice President and Chief Commercial Officer for Emirates received the ‘Airline of the Year’ award at the 2018 Air Transport Awards on behalf of Emirates Mr. Lampros Demertzis, Managing Editor of Air Transport News with Thierry Antinori, Executive Vice President and Chief Commercial Officer for Emirates at the 2018 Air Transport Awards

AED 40b: Trade between Germany and Dubai in 2017 Director of Dubai Customs, Ahmed Mahboob Musabih held a meeting with His Excellency Gunter Rauer, Consul General of Germany in Dubai. The two discussed means of boosting cooperation between Germany and Dubai especially in bilateral trade and customs business. The meeting was also attended by Khalil Saqer bin Gharib, Director of Corporate Communication Department.

“It’s very important for us to boost ties of partnership with German diplomatic missions and business councils. We have priorities which include

10 APRIL 2018

delivering a leading customs expertise to the world” said Musabih. “Germany is an important trade partner to Dubai. The total value of mutual non-oil trade in 2017 was AED 40b”.

He added:”enhancing trade ties with our partners will help them receive the best customs facilitations which will add great value to their business. There are many active German companies in the UAE, and we help them benefit from our product and service offerings”.

On his part, His Excellency Gunter Rauer, Consul General

of Germany in Dubai applauded Dubai Customs’ efforts in supporting national economy and developing tourism and

trade stating that Dubai is a world class trade and tourism hub and a central link between the east and west.

Hellmann UAE creates joint venture Hellmann Indu Chemical

Hellmann UAE has successfully launched its third vertical joint venture, Hellmann Indu Chemical (HIC), after having already created a leadership position in both automotive and healthcare verticals within the Middle East. The strategic joint venture is formed together with the asset based, local logistics firm Indu Maritime Group. Indu Maritime Group, also a family owned business, has more than a million sq. ft. of its own warehousing space in the Jafza.

The Joint Venture is an umbrella to three facilities, accounting for a total of 15,000 pallet positions, with a planned expansion of 5,000 more pallet positions. Equipped with a range of operational local knowhow, dedicated QHSE officers and many other services, HIC is a one stop destination to chemical supply chain solutions. The natural synergy of the two family-owned companies form the basis for providing a host

From right: Simon Reah, Chief Operating Officer – Contract Logistics Hellmann Worldwide Logistics Middle East and South Asia (MESA); Madhav Kurup CEO – Hellmann Worldwide Logistics Middle East and South Asia (MESA); Kishore Lakhani, Chairman, Indu Maritime Group; Kush Lakhani, Managing Partner, Indu Maritime & Logistics; Aijaz Mohammad, Partner, Indu Maritime & Logistics

of high quality services pertaining to warehousing and outbound freight operations for the chemical industry in the Middle East.

The chemical industry is the second largest industry sector in the GCC region worth US$108 billion. The growth of this industry has been almost organic due to the local capacity expansion.

Taking the high tide, globalization of GCC’s petrochemical industry has been a success due to the development of several joint ventures in key Asian markets. Hellmann is one of the leading international logistics provider to create such a niche chemical warehousing solution in the Middle East.

Infor launches healthcare enterprise analytics Infor recently announced Infor Healthcare Enterprise Analytics, a solution that will provide healthcare organisations with greater insight into their operations, supporting their efforts to improve outcomes and lower costs.

Powered by the Infor Birst Cloud Analytics platform, the solution will transform complex data from any source into a comprehensive picture of patient and population health. Infor Healthcare Enterprise Analytics is part of Infor CloudSuite Healthcare, a complete software platform that includes solutions for finance, supply chain, human capital, and clinical interoperability.

Improving visibility to reduce the cost of care, while improving outcomes, is a top strategic priority for most hospital executives. With an analytics solution that can turn data into insights, healthcare organizations can identify opportunities for continuous improvement. They can get a better view of operational productivity, urgent care performance, Emergency Department (ED) statistics, physician comparisons, and re-admission rates, for example.

“Addressing the issues related to data quality, aggregation, and processing is integral to creating a viable analytics environment, for the long-term, in healthcare organizations,” said Tarik Taman, Vice President and General Manager for IMEA, Infor.“The benefits of our modern cloud analytics solution are both operational and strategic. The solution gives healthcare organizations the ability to automate and standardise the process of connecting, preparing and relating data, which speeds up time-to-value.”

As healthcare organizations continue to grow and acquire other providers, having a single source of truth across all entities is critical for timely and accurate decisionmaking. They need a modern, secure cloud analytics platform to reduce IT costs, while providing new analytics capabilities to key stakeholders.

APRIL 2018 11

Saudi Aramco partners with Pearl Initiative to promote corporate governance Qantas and Emirates partners for another five years

HE Khalid A Al-Falih Minister of Energy Industry and Mineral Resourc

Amin Al-Nasser President and CEO of Saudi Aramco

Badr Jafar CEO of Crescent Enterprises and Founder

World markets are rapidly and Mineral Resources of Saudi evolving, and the Gulf Arabia. More than 300 global region’s private sector has an business leaders, ministers, increasingly global impact on senior government officials this evolution. At the same and members of corporate and time, global expectations civil society are expected to of corporate governance attend the forum, which will be standards have been rising, held on Wednesday, 25 April which in turn is having an 2018, at the King Abdullah impact on how companies Petroleum Studies and in the Gulf region conduct Research Center in Riyadh.

Kristalina Georgieva CEO of the business and plan for the “Effective governance World Bank future. This means that it is vital for maintaining the is now essential to drive growth through highest standards of ethical conduct and competitive and sustainable business for promoting best practices in effective practices. Ninety two per cent of CEOs oversight, leadership, and reporting,”said surveyed by the Pearl Initiative believe that Amin Nasser, President and CEO of Saudi working towards sustainable development Aramco.“With that in mind, we are glad to goals will have a positive impact on their partner with the Pearl Initiative to deliver business, and 89 per cent say that it can the Governance in Focus forum which will create concrete business opportunities. focus on the important role of corporate To this end, Saudi Aramco and the Pearl governance in enhancing business resilience Initiative, the leading Gulf-based nonand the investment ecosystem.” profit organization promoting a corporate Badr Jafar, Founder of the Pearl Initiative culture of accountability as a key driver of said:“The strategic partnership with Saudi competitiveness across the region, have Aramco provides a unique opportunity to announced their strategic partnership. These collaborate with one of the world’s most new partners share a deep commitment to influential companies at a time when strong promoting corporate governance within the leadership to promote corporate accountability region’s business landscape. and governance is so important. Through this As a part of the partnership, Saudi Aramco partnership, we look forward to bringing the and the Pearl Initiative will host a highglobal discussion about the fundamentally level forum, Governance in Focus: Boosting changing landscape for business to the region Competitiveness in a New Business Paradigm, and debate the role for corporate governance held under the patronage of His Excellency in supporting growth, investment and Khalid A. Al-Falih, Minister of Energy, Industry innovation in the Gulf Region and globally.”

12 APRIL 2018

Qantas and Emirates welcome the Australian Competition and Consumer Commission’s (ACCC) reauthorisation of their partnership until 2023.

For customers, the continuation of the joint business, announced in August 2017, will deliver expanded services, greater schedule choice, increased frequent flyer benefits and an ongoing commitment to the development of world class products and travel experiences.

Comments from Qantas International CEO Alison Webster: “The ACCC’s reauthorisation of our joint business is an important milestone in helping us continue deliver benefits for travellers and Australian tourism for the next five years. “The evolution of our partnership reflects changes in customer demand and will allow us to leverage the latest aircraft technology and maximise new routes.

“With three options to get to Europe; via Perth, Singapore and Dubai, and greater frequency across the Tasman, the ACCC’s decision allows us to continue to jointly provide the best network, the best service and the best frequent flyer programs for millions of customers travelling between Australia/New Zealand and the UK and Europe.”

Kuwait to drive a new era in global geopolitics and growth with Northern Gulf Gateway project The first session of the Kuwait Investment Forum 2018 (KIF 2018), on ‘Investing for the Future Kuwait’ presented a bold statement in global geopolitics from Kuwait – driving the closer cooperation with the region – through the ambitious Northern Gulf Gateway, an integrated flagship project for realising the Kuwait National Vision 2035 that will open doors for investment opportunities for US, European, Chinese and Asian investors.

H.E. Sheikh Nasser Sabah AlAhmad Al-Sabah, First Deputy Prime Minister and Minister of Defense, Kuwait; Dr. Merza Hasan – Executive Director &

Dean of the Board of Executive Directors, World Bank Group; Mr. Omar Kutayba Alghanim – CEO, Alghanim Industries & Chairman, Gulf Bank Kuwait; Mr. Timothy Keating – Executive Vice President of Government Operations, The Boeing Company, USA; and Ms. Noura Al-Qabandi – Director of International Affairs and Research Department, CITRA, Kuwait, addressed the session.

The panelists underlined the importance of fostering regional and global liberalisation, trade integration and cultural integration, and the leading role of the private sector in development,

Dr. Meshaal Al Sabah, Director General of Kuwait Direct Investment Promotion Authority

The Amir as he walks into KIF 2018 opening session – Bayan Palace

financing and investment, as well as the need to introduce legislation and supportive systems for sustainable development.

At the session, The Boeing Company announced that it will open its permanent office in Kuwait, which will scale up the number of high-quality job opportunities for Kuwaiti nationals.

More details of the Northern Gulf Gateway that opens tremendous opportunities for investment and its impact on the economy were also announced.

US$150 to 200 billon in FDI for developing 20% of the project Northern Gulf Gateway to add US$220 billion to the GDP Development to create 300,000 to 400,000 knowledgebased jobs for world’s youth To attract 3 to 5 million visitors annually, opening new investment opportunities for the tourism, hospitality and leisure sectors Board of Trustees of the Harbour City in Northern Gulf Gateway to discuss with Chinese companies on May 1

Attendees in Bayan Palace

Commvault appoints Olaf Duennweller as Area-Vice President EMEA Central Commvault recently announced the appointment of Olaf Duennweller as Area-Vice President - EMEA Central, effective immediately.

Duennweller comes to Commvault after nearly 17 years at Veritas, growing through the ranks from Pre-Sales Manager to Country Manager for the entire business in Germany.

In this new position Duennweller takes leadership of Commvault’s business across the DACH markets, with responsibility to strengthen regional alliance and partner networks, and increase Commvault revenue and market share through new pan-regional customer implementations and

partnerships. With a focus on delivering simplified, marketleading backup and recovery data protection solutions, specifically supporting pressing GDPR, ransomware, hybrid cloud and scale-out customer requirements, Duenweller plans to increase penetration across public sector, enterprise and mid-market sectors.

APRIL 2018 13

MAPEI invests over US$ 6.5 million to strengthen its presence in the Middle East MAPEI, Italian manufacturer of adhesives, sealants and chemical products for the construction industry recently officially inaugurated the enlargement of its facilities in the UAE. In laying the groundwork for the company’s second decade in the region, MAPEI has invested more than US$ 6.5 million for the expansion of its state-of-theart production facility and new offices at the Dubai Investments Park.

As the region diversifies to non-oil revenues, the construction market continues to show important and solid growth. For this reason Mapei has decided to strengthen its position thanks to this new strategic investment. The newly expanded facility now features an additional 5,200 sq metre covered

warehousing for larger storage capacity, and the addition of a new epoxy resin production line will allow MAPEI to enlarge its portfolio delivering innovative and locally designed solutions. The new offices feature more than 2,000 sq metres of built-up area which includes a showroom and training centre, and is now a workplace to more than 120 employees from 22 different countries.

