Global Supply Chain February 2021 Issue by GLOBAL SUPPLY CHAIN

February 2021 Issue 77

ENHANCING THE BUSINESS OF LOGISTICS

GCC Logistics & Supply Chain Landscape Industry poised for takeoff

Infrastructure Development, Digitalization, Start-Ups and Vaccines to enable business resurgence UD Trucks

Spirited Performance

Vaccine Conduit Dubai in Forefront

DP World Hyperloop Speeding Ahead

RAISING THE BAR WELCOME TO SMARTIST, OUR NEW HIGH-TECH FACILITY IN ISTANBUL - THE LOGISTICS CENTRE OF THE WORLD. WE'RE ALSO RAISING THE BAR FOR ENVIRONMENTAL RESPONSIBILITY AND CUSTOMER-FOCUS, MOVING TOWARDS OUR GOAL OF BECOMING THE WORLD'S LEADING AIR CARGO BRAND.

turkishcargo.com.tr

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                                                                         ’                                

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GCC Logistics…..prepping for revival SIGNATURE MEDIA FZ LLE P. O. Box 49784, Dubai, UAE Tel: 04 3795678 Email: info@signaturemediame.com Exclusive Sales Agent Signature Media LLC P.O. Box 49784, Dubai, UAE Publisher: Jason Verhoven jason@signaturemediame.com Editor: Malcolm Dias malcolm@signaturemediame.com Art Director: Johnson Machado johnson@signaturemediame.com Production Manager: Roy Varghese roy@signaturemediame.com

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The welcome news of the breakthrough vaccines now being administered to populations in countries across the globe is undoubtedly a big shot in the arm, quite literally, for the individuals taking the jab. The spinoff also importantly is for the wider industry and national economies as businesses limp back to normalcy as we once knew it to be. This is the professional view of reputed business consulting and economic intelligence firms Frost & Sullivan and Oxford Business Group in their recent reports on the state of the regional logistics and supply chain industry. We report the analysis. The concerted move and convergence of four major Dubai-based stakeholders—Emirates SkyCargo, DP World, International Humanitarian City and Dubai Airports in transporting theCovid-19 vaccines worldwide is an encouraging move. The Vaccine Logistics Alliance is the brainchild of and developed on the directives of HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai. The facilitation of streamlined vaccine deliveries will certainly play a key role in containing the virus and immunizing populations worldwide. All this bodes well for businesses and we are already witnessing the proverbial first green shoots as industry leaders express optimism and are more hopeful about an expected turnaround in the shortterm and foreseeable future. Our regular series of thought leadership articles and contributions from eminent and well-regarded logistics and supply chain professionals are grist for our content mill as we engage, weigh in and deliberate on major issues gripping the industry. Add to this our latest news roundup, updates, OpEds and a lot of carefully sieved and well-curated input to stimulate and satiate the readers’ quest for gainful insights in the logistics and supply chain arena. Happy reading! Malcolm Dias Editor malcolm@signaturemediame.com FEBRUARY 2021 3

February 2021 Issue 77

20 GCC Supply Chains

A quartet of solutions will ensure the industry comeback

06 NEWS 26 GCC Logistics Forecast 32 UD Trucks 34 IATA 36 Agility-Shipa 38 ACWA Power 40 World Logistics Passport 41 Etihad Cargo 42 Vaccine Logistics Alliance

Up to date news of the Global Suppy Chain industry Vaccines hold the key to industry revival

The commercial vehicles brand has reportedly fared well in 2020 2020 was the worst year for air cargo since 1990 E-commerce entity to open two new fulfillment centres in Dubai Saudi Arabia’s ACWA wins big deal in Uzbekistan Three new countries have joined the initiative Etihad Cargo beats 2020 on-time performance targets Four Dubai entities have combined forces to distribute vaccines globally

4 FEBRUARY 2021

46 Sustainability 48 ADNOC 50 Riyadh Metro 51 DP World Hyperloop 52 Marketing Technology 54 Swisslog 57 Europhia Consulting 60 King Salman Port

Prof. Omera Khan on the need for ensuring sustainability in the industry UAE’s National Oil Company taking initiatives to ensure continued growth

France’s Alstom plays a pivotal role in developing the city’s metro system Much progress to report on the Hyperloop front Appropriate use of Marketing Technology must be beneficial to users E-commerce fulfillment is a key competitive advantage and a pivot to success Insights on global vaccine distribution logistics

Honeywell’s partnership at premier Saudi Arabian port highlighted

Concurrent Show Guangzhou International Cold Chain Logistics and Equipment Exhibition 2021 Guangzhou International Automated Packaging and Packing products Exhibition 2021 Guangzhou International Logistics and Supply Chain Exhibition 2021 IMS-a CeMAT ASIA event 2021 & IIoT Show 2021

www.chinalet.cn

China import & Export Complex,Guangzhou

25-27 May 2021

LET-a CeMAT ASIA event 2021

DP World and Senegal ink agreement to develop Ndayane port

The DP World-UNICEF virtual signing ceremony.

n DP World, and the Government of Senegal, recently signed agreements for the development of a new deepwater port at Ndayane, approximately 50km from the existing port and near the Blaise Diagne international airport. After discussions in the capital Dakar between Senegalese President Macky Sall and Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World, it was agreed that it would be more appropriate for Senegal’s development to carry out a more ambitious project and build an entirely new port outside the city. Agreements were signed between Alioune Ndoye, Minister of Fisheries and Maritime Economy of Senegal; Aboubacar Sedikh Beye, Director-General of the Autonomous Port of Dakar (PAD), and the visiting DP World’s Chairman, paving the way for the development of the new port. DP World Dakar SA, will not only develop and operate the 300-hectare (ha) container terminal but also finance, design and develop the land and maritime infrastructure of the new 600ha port. The first phase of this project will see an investment by DP World Dakar of US$ 837mn, which will make it the single largest private sector investment in the history of Senegal and is expected to be followed by the second phase of investment of US$ 290mn. Phase 1 will include a new container terminal with 840m of the quay and a new 5km marine channel designed to handle 366m vessels and capable of handling the largest container vessels in the world. Phase 2 will create 410m of additional container quay and further dredging of the marine channel to handle 400m vessels. 6 FEBRUARY 2021

Technology Innovation Institute and Virgin Hyperloop announce R&D partnership in the UAE

n The Technology Innovation Institute (TII), the dedicated ‘applied

research’ pillar of Abu Dhabi’s Advanced Technology Research Council (ATRC), and Virgin Hyperloop (VH), recently announced their collaboration on research, innovation and localization of the futuristic transportation method. The agreement was signed by Faisal Al Bannai, Secretary General, ATR and Sultan Bin Sulayem, Group Chairman and CEO, DP World and Chairman of Virgin Hyperloop, during a virtual ceremony. Transporting passengers and goods at speeds exceeding 1,000km/h, hyperloop is a completely new form of transport with the ambition to become the most sustainable means of mass transportation. Technology Innovation Institute and Virgin Hyperloop will explore research for hyperloop systems on TII’s premises, including pulsed power and magnetic levitation technologies and material sciences that are key to developing the next-generation transport system. “Advanced technology allows us to progress every aspect of life and collaborations with industry partners like Virgin Hyperloop help leverage it for the greater good,” remarked Al Bannai. “We are one step closer to ushering in a new era of ultra-fast, sustainable movement of people and goods,” commented Bin Sulayem. Hyperloop is a cutting-edge technology that will drive entrepreneurship and leadership in the transportation space through the partnership with TII. This in turn will provide opportunities for economic growth through the creation of a strong R&D hub in line with the country’s vision. “Abu Dhabi’s thriving technology sector will provide a perfect location as we look to advance hyperloop technology and foster successful public-private partnerships with key organizations within the ecosystem,” noted Harj Daliwal, Managing Director, Middle East and India, Virgin Hyperloop. The partnership not only creates an opportunity for a research hub but also provides Abu Dhabi with a first mover advantage on a passenger and cargo system. A hyperloop network in the Arabian Gulf region could move up to 45mn passengers per year, powered by solar panels covering the tube, a press communiqué indicated.

Robot helps repacking liquid chemicals in Dubai, Jebel Ali and the touch panel to operate the robot are incorporated in a stainless-steel cabinet at the filling robot. chemical logistics hub in Dubai, Jebel Ali Free Zone. “The system is part of our integrated solution set-up at our site This machine, with which the company sets a new innovative in Jebel Ali Free Zone. We can receive the highly hazardous liquid standard, enables the repackaging of hazardous chemicals according chemicals in bulk, repack it and store the material in our chemical to the highest safety standards. The full system is an enclosed warehouse at the same facility system with an air purification to at highest standards,” explained be able to handle even products Markus Koepsel, General Manager with hazardous vapours in a safe RSA-TALKE. manner, the logistics services “We have taken the next step provider revealed in a press to enhance the chemical logistics communiqué. infrastructure in Dubai with this The company detailed how robot and technology, since it the the robot works. A carrying first of its kind installed in UAE”, conveyor moves pallets with emphasized Abhishek Shah, empty containers onto the scale Chairman RSA-TALKE and CEO, base. While the pallet is moving, a Co-Founder, RSA Global. line camera scans the surface and “This newly added option of automatically locates the positions shipping liquid chemicals in bulk of the filling openings. and then transferring it to a packed At the same time, the camera goods provides a new option for system checks whether the our global customer network to openings make sense or not utilize Dubai even more as hub (plausibility check). Afterwards, the in the region”, stressed Alex containers are opened one after the Herreboudt, Board Member RSAother, filled, closed and if required, TALKE and Director Middle East & sealed. The electro-pneumatic Asia TALKE Group. control with the scale electronics The Filling Robot at the RSA-TALKE complex-Dubai.

n RSA-TALKE has introduced a fully automated filling robot at its

SHUAA-led consortium successfully buys out Stanford Marine Group debt n SHUAA Capital, the leading asset

management and investment banking platform in the region, recently announced that it has successfully completed a debt buyout of Stanford Marine Group’s AED 1.13bn (US$ 308mn) facility, resulting in a successful outcome for all parties involved, the financier revealed in a press communiqué. SMG is one of the most prominent and diversified offshore services companies in the Middle East, with a focus on chartering, building and repairing offshore support vessels for the oil and gas industry. Following the debt buyout, SMG is poised for growth. The restructuring transaction has also helped save more than 1,800 jobs, and annual exports of close

to USD 20 million worth of (Made in UAE) vessels made in the Grandweld shipyard’s facility in Dubai Maritime City. “We believe this to be one of the few restructuring transactions in recent times to successfully address all stakeholder needs and we hope that this will serve as a template for further such transactions,” commented Jassim Alseddiqi, CEO, SHUAA Capital. “SHUAA Capital has managed to pull off a complex restructuring program effectively giving the company a new lease of life,” remarked Elias Nassif, CEO, Stanford Marine Group. This investment is part of the Private Markets activity of SHUAA Capital and is held as a co-investment vehicle.

Jassim Alseddiqi, CEO, SHUAA Capital.

FEBRUARY 2021 7

Khalifa Port consolidates UAE Food Security n Abu Dhabi Ports has inked a 50-year land lease agreement with Anchorage Investment, for the development of grain storage and processing plants at Khalifa Port, to be managed by National Feed, one of the largest Agro commodity processors in Abu Dhabi. Set to be developed on a 100,000-sqm plot, and with an initial design capacity of 300,000mt, the facility will introduce grain storage and processing capabilities to the multi-purpose port for the production of key food and animal feed ingredients. Providing Abu Dhabi Ports’ customers with direct access to competitive food ingredients, the facility will utilise grain resources to convert wheat into flour for baked goods, corn into starch and glucose, barley, corn, and wheat by-products into animal feed. “Furthering the capabilities of our multi-purpose port and bolstering our ongoing activities within the region’s food supply chain, the operation will introduce several key advantages for the benefit of new and existing manufacturing customers,”commented Saif Al Mazrouei, Head of Ports Cluster, Abu Dhabi Ports. Following the official handover of the land plot in the first quarter of 2021, the new project will house several grain silos capable of storing grain for an extended period, providing Abu Dhabi and the wider UAE with a long-term storage solution contributing to national food security.

“A robust logistical offering can play a fundamental role in the accessibility and cost structure of food commodity supply chains. With its deep-water capabilities, a strategic geographical location, and access to an extensive road and future rail network, Khalifa Port will unlock new opportunities for National Feed,” remarked Edward Hamod, General Manager, National Feed.