After a decade of developing businesses in the region, MAPEI is now at home with production, logistics and the regional headquarters at the Dubai Investments Park, one of the largest integrated commercial and industrial communities in the Middle East and a wholly owned subsidiary of Dubai Investments.

Accenture’s blockchain solution for shipping A consortium comprising AB InBev, Accenture, APL, Kuehne + Nagel and a European customs organization has successfully tested a blockchain solution that can eliminate the need for printed shipping documents and save the freight and logistics industry hundreds of millions of dollars annually.

The consortium tested a solution where documents are no longer exchanged physically or digitally but instead, the relevant data is shared and distributed using blockchain technology under single

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ownership principles determined by the type of information.

Through a detailed review of the current documentation processes, the group examined a re-allocation of information ownership, accountability and risk enabled by the trust and security blockchain technology offers.

An international shipment of goods for companies in areas such as the automotive, retail or consumer goods industries typically requires more than 20 different documents, many of which are often paper-based,

to enable the goods to move from exporter to importer.

Across these documents, up to 70 percent of the data can be replicated. The document heavy approach limits data quality and real-time visibility to all parties involved in the trade and this can also delay the financial settlement on goods.

The solution can speed up the entire flow of transport documents, reduce the requirement for data entry by up to 80 percent, simplify data amendments across the shipping process, streamline the checks

required for cargo and reduce the burden and risk of penalties for customs compliance levied on customers.

Blockchain is a new type of distributed database system that maintains and records data in a way that allows multiple stakeholders to confidently and securely share access to the same information. The technology is poised to revolutionize operations across a multitude of sectors, such as financial services, government, healthcare, entertainment and freight and logistics.

His Excellency Dr Abdullah bin Mohammed Belhaif Al Nuaimi, UAE Cabinet Member and Minister of Infrastructure Development, tours the Innovation Hub.

His Excellency Saeed Mohammed Al Tayer, Managing Director and CEO of Dubai Electricity and Water Authority (DEWA) tours the Innovation Hub.

Homegrown SME Consultancy Joins Forces With Dubai Business Women Council

Schneider Electric’s solutions for UAE’s innovation month Schneider Electric, \in partnership with the Ministry of Infrastructure Development, the Dubai Electricity and Water Authority, and the Sharjah Electricity and Water Authority, saw strong success in enabling smart utilities during UAE Innovation Month. With UAE utilities providers supporting Smart Cities and smart grids, the Gulf Cooperation Council’s smart grid market is set to triple to USD 1.7

billion by 2026, according to a recent report by TechSci Research. Aligned with governmentled agendas, UAE utilities providers are investing in Internet of Things innovations.

Smart meters, remote terminal units, and advanced distribution management systems for smart grids can optimise costs, transform the customer and citizen experience, and protect critical national infrastructure.

Schneider Electric’s Innovation Hub on Wheels showcased smart utilities in the UAE.

Momin Group upgrades Jafza operations DP World Group Chairman and CEO Sultan Ahmed Bin Sulayem has inaugurated a new manufacturing unit for the Momin Group at Jebel Ali Free Zone (Jafza). The facility has a built-up area of over 10,000 sqm for production of vegetable ghee, soft oils such as corn, canola and sunflower and processing of soya bean oil for the petrochemicals sector.

The opening ceremony was

attended by Mohammed Al Muallem, CEO and Managing Director, DP World, UAE Region, Ebtesam Al Kaabi Head of Sales, Jafza, Abdul Wahid, CEO, Momin Group and senior officials.

Sultan Ahmed Bin Sulayem, Group Chairman and Chief Executive Officer, DP World, said:“The food and petrochemical sectors are important sectors in Jafza and

this new facility reinforces its ability to provide a world class business environment for manufacturing facilities and industrial-scale production.”

Jafza is a major regional hub for the petrochemical industry, with 28% of all oil & gas companies from the Middle East operating there. The sector comprises 16% of Jafza’s total trade volumes and has seen steady growth over the years.

Metis Management Consultancy has partnered with the Dubai Business Women Council (DBWC), the official representative organisation for professional business women and female entrepreneurs working in Dubai.

The local consultancy, which focuses on providing financial guidance and business strategy services to SMEs, has entered the partnership in a bid to support the UAE’s vision of greater female workforce participation, which in turn accelerates towards economic growth and social transformation.

Metis will conduct workshops and lead training sessions on an array of subjects including VAT. From understanding VAT, to how it works, to safeguarding yourself in a VAT environment, the interactive seminars will provide the right tools and resources to female-led businesses, both established and start-up.

APRIL 2018 15

COUNTRY REPORT OMAN

Expanding its seaports is a core part of Oman’s plans for diversification and economic growth. Strategically located on global trade routes between the vast markets of Europe and Asia – and positioned just outside the Strait of Hormuz, a bottleneck for shipping traffic headed into the oil-rich GCC – the country has a strong commercial case to further develop its maritime transport business. This Oxford Business Group (OBG) report provides a detailed insight

man

expands its seaports

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COUNTRY REPORT OMAN

H

alf of the goods entering the sultanate come through its seaports, according to the National Centre for Statistics and Information (NCSI).

Understanding this, authorities continue to invest in boosting connectivity, particularly at its three main seaports of Sohar, Salalah and Duqm. As a result, goods entering by sea have more than quadrupled over the past decade: from just 4,700 tonnes in 2007, it surpassed 10,000 tonnes by 2011 and reached nearly 21,000 tonnes in 2016, according to NCSI data.

“Congestion in the Strait of Hormuz and the capacity of the existing and planned infrastructure in the Gulf will be taxed with the forecast increases in traffic moving into the region,” Philip Marquis,

Operations Manager, Oman Rail, told OBG. “The planned transportation infrastructure enhancements in Oman gives us vast potential to become a logistics hub for the region: the efficiency gains of offloading goods in Oman then transporting them over land are substantial.”

The planned transportation infrastructure enhancements in Oman gives us vast potential to become a logistics hub for the region: the efficiency gains of offloading goods in Oman then transporting them over land are substantial

Sohar Port A case in point is the Port of Sohar on the country’s northern coast. Just 150 km from the UAE border, it offers near-direct access to the rest of the Gulf region, which is one reason why it accounted for some 85 per cent of goods coming into the country by sea in 2016, according to the NCSI. With 22 berths and a free zone industrial area covering 4500 ha, it saw a further spike in traffic in 2017, with the number of vessels received rising

Sohar Port

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COUNTRY REPORT OMAN

Port Sultan Qaboos in Muscat, Oman

and containers (managed by Hong Kong’s by 26 per cent in the first three quarters, to Hutchison Whampoa). To this will soon be 2,224, according to the Ministry of Transport added the country’s first terminal designated and Communications. On December 26, for handling bulk agricultural 2017, the port tweeted goods. Being built by Atyah it had passed the 3,000 Oman’s second Investment and Oman Flour mark for the year.

Mills since early 2015, the Such growth is major port, at US$170m terminal will be unsurprising given the Salalah on the able to handle 600,000 tonnes size of both demand and of grain each year, though as continuing investment. south-west coast of late 2017 no update on its Sohar’s industrial area, with three main near Yemen, is also progress was available. clusters dedicated to seeing major growth Food processing logistics, petrochemicals and metals, have seen The burgeoning food and expansion. investments of more processing cluster of which the According to than US$25bn, driving terminal is a part is expected throughput of more than to drive further demand Salalah Port 1m tonnes a week. This for packaging facilities. In Services, it handled response, Oman International is split between terminals dedicated to general Petrochemical Industry 13.6m tonnes of cargo (operated by USCompany plans to build a cargo in 2017, up based firm C Steinweg), packing materials plant with a liquids (run by a joint capacity of 1.5m tonnes a year; from 13m tonnes venture of US operators Liwa Plastics has expressed in 2016 Oiltanking and Odfjell) interest in setting up Sohar

18 APRIL 2018

operations; and Oman Oil Refineries and Petroleum Industries is developing a US$3.6bn steam cracker project to be integrated with existing plants for oil refining, polypropylene and aromatics, according to Edwin Lammers, the port’s commercial manager.

More recently, Singapore’s Trescorp announced in September 2017 it will build a 45-ha terminal in Sohar dedicated to receiving, storing and blending oil and gas products to the tune of US$600m.

Construction of the first phase is to commence in 2018 on a facility with a capacity of 600,000m cu metres, to be finished in 2020 and then expanded to 1.8m cu metres. Other developments ahead include a US$60m plant for rare-earth metals to be built by a UK-led consortium, and an auto assembly plant with a capacity of 200,000 units a year catering to mostly Asian vehicle brands. The Sohar oil refinery is expanding capacity by 50 per cent to reach 180,000 barrels per day, and five ferrochrome smelters are currently under construction.

All of this should fuel further import-export activity, driving demand for shipping services.

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COUNTRY REPORT OMAN

Salalah Port Oman’s second major port, at Salalah on the south-west coast near Yemen, is also seeing major growth and expansion. According to Salalah Port Services, it handled 13.6m tonnes of cargo in 2017, up from 13m tonnes in 2016. Managed by Dutch operator APM Terminals, the port can accommodate draughts up to 16 metres and has two terminals, one for containers with a capacity of five million 20-foot equivalent units (TEUs) per year, and one for general cargo, In April 2017, 10 as well as warehousing, a freight station, agreements worth bunkering and repair facilities. According US$3.2bn were to APM, the port has signed by Chinese tendered the design contract for a second companies alone container terminal for construction of with a capacity of 3mthe zone’s hotel, as 4m TEU that, when finished, will extend well as plants for the port’s quay wall water desalination, distance from 2,205 metres to 3,555 metres. power generation, Construction is also under way on two new synthetic berths, each 450 metres pipes, building long with a draught up to 18 metres materials, bromine, depth – capable of docking the world’s largest automobiles and vessels – and served energy sector by ultra-large gantry cranes called Super equipment Post Panamax. A further three deepwater berths are being planned. According to Mahmoud Sakhi Al Baloushi, CEO of Al Madina Logistics and Muscat Container Terminal, his company plans to build a Customs warehouse there in the future.

Duqm Port

Port of Salalah, Oman

The next big frontier for logistics development is the Port of Duqm, being built up largely from scratch on the country’s central coast between Sohar and Salalah.

Though it makes up just a fraction of goods imports, at 5,000 tonnes in 2016 per NCSI data, for sheer scale it looks on track to rival Sohar. At the heart of expansion plans is a deal signed with a Chinese consortium called Oman Wanfang in May 2016, giving it 50-

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COUNTRY REPORT OMAN

year rights to develop an area of 11 sq km in the Duqm special economic zone (SEZ) into a US$10.7bn Sino-Oman Industrial City.

Divided into three zones dedicated to light manufacturing, heavy manufacturing and mixed-use development, the city comprises 35 planned projects including an oil refinery, petrochemicals facilities, steel smelter, a building materials distribution centre, auto assembly factory, and plants responsible for producing solar panels, glass, aluminium, and oil and gas equipment.“That the government has remained committed to Duqm Port’s timely completion despite the adverse economic conditions, should serve as a very positive signal to investors,”Reggy Vermeulen, CEO of Port of Duqm, told OBG. The development broke ground in April 2017, and Oman Wanfang has pledged to finish 30 per cent of planned projects by 2022.

To support this activity, the consortium has announced plans to build accommodation for up to 25,000 people, as well as schools, offices, a hospital and sports centre. The city’s infrastructure will be financed by Chinese banks, while individual firms will cover the costs of their own facilities within it, according to the consortium’s chairman, Ali Shah.

The next big frontier for logistics development is the Port of Duqm, being built up largely from scratch on the country’s central coast between Sohar and Salalah.

Though it makes up just a fraction of goods imports

Contract awards

Tourism zone

Many contracts have already been tendered, both inside and outside the industrial city.