Abu Dhabi Ports supports Transportr’s ICD with premium logistics services n Abu Dhabi Ports, part of ADQ has signed an agreement with

Transportr Ltd to manage its inland container depot (ICD) in Musaffah, provide handling facilities within the ICD and deliver fully inclusive transportation solutions for containers between the ICD and Khalifa Port. The agreement will not only improve connectivity between Transportr’s depot and Khalifa Port, but will also aid in reducing costs for transport of containers, while simultaneously improving the efficiency of the supply chain. Transportr had already secured the movement of over 15,000 TEUs for 2021 from several prominent industrialists located in ICAD 1, 2 and 3, and is expected to increase the handling to over 20,000 TEUs over the course of next year. “Connectivity for the entire Musaffah trade will also be improved through reduced waiting times, increased availability and integration with shipping lines,” asserted Saif Al Mazrouei, Head of Ports Cluster, Abu Dhabi Ports. “Transportr’s unique ICD logistics model along with its efficient digital freight network will provide customers with access to a new fully integrated logistics model for servicing diverse range of cargo,” affirmed Alaa Hawari, General Manager, Transportr. Under the new contract, Abu Dhabi Ports will bring forth its full logistic capabilities to oversee inward and outward container handling at Khalifa Port, delivery of orders, processing customs documentation and procedures, container terminal handling, truck 8 FEBRUARY 2021

loading and unloading, as well as container inspections. At the same time, the company will provide ICD-related container handling services as part of the contract offering shipping lines, local importers, and or exporters the ability to collect and offload containers within the ICD. Transportr is one of the fastest-growing digital freight platform in the UAE, in achieving greater economies of scale through reduced transportation costs thanks to the utilisation of mixed-sized containers to and from its Mussafah-based ICD. The operation is expected to improve supply between the companies under the group’s umbrella via an ongoing shuttle service.

Saudi Arabia’s PIF and COSCO become RSGT shareholders

n The sounding shareholders of Red Sea Gateway Terminal Limited (RSGT), a privately-owned independent terminal operating company, have signed separate Share Purchase Agreements (SPAs) with the Kingdom’s Public Investment Fund (PIF) and with COSCO Shipping Ports Limited (CSPL).

This was facilitated through its whollyowned subsidiary Sound Joyce Enterprises Limited, for the sale of 40% equity interest in RSGT (with 20% each) for total consideration of SAR 1,050mn (US$ 280mn). The two transactions imply an enterprise value for RSGT of SAR 3,300mn (US$ 880mn). The completion of both transactions is subject to the approval of the Saudi Arabian Ports Authority (Mawani), as well as other customary approvals. Having commenced operation in 2009, RSGT was founded by leading Saudi and international investors (Founding Shareholders), including Saudi Industrial Services Company (SISCO), Xenel Industries, and City Island Holding Limited, a wholly-owned subsidiary of MMC Corporation Berhad (a Malaysian conglomerate with extensive port operations). Upon completion of the transactions, PIF and CSPL will become shareholders of

RSGT (with 20% shareholding each), while the founding shareholders will retain the remaining 60% shareholding in RSGT. RSGT will remain an independent terminal operator, focused on servicing its existing and future customers in the global logistics chain. The company signed a new 30-year build, operate and transfer agreement with Saudi Ports Authority (Mawani) in December 2019 (BOT Agreement), which envisages the investment of US$ 1.7bn in automation, infrastructure, and equipment through 2050, in order to reach an annual throughput capacity of approximately 9mn TEU. “As the largest terminal operator on the Red Sea and in Saudi Arabia, we are committed to serving the growing requirements of international cargo and container services throughout the global logistics chain and to fulfilling our customers’ needs and the goals of Saudi Arabia’s Vision 2030 programme for infrastructure and port development,”asserted Jens O. Floe, CEO, RSGT.

Cathay Pacific launches freighter service to Riyadh n Cathay Pacific Cargo has launched a new scheduled freighter

service between Hong Kong and Riyadh (RUH) commencing 5 January 2021. The airline has seen a growing demand for air cargo flights between Saudi Arabia and Hong Kong (HKG), a leading cargo and logistics hub in Asia. These new flights will meet the strong demand for shipments of e-commerce and other general cargo such as garments, providing our customers with reliable, efficient and direct air cargo services offering the high level of quality for which Cathay Pacific Cargo is known. The inaugural flight will see Cathay Pacific Cargo operate the service using its Boeing B747-400 ERF aircraft. Flights will operate once per week every Tuesday with a stopover in Dubai (DWC) on the return flight to Hong Kong. Cathay Pacific Cargo has launched a number of scheduled and charter services recently to meet the air cargo needs of its customers. Recently, the airline launched a seasonal cargo service between Hong Kong and Hobart in Australia, providing an important airfreight lane for the export of fresh produce from Hobart to various parts of Asia via Hong Kong. Meanwhile in September last year, the airline launched a temporary service to Pittsburgh in the US to serve the seasonal upsurge in demand, a press statement concluded. FEBRUARY 2021 9

dnata inaugurates advanced cargo complex at Manchester Airport n dnata has opened a new, advanced cargo complex, dnata City North, at Manchester Airport (MAN). Representing an investment of over GBP 30mn (US$ 41mn), the 150,000sqft facility allows the company to significantly expand and consolidate its Manchester operations. Particularly well-situated for ease of airfield access, dnata’s purpose-built on-airport facility includes 125,000 sq ft² warehouse space and is capable of processing in excess of 150,000 tons of cargo annually. It is equipped with the latest technologies and complies with the highest industry standards ensuring efficient and safe handling of all types of cargo, including pharmaceuticals, perishables, dangerous goods, aircraft engines and vehicles. “Our new, purpose-built facility in Manchester complements our existing multiple UK operations including the dnata City complex at London Heathrow, enabling customers to enhance their operations in the region,” indicated Alex Doisneau, Managing Director, dnata UK. “The new facility will further enhance the role we play in ensuring freight is seamlessly transported into and out of the North region markets from all parts of the world,” remarked Gareth Jackson, MAG Group Property Director. dnata City North contains a pharma and perishables centre offering customers a safe and reliable cold chain solution for the handling of temperature sensitive goods, including the Covid-19 vaccine. The facility was designed with flexibility and unique product handling requirements in mind, taking advantage of the latest technologies. The cold storage areas in the centre are modular, enabling teams to manage changing handling demands with dedicated climate control capability. Web-based monitoring systems are also in place to facilitate real-time management of all areas.

10 FEBRUARY 2021

Bahri Ship Management receives ISO 45001 certification for occupational health and safety n Recognizing its sustained

efforts to ensure a safe and healthy work environment, Bahri Ship Management, one of five business units within Bahri, was recently awarded the latest ISO 45001:2018 standard for occupational health and safety (OH&S) management systems. The business unit was presented the ISO 45001:2018 certificate by DNV GL after it met the international standards and criteria for improving employee safety, reducing workplace risks, and creating better, safer working conditions. “This is part of our continued efforts to ensure excellence and innovation in our services, while also safeguarding the wellbeing of our employees and minimizing the environmental impact,” commented Eng. Abdulaziz Sabri, President, Bahri Ship Management.

ISO 45001:2018 covers occupational health and safety (OH&S) management systems and aims to enable organizations to provide safe and healthy workplaces by preventing work-related injuries and illnesses and proactively improving their OH&S performance. Bahri Ship Management’s ISO 45001:2018 accreditation extends to all its offices and vessels, covering all the administrative and support staff and the ships’ crew. As a testament to its commitment to quality, safety, and environmental protection, Bahri Ship Management, in addition to the new certification, holds ISO 9001:2015 quality management systems, ISO 14001:2015 environmental management systems, and ISO 50001:2018 energy management certifications.

Cebu Pacific welcomes its second ATR freighter n The largest Philippine carrier Cebu Pacific recently took delivery of its second ATR cargo freighter, further strengthening its cargo operations to and from domestic airports. Both ATR freighters, operated by CEB’s subsidiary Cebgo, are equipped with a ‘Large Cargo Door’, allowing for capacity to be as much as eight (8) tons of palletized cargo. Apart from its two ATR freighters, CEB has also recently modified one of its A330 aircraft into an all-cargo configuration, removing seats so that cargo can be carried in the main deck. “There is a growing demand for cargo to and from the Philippines and our fleet of dedicated cargo aircraft allows us to address this while doing so in a more efficient manner,” affirmed Alex Reyes, Vice President-Commercial, CEB. CEB has ensured transport of essential goods is not hampered, especially during this time. The carrier continues to anticipate

its cargo business to continue flourishing, and its investment in these dedicated cargo aircraft supports its commitment to continue

providing affordable and accessible air travel services for everyone, a corporate press communiqué concluded.

Swissport bags big contract in Saudi Arabia n Swissport will be serving Air France-KLM

Group in Saudi Arabia until 2025. A new contract expands the existing cooperation to all flights of all airlines of the FrenchDutch airline group, including freighter services, to and from the Kingdom of Saudi Arabia. With the 5-year commitment of FrenchDutch airline group Air France-KLM in Saudi Arabia, Swissport further strengthens its presence on the Arabian peninsula. The new contract also includes air cargo handling in addition to passenger services and ramp handling. The new agreement covers all airlines of the Air France-KLM Group, including KLM, Air France, Air France Cargo, Martinair and Transavia. “By including all airlines of the group into the contract, we are the preferred partner for Air France-KLM in the region,” commented Gerold Tumulka, CEO, Swissport Middle East. The contract expansion supports Swissport’s growth strategy in the Middle East. Just recently, Swissport had added Al-Qassim as a fourth airport to its portfolio

in the Kingdom of Saudi Arabia. Overall, Swissport has been present in Saudi Arabia since 2016 when it started operations in Riyadh, Jeddah and Dammam. Swissport has since gradually developed its business from a greenfield start-up into an established

organization with a broad customer base of established regional airlines and well-known international carriers. Swissport Middle East is also operating in Oman since 2017 together with its partner Al Jarwani Group, which holds 30% of the joint venture. FEBRUARY 2021 11

Wizz Air Abu Dhabi takes to the skies for the first time n The maiden flight of Wizz

Shareef Al Hashmi, ADAC CEO (L) and Wizz Air Abu Dhabi’s MD, Kees Van Schaick (R) mark the launch of Wizz Air.

Ras Al Khaimah International Airport signs MoU with Bahrain’s Gulf Air n Ras Al Khaimah International

Airport (RAK) recently signed a Memorandum of Understanding (MoU) with Gulf Air, the national carrier of the Kingdom of Bahrain, with the agreement aiming to build connectivity between the emirate and the kingdom. Heralding a new phase of operations for RAK International Airport, the MoU was signed in a virtual ceremony that brought together high-ranking executives from both organizations. Sanjay Khanna, CEO, RAK International Airport, and Captain Waleed AlAlawi, Acting CEO, Gulf Air, attended the event, along with members of their teams. “As a boutique carrier, we look forward to adding Ras Al Khaimah to our network of 12 FEBRUARY 2021

destinations,” affirmed Captain AlAlawi. “We are delighted to sign this Memorandum of Understanding with Gulf Air and enhance Ras Al Khaimah International Airport’s connectivity to destinations around the world,” remarked Khanna. In November last year, RAK International Airport commenced passenger services with Indian value carrier SpiceJet flying out of Delhi, with Mumbai, Lucknow and Cochin added at the start of this year, along with increased frequencies from the Indian capital. Established in March 1976 under the government of Ras Al Khaimah, Ras Al Khaimah International Airport (RKT) is the gateway between Ras Al Khaimah (RAK) and the world.

The RAK International Airport-Gulf Air MoU signing ceremony.

Air Abu Dhabi took off from AUH on 15 January 2021 15 January 2021 marked the first time that Wizz Air Abu Dhabi took to the skies in the UAE. The inaugural flight on the eco-friendly aircraft, Airbus A321neo, departed from Abu Dhabi International Airport bound for Athens, Greece. Shareef Al Hashmi, CEO, Abu Dhabi Airports, greeted Kees Van Schaick, Managing Director, Wizz Air Abu Dhabi, as the plane prepared to depart Abu Dhabi International Airport (AUH), a press statement from the air carrier indicated.

DP World and Israel’s Allalouf Logistics sign agreement to foster regional trade n DP World’s port-centric logistics arm Smart Solution Logistics (SSL) has signed an agreement with Israel-based Allalouf Logistics to explore new growth opportunities for the logistics and general freight forwarding business in the UAE and Israel. The agreement was signed by Albert Kraak, Chief Operating Officer, SSL and Gil Miller, Managing Director, Allalouf Logistics. Strategically located in Dubai’s Jebel Ali Port with excellent connectivity to terminals at the port, DP World’s SSL offers an extensive range of containerized logistics solutions. Through its collaboration with Allalouf Logistics that is part of the Allalouf Group, one of the largest and longest established shipping agencies in Israel, the company aims to reinforce the logistics sector, in the UAE, Israel and other prime markets. According to the Federal Competitiveness and Statistics Authority, the logistics sector’s gross output amounted to AED 219bn in

2018. Additionally, the sector’s contribution to the UAE’s GDP is projected to increase by 8 percent in 2021. “We are confident that this new venture will aid the economic prosperity of the nation, while also cementing the leading

status of the logistics industry in the region,” commented Kraak. “We see immense potential in this collaboration and are positive that it will promote trade and commerce between the two countries,” remarked Miller.

Top UAE entities join World Logistics Passport initiative to boost South-South trade n Three leading institutions in the UAE

recently announced they have joined the World Logistics Passport (WLP), a major initiative established to increase trading opportunities between developing markets. The WLP is helping to reimagine how goods and services move around the world, increase resilience in global supply chains and remove the barriers that prevent developing economies from trading as freely as they might. The new joiners are Etihad Credit Insurance (ECI), Dubai Multi Commodities Centre (DMCC) and flydubai. The WLP aims to tap into over 20 markets, representing 54% of global GDP. By 2023, the WLP is projected to have about 2% impact on global trade. To date, Colombia, Senegal and Kazakhstan have formally joined the initiative. Brazil, Uruguay and South Africa have also registered as partners. “We welcome ECI, DMCC and flydubai

to the WLP team, mobilizing infrastructure and expertise to make trade quicker, easier and more cost-effective,” remarked Sultan Ahmed bin Sulayem, Group Chairman and CEO, DP World. “This collaboration further mirrors our mandate to boost the competitiveness of UAE exporters and protect their receivables when operating in international markets,” commented Massimo Falcioni, CEO, ECI. “The transformation of logistics, supply chains and distribution channels through projects such as this one without a doubt add immeasurable value to world trade and unlock a host of opportunities,” affirmed Ahmed Bin Sulayem, Executive Chairman and Chief Executive Officer, DMCC. “flydubai has always been committed to facilitating trade and connectivity through Dubai’s aviation hub, and by joining the World Logistics Passport,” noted Ghaith Al Ghaith, Chief Executive Officer, flydubai.

Ahmed Bin Sulayem, Executive Chairman and CEO, DMCC.

FEBRUARY 2021 13

Maersk makes new key appointment n Maersk has announced the appointment of Ryan Best as its new Regional Head of Logistics & Services for West Central Asia (WCA) effective 1 April 2021. Integrated container logistics has been at the forefront of Maersk’s strategy and the Logistics & Services portfolio within the organisation plays a critical role in this aspect, expanding Maersk’s footprint on land to enable integrated, end-to-end container logistics solutions. In his new role as the Regional Head of Logistics & Services, Ryan Best will play a key part in building end-to-end solutions for customers’ supply chains across geographies including India, Sri Lanka, Bangladesh, Pakistan, UAE and Saudi Arabia. “Ryan’s contribution will be instrumental

to our continued transformation journey to become the global integrator of container logistics”, said Richard Morgan, Managing Director, Maersk West Central Asia. A British citizen, Ryan Best has extensive experience of over 25 years in the logistics industry. Having held several senior positions in operations, sales and supply chain across Africa, UK, Australasia and APAC markets, Ryan’s most recent employment was at Agility Global Logistics where he held the position of Vice President, Integrated Supply Chain Solutions, APAC region. “I am excited to participate in this transformation journey and contribute towards the company’s success in the West Central Asia market,” commented Best.

Ryan Best

SAFEEN and AMLS launch fully integrated Marine Logistics Provider OFCO n SAFEEN, Abu Dhabi Ports’

maritime arm, has recently signed a historic agreement with Allianz Marine & Logistics Services (AMLS), to launch a new international provider of integrated maritime logistic services. Operating under the title of Offshore Support and Logistics Services Company (OFCO – Offshore International), headquartered in Abu Dhabi, the new joint venture will be one of the largest, most capable, and cost-efficient providers of onshore and offshore integrated logistics solutions and subsea services in the GCC region and beyond. OFCO’s broad range of services will be aimed towards large offshore infrastructure projects, which include ongoing operations within the regional oil and gas sector, as well as future projects set to be launched in the coming years. “The launch of OFCO represents a significant leap forward for SAFEEN, which is one of the main pillars of our maritime business,” commented Captain Mohamed Juma Al Shamisi, Group CEO, Abu Dhabi Ports. “With access to a growing diversified fleet of modern vessels, our partnership with AMLS will allow us to take our expertise and 14 FEBRUARY 2021

capabilities to new horizons as a preferred global maritime services provider,” noted Captain Maktoum Al Houqani, Head of Maritime Cluster, Abu Dhabi Ports. “By engaging with one of the subsidiaries of Abu Dhabi Ports Group, we are enhancing not only our ability to support regional infrastructure projects, but are expanding our existing portfolio internationally as well,” remarked Ahmed Khalil, General Manager of Allianz Marine & Logistics Services.

Dubai Customs discusses trade expansion and cooperation with Germany

n Ahmed Mahboob Musabih, Director General of

ADFD-Funded AED 3.7bn Bahrain Airport expansion project completed n A delegation from the Bahrain recently arrived in Abu Dhabi aboard an operational test flight following the completion of a project to build a new passenger terminal at Bahrain International Airport. The facility has been expanded with a funding of AED3.7bn (US$1bn) from Abu Dhabi Fund for Development, one of the UAE’s leading financial institutions. The Fund facilitated the project on behalf of the UAE, which extended AED9.1bn (US$2.5bn) to Bahrain in 2013 as part of its commitment to the GCC Development Programme. Mohammed Saif Al Suwaidi, Director General, Abu Dhabi Fund for Development, received the delegation that included HE Eng. Kamal Bin Mohammed, Minister of Transport and Communications and Zayed Bin Rashid Al Zayani, Minister of Industry, Commerce and Tourism.

The new terminal marked the completion of the first phase of the airport modernization project that aims to stimulate Bahrain’s economic growth in line with the country’s Economic Vision 2030 by raising the airport’s strategic importance. The new 210,000sqm terminal is four times the size of the existing one, enabling the airport to double its passenger handling capacity to 14 million annually. “The airport expansion project will greatly benefit the Bahraini economy and enhance the role of its services sector, which is a priority economic sector for Bahrain to establish itself as a regional logistical hub,” Engr. Kamal commented. The project includes many associated projects, including 5,500 car park slots, two receptions, a building dedicated to private aviation, as well as an aircraft fuelling area.

Dubai Customs recently held a videoconferencing meeting with a German delegation headed by Holger Mahnicke, German Consul General to Dubai, to discuss means of enhancing mutual economic cooperation and trade between Dubai and Germany, the role of Dubai Customs in supporting supply chain and the customs facilities provided. The two sides covered major matters including the stimulus packages launched by the Federal Government and Dubai Government to support the business activity and to mitigate the impact of the pandemic. They also talked about the measures taken by Dubai Customs to back the global supply chain and the business and trade groups in Dubai. Mutual trade between Germany and Dubai grew 13.2% in the last ten years (2011-2020) from AED 21.7bn to AED 24.6bn. Data for the last year revealed that imports from Germany had the lion’s share at AED 20.6bn, followed by re-exports at Dhs2.57bn and exports at AED 1.38bn. “Ertibat is a transparent and solid platform that enable us foster our relationships with foreign business sectors and provide them with the best services and facilities,” remarked Musabih There are 300 German companies operating in Dubai. He expressed optimism about the future of the economic and trade sector in the UAE, with the UAE prepared to host major international events including EXPO 2020. The meeting also focused on Cross Border e-Commerce. The innovative platform utilizes block chain technology to integrate and automate operations between Customs, Free Zones, logistics, and courier companies FEBRUARY 2021 15

EGA and LafargeHolcim’s Geocycle UAE renew recycling partnership n Emirates Global Aluminium and Geocycle UAE, part of the world’s largest building solutions group LafargeHolcim, recently announced they have signed an agreement to extend their groundbreaking 10-year partnership in creating value from industrial waste in the UAE. EGA has worked with LafargeHolcim since 2010 to find productive uses in the UAE for spent pot lining, the used inner lining of reduction cells, which is one of the aluminium industry’s most significant waste streams. The two companies jointly developed a technique for preprocessing and then using spent pot lining as an alternative feedstock in local cement manufacturing. LafargeHolcim established Geocycle UAE as a subsidiary focused on pre-processing spent pot lining and other materials. Since 2010, EGA has supplied GeocycleUAE with over 160,000 tonnes of spent pot lining, requiring almost 3,000 truck trips between the two company’s facilities. Over the next two years, EGA will supply a further 40,000 tonnes of spent pot lining, both to Geocycle UAE and directly as preprocessed material to LafargeHolcim’s cement plant in Fujairah. Last year, EGA commissioned its own spent pot lining crushing facility at Al Taweelah. “Our partnership with LafargeHolcim, Geocycle UAE and the broader UAE cement industry has played an important role in

enabling us to turn spent pot lining from a problem into a valuable resource,” affirmed Abdulnasser Bin Kalban, CEO, Emirates Global Aluminium “This renewed contract for SPL pre-processing adds to the successful journey of waste treatment and recycling between Geocycle UAE and EGA during the past 10 years that helped improve sustainability in the UAE,” asserted Medhat Ismail, General Manager, Geocycle UAE.

BMW Group becomes first customer for EGA’s CelestiAL aluminium n Emirates Global Aluminium, the world’s

biggest ‘premium aluminium’ producer recently announced that BMW Group is the first customer for EGA’s CelestiAL aluminium, made with the power of the desert sun. EGA has supplied metal to BMW Group since 2013 for use in the German carmaker’s engines and other parts. EGA will supply 43,000 tonnes of CelestiAL aluminium to BMW Group per year. BMW Group’s annual supply contract with EGA is worth a three-digit million-euro sum. EGA’s CelestiAL metal will cover almost half the annual requirements of Plant Landshut, the BMW Group’s only production facility for light metal casting in Europe. “We are delighted that the BMW Group is the first customer for EGA’s low carbon CelestiAL. Aluminium is lightweight, strong and infinitely recyclable, and that is why it has an important role to play in developing 16 FEBRUARY 2021

a more sustainable society,” commented Abdulnasser Bin Kalban, Chief Executive Officer, EGA. “In EGA, we have found a strong partner who values sustainable development just as much as we do. Aluminium plays an important role in e-mobility and using sustainably produced aluminium is tremendously important to our company,”

remarked Dr. Andreas Wendt, BMW AG Board Member for Purchasing and Supplier Network. EGA’s sourcing of solar power from the Mohammed Bin Rashid Al Maktoum Solar Park through Dubai’s electricity grid is tracked and traced through the use of the International Renewable Energy Certification System.

DP World signs a 20-year concession agreement with Angola n DP World signed a 20-year concession agreement with the Government of Angola to operate the Multipurpose Terminal (MPT) at the Port of Luanda. The agreement was signed recently in Luanda today by António Bengue, Chairman, Porto de Luanda and Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World. The MPT will be the first seaport terminal located on the western coast of Southern Africa to be operated and managed by DP World, and will further extend the company’s footprint in Africa. Under the agreement, DP World will invest US$ 190mn over the 20-year period of the concession, with plans to rehabilitate the existing infrastructure and acquire new equipment to bring operations in line with global standards and improve the efficiency of the MPT. This is part of the broader aim of increasing the terminal’s annual throughput to approximately 700,000 TEUs per year. This will be supported by a modern port management system, as well as further training and development of Angolan staff employed at the terminal. “Our entry into Angola and planned investment in the terminal, as outlined in the agreement, reflects our belief in the potential for further economic growth in the country,” observed

L to R António Bengue, Ricardo de Abreu and Sultan Ahmed bin Sulayemafter the signing ceremony.

Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World. “We understand that the performance of the Transport Sector in our country must count on key players such as DP World, to help us both modernise our infrastructure, as well as make it more competitive,” noted Ricardo de Abreu, Minister of Transport of the Government of Angola.

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Web: www.tranzone.ae FEBRUARY 2021 17

Kia presents its new brand purpose and future strategy SOHAR-Eagle Ceramics deal signing ceremony.