In February 2017 the zone’s regulator, the Duqm Special Economic Zone Authority (SEZAD), awarded contracts worth US$219.9m (OR84.7m) to build roads, storm-water drains and dams, followed by a US$278.6m (OR107.3m) deal with a joint venture of Turkey’s Serka and Portugal’s MSF to build an infrastructure package called IP2 – a prerequisite for operation of Duqm’s four planned commercial terminals. In April 2017, 10 agreements worth US$3.2bn were signed

by Chinese companies alone for construction of the zone’s hotel, as well as plants for water desalination, power generation, synthetic pipes, building materials, bromine, automobiles and energy sector equipment.

More deals may soon be on the way: in September 2017 Oman Wanfang signed an memorandum of understanding (MoU) with the Chinese Petrochemical Industries Federation to tap its network of private firms to build petrochemicals plants, oil storage structures and other facilities.

Alongside industrial operations are plans for an integrated tourism complex in the Duqm SEZ, called“Little India”. At a cost of US$747.8m (OR288m), the mixeduse development will include commercial offices, beachfront villas and apartments, a marina, a five-star hotel, restaurants and theatres. As of late 2017 SEZAD had signed an usufruct agreement allocating 600,000 sq metres to the master developer, also called Little India, whose MD, Pradeep Nair, said construction of phase one would start in early 2018 on an initial investment of US$12m. This will comprise a 25-unit Villa Resort to be run by the Marriott hotel chain, construction of which is set to finish in September 2018, and a 96-unit apartment building to be completed

by February 2019. To secure the necessary funds, in December 2017 the company signed an MoU for financing arrangements with Bank Muscat.

22 APRIL 2018

New holding company in Oman moves to consolidate transport management and find new efficiencies A major holding company formed to manage state assets in transport and logistics has seen a raft of new activity in the period running up to 2018, as it moves to integrate operations among its subsidiaries and speed Oman towards becoming a top-10 logistics hub by 2040. Overseeing operations from shipping and ports to the postal service and supply chain management, Asyad is a rebranding of state-run conglomerate Oman Global Logistics Group that occurred in June 2017.

Its formation represents the transport portion of a larger overarching government strategy under way since March 2016, in which the authorities aim to create large holding companies of stateowned enterprises with broad oversight powers – such as the Oman Food and Investment Company set up to promote food security, and Nama, a utilities conglomerate managing water and electricity services. “We need a systematic and scientific way to ensure that the logistical setup in Oman remains sustainable,” Abdulrahman Al Hatmi, CEO of Asyad, said at the company’s launch. He added that the transition would take around two years, saving US$18.2m (OR7m) in the first six months alone.

Backdrop The firm’s existence is the culmination of a vision that began four years ago. In 2013,, authorities from the Ministry of Transport and Communications set up a taskforce of 10 experts from state agencies, private companies and academia to develop a long-term sector blueprint with help from 65 specialists. The result, the Sultanate of Oman Logistics Strategy 2040, published in mid-2015, set the ambitious goal of making the country one of the world’s top-10 locations for logistics through a range of state-led investments. In the process, the plan will create 300,000 jobs and raise the sector’s value from US$3.9bn (OR1.5bn) to US$36.4bn (OR14bn) by 2040. “The impetus behind holding companies like Asyad is to look at each sector comprehensively, unify strategy, and capitalise on synergies in order to gain better control of the markets,” Omar Mahmood Al Mahrizi, VP, Transport at Asyad, told OBG. “One important result is the greater negotiation power that comes from scale.” Another factor was the need to address the logistics component of Tanfeedh, a diversification enhancement programme set

COUNTRY REPORT OMAN

up in 2016 to accompany the release of Oman’s ninth five year plan for 2016-20, its aim being to monitor and manage the process. “We see our role in the style of an NGO,” Al Mahrizi told OBG. “We are not just favouring Asyad subsidiaries in reorganising assets; rather, we are seeking a better balance with the private sector.”

Strategy The group’s strategy rests on three main pillars.

The first is to manage a range of investments at special economic zones in the main ports of Sohar, Duqm and Salalah. These offer incentives and tax benefits to foreign firms that are capable of driving logistics as foreign investors build industrial centres under Oman’s long-term development blueprint, Vision 2040. The second pillar is to enhance freight operations through three subsidiaries – Oman Shipping Company, Oman Rail and Oman Drydock Company – to deliver efficient, comprehensive services in shipping. As part of this, Asyad will own several warehouses and spaces for light industry, upgrade technology and practices, and build a connectivity network to serve the country’s growing trans-shipment industry, which receives more than 3,000 requests catering to 52 port destinations each year, according to Asyad.

“The creation of Asyad is a positive development in Oman’s transport and logistics sector as it will be incentivised to be a strong advocate for simplifying procedures within the sector, Stephen R Thomas, CEO of Renaissance Services an Oman-based investment firm, told OBG. The third pillar is to consolidate and improve public services through Asyad’s four other subsidiaries: Oman National Transport Company, National Ferries Company, Oman Post and the public bus system, Mwasalat. The underlying goal is rationalisation, achieved through both new investments and reorganisation of existing assets, as well as by modernising logistics processes, reforming import-export procedures and upgrading soft infrastructure. “Currently, 90 per cent of our revenue comes through shipping and handling, and this is very unsustainable,” Al Hatmi explained. “We want to streamline our logistics and shipping, so that it accounts for about 50 per cent of all our revenue.”

Logistics integration Asyad has been busiest in three main areas.

The first is integration of data systems. In August 2017 the group floated a tender for consultancy services to conduct feasibility studies on a new ports community system (PCS), an

electronic platform that would synthesise data on all logistics activity to streamline operations.

Bids closed in mid-September and an award announcement was expected by year’s end, Al Mahrizi told OBG in October.

Modelled on the concept of a single window, the new PCS would integrate disparate datasets from its various stakeholders, including the three main seaports, the international airports, the Royal Oman Police, and the Ministry of Agriculture and Fisheries. These agencies’ data will then be transmitted securely to a central software and analysed for key trends that can inform decision-making. “I am confident that the creation of Asyad will lead to a more efficient and synergistic transport and logistics sector in Oman,” Abdulmalik Abdulkarim Al Balushi, CEO of Oman Post, told OBG.

Ferries and cargo The second main area of activity is maritime transport services. In September 2017 Asyad signed a deal with Qatar Ports Management Company – known as Mwani – to develop ferry services that can carry cargo and passengers between Qatar and Oman. The agreement stipulates that the two will develop a joint strategy for offering cargo and logistics services between Hamad Port in Doha and Oman’s three primary seaports, and paves the way for a commercial venture that would boost joint connectivity and share the costs of the investment. The move is part of a broader effort to enhance bilateral collaboration and deepen economic relations between the two neighbours.

Sohar in 2011 – into a mixed-use development comprising hotels, restaurants and retail outlets in a $1bn partnership with Dubai’s DAMAC called Mina Sultan Qaboos Waterfront. Mina abuts the Muttrah souq (market), one of the oldest souqs in the Arab world and Oman’s most-visited tourist attraction. “Ports management is our most profitable segment, so we are building up capacity in that space,” Al Mahrizi told OBG. “This will enhance multimodal transport and maximise our ability to meet 2040 targets.”

In progress Several other projects still in assessment and design stages at Asyad were shared with OBG. According to Al Mahrizi, one is an integrated call centre merging currently separate systems for the public buses, postal service and ferry transport. Other synergies will be to launch joint products, such as a single ticket valid for all public transport, or to offer unrelated products at a single location, such as the purchase of bus tickets at branches of the Oman Post. “We have identified a model for reviewing subsidiary portfolios: it’s to be asset-light, to own only what we need to,” he told OBG. “This will mean some divestments, but also acquisitions, executed in phases as we complete reviews and feasibility studies. To hit our targets we must move quickly and use funds wisely.” He also said the group is currently piloting a logistics corridor facilitating swifter shipments to Yemen. Under the system, goods could land in Salalah having already declared Customs at their point of origin, thus allowing more seamless trans-shipment across the western border.

Port operation A third major development was announced in October 2017, when the Ministry of Transport and Communications granted Asyad the licence to operate Sultan Qaboos Port in Muscat, including passenger shipping services, starting on January 1, 2018. As of that date the current operator, Port Services Corporation, transferred most of its employees and liquidated its assets, passing full control to Asyad, according to a ministry statement. Oman Investment Fund, the country’s sovereign wealth fund, had owned a 35.5 per cent stake in the company. In December 2017 Asyad announced it had formed a new subsidiary called Marafi specialising in ports management to run the facility.

The move complements efforts by a staterun developer of tourism infrastructure, Omran, to transform the port – long a cargo hub until its commercial operations were transferred to

On the horizon In the medium to long term Asyad has ambitions to expand its operations abroad. According to Al Hatmi, after an initial period of 18-24 months focused on restructuring its domestic assets, the group will target “inorganic” growth through mergers and acquisitions overseas. To make the global top-10 for logistics will require expanding Asyad’s business outside Oman, Al Hatmi told local press in June 2017. “(We) need to go beyond (current port assets) and look at integrating services between a host of supply chains in the logistics sector,” he said. In the meantime, to achieve near-term milestones the company is looking to attract more foreign capital into special-purpose vehicles, adding: “We want more of private investment or foreign investment and less government money.”

-www.oxfordbusinessgroup.com

APRIL 2018 23

trends Infrastructure

Infrastructure development is integral to every economy around the world. But how should governments undertake and invest in development keeping future trends in mind. Our world is changing at a furiously fast pace and these future trends are integral to our tomorrows. This comprehensive and detailed report by KPMG International’s Richard Threlfall, Global Head of Infrastructure; Stephen Beatty, NonExecutive Chair, Global Infrastructure and Julian Vella, Asia Pacific, Head of Infrastructure provide these insights 24 APRIL 2018

V

iewed against the disruption, confusion and uncertainty of the past year, it would be easy to become despondent about the future of infrastructure around the world. Yet we see great opportunity and promise emerging. There is much to be excited about. Governments continue to demonstrate a strong desire and ambition to invest in infrastructure, both as a path to economic growth and as a

COVER

Do you invest into ports and airports to encourage globalization or do you build walls and barriers to hold it at bay?

way to hold back the rising tide of populism.

New technologies and rapid innovation are creating new approaches, models and tools for infrastructure development and helping to bring down costs. The quest to identify new pricing and funding models offers the potential to unblock pipelines and unleash a new era of rapid development.

And new perspectives on key issues such as sustainability, governance and investment are driving greater sophistication in many markets. A new dawn may be rising.

Trend 1 The clash of competing forces This was supposed to be a decade of growing global harmony. Technology was going to break down barriers between societies. Social media was going to strengthen democracy.

Globalisation was going to remove distance between markets. And political stability was going to drive growth. Utopia was on the horizon. But reality has proven to be far different. Rather than coming closer together, our societies, markets and institutions seem

to be rapidly fracturing. Schisms are opening everywhere: between the West and the East; between the young and the old; between the ‘haves’ and the ‘have-nots’; between the left and the right; between protectionists and free-marketers … everywhere you look, the public discourse has become more divisive.

Some governments in the East are making good progress in this regard. In the West, however, all signs suggest that this year will be even more disruptive and divisive than the last; don’t expect a return to harmony in

APRIL 2018 25

COVER

ways to rise above the din of divisiveness.