SOHAR signs agreement for ceramic tiles manufacturing facility n SOHAR Port and Freezone recently entered into an agreement with Eagle n Kia has announced new details of its new brand purpose and ambitions for the future during a digital showcase event. Supported by a new brand slogan, ‘Movement that inspires’, Kia today reveals new details of a strategy which will see the company go beyond vehicle manufacturing to create sustainable mobility solutions for customers. “Our vision is to create sustainable mobility solutions for consumers, communities, and societies globally. Today we start putting this vision into action with the launch of our new brand purpose and strategy for the future,” explained Ho Sung Song, President and CEO, Kia Corporation. “Movement has always been at heart of our brand, and moving people at the core of our business. Movement helps humankind to constantly progress, improve, and evolve. That is why at Kia we believe that movement inspires ideas,” commented Artur Martins, Senior Vice President, Head of Global Brand & Customer Experience, Kia. Kia is also developing a range of new Purpose-Built Vehicles (PBVs) for corporate customers. These specialized vehicles will be based on flexible ‘skateboard’ platforms, with modular bodies designed to meet the specific mobility needs of a broad range of corporate and fleet customers. “Our aim is to design the physical experience of our brand and to create original, inventive, and exciting electric vehicles. The ideas of our designers and the purpose of the brand are more connected than ever, with our customers at the centre of what we do,” remarked Karim Habib, Senior Vice President, Head-Kia Global Design Centre.

18 FEBRUARY 2021

Ceramics. The signing took place at the office of the Public Authority for Special Economic Zones and Free Zones (OPAZ), under the patronage of Eng. Ahmed Hassan Alawi Al Dheeb, Deputy Chairman, OPAZ. The agreement was signed between Omar Mahmood Al Mahrizi, CEO, SOHAR Freezone and Deputy CEO, SOHAR Port and Manoj Valamji Panchotiya, partner, Eagle Ceramics. The partnership will see the establishment of ceramic tiles manufacturing unit at SOHAR Freezone. “Apart from generating value-added services, the project is in line with our overall objective to increase the attractiveness of SOHAR Freezone to regional and global investors. This, in turn, will allow us to boost our contribution to the GDP of the Sultanate and further the development of the logistics sector,” commented Al Mahrizi. The project will see an estimated total capital investment of US$ 1.2mn and will take up a plot size of 20,000sqm at SOHAR Freezone. The finished products from the facility will be distributed locally as well as exported to regional GCC markets. “We also look forward to the establishment of further downstream projects in the future, to enhance the offerings at SOHAR, alongside other industries,” remarked Panchotiya.

Qatar Airways Cargo takes a major digital leap with global eBooking on WebCargo n Forwarders globally will soon be able to conduct real-time eBookings, access live rates, and see available capacity with Qatar Airways Cargo via the service of WebCargo, a Freightos Group company, providing critical agility as supply chains contend with COVID-19’s impact and disruption. Rollout will begin with France, Germany, Italy, Netherlands, South Africa and Spain on 7 February 2021. As part of the launch, Qatar Airways Cargo will be offering the most competitive rates on WebCargo by introducing a discount scheme to forwarders*, resulting in an average saving of USD0.06/kg for the first 20,000 shipments booked via the platform in these countries. The cargo carrier is determined to push the development of WebCargo bookings

and will also implement a number of special promotions further in the year. As of Q1-2021, more than 2,000 WebCargo forwarders and customers across over 10,000 global branches will have instant access to capacity and pricing. “The future of air cargo is indeed digital and this change will definitely bring in efficiency across the supply chain,” commented Guillaume Halleux, Chief Officer Cargo, Qatar Airways. “Digitalization is a crucial step in powering agile supply chains in a rapidly changing world. We’re incredibly proud that Qatar Airways Cargo, the largest cargo airline in the world has selected WebCargo to launch third-party eBookings for forwarders around the world,” remarked Zvi Schrieber, Group CEO, Freightos.

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GLOBAL & GCC SUPPLY CHAIN 2020 REVIEW

Global and regional supply chains severely disrupted by pandemic Worldwide increase in regionalisation and localisation The Covid-19 pandemic profoundly disrupted global trade in 2020. However, it has also caused new paradigms to emerge, some of which point to potentially positive outcomes over the medium term. In its latest January 2021 report, the Oxford Business Group has determined and deduced key takeaways of the impact of the Covid-19 crisis from the serious interruption of the flow of goods; increasing trend towards nearshoring to gain advantages of efficacy derived from the availability of better controlled and streamlined production processes, transportation and related logistics services on account of proximity and the realignment of bloc, regional and international trade deals.

20 FEBRUARY 2021

GLOBAL & GCC SUPPLY CHAIN 2020 REVIEW

rom national lockdowns to closed airspace and borders, Covid-19 resulted in unprecedented disruption to the mechanics of most economies, regardless of their size or stage of development. In particular, the creation of such barriers placed a major strain on global supply chains. This was felt most keenly in the case of essential linkages related to food and medicine, and the global distribution of such products became a key focus of efforts to respond to the early stages of the pandemic.

Supply chain disruption: Food and medicine In the first months of the year, China, the world’s largest producer of active pharmaceutical ingredients, severely curtailed industrial production to limit the spread of Covid-19, causing a shock along the entire chain. Although India is a global leader in the production of generics, 70% of its raw materials come from China. Of these, one-third come from Hubei, where the outbreak originated. Response to the disruption varied by country: some repurposed civilian aircraft to bring in pharmaceutical supplies, while others turned to technology to minimise the impact.

Dubai Customs, for instance, introduced new practices, technologies and equipment to speed up the clearance of medical supplies. In March Dubai International Airport reported a 49.4% year-on-year increase in the volume of pharmaceutical cargo handled. Short-term fixes aside, the virus could potentially result in a significant realignment of supply chains away from China and India, and lead to long-term benefits for local industries in other emerging markets–particularly those with large internal markets relative to others in their region, such as Egypt, Indonesia, Saudi Arabia and Mexico.

Cold chain bears the brunt The global network of supply chains for foodstuffs was also significantly impacted by the pandemic. As with pharmaceuticals, a combination of complex value chains and production processes made supply chain management challenging. Recognising the potentially serious impact of the breakdown of such networks, in April the UN Food and Agriculture Organisation (FAO), the International Fund for Agricultural Development, the World Bank and the UN World Food Programme issued

a joint statement on the impact of Covid-19 on food security and nutrition. “Agriculture and its food-related logistic services should be considered as essential. Increased efforts are needed to ensure that food value chains function well and promote the production and availability of diversified, safe and nutritious food for all,”the statement read in part.

Facilitating food movement Many governments acted to facilitate the movement of food. For example, in midApril members of the GCC, including Qatar, agreed to establish a food supply network to safeguard the region. Disruptions led some countries to explore more localised supply chains and focus their attention on boosting domestic resiliency, particularly with regard to the provision of essential food. Going forwards, this trend could result in countries adding more value domestically, as well as offering more products directed towards local and regional markets, in addition to existing global trading partners. While the initial shocks of the pandemic resulted in short-term solutions and rapid realignments, it is becoming increasingly clear that Covid-19 will also give rise to broader, long-term structural shifts.

At what capacity is your company currently operating? Regional average 0–20%

20%

21–40%

41–60%

40%

61–80%

81–100%

60%

80%

100%

Are you planning to retain remote working as part of your company’s policy? Regional average Full time

More than 1 day per week

20%

1 day per week

40%

Less than 3 days per month

60%

Do not know or N/A

80%

100%

42% are planning to retain remote working as part of their company’s policy How satisfied are you with your government’s FEBRUARY 2021 21 economic response to the pandemic?

20%

40%

60%

80%

100%

42% are planning to retain remote working as part of their company’s policy

GLOBAL & GCC SUPPLY CHAIN 2020 REVIEW

How satisfied are you with your government’s economic response to the pandemic? Regional average Very satisfied Satisfied

Neutral

Unsatisfied

Very unsatisfied

Do not know or N/A

1% 7% 7%

61%

By early April 2020 more than half of the global population was under partial or total lockdown

24%

are satisfied or very satisfied with their government’s economic response to the pandemic

35%

26%

Among these is a move away from over-

of their GDP from hydrocarbons, the

the past – helped bolster their resilience.

Which digital transformation haswasyour company implemented as a result of2020, Covid-19? For example, in January just prior Middle East particularly vulnerable reliance on China as a production site andmeasures to the pandemic, Saudi Arabia had the to the immediate of the pandemic. Noeffects Regional average Yes fifth-highest forex reserves in the world, Global efforts to contain the virus at US$ 501.8bn, and relatively low public which included severely restricting, and Stimulus and sops debt, at 22.8% of GDP. in some cases prohibiting, transport and The UAE was similarly well insulated, cross-border travel – ultimately led to a It is increasingly clear that economies crisis with record forex, sharp reduction in29% demand for oil. 31% entering the3% in the region were hit by36% reduced trade 90% 34% 5%at US$ 110bn, and low debt – equivalent to This fall in demand, exacerbated by volumes and lower oil prices. As a spinoff, a price war between Russia and Saudi multiple GovernmentsInvestment launchedinextensive Use of Digitalisation Adoption ofaround 20% of GDP. Remote Do not know Arabia in the first half of the year, contactless stimulus packages to stabilise their automation cloud-based of revenue Other working/meetings or N/A software/hardware technology channels/services technology resulted in the price of oil falling from economies. The pandemic looks set to Infrastructure resilience year-opening values of US$ 66 per barrel accelerate economic diversification efforts to less than US$ 20 in late April 2020. and short-term recovery will be tied to oil Aside from economic pressures, countries While prices have since recovered prices and the resumption of travel. in the region had varying levels of to around US$ 50, partly on the back Facing the twin challenges of a sharp resilience when it came to handling of a historic production cut agreement reduction in trade and a steep drop in the health challenges posed by the from oil-producing nations, the fall has the price of oil as a result of Covid-19, pandemic. nevertheless had a significant impact on countries in the Middle East have Recent investment in the health care major oil-producing nations in the region. weathered a particularly difficult and systems helped many countries cope with challenging 2020. increased pressure as infections spread. While circumstances have been Saudi Arabia recorded a compound Oil-dependent economies challenging, the region has looked to annual growth rate of 21% in its health digital innovation as a path to recovery, care budget between 2010 and 2019, with For example, both Saudi Arabia and Oman and a number of governments have the number of hospitals and hospital derive around 75% of export revenue from accelerated their existing plans for beds increasing by 9.1% and 10.7%, oil and gas, while the sector contributes an economic diversification. respectively, during 2014-18. estimated 45% to Kuwait’s GDP. In contrast, lower-income and Although this focus on energy made conflict-affected nations in the region, these countries particularly vulnerable Hydrocarbons oriented such as Yemen, Syria and Iraq, had less to a fall in revenue, their strong foreign developed health infrastructure, leaving currency (forex) reserves – largely the As a region in which a number of them more vulnerable. fruit of strong hydrocarbons earnings in countries derive significant proportions source of raw materials and commodities.

90% have implemented remote working/meetings as a result of Covid-19

22 FEBRUARY 2021

At what capacity is your company currently operating? Regional average 0–20%

21–40%

41–60%

61–80%

81–100%

in social assistance, including support Meanwhile, in Lebanon the 4 August 11.4bn) stimulus, equivalent to around for low-income families and micro2020 explosion in the Port of Beirut 30% of GDP, in mid-March. entrepreneurs, among others. destroyed half of the city’s medical In addition to increasing liquidity centres and left three of its hospitals support from 0% 20% 40%funds and loan facilities 60% 80% 100% ‘non-functional’, according to the World the central bank, the package paid the Cooperation on food security Health Organisation, placing significant salaries of all private sector employees, Are you planning to retain remote working as part of your company’s policy? strain on the health care system. along with the electricity and water bills With the pandemic leading to the closure Regional average of citizens and businesses, for three of many borders and the disruption of Full time More than 1 day per week 1 day per week 3 days per month No Do notwere knowregion-wide or N/A months. Certain bills andLess taxthan payments supply chains, there Demographic advantages were also deferred. collaborative efforts to shore up supplies Elsewhere, in mid-April the Saudi of essential items such as food, water Despite these challenges, most countries government launched a multifaceted and medicines. As a region that is a net in the Middle East benefitted from their SR132bn ($35.2bn) stimulus package, importer of food and water, this was of favourable demographic profiles. With consisting of SR70bn (US$ 18.7bn) in particular importance. a large proportion of their populations 0% 20% 40% 60% 80% 100% support for the private sector, SR50bn To this end, in mid-April the GCC below 30 years of age, they benefitted (US$13.3bn) in stimulus for the banking adopted a Kuwait proposal to create a from a relatively small number of people sector and small and medium-sized joint food supply network across the bloc. in high-risk groups. enterprises, and SR12bn (US$3.2bn) Concerned by disruptions to trade, the Elsewhere, another factor that helped build resilience was the state of ICT networks. Once again, technologically you with yourchains government’s HowHow has satisfied Covid-19are affected supply in your sector? advanced nations such as Saudi Arabia, Regionalto average economic response the pandemic? the UAE and Qatar had stronger digital 100% Regional average infrastructure, which allowed them to adapt more easily to the shift towards Very satisfied Satisfied Neutral Unsatisfied Very unsatisfied Do not know or N/A digital payments, online health initiatives and remote-working practices. 80% 1% To limit the spread of the virus, governments in the Gulf implemented 7% a series of restrictions on businesses 60% and movement throughout March and 7% April. While these strategies varied from country to country, they usually included 40% the closure of businesses deemed non-essential, along with curfews and are satisfied or 27.8 lockdowns.

42% are planning to retain remote working as part of their company’s policy

61%

By early April 2020 Institutional response more than half of In addition to the medical response, the global population governments in the region passed significant financial stimulus packages was under partial to help offset the economic fallout of the pandemic. or total lockdown This was the case in Bahrain, where the

very satisfied with their government’s economic response Short to delaythe Long delays Total pandemic

20%

No Effect

24%

(days or weeks)

(months)

shutdown

35%

Do not know or N/A

83% say Covid-19 has delayed supply chains in their sector

government launched a BH4.3bn (US$

26%

Which digital transformation measures has your company implemented as a result of Covid-19? Yes

Regional average

90%

36%

34%

29%

31%

Remote working/meetings

Investment in automation software/hardware

Use of cloud-based technology

Digitalisation of revenue channels/services

Adoption of contactless technology

Do not know or N/A

Other

90% have implemented remote

FEBRUARY 2021 23

GLOBAL & GCC SUPPLY CHAIN 2020 REVIEW

How will oil prices impact economic recovery in your sector? average recovery in your sector? How will oil prices impactRegional economic Very significantly

Significantly

Regional average Moderately Insignificantly

Very insignificantly

Do not know or N/A

Very significantly

Significantly

Moderately

Very insignificantly

Do not know or N/A

20%

Insignificantly

40%

60%

80%

100%

67% expect oil prices will significantly 67% expect oil prices will significantly or very significantly impact recovery or very significantly impact recovery 40%

countries set up special arrangements at border control and Customs posts that facilitated the movement of food and medical supplies.

Private sector response Companies in the private sector were also forced to adapt to the new normal. In response to the sharp increase in demand for online services, many retail companies worked to upgrade their digital offerings, particularly in the areas of ordering, delivery and payment.

60%

80%

100%

To what extent will the pandemic permanently change the way in which youpandemic communicate and interact To what extent will the permanently change your you clients and customers? the waywith in which communicate and interact Regional average with your clients and customers? 2% Very insignificantly 2% Very insignificantly

Regional average

10% Insignificantly 10% Insignificantly

Nearshoring

50% say 50% the pandemic

2% Do not know or N/A 2% Do not know or N/A 15% Very significantly 15% Very significantly

say significantly the pandemic will or

Even before the onset of Covid-19, rising will significantly or very significantly Chinese labour costs and increased tariffs related to the US-China trade war very significantly change the way they were leading some companies to move change the way they 37% communicate industrial operations into third countries, 25% Moderately while maintaining production bases in 37% communicate Significantly and interact 25% the country – a strategy referred to as Moderately Significantly and interact China +1. The pandemic has served to accelerate this trend, with the EU, Japan and the US all making public statements about the developed labour pool and a shared offers a range of potential advantages prospective relocation of companies with border with the US. The signing of the over traditional offshoring, including China-based factories. US-Mexico-Canada Agreement (USCMA) fewer cultural, linguistic and timezone Many international firms July further cemented this potential. differences, greater your regulatory alignment Howbegan likely are you to relocate supply chainsinmore locally, looking to diversify their supply chains Asian countries are likewise well and lower risk to intellectual property. in response to disruptions inThanks global supply chains during the Covid-19 pandemic? How are you to relocate your supply chains more to reduce future exposure risk likely by shifting placed to locally, benefit. Prior to the pandemic, to its proximity to the US, Latin in inresponse to disruptions in global supply chains during Covid-19 pandemic? to countries the Association of Vietnam had already absorbed much of the America has seen some benefits from this the Regional average South-East Asian Nations (ASEAN) like manufacturing capacity that China had lost. trend, with two countries in the region Regional average Vietnam, Thailand and Malaysia. The country has signed a raft of international standing out as affordable nearshoring Others began to bring their production trade deals and invested significantly in options: Mexico and Colombia. capacity closer to home, a trend known industrial infrastructure in recent years. as nearshoring. On17% a similar note, existing17% 17% 14% 21% 15% North America manufacturing hubs in Morocco, 17% 14% 21% 15% 17% 17% Tunisia and Egypt could be viewed as Mexico in particular has several Proximity payoff competitive destinations for European characteristics that make it an industrial firms seeking to nearshore advantageous nearshoring location, As well as increasing resilience to their production bases. including a wide range of cities, a supply chain disruptions, nearshoring Very likely

Likely

Somewhat unlikely

Unlikely

Very unlikely

Do not know or N/A

Very 24 FEBRUARY 2021likely

Likely

Somewhat unlikely

Unlikely

Very unlikely

Do not know or N/A

and interact

Moderately

Significantly

GLOBAL & GCC SUPPLY CHAIN 2020 REVIEW

How likely are you to relocate your supply chains more locally, in response to disruptions in global supply chains during the Covid-19 pandemic? Regional average

17%

14%

21%

15%

17%

Very likely

Likely

Somewhat unlikely

Unlikely

Very unlikely

Do not know or N/A

31% are likely or very likely to relocate their supply chains more locally, in response to disruptions in global supply chains during the Covid-19 pandemic Regional trade deals In addition to the increase in nearshoring, 2020 saw significant activity on regional trade deals. On July 1 the USMCA replaced the North American Free Trade Agreement as the framework governing trade between the US, Mexico and Canada. In addition to strengthening environmental and working regulations and incentivising domestic vehicle production, the agreement updated intellectual property protections in a move that the authorities hope will spur research and development in industry. For Mexico, in particular, the new intellectual property laws could potentially boost the long-term prospects of its industrial and pharmaceutical sectors.

Africa In Africa, meanwhile, Covid-19 has sped up the adoption of various measures associated with the African Continental Free Trade Area (AfCFTA). Initially agreed in March 2018 and subsequently signed by 54 of the 55 member countries of the African Union, the deal aims to create a single market across Africa. The AfCFTA requires members to remove 90% of tariffs on goods, facilitate the movement of capital and people, and take steps to create an

Africa-wide Customs union, which could significantly boost regional trade. When fully operational by 2030, the AfCFTA is expected to cover a market of 1.2bn people with a combined GDP of US$ 2.5tn. The focus on digital trade will include efforts to speed up Customs clearance procedures between countries. International media also reported that the 54 AfCFTA signatories were moving forward with talks on the taxation of e-commerce platforms, which have seen substantial growth during the pandemic.

RCEP Elsewhere, in Asia the Regional Comprehensive Economic Partnership (RCEP) was finally signed in November, on the sidelines of the annual ASEAN summit. As well as marking a significant regional milestone, it is hoped that this deal will help its 15 signatories recover from the economic fallout of the pandemic by boosting regional trade linkages, making it easier to establish a production base in an ASEAN member state and export to the other 14 members of the bloc. The 500+-page agreement should provide a substantial fillip to regional trade, lowering tariffs, standardising Customs procedures and improving regulatory harmony among its members. Its 20 chapters cover topics from digital

procedures to financial services and intellectual property rules. “We acknowledge that the RCEP agreement is critical for our region’s response to the Covid-19 pandemic and will play an important role in building the region’s resilience through an inclusive and sustainable post-pandemic economic recovery process,” the Joint Leaders’ Statement released on the occasion of the signing noted. While it had been under negotiation for some years, it is widely thought that Covid-19 accelerated the process of RCEP’s signing and convinced wavers of the benefits associated with greater regional integration.

Embracing multilateralism and regionalisation In short, the pandemic has underlined how multilateralism and regionalisation can help to mitigate global shocks. By developing more efficient and agile supply chains with their neighbours, countries have reduced the risk of overreliance on trade with the world’s largest industrialised economies. Going forwards, Covid-19 will invigorate efforts to boost supply chain resiliency, enhance the diversity of trade relations and foster wider cooperation between trading partners. (Input from the Oxford Business Group) FEBRUARY 2021 25

EXPERT OPINION: GCC SUPPLY CHAIN & LOGISTICS INDUSTRY FORECAST

Top

growth opportunities in the GCC Supply Chain and Logistics Industry for 2021

GCC Governments will continue to prioritise, focus and invest in logistics and multi-modal transportation infrastructure in the region specialty packaging, precise temperature and humidity In(e.g., this ‘What you need to know now’ management). Even a product as simple as hand sanitizer, upbeat input Frost & Sullivan, the for example, requiresby careful handling due to its alcohol global growth consulting content, especially for strategy longer-term storage. Moreover, and products shipped on a push-based approach various research firm, examines the from reality and suppliers lacked in terms of stock-keeping status quo standardization with regard to the current unit (SKU) formats and shipment information, which also scenario with regard to the GCC led to inefficient warehousing operations. logistics and supply chain industry and how the regional Governments, Second, limited real-time transparency on warehouse stock levels significantly limited options for orchestrating an authorities and the trade are joining effective last-mile delivery network. This also made it forces to salvage and make the best of difficult to make reliable promises to end users and created the situation whilst endeavouring to avert friction in planning processes. Transportation planning and and preempt any downturn in the long managing multiple carriers posed additional challenges that term in the ofbefore. the current pandemic governments hadlight not faced challenges – Editor.

To tackle this issue, China’s Ministry of Commerce, the General Administration of Customs, and the State Administration for Market Regulation jointly issued the ith on the current state Quality of the Logistics and Pandemic Supply Chain Announcement Further Strengthening Oversight for Exported Prevention and Control Supplies on April 26, 2020, allowing specified pandemicIndustry in the GCC, what do you need to know now? related medical equipment (e.g., test kits, surgical masks, preventive clothing or ventilators) to be exported only if they have obtained foreign certifications or The logistics industry in the region is evolving rapidly registrations that are accepted by the importing countries.

driven by increasing non-oil sector contribution to the GDP, infrastructure development, the emergence of free trade zone, industrial parks, and increased trade cooperation. Governments in the region have undertaken policy measures to reduce their dependency on oil exports by strengthening economic diversification initiatives, tax reforms, improving the investment climate, increasing investment in food security and encouraging private sector participation. Covid-19 related disruptions caused significant slowdown during H1-2020. Volume handed by Jebel Ali port contracted by 6.7 % in H1-2020. Frost & Sullivan believes that mega-events such as EXPO 2020 (now moved to 2021), and investment in digital infrastructure upgrade to accommodate the growing demand from the e-commerce sector, will drive logistics industry growth. Frost & Sullivan estimates it to grow by 4.3% between 2020 and 2025. National and regional lockdowns, travel restrictions, slowdown in customs clearance, port congestions & restrictions, increasing last-mile delivery costs, are some of the factors disrupting the logistics operations in the region and contributing 26 FEBRUARY 2021

DEMAND INCREASE – EXAMPLE UNICEF:

>100x FOR FACE MASKS

N95

>300x FOR N95 MASKS

>2,000x FOR MEDICALGLOVES

Source: Unicef Note: The demand surges represent estimates of UNICEF’s procurement as a to the to faster adoption digital quantities technologies. response COVID-19, comparingof approximate procured in 2019 to 2020. These numbers do not represent global demand surges since numerous During rebound phase from the pandemic, digital actors procuredthe medical supplies during the pandemic.

transformation initiatives will play a crucial role. With governments focusing on digitalization and increasing contribution of knowledge economic sectors, launch of 5G services supported by several initiatives relating to Artificial Intelligence, Cyber Security, and other parameters is expected to aid the transformation of the logistics ecosystem.

Government focus will continue to be on development of logistics infrastructure

Upgrading and Modernization of Port Infrastructure with Digital Applications will be the prime focus. The region’s geographical location on the transcontinental trade has facilitated its focus on the development of logistics hubs for both domestic and transit goods. As part of economic diversification initiatives and national infrastructure plans, the development of free zones are given priority to increase trade. Cross border e-commerce is one of the growth areas and contributes to around 40 % of total e-commerce value.