2018. Governments recognise that increased Those with clear purpose should be able to infrastructure investment can help solve find a way to strike compromise between the many of the long-term challenges they now competing forces. There are roots of these face. But they are also prudent enough to virtues in all markets – they just need to be know that there will be many short-term prioritized and strengthened. Those that are obstacles to overcome before they can get there. The big challenge, therefore, is to create able to achieve this will be markets to watch over the coming year. a shared future in an increasingly fractured world by making smart infrastructure investment decisions. Tough decisions will Trend 2 Infrastructure planners need to be made: Do you fund healthcare for start to think about flexibility the boomers and mobility for the millennials? We are living in an era of rapid and Should you prioritize better transport to help fundamental change. Consider this – just 10 those with jobs or social infrastructure to also years ago, the first iPhone was introduced; help those without? Do you invest into ports there were no ‘app’ stores; no real-time and airports to encourage globalization or do way-finders or smart maps; Twitter was in you build walls and barriers to hold it at bay? its infancy and Facebook was a toddler. Yet What is clear is that making sound decisions today, the smartphone and its applications in this environment will require better data, have become indispensable in most people’s more sophisticated analytics and much more lives. It’s not just technology that is rapidly reliable projections. In the West, the coming and fundamentally changing. So, too, are year will see infrastructure planners and social norms, demographic trends, economic policy makers struggle with distractions. truths, the boundaries between our public The East, on the other hand, is going in and private lives, environmental realities and a different direction; Asia is opening up. customer expectations.

Massive cross-border projects (such as In many ways, the world we lived in 10 Kuala Lumpur–Singapore high-speed rail years ago seems quaintly archaic; the world (MyHSR), Thailand’s Eastern Economic of 10 years from now, excitingly innovative.

Corridor, the China Thailand high-speed The problem is that infrastructure is not railway via Laos, and the China–Pakistan keeping pace with the changes we are Economic Corridor) are rapidly moving experiencing around us. We continue to forward and, in doing so, helping to create develop assets with 50 to 100-year lifespan better interconnectivity across the region. expectations. We build for the needs of At least in the East, many politicians are today, not tomorrow. We assume fixed recognizing that greater technology sets will remain regional and international for the foreseeable future. We connectivity can be a spend years in planning and At least in the path to faster growth, consultations, ignoring the more stable economic risk that the completed asset East, many development and will be out of date before it politicians are improved living standards. comes into operation. More And they are increasingly often than not, we simply recognizing that willing to put aside do what we have always greater regional political, cultural and done. This year, we hope to historical differences in see infrastructure planners and international order to achieve that. and developers design and connectivity can Despite the challenges contract infrastructure projects there is room for hope be a path to faster that could support a range of and optimism. Those possible futures. growth, more markets with strong and When building a new highindependent infrastructure speed rail line, for example, stable economic authorities should find the proponents should be thinking strength to act on their about how other technologies development and longer-term visions. Those – such as hyperloops or drones improved living with visionary leaders and – might utilize the same space institutions should find and provide more flexible standards 26 APRIL 2018

solutions. When building a new electricity grid, we should be thinking about how the introduction of electric vehicles might influence and alter the nature of demand.

When looking at transport investments, and spatial planning generally, planners need to consider that autonomous vehicles (AVs) could radically change the way people travel and indeed how they live and how they work. AVs will also create opportunities for businesses to change the way they operate including how they import materials and distribute their products.

To be sure, the design and development of more ‘flexible’ infrastructure will come at a higher upfront capital cost. Not knowing exactly what the future may bring, planners and designers will need to consider multiple different scenarios, identify the most likely and then build accordingly. That may mean adding more capacity than is immediately needed, choosing a different route that offers greater future flexibility or spending more to avoid a potentially obsolete design. It will certainly require planners and owners to take more risks. To future-proof infrastructure, achieve greater resilience (and maybe help overcome the natural reluctance to spend more) planners and designers will need to consider the long-run value of flexibility and build those assumptions into the business case.

Simply put, flexibility must become a key design and contracting principle with the costs weighed against the longer-term benefits and an evaluation methodology to match. While the future may be uncertain, we have the opportunity to give younger generations the flexibility to shape it. If we do not, new customer demands will go unfulfilled, new technological opportunities will be missed and, as a result, society will suffer. Better to build flexibility in today than miss the potential of tomorrow.

Trend 3 Sustainability – in all its forms – rises up the agenda If we want our infrastructure assets to create long-term value and enhance social harmony, we need to think much more about sustainability. Unfortunately, today’s view of sustainability is far too narrow. Raise the issue and most people instinctively think about the environment. But the reality is that ‘sustainability’ is a much wider concept.

Given the competing forces now at work around the world (see Trend 1), the need

We believe success doesn’t come as a coincidence.

It comes with vision, grit and teamwork.

- Eng. Khalid Al Khatib

COVER

in some developing markets, particularly for sustainability in all its forms is more where current services are inadequate, critical than ever – not only for users and infrastructure is being built at astounding planners, but also for investors and owners. speeds (think China’s development of highResponses must be thoughtful and rapid. As speed rail and what’s been happening in the we noted in last year’s edition of Emerging Middle East.) New projects – from transport Trends, investors are increasingly sensitive and power through to hospitals and schools to social and environmental impacts – not – are being delivered almost overnight just financial returns. And a growing number as governments focus on of today’s investors are rapidly responding to the looking for assets that fast-changing needs of their have taken a much more This year, we economies and societies. sophisticated view of hope to see But putting the assets sustainability as a way to into the ground is often the safeguard their investments infrastructure easy part. Knowing which and retain their value. planners and assets should be built at For infrastructure planners and designers, developers design which time to deliver the most value is much more this requires a more holistic and contract difficult. The risk in building approach to asset design and infrastructure too quickly development. Authorities infrastructure is the threat of building are obliged to create more projects that could ‘white elephants’ that do not flexible space for innovation – in contracting, in funding support a range of match the current and future needs of the population they and financing models, in possible futures intend to serve. Slow-moving technological adoption and projects, on the other hand, adaptation, in construction run the risk that they will become more approaches and materials, and in design expensive – or even obsolete – as they and usage. At the same time, new skills will languish on the planning table (or, worse, be required as more time is spent scenario during construction). Over the coming year, planning (as noted in Trend 2). we hope to see markets rethink the pace of Trend 4 The pace of development their infrastructure planning and delivery.

In the developing markets, this may mean comes under the microscope slowing down to think more clearly about Depending on where you live, infrastructure project prioritization, suitability, resilience development is either fast and furious or slow and methodical. Both come with unique and sustainability (see Trend 3). In the mature markets, it must mean speeding up challenges and risks. In the mature markets, the rate of delivery by allowing planning, infrastructure can take years to move from prioritization, approval and delivery idea to output. Much-needed upgrades processes to become more streamlined. In and replacements are slow to emerge from some situations, this may mean balancing the pipeline (as evidenced by Heathrow’s democratic process against efficacy.. ‘third runway’ debate or the continued lack of momentum on the Brent Spence Bridge Corridor in the US) while other valuable Trend 5 Security becomes critical investments are held up in multiple layers of The past year has clearly demonstrated that planning, approvals and consultations. This is our infrastructure is continuously under the price of democracy; when major decisions attack. This year, the threat will continue are consultative, progress is often slow. to evolve and broaden. Asset management Given the rapid pace of change now techniques have also moved into the digital at play around the world, it is vital that era and security protocols (both physical and decision-makers find renewed urgency in virtual) have become more sophisticated. Yet their approach. Many of the greatest risks in attacks still happen with alarming frequency. delivering infrastructure are related to time; And, as cyber threats evolve beyond simple reducing the amount of time therefore also thuggery to also include misinformation reduces the risk of the project (assuming campaigns and political muckraking, they quality standards are maintained). In contrast, have also become incredibly disruptive.

28 APRIL 2018

Consider, for example, the impact of global ransomware cyberattack ‘WannaCry’, not only on businesses, private citizens and governments, but also on critical infrastructure (such as the National Healthcare Service in the UK which scrambled to function after it was infected).

At the same time, the expanding digital interconnectedness of our infrastructure is only exacerbating the situation by bringing entire systems (versus single assets) within the reach of hackers. Indeed, in private conversations, security and military officials note growing concerns about the ability for some infrastructure – particularly autonomous vehicles – to be turned into weapons remotely. The tech sector must address such security concerns and governments must ensure that they do.

The physical threat against infrastructure has also widened and evolved this past year.

In part, the risk comes from people; terrorist attacks on so-called ‘soft targets’ in places like the US, Canada, the UK, Spain, Sweden, Germany, France, have forced decision makers and authorities to rethink the way they secure public spaces, mass transit and even pedestrian walkways. But the threat also comes from nature.

The reality is that governments have been on the back foot for several years and now need to adopt an aggressive stance toward security both in planning and operation. This year, we expect to see heightened focus on improving the security of existing infrastructure (particularly for pedestrians) and embedding security into new infrastructure. In some cases, models for new infrastructure development may change (it’s easier to secure a small parkette than a sprawling city park).

Trend 6 Creating alignment between payers, financiers and beneficiaries Citizens are often willing to pay for infrastructure – as long as they see the benefit. But things get much more difficult when the payers of infrastructure do not see themselves as the end beneficiaries. In some markets, infrastructure is funded out of central budgets. So a taxpayer in one city may end up footing the bill for a new rural highway they may never use, even though they get some important indirect benefits from it (such as efficient transportation for

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COVER

For infrastructure owners and operators, food products resulting in lower costs at the variable pricing helps manage demand and supermarket). ration capacity. In the energy sector, this More often than not, governments tend has helped authorities to better manage to revert to opaque funding equations, peaks. In transport, it has encouraged hard-nosed negotiations and capacity commuters to shift their travel times. calculations when making these types of In recent years, we have seen the funding decisions. Rarely are end-payers or emergence of dynamic pricing: charges beneficiaries ever consulted. This year, we adjusting in real-time to reflect actual expect to see governments and infrastructure capacity, supply and demand. Some of the funders think more critically about the first adopters were low-cost airlines. They balance between who pays and who benefits were soon followed by railway companies from infrastructure development. Those and app-based taxi companies such as Uber in markets where devolution is disrupting centralized funding models will perhaps have and Grab. Governments are also getting in the toughest discussions. But the rising public on the action; some managed lanes in the US awareness of the social value of infrastructure require operators to adjust their tolls in realtime to achieve a certain traffic speed. We suggests that all governments will be talking believe that the trend to use more dynamic about this issue over the coming year. On pricing is only going one way. the plus side, governments around the world The availability of real-time data, computing have been working hard to identify new power and more sophisticated algorithms approaches that could solve the funding now means that companies can calibrate their paradigm (a trend we have noted in previous prices much more carefully, knowing exactly editions of Emerging Trends). the shape of the demand curve and the true New technologies and analytics costs associated with delivering a service. As approaches will undoubtedly help decisiontechnology becomes more complex, we expect makers find the balance between promoting infrastructure owners to move towards a form broader economic benefits and improving of dynamic pricing, allowing them to hone upward social mobility. Politicians will need rates to the individual, in real-time, based on to engage the public in sober discussions a variety of variables including their ability about who pays for infrastructure (always a to pay, the value they place on a service and politically charged debate). In some cases, the urgency of their use. And in many cases, the need to serve the overall ‘public good’ may lead to some continued misalignment as this shift will mean much closer alignment between those who pay for the ‘haves’ carry some of the infrastructure and those who costs for the ‘have nots’. The And a growing benefit (see Trend 6).Yet there good news is that, over the is also a social dilemma to coming year, we expect this number of dynamic pricing; it can reduce debate to gain momentum, today’s investors access for those unable or maturity and engagement unwilling to pay a premium for from governments, citizens are looking the infrastructure they need. and funders.