While governments are assuming overall responsibility for end-to-end supply chain orchestration, two categories of activities are most relevant from a logistics point of view: inbound logistics and distribution. EXPERT OPINION: GCC SUPPLY CHAIN & LOGISTICS INDUSTRY FORECAST

KEY ACTIVITIES TO SECURE MEDICAL SUPPLY

Demand identification and forecasting

Sourcing

EXHIBIT 1

Procurement

Inbound logistics

Allocation

Distribution

n Major logistics challenges (details in the following)

FEBRUARY 2021 27

EXPERT OPINION: GCC SUPPLY CHAIN & LOGISTICS INDUSTRY FORECAST

Delivering Pandemic Resilience DHL White Paper 9

8 Delivering Pandemic Resilience DHL White Paper

INBOUND LOGISTICS AND DISTRIBUTION PAIN POINT

EXHIBIT 2 Source: DHL, McKinsey

Transport and consolidation in sourcing country Local quality checks and steady supply Transportation capacity bottleneck Limited transparency with high variance in quality

Customs and regulation

Warehousing

Lack of coordinated fast track

Limited storage capacity and lack of routine

Inbound transport

Supplier certification and qualification

Limited and volatile freight capacity

Frequent import regulation changes and country variations

Extraordinary time pressure Reliable ETA times difficult to obtain

Quality check Substantial amount of disqualified products due to arrival-only quality check

Magnitude of pain points n High n Low

Suboptimal SKU formats and imprecise product information

Distribution

Lack of expertise and sophistication in LSH storage

Limited transparency on stock levels and demand

and last mile

Challenging transportation planning and carrier management

Overarching pain points Lack of transparency and traceability Broad stakeholder landscape without E2E coordination

Recommendations and Best Practices Port Infrastructure development projects in United Arab A CLOSER Khalifa LOOK: PAIN AND THEIR ROOTDuqm CAUSES Emirates’ Port POINTS in Abu Dhabi; Oman’s Port; • Service providers can leverage the above developments and IN INBOUND LOGISTICS AND DISTRIBUTION Saudi Arabia’s Jizan Port and Mubarak Al-Kabeer Port in focus on emerging opportunities in multi-modal logistics DEMAND INCREASE – EXAMPLE UNICEF: During the COVID-induced PPE shortages, governments (e.g., specialty packaging, precise temperature and humidity Custom clearance is often a lengthy process due to Kuwait are expected to improve regional connectivity. solutions and port infrastructure development. Major global faced a range of different transport challenges. In the race management). Even a product as simple as hand sanitizer, insufficient personnel and a lack of coordinated fast-track to source PPE, a push-based sourcing approach careful handling due to its alcohol processes. Amid the COVID crisis, governments responded for example, Al Khomra Logistics Zone in Jeddah Port launched and requires regional service providers are expected to expand their predominated to ensure volume. This resulted in content, especially for longer-term storage. Moreover, by relaxing custom clearance procedures (to varying by Saudi Ports Authority will become one of the largest storage and warehousing capacities in port cities to meet the unpredictable supply in terms of volume, quality and degrees) in order to accelerate distribution to end users. As products shipped on a push-based approach from various FOR FACE MASKS delivery time. lacked standardization in terms from of stock-keeping a result,Dubai things like supplier certification and product quality suppliers integrated logistics zone in the region. Commerce increasing demand trade and cross border e-commerce. unit (SKU) formats and shipment information, which also were not adequately verified. With less experienced and City is developed to support global and regional brands to In many cases, local quality checks were insufficient due to led to inefficient warehousing operations. reliable actors suddenly appearing on the market in this time pressure,their the increased bargaining power oftrade suppliers,in “gold environment, it was quite common to find large expand e-commerce therush” GCC region. Digitalization of Supply Chain solutions

>100x

and the fact that many governments lacked access to local testing infrastructure. Outbound shipping was often delayed due to road transport bottlenecks on the way to ports and airports. For PPE, in particular, regional national lockdowns during the peak of the first phase limited not only production, but also much-needed shipping capacity. When supplies finally arrived at outbound ports, reliable estimates for arrival times (ETAs) on the receiving end were hard to come by. And when supplies did reach their destination countries, custom clearance processes added another hurdle.

What is driving growth?

• Logistics related infrastructure development is given high priority across GCC regions. As a result, the expansion of warehousing capacities is gaining traction to meet the growing demand from trade and e-commerce logistics sectors. • Number of licenses issued to the e-commerce sector is on the rise due to behavioral shift towards online purchasing by consumers. Focus is on the development of e-commerce zones in the region. • 3PL service providers are expected to benefit from investment incentives offered by government in port cities and major consumption centres. 28 FEBRUARY 2021

2 is a critical success factor

amounts of product that was insufficient in terms of quality, Second, limited real-time transparency on warehouse stock levels significantly limited options for orchestrating an or even counterfeit.2 effective last-mile delivery network. This also made it The distribution challenges faced by governments were difficult to make reliable promises to end users and created twofold: friction in planning processes. Transportation planning and managing multiple carriers posed additional challenges that First, in warehousing. Due to the time pressure and surging governments had not faced before. demand, warehouses not actually designated for life 2 To tackle this issue, China’s Ministry of Commerce, the General Administration of science products were nevertheless used for medical Customs, and the State Administration for Market Regulation jointly issued the Announcement on Further Strengthening Quality Oversight for Exported Pandemic supplies, including PPE. This sometimes resulted in Prevention and Control Supplies on April 26, 2020, allowing specified pandemicrelated medical equipment (e.g., test kits, surgical masks, preventive clothing or damaged or deteriorated supplies (despite relatively short ventilators) to be exported only if they have obtained foreign certifications or storage times) because necessary conditions were not met registrations that are accepted by the importing countries.

N95

>300x FOR N95 MASKS

>2,000x

Digitalization is gaining traction across freight transportation and warehousing segments; the focus FOR MEDICALGLOVES is shifting towards process automation and predictive analytics. Limited applications of technology warehousing operations are labour-intensive and have increased cost of operations. Empty miles in freight transportation have contributed to inefficiencies, thereby paving the way for digitalization. Advancements in digital technologies are expected to influence manned and unmanned connected autonomous transportation as well as connected physical transportation infrastructure driven by the application of smart sensors.

Source: Unicef Note: The demand surges represent estimates of UNICEF’s procurement as a response to COVID-19, comparing approximate quantities procured in 2019 to 2020. These numbers do not represent global demand surges since numerous actors procured medical supplies during the pandemic.

number of couriers and consignees need to be informed or even trained.

requirements.

EXPERT OPINION: GCC

Given the urgency of the pandemic, vaccines will likely be transported via air freight for longer distances. To ensure 200,000 global& coverage for the next two years,7 some SUPPLY CHAIN LOGISTICS INDUSTRY FORECAST movements by pallet shippers on 15,000 flights may be needed. In downstream distribution, accommodating the stringent temperature requirements will be even more challenging, though for a different reason. While process duration is much more plannable and consistent here, the lot size decreases substantially. This poses three operational challenges:

APPROXIMATELY

15k FLIGHTS, AND

200k

First, the sheer number of shipments – imagine almost 15 million cooling boxes in an exemplary supply chain – paired with the required volume of cooling bricks or dry ice. Dry ice production does not seem to be a bottleneck for vaccine distribution. But even under aggressive assumptions, both the availability of suitable packaging as well as the maximum-allowed quantities of dry ice in air Further, automation, robotics, cargo transport could potentially limit shipment autonomous vehicles, and big data possibilities in certain cases if the preparations are not analytics are expected to either transform made in time.8

or disrupt logistics service offerings. There has been a significant increase in demand for modern warehouses, creating opportunities for modernization with warehouse management systems and automation solutions. Internet of Things (IoT), augmented reality, automation, and autonomous vehicle technologies will improve efficiency in sorting, order picking, and packing operations in warehouses.

Start-Ups will lead transformations in the Logistics ecosystem

MOVEMENTS BY PALLET SHIPPERS, AND

15m

DELIVERIES IN COOLING BOXES WOULD BE REQUIRED TO SHIP

10 billion DOSES IN THE STRINGENT AND CONVENTIONAL SCENARIO. Source: DHL, McKinsey

High market fragmentation, inefficiencies in freight transportation Recommendations and and last-mile delivery have opened up Best Practices start-up opportunities. • Covid-19 related disruptions provide Several regional programmes and opportunities for the start-ups to focus initiatives are targeting to position the on the development of innovationGCC region as an innovation and a based solution offerings. What is driving growth? knowledge hub. Government support • Digital freight platforms, freight • High level of inefficiencies in freight measures include development of aggregation, mobile-based freight transportation resulting in increased entrepreneurship and improving the market solutions, load matching, focus on the development of digital Quality assurance (QA) reviewssystem the manufacturing process andcapital. issues a certificate of manufacturing if approved. Quality check (QC) e-commerce reviews the ingredients/ logistics, financial to access warehousing, platforms to improve service efficiency, components and issues a certificate of quality. approximately 10 billion doses to be distributed. Stimulus programmes announced by cargo monitoring, software relating to monitor cargo traffic and capacity Global coverage assumes The reason dry ice capacity on airplanes is limited is because dry ice will sublimate into carbon dioxide gas with time, displacing the breathable oxygen in the cabin. thein dry governments incentives logistics process automation are some management. These restrictions ice capacity are there toincluded maintain breathable levels of oxygen and in the cabin of the airplane and are calculated by taking account factors such as the airplane’s ventilation rate, sublimation rate of dry ice, dry ice packaging, and safe CO2 concentration limits. Currently, all wide-body aircrafts (e.g., B767, B777) exemptions equity-free grants containers. or of the areas that offer high growth • Rising complexity in supply chains can carry a maximum of 816-1088 kgsuch of dry ice,as when carried in refrigerated/insulated exemptions of fees, subsidized housing, prospects. due to growth in global sourcing and office space and health insurance • As the last-mile delivery space is distribution practices will drive rapid coverage for companies. becoming congested, focus is shifting adoption of digital solutions. Dubai Future Foundation and Social towards other areas of e-commerce • Demand for modern warehouses is Development Bank, Ghadan 21 in Abu logistics such as e-fulfillment. expected to increase due to growth in Dhabi, Sharjah Entrepreneurship Centre e-commerce volumes. are some of the institutions supporting Vaccine Logistics the development of start-up ecosystem GCC is positioning itself as will support growth in the region. Dubai, Abu Dhabi, Riyadh, a major hub for e-commerce of cold storage and Bahrain, Sharjah have emerged as some of the preferred locations for the regional air freight logistics start-ups. Recommendations and Pandemic is expected to expose Best Practices vulnerabilities in global supply chain of • End-to-end logistics solutions with What is driving growth? Covid-19 Vaccines. focus on supply chain visibility backed • Inefficiencies in freight transportation, In times of pandemic, logistics by digital applications will gain storage and warehousing are key services will be crucial for the healthcare traction. Warehousing automation, challenges being addressed by most of industry to deliver time-critical medical digital freight platforms, innovations the logistics start-ups. equipment and pharmaceuticals that in last-mile delivery are expected to • Last-mile delivery challenges, emptyrequire cold storage facilities. Some of remain some of the focus areas. mile run by road freight vehicles, lack the primary factors important for vaccine • Digital technology adoption in the of supply chain visibility, absence logistics include cargo monitoring with areas of customs clearance and port of real-time cargo monitoring, slow supply chain visibility and traceability, infrastructure upgrading, e-commerce adoption of digitalization are some of vaccine temperature monitoring and hubs are some of the segments the factors contributing to the growth stability testing. expected to benefit from digitalization. of logistics start-ups in the region. 6

7 8

30 FEBRUARY 2021

Local warehousing. This distribution archetype makes use of local storage and fulfillment capacities to receive entire Direct shipment. The most direct and fastest of the pallets and then break them down into parcel-sized units distribution archetypes takes vaccines (either palletized or for warehousing and subsequent last-mile delivery. This boxed) directly from the fill-finish point to the final could be the archetype of choice for large destination destination via truck or air. This mode could make sense regions and a long-termINDUSTRY solution for vaccine types that can EXPERT OPINION: GCC SUPPLY CHAIN & LOGISTICS FORECAST for initial global distribution for front-line use, over the be transported under less stringent temperature long term in small regions, or in cases where the endpoint requirements. selecting the right distribution archetype:

Delivering Pandemic Resilience DHL White Paper 21

THREE ARCHETYPES OF END-TO-END LOGISTICS SOLUTIONS FOR COVID-19 VACCINE DISTRIBUTION

GCC being a major logistics hub, development of vaccine distribution infrastructure is given priority in some of the key ports. The Covid-19 Vaccine Cargo Hub developed by Emirates SkyCargo in Dubai South is expected to emerge as a major distribution hub for vaccines and related supplies in the region. Smart Logistics Hub, which is located in Bahrain, will focus on prompt distribution of perishables, vaccines and medicines. With block chain platform supported by advanced digital infrastructure, it will smoothen customs clearances, fee payments and smooth transition of cargo to major centres in the GCC region.