Over the coming year, for assets that we expect infrastructure Trend 7 Pricing have taken a owners to start placing more models mature emphasis on understanding Companies have been using much more the need, value and ethics of variable pricing for decades. sophisticated dynamic pricing. We expect But in the past, approaches to see regulators think more to variable pricing were view of clearly about how fairness fairly crude – largely based sustainability can be achieved in certain on time of day availability dynamic pricing models. (peak versus off-peak) and as a way to And we expect to see new scarcity. Energy is cheaper safeguard their dynamic pricing models at night when fewer customers are using it, rail investments and being applied across a wider variety of infrastructure travel is cheaper outside retain their value services. rush hours, and so on.

30 APRIL 2018

Trend 8 The benefits of sharing data become more evident Data is rapidly becoming the backbone of the infrastructure sector. As noted in a number of our trends, data has the power to transform the way governments, planners, developers, owners and operators manage infrastructure and can lead to a dramatically improved user experience. However, we are currently in a ‘mixed economy’ of data ownership – no one party owns all of the data required for smart decision-making. Some data is proprietary (like company data or census data). Some is open and freely available (such as a transport authority’s traffic pattern data). Some is owned by private companies, and some is publicly available but fractured across different public entities.

Similarly, private organizations and individuals can request access to certain data sets but only when the use case and the controls are understood and verified. Others have gone further by making their data sets widely available; open data from Transport for London is now being used by more than 600 different apps. While there are a

COVER

number of bodies looking into the issue (the UK’s National Infrastructure Commission recently released its report recommending a presumption of sharing of non-personal data1 ), nobody yet knows how the concept of ownership will evolve. What we do know is that the benefits of sharing are obvious but constrained by mixed views on who owns what data and how it can be used. This year, we expect governments to get a better handle on managing, sharing and using data across departments and jurisdictions — and between the various players involved in the delivery of government services (particularly when it comes to social services). Some of the more progressive governments will likely start to create more open frameworks for data sharing and collaboration. Over the longer-term, we expect to see a global transition in the way people value and share data. And, as a result, the ownership of data will become less important. The challenge will then become how to share data across multiple platforms – in an open and transparent way – while protecting the privacy of individuals.

Trend 9 Alternative asset classes re-converge Over the past two years, we have highlighted ongoing changes in infrastructure investments. Two years ago, we suggested that – in search of higher-returns — more aggressive investors would be moving to less developed markets, taking greenfield risk and broadening the definition of infrastructure. Last year, we noted that the search for higher-yields and expansion into new markets would lead to a higher level of sophistication within investment firms.

This year, we expect the lines between various asset classes to continue to blur an expansion in the pools of equity that will target the infrastructure sector. For example, the line between real estate investors and infrastructure investors is not just blurring – it is starting to disappear entirely. Real estate is, after all, one of the key components of any infrastructure project, but more recently we have seen traditional real estate private equity firms developing significant infrastructure funds and capabilities. Interestingly, these sectors used to be much closer. Thirty

years ago, most of the private investors who participated in infrastructure did so to capture the underlying real estate value. But over the past three decades, investors became much more specialized. Now, however, the pendulum is swinging once again. In the developed markets, this trend is being driven by the search for new investable long-term opportunities. But in the developing markets, the ultimate goal seems to be to capitalize on rising levels of industrialization.

Ownership may also repeatedly change which would only lead to greater uncertainty in the affected markets. Over the coming year, we expect to see private equity move into a wider range of assets across a wider variety of markets – largely focused on those that offer the greatest potential for rapid industrialization. We also expect to see the competition between these new players and the traditional infrastructure and real estate investors heighten as more parties start to fight for fewer investable opportunities. https://assets.kpmg.com/content/dam/ kpmg/xx/pdf/2018/02/emerging-trends-ininfrastructure.pdf

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ROAD SAFETY

Bosch develops safer cars Beginning March 31, Bosch connected vehicles with eCall will automatically call for help in an accident.

Thanks to the automatic eCall, emergency responders can arrive at the scene of an accident up to twice as fast.

Regional specifications for the UAE and KSA are also underway

32 APRIL 2018

O

n March 31, 2018, the automatic “emergency call” system – eCall, for short – will become mandatory in the European Union.

This requirement means that a digital first responder who automatically calls for help in an accident, will be riding along in the car, each and every time. “Connecting cars makes a great deal possible. Through the automatic eCall system, connected vehicles are now going to become lifesavers as well,” says Dr. Dirk Hoheisel, member of the board of management of Robert Bosch GmbH. All new passenger vehicle models that hit the EU market after March 31, 2018, will come with eCall as standard. These vehicles will feature a standardised eCall box that automatically alerts the local emergency services via the number 112, which is the same across Europe. As a result, lifesaving assistance will be able to arrive with greater speed and precision at the scene of an accident.

These developments assume more importance, considering regional initiatives and campaigns currently underway, including countries such as the UAE and Saudi Arabia,

to combat road accidents. The EU expects that eCall will save 2,500 lives each year and reduce the number of people who are seriously injured by 15 percent. The first automakers are already providing their customers with the digital lifesaver as part of the navigation system without being required to do so by law. Bosch offers an extensive eCall range featuring telematics solutions and services. Thanks to the telematic eCall plug, even older cars can benefit from the solution.

Rapid assistance as standard There are many things to think of in an emergency, and every second matters.

However, many people fall into a state of shock following an accident. In an even more terrifying scenario, the people in a vehicle end up unconscious or trapped after an accident, unable to call for help themselves.

These are precisely the situations in which the automatic eCall system springs to action as an indispensable lifesaver. It knows exactly where the accident has occurred – regardless if it happens at night on a deserted road or on the freeway – and automatically sends that information to the rescue services.

ROAD SAFETY

“eCall places the emergency call faster than a person could and initiates the lifesaving rescue chain,” Hoheisel says. An SOS button is also installed on the vehicle’s dash, which the vehicle’s occupants can use to manually place the emergency call. In both cases, an audio connection is first established between the vehicle and the local emergency services team to communicate further details about the accident. If the driver does not respond, emergency responders go directly to the scene of the accident. Thanks to precise information about the location based on GPS coordinates, the emergency responders even know in which direction of travel the accident occurred. As a result, the automatic eCall enables emergency responders to arrive at the scene of the accident 40 per cent faster in a city, while in rural areas, they can cut the usual response time in half.

A connectivity box that saves lives The first automakers are already offering their customers eCall as part of a vehicle’s navigation or infotainment system for a number of years. In such a set-up, what is installed in the car is not a standard eCall box, but rather an additional

control unit that a connected vehicle uses to communicate with the outside world. At Bosch, this control unit is called the connectivity control unit, or CCU. It is the heart of connected mobility and the communication hub for eCall and other functions and services. The CCU registers a crash when the car’s airbags or seat-belt pretensioners are triggered. It then alerts rescue services or the Bosch emergency call center within a matter of seconds. The CCU is also connected with additional sensors in the vehicle and knows, for example, how many seat belts are in use − and therefore how many people are in the car. As a result, emergency responders not only arrive faster, but also better prepared at the scene of an accident.

the navigation system’s language settings, the associates on the eCall team know which language the driver speaks, which enables them to quickly and directly inquire how the driver is doing and learn what has happened.

This way, there are no communication problems, especially during a critical situation like an accident. The Bosch emergency team then coordinates all rescue operations with the local emergency services in the respective national language. Bosch offers its eCall service in more than 50 countries worldwide, including in Japan, Brazil, and North America. A number of automakers, such as Daimler AG, are already opting for Bosch’s multilingual eCall service.

eCall also speaks French

The eCall requirement applies to new vehicle models that go through the EU’s approval process for the first time beginning March 31, 2018, before hitting the market. Vehicle models with an earlier type approval may continue to be manufactured and sold without eCall. “For Bosch, no car is too old to be a lifesaver, which is why we have developed an eCall retrofit solution in the form of the telematics eCall plug,” Hoheisel says. The retrofit digital first responder for any car is simply inserted into a vehicle’s 12-volt socket (cigarette lighter). No appointment at a garage is necessary. Thanks to an integrated acceleration sensor, it registers collisions and accident severity. It uses Bluetooth to send this information to the corresponding app on the driver’s smartphone, which in turn alerts the service center of the vehicle insurers’ accident switchboard. Even with the retrofit solution, an audio connection is first established with the driver. If the driver does not respond, emergency responders are immediately dispatched to the scene of the accident.

Knowing the challenge of communicating with local emergency services in a foreign country, the eCall service from Bosch speaks 16 languages fluently, among them French, Swedish, and Turkish. Unlike standard eCall, which directly notifies the local emergency services via 112, Bosch eCall first alerts Bosch’s own emergency call center, which is manned 24/7, 365 days a year. Based on

From cigarette lighter to lifesaver

For motorcycles as well For motorcyclists, the risk of being killed in an accident is 18 times higher than for drivers. In light of this, Bosch is developing eCall not only for cars, but also for twowheelers. A special CCU for motorcycles captures the bike’s operating data, which it uses to detect accidents. Thanks to an integrated GPS module, the exact location of the accident is transmitted to the emergency services call centre.

APRIL 2018 33

AIR CARGO’S TOP PERFORMER

top cargo carrier Jack Muhs, Regional President of FedEx Express Middle East, Indian Subcontinent and Africa speaks to Munawar Shariff about the company’s successful cargo business that originates from and to the country and region

W

hat is the status of the air cargo industry in the GCC region today?

The air cargo industry in the region is strong.

According to the latest IATA statistics, in 2017 international freight tonne kilometres (FTK) registered by Middle East airlines achieved 8.1 per cent growth.

Governments around the region are also investing in the development of the logistics and transportation industries as part of their economic diversification strategies. UAE Vision 2021 and Saudi Arabia’s Vision 2030 will see the respective governments invest heavily in developing infrastructure, which in turn will support the logistics industry’s growth, helping to reinforce its position as a contributor to each country’s Gross Domestic Product (GDP). In addition, airport expansion projects in several

APRIL 2018 35

AIR CARGO’S TOP PERFORMER

GCC countries will support the region’s growing aviation sector by providing facilities for the increasing numbers of flights, while also accommodating growth in the logistics industry.

Today, the UAE, and Dubai in particular, is an especially vibrant hub for the region’s air cargo industry. With two airports of its own, Dubai is one of the busiest air cargo hubs in the world. In 2016 alone, Dubai International Airport

36 APRIL 2018

handled nearly 2.6 million metric tonnes of cargo, and Dubai World Central handled close to 900,000 metric tons[1].

Dubai is one of the largest trade hubs in the world, and the largest re-export hub in the region. With its excellent infrastructure facilities, Dubai plays an important role for FedEx Express’ operations, which is why we chose to establish our headquarters for our Middle East and Africa operations in the UAE in 1989. Our facility, located in Dubai

International Airport’s Terminal 2, is the central hub for our region, which comprises the Middle East, Indian Subcontinent and Africa. Today, we operate 44 FedEx flights a week into and out of our hub, which connects to and from airports in the US, France, India, China, Hong Kong, Italy and Singapore. FedEx also connects customers across the region to more than 220 countries and territories worldwide, using more than 700 commercial line-haul flights.

AIR CARGO’S TOP PERFORMER

How does it compare to the international air cargo business?

The existing air cargo infrastructure in the region is well-developed, with more than 40 airports in the GCC providing facilities for logistics companies and passenger airlines alike. Governments in the GCC recognise the potential for the cargo sector to contribute to economic diversification, and the level of planned investment in the development of the transportation and logistics industries is very promising for the future of the air cargo industry.

Additionally, countries in this region continue to pursue strong trade ties with nations around the world, providing an immense level of connectivity.

For FedEx what are the challenges you face in the region? What measures are in place to overcome these?

Each country in the GCC has its own border regulations, which can cause slow clearing processes. Modernised and unified customs regulations will be beneficial for not only our customers, but for the region’s economies as well.