Recommendations and Best Practices

• Bottlenecks along the healthcare supply chain include safe transportation of vaccines, sourcing and procurement from vaccine manufacturers, realtime temperature monitoring at warehousing and cold storage facilities at consumption centres. • Removal of bottlenecks along the entire healthcare supply chain is expected to be the key focus area.

What Lies Ahead – Future Outlook Freight Transportation: Shortage of cargo capacity due to reliance on belly cargo, increasing demand for time-critical cargo are some of the key factors that support the growth of air cargo. Increasing digitalization will

Pallet shipper The likelihood of a pandemic has increased in the century since the 1918 flu pandemic. We’ve seen SARS and MERS Cooling box emerge, and while COVID-19 is the most recent, it will not be the last. Among the factors driving this trend are increased global travel and changes in land use, and since these factors are expected to increase, we can expect the frequency of pandemics to intensify as well.9

Cooling boxes

on pallet Global public health emergencies present immense challenges – and preparedness may save lives when the next crisis hits. Research by the University of Oxford’s Blavatnik School of Government, which investigated government responses to the COVID-19 pandemic, suggests that countries with more stringent Pallet Warehousing countermeasures, such as the mandatory use of face shipper and fulfillment masks in public, have had lower COVID-19 infection rates.10 In many regions, however, supply shortages would have made widespread mask use impossible.

Lessons learned from the COVID-19 pandemic and OR investments in crisis prevention can help government leaders ensure adequate supplies. The following five pillars of successful crisis response management will be key to meeting the supply chain challenges of future global health emergencies: Developing and disseminating a clear and pre-defined Local(1) cross-docking and labeling emergency response plan (2) Building a partnership network of both public-private and public-public partnerships

(3) Identifying and ensuring access to required physical Last-mile delivery logistics infrastructure of cooling box (parcel sized)

(4) Establishing IT-enabled supply chain transparency

(5) Creating organizational and allocating 1 Direct shipment to point of use 2 Local cross-docking 3 Localstructures warehousing Access to medical products is essential to a successful resources to institutionalize and coordinate the entire Direct shipment of pallet shipper Local cross-docking of cooling Use of local storage and fulfillment health-emergency response, and preventing such supply response management incl. plan, partners, infrastructure or cooling box from fill-finish to boxes on pallet to reduce capacities to break-down pallet issues in the future should be a clear goal moving forward. and IT point of use cross-border costs shipper into cooling boxes

FIVE PILLAR FRAMEWORK FOR SECURING MEDICAL SUPPLIES DURING PUBLIC HEALTH EMERGENCIES

EXHIBIT 9

Forecasting

Public - public

IT-enabled supply chain transparency

What is driving growth?

• Discovery of the vaccine will push the heallthcare industry to develop enough capacity to produce and distribute vaccines all over the world from the place of production. Logistics services will be crucial for the healthcare industry to deliver time-critical medical equipment and pharmaceuticals that require cold storage facilities. • National Vaccination Programs are being developed by major economies including the United States, Europe, India and China. With production centres distributed across regions, GCC distribution hubs are expected to play a key role in the global vaccine supply chain.

EXHIBIT 7 Source: DHL, McKinsey

Response plan

Including reaction to possible disruptions

Physical logistics infrastructure

Managing Unit Public - private

Partnerships

Production companies

Logistics companies

Charter Cargo plane

End customers e.g. Hospitals, Pharmacies

9 Jamison, 10 Oxford

Gelband and Horton et al. 2017.

COVID-19 Government Response Tracker (OxCGRT) (2020).

simplify logistics processes of freight segments. Collaborative development among competitors, logistics service providers and start-ups will eliminate system redundancies. Warehouse Infrastructure: Infrastructure development will be the area of focus between 2020 and 2025 to improve connectivity. Investments in cold storage and other warehousing infrastructure is expected to increase

cross border e-commerce. Storage expansions, upgrading of cargo handling facilities, and development of free zones are the other growth areas to watch out for. Digitalization is expected to be adopted quickly in this segment as automation of warehouse operations would reduce the dependency on the labour force and improve accuracy in picking and sorting. (Input from Frost &Sullivan) FEBRUARY 2021 31

UD TRUCKS

UD Trucks reports upbeat 2020 performance across key MEENA markets idespite challenges New business surges in Saudi Arabia following appointment of a new local partner

D Trucks continued its journey of growth across the Middle East in 2020, the company reported recently at an in-person attendance press conference. Despite the challenging business environment caused by the pandemic crisis, the Japanese commercial vehicle brand improved its market share in the majority of its regional markets, while also registering increased sales in many of the countries. Total sales across the year rose by six percent versus 2019, in a market that experienced an overall decrease. The positive performance was built on the company’s continued, comprehensive and consistent strategy for growth, which is based on customer focus and satisfaction, a strong partnership with its regional partners and employees’ engagement.

Extensive range UD Trucks’ full range of modern heavyduty and medium-duty vehicles, which introduced new features to the region, combined with a total solutions approach for trucks and services, were key to this growth, and will continue to play a critical role as the company pursues further growth in the future, the statement continued. UD Trucks’ MEENA team demonstrated a high level of agility and resilience in facing up to the unprecedented pandemic-related challenges, placing health and safety first for its customers, employees and partners, as well as supporting its customers and helping partners to minimize any negative impacts of the crisis. Against the backdrop of extremely challenging economic conditions, UD Trucks succeeded in almost doubling its sales in the key market of Saudi Arabia, whilst also growing by an impressive 14 32 FEBRUARY 2021

Mourad Hedna, President, UD Trucks Middle East and North Africa.

percent in Qatar. At the same time, the brand maintained stable sales in other key regional markets, including the UAE, Oman, Bahrain and Ethiopia.

marked by a series of celebratory launch events in Jeddah, Dammam and Riyadh.

Zahid Tractor

Simultaneously, UD Trucks continued to invest significant resources in East Africa as it rolled out ambitious new plans for its Kenya operations. CMC Motors, the local distributor, developed and expanded the brand both locally and regionally. The importer offers customers the new range of the Quester and Croner models, which deliver unique solutions for every application. As the year developed, UD Trucks shifted its focus to take measures during the pandemic outbreak to support customers and business partners.

With the confirmation of Zahid Tractor as UD Trucks’ new exclusive importer and distributor in Saudi Arabia shortly before the start of the year, 2020 was always going to be a transition year for the brand in the Kingdom. There was a focus on raising customer service standards and support to the highest levels, reflecting UD Trucks’ ambitions and Zahid Tractor’s longstanding reputation as a customer-centric organization. The new partnership was

East Africa

UD TRUCKS

We will start implementing our ‘Better Life’ strategy, which will continue to strengthen our presence and contribution to the region” — Mourad Hedna Warranty terms were extended for customers whose contracts expired within the lockdown period to alleviate any concerns they may have had regarding vehicle maintenance and repair needs during these challenging times.

Digital domination The pandemic has been a trigger for disruption in many industries and businesses. Digitalization is a key for the adoption and acceleration of this disruption. As a smart-thinking, modern company, UD Trucks accelerated its focus on implementing a digital approach to stay connected and keep its partners informed of the latest news and announcements. Several systems were made available to partners, allowing unlimited access to E-Learnings and online module and virtual training sessions. Remote commercial and technical training sessions were delivered to over 450 participants around the region. Two virtual conferences with MEENA partners took place, with strong engagement from all participants, helping to strengthen the UD Trucks family spirit.

UD Trucks Quester

Adopting ‘Better Life’ policy With attention now firmly on 2021, UD Trucks is set to launch its ‘Better Life’ long term strategy to demonstrate the brand’s commitment to provide a better life for people and the planet by delivering sustainable logistics solutions. The company will aim to have the lowest impact on the environment, be a leader in customer satisfaction, and provide customers with best-in-class trucks and services. “2020 was a difficult year across all market segments with many challenges and uncertainties. Thanks to our customers’ trust and our partners and employees’ engagement, the solid

UD Trucks Croner.

performances we recorded have given us a lot of confidence and motivation to continue our sustainable growth journey,” stressed Mourad Hedna, President, UD Trucks MEENA. “Simultaneously, as a company with a long-term focus, it is essential that we provide visibility to our key stakeholders,

including our customers, our partners, and our employees, of our long-term strategy and ambition beyond 2021 and the pandemic. That is why we will start implementing our ‘Better Life’ strategy, which will only continue to strengthen our presence and contribution to the region,” he concluded. FEBRUARY 2021 33

IATA GLOBAL CARGO REPORT

IATA: 2020 worst year for Air Cargo demand since 1990

Global cargo capacity shrank by almost a quarter in 2020 over 2019

he International Air Transport Association (IATA) recently released data for global air freight markets showing that demand for air cargo decreased by 10.6% in 2020, compared to 2019. This was the largest drop in yearon-year demand since IATA started to monitor cargo performance in 1990, outpacing the 6% fall in global trade in goods. Global demand in 2020, measured in cargo tonne-kilometres (CTKs), was 10.6% below 2019 levels (-11.8% for international operations). Global capacity, measured in available cargo tonne-kilometres (ACTKs), shrank by 23.3% in 2020 ( 24.1% for international operations) compared to 2019. This was more than double the contraction in demand. Due to the lack of available capacity, cargo load factors rose 7.7% in 2020. This contributed to increased yields and revenues, providing support to airlines and some long-haul passenger services in the face of collapsed passenger revenues. Improvements towards yearend were demonstrated in December when global demand was 0.5% below previousyear levels (-2.3% for international operations). Global capacity was 17.7% below previous-year levels (-20.6% for international operations). 34 FEBRUARY 2021

global industrial production has also recovered. “Air cargo is surviving the crisis in better shape than the passenger side of the business. For many airlines, 2020 saw air cargo become a vital source of revenues, despite weakened demand. With much of the passenger fleet grounded, meeting demand without belly capacity continues to be an enormous challenge,” remarked Alexandre de Juniac, Director General & CEO, IATA. “As countries strengthen travel restrictions in the face of new coronavirus variants, it is difficult to see improvements in passenger demand or the capacity crunch. 2021 will be another tough year,” he added.

Alexandre de Juniac

That is much deeper than the contraction in demand, indicating the continuing and severe capacity crunch. With the stalling of the recovery in passenger markets, there is no end in sight for the capacity crunch. Economic conditions are picking up in 2021, the IATA report continued. The new export orders component of the manufacturing Purchasing Managers’ Index (PMI) is in growth territory in both developed and emerging markets. And

2020 Middle East Regional Performance Middle Eastern carriers reported a decline in demand of 9.5% in 2020 compared to 2019 (-9.5% for international operations) and a fall in capacity of 20.9% (-20.6% for international operations). After a slight slowdown in recovery in November, carriers in the region performed well in December, posting a 2.3% increase in international demand. International capacity decreased by 18.2% in December, unchanged from November.

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AGILITY-SHIPA

Agility-backed Shipa opens two e-Commerce Fulfillment Centres in Dubai Centres help global, regional and local brands manage online orders and delivery across GCC

hipa, the digital logistics and e-commerce arm of Agility, recently announced that is has opened advanced e-Commerce Fulfillment Centres in Dubai to manage online purchases and deliver to customers in the UAE, Saudi Arabia, Kuwait, Qatar and Bahrain. The centres, in the Jebel Ali Free Zone (JAFZA) and Dubai Investment Park (DIP), will help global, regional and local brands scale quickly to capitalize on the explosive growth in e-commerce and online sales across the GCC. Shipa’s 60,000sqm fulfillment centre in the Jebel Ali Free Zone (JAFZA) and a second 20,000sqm facility in Dubai Investment Park feature a combined 2,000 pallet positions and 10,000 bin locations. Both leverage the operational expertise and technology of Agility, a leading global logistics provider.