Lifting impediments to trade is essential for business growth; businesses thrive when they have access to single clearance processes for air and road movements, and a consistency in processes and application for all ports of entry into each country.

Our customers can use FedExÂŽ Electronic Trade Documents (ETD) or Electronic with Original (EWO) to complete and submit their customs documents online and ahead of time, which enables a pre-clearance process.

This helps to avoid potential delays at customs, which is critical for urgent shipments.

APRIL 2018 37

AIR CARGO’S TOP PERFORMER

The Dubai Chamber of Commerce and Industry has implemented the ATA Carnet system. This has greatly improved the process of moving shipments in and out of the city.

Implementing a similar system across the region, either by adopting a global measure or developing a new standard, which will facilitate faster delivery times and enable us to better serve our customers.

How is FedEx handling its regional market share? Who is your competition? Which is the most promising market?

FedEx Express has a strong presence in key markets across the Middle East, and we continue to see healthy growth in the region. We started our direct-serve

38 APRIL 2018

operations in the Middle East nearly 30 years ago when we established our regional headquarters and gateway facility in Dubai in 1989, followed by the FedEx Dubai Hub which commenced operations in 1998 as a regional hub for the Middle East, Indian Subcontinent and Africa (MEISA).

FedEx was the first to launch a scheduled all cargo direct flight from the United States to Dubai in April 2011. The flight operates four days a week, and offers a strong value proposition between the United States and the UAE. With this capability, customers in the UAE have been able to import from North America in just two days.

Our customer base across the region is as broad as the solutions we offer. FedEx has

diverse capabilities that can accommodate a wide range of requirements, including services designed to meet the unique demands of niche markets. Whether our customers want to ship an aircraft engine or a document across the world, FedEx Express can make it happen.

Moreover, this is one of the fastest-growing regions in the world for us with considerable potential. In the UAE in particular, as the country’s leadership pushes an ambitious economic diversification agenda, we anticipate greater demand for air cargo and logistics services across these emerging industries connecting more people with goods, services and ideas that stimulate growth. Today, FedEx actively works to support new industries in the UAE and around the region, through

AIR CARGO’S TOP PERFORMER

What kind of freighter fleet does FedEx own? What is its most fuel-efficient cargo carrier?

FedEx runs a fleet of more than 600 aircraft.

We have 28 Boeing 777 and 16 McDonnell Douglas MD-11 international flights arriving to and departing from our regional hub located in Dubai International Airport’s Terminal 2 every week.

As our business relies on global transportation, we are continuously working to modernise our fleet, both on the ground and in the air. In FY16, from June 2015-May 2016, we saved more than 153 million gallons of jet fuel[2] by continuously modernising our aviation fleet, and enhancing our operations. That resulted in avoiding the equivalent of almost 1.5 million metric tonnes of carbon dioxide emissions.

In November 2017, we announced the acquisition of 30 new ATR 72-600F aircraft.

ATR’s approach to sustainability is aligned with our own; they create aircraft that minimise the environmental impact of delivered goods and services, with unrivalled fuel efficiency and exceptional environmental performance.

How is FedEx gearing up for future growth in the region?

our wide range of solutions, such as FedEx International First®, FedEx International Priority DirectDistribution®, FedEx Supply Chain Services® and many more.

We believe that going forward, there is even greater economic and business potential in the UAE, Saudi Arabia, and Egypt.

These three markets have strong, growing e-commerce sectors, which will naturally increase the need for fast and reliable logistics services. Beyond that, the governments in the UAE and Saudi Arabia are concentrating efforts on developing their logistics potential as part of their respective diversification strategies. This will generate significant growth potential for these markets, as the on-ground facilities are upgraded.

FedEx recognises the importance of this region to global trade. In 2015, FedEx Express formed a distinct MEISA organisation focusing on the Middle East, Indian Subcontinent and Africa countries, which represents more than 30 per cent of the markets FedEx serves globally. This allows us to concentrate our attention on the prospects of the region, which consist of several highgrowth economies that are among the most competitive and best places to do business.

This includes, of course, the UAE. FedEx Express has a well-established infrastructure, air network, and service portfolio, which are capable of meeting the surge in import and export trade volumes of the region. In the Middle East alone, we have a strong team of more than 1,400 team members in the UAE, Kuwait and Bahrain that make our business successful. FedEx operates seven stations, 18 retail locations and two 24/7 call centres across the UAE, Bahrain and Kuwait. FedEx provides access and connects markets that comprise more

than 90 per cent of the world’s GDP, in one to three business days on average.

Our focus for 2018 and beyond will remain on providing customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. Our exceptional global network connectivity, wide range of customisable service offerings, and our dedicated people will remain our strengths as we move forward.

What are the trends and disruptors to traditional business in the air cargo industry today?

Disruptive technology is one of the greatest opportunities in the logistics industry. The increased adoption of smart technology, including growth in smartphone usage as well as city- and country-wide smart movements, is driving connectivity. Smart technology has a role to play in the logistics industry, too. For example, we offer our customers SenseAwareSM, a smart device that leverages increased connectivity to deliver an enhanced customer experience. With SenseAwareSM, FedEx customers can track their shipments minute-to-minute, and not only can see where their shipments are, but also can access details such as the temperature of the packages, light exposure and more.

Technology will continue to have an impact on the way logistics companies operate. For example, Big Data analyses can be used to help predict spikes and troughs in consumer demand, and blockchain will be used to provide increased transparency and security throughout the shipping process. Automation will be increasingly prevalent throughout the industry.

E-commerce is a sector that is growing – it is expected to be valued on a global scale at US$4.5 billion in 2021[3]. This benefits the logistics industry as online retailers must have a reliable partner to deliver their orders.

With expertise built on the support of all types and sizes of e-commerce companies around the world, we have developed a range of solutions that can help businesses to go the extra mile. These include tools for flexible delivery options, making order fulfilment and shipment easier and more convenient. _______________________________ Source: [1] https://aircargoworld.com/allposts/top-50-cargoairports-total-domestic-and-international-charts/ [2] http://csr. fedex.com/pdfs/FedEx_2017_Global_Citizenship_Report.pdf [3] https://www.shopify.com/enterprise/global-ecommerce-statistics

APRIL 2018 39

The

air ship

Global Supply Chain has partnered with Brian Cartwright, Managing Director, Top Management Resources Group (TMR), to run a series of exclusive interviews with industry leaders to provide real time insight on the regional supply chain and logistics sector.

Here, Cartwright talks to Julian Benscher, President, Skyship Services, about this new cargo transporting channel, the potential market in the country and region and the future 40 APRIL 2018

A

irships are coming back in a big way and will certainly be a major disruptor to the traditional modes of air, sea, and land transport.

Julian Benscher, President, Skyship Services, who is one of the world’s leading lighter-than-air businessmen, the son of a former European tycoon, he’s a man

of many talents and who was one of the main investors and creators of boy band the Backstreet Boys.

Benscher has been involved in airships for over 30 years, he is the President of Skyship Services a US based company which owns and operates a fleet of Skyship 600’s, the world’s largest conventional Airship

FUTURE TECHNOLOGY

containing 666,000 cubic metre of helium and a 61-metre-long Airship.

As Benscher is one of the key people in the world of airships across the globe, it made sense to pick his brains about airship technology in general and in particular its application for the logistics sector. Here is an excerpt from the conversation:

APRIL 2018 41

What would be the main advantage for using airships in logistics over other modes of transporting cargo?

When we talk about airships in logistics a major advantage is the ability to be able to take off and land without the need for an airstrip which is a potential game changer for delivering cargo to remote locations.

Is the ability to lift heavy cargo in an airship as simple as it appears to be?

Airships are deceptively complicated; their structure and physical attributes conceal some extraordinary complexities which must be considered. Most of the volume of the airship envelope consists of helium which is inert and therefore safe and the second lightest lifting gas which is available, hydrogen being the first with its inherent problems. Consequently, one has to consider the changes in atmospheric pressure that cause the helium to expand and contract. The envelope has a ballonet fitted in the front and rear of it. These ballonets enable air to be drawn within them and released from them to counter the expansion and contraction of helium.

42 APRIL 2018

A second but related issue, when considering cargo is how one compensates for the weight of the load that would be added and removed from the airship. These issues are simple to articulate but a solution for a commercially viable airship has taken huge investment and scientific innovation and endeavour to become a realisable possibility.

Both Lockheed Martin and Hybrid Air Vehicles have made huge strides in this space and expect to have certified cargo airships operational within the next few years.

How do you see the airships industry developing in the Middle East?

Airships are coming to the region far sooner than many people think. One of our very own Skyship 600’s will be operational in the UAE in the second half of 2018 and will be operated by Skyship Services in conjunction with Airships Arabia. Initial use of airships in the Middle East will be focused around surveillance, tourism and advertising, but more importantly the operation will provide valuable airship experience to the Airships Arabia team and the regional certification authorities.

The hybrids are expected to be operating in the region by 2021 and will be suited to carrying high volumes of cargo. The initial Lockheed Martin model is forecast to have a payload of 20 tonnes and Airlander is working on a 12-tonne unit with future versions expected to carry 75 tonnes.

What do you think are the main obstacles the airships industry will need to overcome in this region?

The Skyship 600 is the largest twin engine certified non-rigid airship in the world today, by bringing this airship to the UAE with Airships Arabia now it is hoped that we will overcome any regulatory obstacles by familiarising the regional authorities with what we do. The current absence of specific regulations pertaining to airships is because there have never been manned airships in the Middle East. The Skyship had to undergo the same rigorous certification process as any twin-engine aircraft, and the cargo airships will have to comply with the same rigorous certification process. Once certification is achieved the remaining hurdles are to ensure

FUTURE TECHNOLOGY

Brian Cartwright, Managing Director of Top Management Resources Group (TMR), is well known throughout the international Supply Chain & logistics sector as a focused and highly proactive business leader, mentor, and thought leader.

that the airships and their operators follow local rules and regulations in much the same way as any certified aircraft and its operator that wishes to operate in the region.

How will airships compare in terms of time and cost versus cargo planes?

The time and cost resulting from the ability to operate to and from unprepared sites, including water, will be significant and is a game changer. They are also significantly more efficient in terms of cost to operate for example the Airlander 10 hybrid airship has a fuel burn rate of less than 500kg per flight hour, compared to say a 737 which burns 2,300kg of fuel per flight hour. Even the fuel per km comparison shows the Airlander 10 at less than quarter of the fuel burn of a 737.

For those who don’t already know can you explain the difference between conventional airships and hybrid airships?

Conventional airships such as the Skyship 600 only derive lift from the helium gas inside the envelope whereas hybrids derive lift from a combination of helium gas, forward motion generating lift from the hybrid airship’s lifting body hull shape and from vectored engine thrust.

APRIL 2018 43

FUTURE TECHNOLOGY

Uber Freight -

shaking it up Logistics Management Group News Editor Jeff Berman caught up with Bill Driegert, Director of Uber Freight, early last month to discuss topics such as the freight transportation market, driver shortage, regulations, and truck capacity 44 APRIL 2018

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uring a wide-ranging conversation, Uber Freight’s Director, Bill Driegert, offered up insights on the company’s approach to a competitive market, the impact of the driver shortage and regulations, and where things may go from here.

The following is a transcript of the conversation between Logistics Management’s Jeff Berman and Bill Driegert.

intermediaries, as shippers are looking for options.

Typically, intermediaries are the ones most well suited to find capacity at the last minute and to access that capacity.

Uber Freight is taking that a step farther.

We want to make the transaction and access to capacity be as seamless and as fast as possible by accessing drivers almost instantaneously.

We don’t have to pick up a phone and call them. It is a much (quicker) transaction.

How are companies like Uber Freight approaching current market conditions, specifically as they relate to tight capacity?

How does this work on the pricing side?

Whenever there is a big capacity crunch, it has created increased opportunities for

All of our prices are transparent so we are the only provider in the truckload market with 100 per cent transparency with any of our

FUTURE TECHNOLOGY

drivers and carriers that log in so they can immediately see what the execution price is … and what that allows for us to be more faster and more elastic in how we go to market.

We can blast out to our carriers seamlessly and tell them exactly what we have. This removes the need that, for many providers, requires a series of phone calls, which requires a lot more touch points.

When shippers enter into our network, they can immediately access all of these carriers instantaneously.

How does surge pricing factor into this?

Within truckload, we have a whole different approach to pricing that is much more market-driven within the freight markets.

So, our prices are very much set by what is happening in the market, and it is a very

competitive market so they are competitive with other providers.

Ultimately, because our model is so much speedier it gives us access to carriers earlier, and we are often the first place they look because they don’t have to call or negotiate with anyone. It makes the experience better for them.

Going back to Uber Freight’s formal entrance in the market to now, nearly a year later, what are some of the things in the market that have changed or remained the same over that period? Also, how has the market reacted to Uber Freight’s entrance into what is a crowded and competitive field?

Since launching, I think we have had strong success with customers in telling our story and proving through execution how we can make

their (operations) more efficient. We have had a lot of success over the last year, and I would say that this is an exceptional market.

It is the tightest market I have ever seen since 2006. With that, comes a lot more interest from customers, as they are asking themselves what they need to do to be more efficient and determining what services are the ones worth buying.

Secondly, given all the volatility in the market and accounting for the impact of ELD and some capacity shortages earlier in the year, the combination of those factors definitely changed how customers think about going to market. For us over this time, it was very much about growth and improvement on the model as we went to market.

We are still a small percentage of the market, and it will take more growth more growth before we become a significant part of that total. We have been able to begin

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to start working with some of our larger customers in the market.

Looking at ELD, the soft enforcement period ends on April 1. What have you seen since the December 2017 rollout of ELD in terms of its impact on the marketplace as it relates to your business? Has it been a drag on things or perhaps helped?

With total enforcement starting in April, what we are seeing on a lane-byUltimately, lane basis that some lanes because our are not impacted and other lanes that are right model is so much on the edge of what could speedier it gives be a 1- or 2-day run it is not as clear. As this plays us access to out, what I think we may carriers earlier, see is that certain lanes may be impacted more and we are often than others, and we don’t know exactly what that the first place they impact might be. look because they By the fall, we should have a better sense of don’t have to call what things look like in or negotiate with the market as it relates to ELD. We certainly anyone. It makes are seeing an impact on the experience certain lanes, and we are seeing drivers being more better for them conscious of their hours to make sure the times work.

For us, we have been working with our shippers to make sure those lanes attractive to our drivers and making those loads attractive and that they are able to work within their hours.

There is no shortage of players in this market. How do you view the competitive landscape?

We are familiar with the many players out there and what they bring to the table. Uber Freight is unique, and I think we bring a deeper depth and technological capability, exceptional operating ability and resources that our competitors would not have access to.

And as a result, I think we have the most sophisticated marketplace, and our approach is unique because it is real-time with fixed prices, and it is unique in its access to capacity. It is very difficult for a lot of our competitors to replicate what we have unless

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they build it from scratch, and that is the advantage we have.

We are in it for the long haul, and are very driver-centric, as it is all about empowering the drivers, making them more efficient, and improving their revenue. That makes it a compelling product for shippers because they know they have immediate access to this high-quality driver pool. That was very much our focus early on, and all of these things have a big impact.

There are many challenges in the TruckLoad (TL) market, whether it is

the driver shortage or lack of available capacity, among others. What are the biggest challenges these things present, especially on the driver side?

Smaller carriers have a hard time currently operating in the market. And that is why we have been so focused on drivers, as our success hinges on their success, and it is critical that we build tools and a platform with them in mind.

We are very careful in how we view the market and try to make it better for them. It can be very hard for an owner-operator to get access to good freight, and with what have

FUTURE TECHNOLOGY

built provides for a more seamless, easier and more transparent transaction. We think this provides drivers with better opportunities.

A lot of the capacity challenges in the market are due to driver churn, with some drivers leaving larger carriers and try to go on their own, but find they no longer have direct access to that good freight and instead need to go through intermediaries. Our objective is to make this a more stable market for small carriers and those individual drivers that come into the market.

How does Uber Freight match up with traditional brokers as it relates to business on a transactional level?

Some differences we have are things like transparency, the lack of rate negotiation that a traditional brokerage would have with their drivers, as well as transparency with shippers.

We want to be a transparent, real-time partner, as anyone logging into our system can see prices for any given load at which point they can determine if that works for them or not. Nobody else offers that, and it a small but pretty significant difference for the driver and carrier experience as to what they see in the market. A shipper also would not typically be able to see what a broker was executing at, too.

How do you view the truckload market between now and the end of 2018 from an Uber Freight perspective?

With the capacity situation that is brought on by ELD and the driver shortage to a large degree, we think it creates an opening in which we think Uber Freight is well positioned. 2017, for us, was about building our foundation and initial relationships with shippers and carriers.

And for 2018 we are well-positioned to be active in the market. It is a great opportunity for us go out and demonstrate the value of what we have built. We are seeing freight move off our platform and more engagement from drivers that are using it every week, and from shippers we are seeing increased interest in how we reach the market and plug in deeper to their operations with real-time access.

It is a unique time in the market, and it is creating a lot of opportunities for how they run operations and go to market. -www. supplychain247.com

APRIL 2018 47

Gulftainer

port operator Gulftainer is to operate and develop the Port of Delaware for the next fifty years. This strategically located port is poised to double its capacity and its container handling volumes as a consequence of this deal John Carney, Governor of Delaware

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ulftainer,privately-owned independent port operator, headquartered in the United Arab Emirates (UAE), has announced that its subsidiary GT USA has inked an agreement on terms with the State of Delaware, USA, which would grant GT USA exclusive rights to operate and develop the Port of Wilmington for 50 years.

Terms of the agreement are to be formally approved by Diamond State Port Corporation Board and the Delaware General Assembly within the next month, followed by the formal review by the Committee for Foreign Investment in the United States (CFIUS).

The new agreement provides Gulftainer access to one of the most strategically located marine ports in the US, situated only a four-hour voyage from the Atlantic Ocean. GT USA’s concession includes the full

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Badr Jafar, CEO of Crescent Enterprises and Chairman of Gulftainer’s Executive Board

PORT OPERATIONS

APRIL 2018 49

Port of Wilmington in Delaware, USA

management and development of the Port’s existing container volumes of 350,000 TEUs per year, which is forecasted to more than double in the years to come as a consequence of this deal.

Notably, Wilmington Port, which started operations in 1923 as the first major port on the Delaware River, is the top North American port for imports of fresh fruit into the USA, and has the largest dockside cold storage facility in the country.

Over the next nine years, Gulftainer is planning to invest US$580 million in the port, including approximately US$410 million for a new 1.2 million TEU container facility at DuPont’s former Edgemoor site, which was acquired by the Diamond State Port Corporation in 2016. During this period, the company will fully develop all the cargo terminals capabilities and enhance the overall productivity of the port.

50 APRIL 2018

The landmark agreement on terms follows over a year of negotiations and an evaluation of Gulftainer’s capabilities globally, including in the USA. Within the USA, the Company currently operates the Canaveral Cargo Terminal in Port Canaveral, Florida, after winning a 35-year concession in 2015. As part of these operations, the company has also been providing services to the US Space Industry, including contracts with SpaceX and Blue Origin.

John Carney, Governor of Delaware, emphasised,“With Gulftainer’s proposal, we have an opportunity to develop the overall infrastructure and potential of the port, which can lead to a direct and significant impact on our economy as a whole.”

He added,“We hope to see significant impact to the state’s revenue stream with the planned injection of US$580 million investment into the cargo facilities within

the city of Wilmington. This massive infrastructure upgrade will have a knockon effect to the logistics sector of the entire East coast. It is also exciting to see that Gulftainer’s proposal included a plan to establish a marine training institute to boost local career aspirations in maritime industry and port operations.”

Badr Jafar, CEO of Crescent Enterprises and Chairman of Gulftainer’s Executive Board, said, “For over 40 years, and as the oldest container operator in the Gulf Region, Gulftainer has been at the forefront of transforming port and logistics operations across four continents.

We are honoured and excited to extend this experience and capabilities to the Port of Wilmington, as we continue to pursue a strong growth trajectory in the USA.” He added,“Gulftainer looks forward to being given the opportunity to work closely with the State of Delaware authorities to

PORT OPERATIONS

Official logo of Gulftainer

achieve significant enhancement across the board, from infrastructure development and capacity building to creating a sustainable source of employment and overall economic growth. We are keen to position Wilmington as the major gateway port to the US MidAtlantic states.”

GT USA will also establish a training facility at the development site specifically for the Ports and Logistics industries that is expected to train approximately 1,000 people every year.

Jeffrey W. Bullock, Secretary of State of Delaware, noted,“We expect to leverage Gulftainer’s strategic expertise in terminal operations to transform the Port of Wilmington, during the 50-year lease period, into the best facility of its kind in the region.”

For his part, Peter Richards, Group CEO of Gulftainer, said,“At Gulftainer, we see enormous opportunity to add value to the port infrastructure in the US and are excited to expand our operations within the country. The Port of Wilmington has for decades handled important gateway cargo that supplies the entire nation. Our plan is to build on this foundation and take the operations to new heights by working closely with each of the stakeholders within its ecosystem. With projected volume growth more than doubling in under a decade, doubling the revenue to Delaware state, a brand-new terminal at Edgemoor and a possibility to create around 12,000 jobs, this project is likely to become one of the biggest success stories in the US ports sector.”

Currently owned and operated by the State of Delaware, the Port of Wilmington is a fully serviced deep-water port and marine terminal, strategically located on 308 acres at the confluence of the Delaware and Christina Rivers.

Established in 1976, Gulftainer is a privately owned, independent port management and 3PL logistics company based in Sharjah, United Arab Emirates (UAE). For more than 40 years Gulftainer have sustained a world-class operations standards, covering cities such as the Khorfakkan Container Terminal (KCT) and the Sharjah Container Terminal (SCT), as well as sustaining an international presence which spans across the Middle East, Europe, and the Americas with projects in Iraq, Saudi Arabia, Lebanon, Brazil and the USA.

APRIL 2018 51

TECHNOLOGY LAUNCH

Launches its supply chain visibility suite – Orbit

Real time visibility in the supply chain is a highly sought after component for a successful operation.

Fareye recently launched Orbit - a supply chain visibility suite which promises complete transparency in the supply chain from start to finish

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Supply chain visibility

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igital logistics platform, FarEye, recently launched supply chain visibility suite Orbit. This allows enterprises to have complete visibility of goods while in transit from the plant right through to the final destination. The suite which is a “platform for predictability” for freight movement, includes capability to design an organisation’s custom logistics process, integrates with TMS and WMS systems, allows data-driven transporter allocation, digital proof of delivery and provides live ETA during the entire journey.

FarEye’s solutions in logistics technology for the B2C industry is widely used by global giants like Walmart, Dominos, DHL, Noon and Amway. It has been working with organisations to reduce cost and deliver on-time parcels especially in retail and ecommerce. The B2B world today lacks data-driven optimisation and predictability of freight across the supply chain. Orbit is built to ensure that supply chains are reliable and optimised. It addresses one of the fundamental issues facing the industry today – greater visibility and helps

businesses in making time-sensitive databacked decisions.

Enterprises face challenges of control over supply chain that might delay shipments. Supply chain providers across the globe are aiming to achieve complete visibility and seamless collaboration amongst all the stakeholders to tackle the processes of unforeseen events, an inability to receive live status updates on inventory among others.

Kushal Nahata, Co-founder and CEO, FarEye, says, “With multiple stakeholders involved in the movement of freight, the supply chain has historically been like a black box for enterprises, with customers not knowing where and what condition their goods are in.

As the world moves towards a just-in-time manufacturing model which demands shorter and reliable supply chains, companies are rightly demanding to know the location and state of their goods at every stage of their journey. Orbit will give businesses complete visibility of goods from the start of their journey until the final destination and help foster collaboration among the various stakeholders and logistics processes.”

TECHNOLOGY LAUNCH

Business challenges that led to the development of Orbit • Limited visibility of live freight location • Delayed delivery confirmation due to manual processes • Inefficiencies due to high unloading/wait time • High costs due to wastage of goods during transportation

Orbit also delivers: • On-time delivery with live notification & alerts • Consolidated Dashboard, Reports & Records with ETA of shipment along with SMS updates.

• Improved efficiencies and reduced cost with digitalized processes • Reduced inventory with reliable supply chain • Data driven transportation performance management • Proof of Attempt and deliveries with digital signatures & feedback rating

• Easy amendments of 3PL contracts, shipment routes and other for improved future deliveries.

As companies expand globally and rely more on geographically dispersed partners, vendors and customers, ORBIT enables supply chain professionals to make their processes interconnected, improve efficiency, optimize cost/resources along with an added layer of real-time visibility, predictab

The suite, which also works for reverse logistics, integrates with 3PL (third-party logistics) systems as well as warehouse management systems to provide full visibility at every step. The FarEye suite also integrates with GPS devices and temperature sensors to alert companies of any potential or actual problems with the goods while in transit, and features item level tracking and event-specific alerts. FarEye’s ‘Delivery Happiness Dashboards’ make it possible to track KPIs like vendor performance, bottlenecks in transit etc., which can be used to take data-backed decisions. The suite also offers automation of logistics processes with mobile application like digital proof of delivery and feedback.

Available immediately, Orbit is built on top of a Business Process Management (BPM) framework to design multiple logistic workflows across regions. It can be quickly and easily integrated into logistics firms’ existing TMS and WMS systems, thereby minimising disruption and infrastructure costs.

Features of the solution • Live ETA status update of freight • Mobile workflow for status update • Integration with TMS/ Logistics ERP systems • Customer specific logistics workflow with freight movement SLA’s • Intelligent allocation of freight to 3PL partners • Mobile application for drivers to update delivery status and ePOD • Analytics dashboard for KPI & vendor performance measurement and bottlenecks in movement

APRIL 2018 53

AIR CARGO TECHNOLOGY

The digital dangerous goods supply chain IATA has initiated a change, a step ahead in the digitalisation of the supply chain of dangerous goods as well as launching a solution that will enhance safety and improve efficiency in the transport of dangerous goods by air

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he International Air Transport Association (IATA) has taken a significant step forward in the digitalisation of the dangerous goods supply chain following the adoption of the e-Dangerous Goods Declaration (e-DGD) standards.

The e-DGD is an electronic approach to manage the IATA Dangerous Goods Declaration (DGD), leveraging industry initiatives to digitalise data and embrace data sharing platform principles. This

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aligns with and supports industry initiatives to modernize air cargo processes efficiently and share critical data among stakeholders that need it. Implementing the e-DGD requires cooperation between all stakeholders, including shippers, forwarders, carriers, ground handling agents and third party providers.

The benefits of implementing the e-DGD with clearly defined data governance include improved transparency, traceability and data quality. This, in turn, will improve process efficiency and reduce errors and delays.

The e-DGD was developed through the IATA Cargo Services Conference with key support provided by four proof of concept partners - Air FranceKLM Cargo, Lufthansa Cargo, Swiss WorldCargo and Cargologic confirming industry requirements.

“The e-DGD demonstrates the air cargo industry’s commitment to modernize processes. The challenge now is implementation so that the benefits can be realized by the supply chain and, more importantly, by our customers,”said Glyn Hughes, Global Head of Cargo, IATA.

“The e-DGD is an important step in the digitization of airfreight documents.

By using data sharing principles, the e-DGD brings a new opportunity to introduce further automation and artificial intelligence exploration in air transport processes. Our ultimate goal is to increase quality, transparency, efficiency and customer satisfaction.

Air France-KLM Cargo is proud to be among the inspirers and architects of this achievement at CDG airport,”said Elisabeth Herelier, Air France Cargo EVP. Dr. Jan-Wilhelm Breithaupt, Vice President Global Handling, Lufthansa Cargo´s said,“e-DGD is one important component of Lufthansa Cargo´s digitisation strategy to provide a holistic digital environment for our customers.

Only when all stakeholders of the supply chain find benefits in the solution, will digitization be successful on such a large scale. This was taken into account for the e-DGD standard, and we´re happy to perform the Pilot project with industry partners in our hub in Frankfurt.”

Ashwin Bhat, Head of Cargo at Swiss WorldCargo said,“e-DGD is a powerful step forward for the air cargo

AIR CARGO TECHNOLOGY

industry, and the digitization in this offering can translate to direct benefits for Swiss WorldCargo customers. We anticipate that it will ensure a standardized, successful way of working, thus continuing the efficient collaboration between all our partners and stakeholders within the supply chain.

Dangerous goods handling innovation IATA has also launched an innovative new solution for the air cargo industry: Dangerous Goods AutoCheck (DG

AutoCheck) that will enhance safety and improve efficiency in the transport of dangerous goods by air and support the industry’s goal of a fully digitized supply chain.

“The air transport industry handles in excess of 1.25 million dangerous goods shipments transported per year. With the air cargo growth forecast at 4.9 per cent per year over the next five years this number will rise significantly. To ensure that air cargo is ready to benefit from this growth the industry needs to adopt modern and

harmonized standards that facilitate safe, secure and efficient operations, particularly in relation to carriage of dangerous goods.

DG AutoCheck is a significant step towards achieving this goal,”said Nick Careen, Senior Vice President, Airport, Passenger, Cargo and Security, IATA.

Facilitating acceptance checks DG AutoCheck is a digital solution that allows the air cargo supply chain to check the compliance of the Shipper’s Declaration for Dangerous Goods (DGD) against all

APRIL 2018 55

AIR CARGO TECHNOLOGY

relevant rules and regulations contained in the IATA Dangerous Goods Regulations.

The tool enables electronic consignment data to be received directly, supporting the digitization of the cargo supply chain. Optical Character Recognition (OCR) technology also transforms a paper DGD into electronic data. This data is then processed and verified automatically using the XML data version of the DGR. DG AutoCheck also facilitates a ground handlers or airline’s decision to accept or reject a shipment during the physical inspection stage by providing a pictorial representation of the package with the marking and labelling required for air transport.

“The DGR lists over 3,000 entries for dangerous goods. Each one of which must comply with the DGR when shipped. The paper DGR is 1,100 pages long. Manually checking that each Shipper’s Declaration is compliant and the package(s) are correctly, marked, labelled and packaged is a complex and time consuming task. Automation with DG AutoCheck brings us a giant step forward. The cargo supply chain will benefit from greater efficiency, streamlined processes and enhanced safety,”David Brennan, Assistant Director, Cargo Safety and Standards, IATA.

Industry collaboration Collaboration is critical in driving industry transformation especially for a business with such a complex supply chain. DG AutoCheck is a good example of effective industry partnerships.

An industry working group made up of more than twenty global organisations supported the development of DG AutoCheck. This group contains airlines, freight forwarders, ground handlers and

express integrators including Air-France-KLM Cargo, Swissport, Panalpina and DHL Express.

“The air cargo supply chain is currently undergoing a major digital evolution.

Collaboration across the industry is essential if the goal of a digitized electronic end to end messaging platform is to be realized.

There is no time to lose; our customers already expect the efficiency of electronic documentation throughout the supply chain,” concluded Careen.

APRIL 2018 57

AIR CARGO

One and a half million fish recently flew from Turkey to Oman. Yes, you read that right. Of course they were in a controlled air cargo environment on board a Turkish Cargo Boeing 777 freighter

Fishy cargo P

erforming air cargo transportation to 121 different countries around the world as a sub-brand of Turkish Airlines, Turkish Cargo recently added another successful operation to its proven track of records. Turkish Cargo carried 1,5 million live Gilt-head breams weighing 100 tonnes to Oman from Izmir by providing the environment, needed by the fish underwater, above the clouds.

Providing substantial contributions for Turkish exporters to introduce their names in different markets with its enhanced services and new destinations added to its flight network recently, Turkish Cargo achieved this successful operation to carry 1,5 million Gilthead breams, grown in the Aegean Region by Kilic Holding equipped with the highest fish growing capacity across the Europe, to Oman.

During this cargo flight carried out in a Boeing 777F wide-body freighter on charter basis and accompanied by aquaculture

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AIR CARGO

engineers, pH balance, oxygen and water temperature levels of baby gilt-head breams were checked every hour.

Delivering a statement on this cargo flight operation, Turhan Ozen, Chief Cargo Officer at Turkish Airlines, said,“Hundred tonnes of live fish were required to be transported to Oman from Bodrum in a maximum period of 40 hours. They were first taken to trucks and carried to Izmir in three hours upon completion of the initial preparations, and then, they were loaded in our freighter equipped with special conditions set by our cargo handling team. They were carried to Oman from Izmir in three hours, so, we were able to carry them within 24 hours in total. We accomplished this operation by using a Boeing 777F type freighter in accordance with IATA LAR (Live Animals Regulations), reinforcing our success in the transportation of live animals requiring an utmost level of care. Carrying 1.5 million live

APRIL 2018 59

AIR CARGO

fish by means of a freighter requires accurate air-conditioning, and expertise in oxygen and temperature checks. Furthermore, this carriage operation fell under the status of transportation of dangerous goods due to the oxygen cylinders utilised. We could provide the environment required for health of the fish, and meet the requirements of the operation thanks to our expert team and the assurance by Turkish Cargo. We, as Turkish Cargo, will keep standing by the Turkish exporters at all times.”

Acting in accordance with the principle of “delivering as soon as possible” in cargo operations, Turkish Cargo provided

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a beyond-expectations service during this operation, contributing to the supply chain of marine products, and thus, the Turkish economy.

Turkish Cargo has an adequate freighter fleet and a globally-effective flight network to readily meet the requests for importation of live fish from many Arab countries such as Tunisia, Oman and Saudi Arabia, hence building trust for carriage of special cargo.

Serkan Ilgaz, Executive Vice President, Production at Kilic Holding, said, ‘’We are standing as the only company performing sea fish imports operations from Turkey.

We carried approximately 1,5 million baby

gilt-head breams to the Indian Ocean off the coast of Oman in shorter than 40 hours, and performed our first shipment with Turkish Cargo. We hope to keep developing our cooperation with our flag-carrier airline in the new achievements in future.”

Standing as the dynamic brand across the cargo industry managing its operations in accordance with the guidelines published by the International Air Transportation Association (IATA), Turkish Cargo exercises maximum care in all transportation operations for live animals, and maintains the best safety, comfort and hygienic conditions with its well-trained personnel.

w us, we carry the UK.

our client focused range of products, edicated cargo team, you can rest ed that Oman Air Cargo will move consignments with the shortest ptance cut-off time at origin, and the highest loading and delivery ity at your chosen destination e applicable.

man Air Cargo, we ensure we deliver your ignment wherever you may need.

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