Multi services The centres offer bonded and non-bonded storage; inbound air and ocean stock replenishment; pick-and-pack services; customer technology integration and APIs; local and international returns services; and integration with cross-border and last-mile transportation vendors. Shipa’s value-added services include e-fulfillment solutions scalable for all GCC markets, including access to more than 1.2mn sqm of GCC warehousing, customs brokerage, express bonded road services, and delivery options that include COD, pre-paid and payment-at-door. Shipa Delivery, Shipa’s last-mile delivery network, provides last-mile services in GCC markets. Both facilities offer racked and bulk storage and use leading warehouse 36 FEBRUARY 2021

AGILITY-SHIPA

Hassan Mikail, CEO-Middle East, Shipa E-Commerce

management systems. In addition, both adhere to rigorous Quality Health Safety, Security and Environment (QHSSE) standards and offer temperature-controlled storage, including frozen and refrigerated storage. The JAFZA facility offers bonded and duty-paid facilities to serve retailers with regional logistics requirements.

Jeremy M. Skyrme, Chief Growth Officer, Shipa

Accelerated growth Globally and in the Middle East, the Covid-19 pandemic has accelerated growth in online sales and the shift from in-person purchases to digital commerce. Even before the pandemic, e-commerce and digital sales were growing at 21% a year in the GCC, where annual retail spending is estimated at US$ 230bn a year, according to global consulting firm Consultport. “The brands that get the customer experience right in the UAE, Saudi Arabia and across the GCC will be the ones that succeed. Ship’s world-class fulfillment centers give the company services and solutions that ensure a fast, efficient, mistake-free flow of goods from first mile to last mile, the keys to guaranteeing customer satisfaction and repeat business,”commented Jeremy M. Sky me, Chief Growth Officer, Shilpa.

Demand surge Shilpa launched its fulfillment centers to meet the surge in demand brought about by the dramatic acceleration in e-commerce and online transactions. The need for efficiency and improved per unit productivity are important requirements for companies looking to trusted partners as they outsource fulfillment. “Shilpa is widening their service offering to meet changing market dynamics. We are delighted that Shilpa is leveraging the full scope of the Agility JAFZA and DIP capabilities to further support global and local businesses,” affirmed Hassan Mikhail, CEO-Middle East, Shilpa Ecommerce.

Tarek Sultan, Vice Chairman, Agility

Agility invests US$ 35mn in Queen’s Gambit Blank-check Company will acquire, invest in sustainable businesses

Agility announced that it has invested $35 million in Queen’s Gambit Growth Capital, a blank-check company that will target businesses offering sustainable solutions in clean energy, healthcare, financial technology, industrials, mobility and emerging technology. Queen’s Gambit’s all-female management team is led by CEO Victoria Grace, a New York-based venture capitalist, and supported by an all-female Board with strategic networks and diverse industry experience. “Agility’s investment in Queen’s Gambit reflects our commitment to sustainability and our belief that innovative technology can yield both social and economic returns,” remarked Tarek Sultan, Vice-Chairman, and Agility. The Queen’s Gambit’s female-led management team has the potential to tap into a differentiated network and perspective that positions it to execute a business combination with an attractive target,” according to Sultan. “This is a chance to take a more inclusive view of opportunities in the market, and drive value in the process,” he added. Agility has been intensifying its long-standing commitment to the environment, sustainability and improved governance. It was recently added to the FTSE4Good Index Series, a resource used by investors to identify companies around the world with strong environmental, social and governance (ESG) practices.

FEBRUARY 2021 37

ENERGY & UTILITIES

ACWA makes milestone inroads into Uzbekistan to enable the country’s energy transformation New developments on three major power projects with a combined investment value of US$ 2.5bn and capacity of 2500MW

The 1500MW CCGT power plant Sirdarya site.

The Uzbekistan Ministry of Energy, ACWA Power and Air Products have entered into a strategic framework agreement to enable research programs in the fields of renewable energy and hydrogen with the endorsement of Power Purchase Agreements (PPAs) and investment agreements

ollowing agreements signed in March 2020, cooperation between the Uzbekistan Ministry of Energy, the Ministry of Investments and Foreign Trade, and Saudi Arabia’s ACWA Power have led to three major milestones in the development of power projects to enable Uzbekistan’s ambitious energy transformation plan and increase energy capacity by 2500MW.

The ground-breaking ceremony of the 1500MW Sirdarya CCGT plant, followed by the signing of two Power Purchase Agreements and Investment Agreements for two wind power plants located in Bukhara and Navoi, was conducted in the presence of Alisher Sultanov, Energy Minister of the Republic of Uzbekistan, as well as a Saudi Arabian delegation led by Eng Khalid AlFalih, Minister of Investment. ACWA Power will be delivering these three projects utilising its technical knowledge, expertise, and experience, to contribute directly to meeting 38 FEBRUARY 2021

Uzbekistan’s growing yearly electricity demand, which is expected to reach 110 billion kWh by 2030.

National Mandate The company’s contribution is also aligned with Uzbekistan’s national mandate to increase energy efficiency, introduce energy-saving technologies, and develop and implement renewable energy sources, under its recent energy sector reforms. “As the Minister of Investment for Saudi Arabia, it is particularly pleasing to see a homegrown Saudi company such as ACWA Power supporting Uzbekistan to deliver such a vital component of its infrastructure investment programme, which is central to the country’s economic transformation,”noted Al-Falih. “Enhancing Uzbekistan’s clean energy capacity involves many developmental and investment targets to be hit, over a period

of time. By executing our plans efficiently, we will only attract more investment to Uzbekistan, and improve our nation’s energy status,”observed Sultanov.

Training and up-skilling ACWA Power is also committed to training and up-skilling 1000 local employees in Uzbekistan during the project’s construction and operation phases, generating long-term, socioeconomic value through knowledge sharing and job creation. “ACWA plays a vital role in supporting Uzbekistan’s decarbonisation efforts and energy transformation, stemming from the international cooperation between Saudi Arabia and Uzbekistan under their progressive and visionary leadership,” commented Mohammad Abunayyan, Chairman, ACWA Power. Through the addition of new renewable energy capacity, exploration of innovative

ENERGY & UTILITIES

Mohammad Abunayyan, Chairman, ACWA Power.

The Bukhara agreements have a total investment value of $1.3 billion, and are expected to offset 1.6 million tonnes of carbon emissions per year. Powered by approximately 200 wind turbines, the projects will contribute one third of Uzbekistan’s 3GW wind energy targets, supplying 2.7 million households and supports the government’s aims to have 30 percent of its power capacity from renewable sources by 2030.

Hydrogen Programme

technologies and the advancement of cleaner, more efficient and costcompetitive gas power, ACWA Power is expanding its presence in Uzbekistan, a high growth market, leveraging our global expertise and technical know-how to create long-term and sustainable value for the country’s local communities.”

Sirdarya CCGT The groundbreaking of the 1500MW Sirdarya CCGT plant was marked by ceremonially commencing construction. The project will provide cleaner, more efficient and cost-competitive gas power that can be utilised across industries in Uzbekistan and is expected to meet 15 percent of power demand in Uzbekistan and comprise of 8 percent of installed power capacity when complete. With an approximate aggregate worth of US$1.2bn, the plant has an efficiency rate of over 60 percent, saving almost twice the natural gas currently used for electricity production compared with older plants in the country. Its design, operational, and real time monitoring structure is state of the art, engineered by global experts to drive the energy production process round the clock, to create a seamless flow through the air-insulated switchyard to the national power grid of Uzbekistan, while

offsetting 2.2 million tonnes of carbon dioxide emissions each year.

Bukhara Wind Project The two Power Purchase Agreements for the two wind power plants; with an aggregate power generation capacity of 1000MW was signed by Isakulov Aynakulovich, Chairman, National Electric Grids of Uzbekistan and Rajit Nanda, Chief Portfolio Management Officer and Interim CIO, ACWA Power.

The Uzbekistan Ministry of Energy, ACWA Power (a leading developer, investor and operator of power and water assets) and Air Products (a world leader in hydrogen production and distribution), have also entered into a strategic framework agreement to develop research programs and projects in the field of hydrogen and renewable energy, using the extensive experience of ACWA Power and Air Products. This agreement will support Uzbekistan’s ongoing efforts to reduce greenhouse gas emissions as part of global commitment to the Paris Agreement under the UN Framework Convention on Climate Change. ACWA Power will continue to play a role in high-growth markets through operational excellence and technological expertise, delivering power and desalinated water to communities in thirteen countries worldwide.

The inaugural ceremonies in Uzbekistan.

FEBRUARY 2021 39

WORLD LOGISTICS PASSPORT

India, South Africa and Indonesia join the World Logistics Passport

Global programme now expands to span nine countries across three continents

he World Logistics Passport (WLP), a major policy initiative established to increase trading opportunities between emerging markets, recently announced that India, Indonesia and South Africa as members. They join Colombia, Senegal, Kazakhstan, Brazil, Uruguay and the UAE in a club of trading nations sharing expertise to smooth trade flows around the world. The WLP creates opportunities for business across Africa, Asia, Central and

Mike Bhaskaran, CEO, WLP

40 FEBRUARY 2021

South America to improve existing trading routes, and develop new ones, through the world’s first logistics loyalty programme for freight forwarders and traders. It overcomes non-tariff trade barriers by fast-tracking cargo movement, reducing administrative costs, advancing cargo information and facilitating movement between ports and air. “The recent announcement shows that governments and businesses are thinking differently about how goods and services move round the world, and we are delighted to welcome India, Indonesia and South Africa to the club,”remarked Mike Bhaskaran, CEO, World Logistics Passport.

Spur trade opportunities

India the largest economy to join the WLP to date

Indonesia the first South-East Asian nation to the join

The WLP now counts Mumbai International Airport (Chhatrapati Shivaji Maharaj International Airport), Nhava Sheva International Container Terminal (Mumbai), and Emirates SkyCargo in India and Nepal as partners. As a trade enhancing policy initiative, the WLP is closely aligned with the country’s aim to boost national competitiveness, increase the efficiency of its logistics sector and build tighter economic integration with emerging economies in South and South East Asia.

Indonesia is a strategically important market for the WLP, as it represents a region key to the WLP concept for its fast economic growth driven by manufacturing exports. The WLP now counts the Indonesia National Shippers’ Council as a partner, which will provide benefits related to navigating the local market. Last year, the Indonesia National Shippers’ Council signed a MoU with PCFC in Dubai to realise trade cooperation, thus the registration can be seen as an evolution of an already entrenched and fruitful partnership.

The WLP programme is closely aligned with South African National Development Plan 2030, particularly in terms of increasing intra-regional trade and improving trade penetration into fast growing markets in Asia and Latin America. South Africa has joined the WLP at a time when the countries, and broader region, seek to recover from the economic impact of Covid-19. The WLP will help to achieve the goals in the Reconstruction and Recovery Plan, boosting job creation and supporting export-led growth.

ETIHAD CARGO

Etihad Cargo beats 2020 on-time performance targets Carrier surpasses 85% ‘Delivered as Promised’ performance

tihad Cargo, the cargo and logistics arm of Abu Dhabi-based Etihad Aviation Group, has achieved 87 per cent on-time-performance (OTP) during 2020, ahead of its 85 per cent target and despite a significant increase in flight utilisation. The award-winning UAE carrier also maintained a ‘Delivered as Promised’ (DAP) record throughout the year, passing its initial target of 85 per cent, underlining its on-time delivery capability. “Securing these excellent annual results in Etihad Cargo’s key performance metrics of OTP and DAP which measure the punctuality of the freighter fleet against the schedule and ability to deliver cargo at an agreed time demonstrate the reliability of the freighter service,” explained Martin Drew, Senior Vice President Sales and Cargo, Etihad Aviation Group.

Industry standard DAP is based on the IATA industry standard CargoiQ, of which Etihad Cargo is a certified member, and facilitates a standardised measurement of service promise. It measures milestones along the shipment journey and marks the point where the customer is notified of shipments being ready for collection. Etihad Cargo’s strong 2020 performance was supported with its extensive global road feeder service network, which covers 150 stations across the UAE, GCC, Europe, North America, Japan, India, and Australia.

“Etihad Cargo’s extensive global road feeder service network performed particularly well within Europe and North Africa in 2020 with 15,119 total truck journeys – an average of 350-plus per week – within the first 10 months of this year,” noted Andre Blech, Director Cargo Operations and Delivery, Etihad Aviation Group. The road feeder service network also supported Etihad Cargo’s commitment to guarantee full compliance of industry standards and regulations across its network and enhanced product offering.

Digital solutions The carrier is also using digital solutions to support automated reporting and real-time information, with partnerships with several ‘smart’ industry initiatives including One Record, CargoiQ and most recently the IATA e-AWB bearing fruit. Etihad became the UAE’s first airline

to implement electronic technical logs (eTech logs). The switch accelerated Etihad Cargo’s journey to paperless airline operations and helped the carrier achieve an IATA ranking of eighth in the world for e-AWB penetration. Etihad Cargo’s digital transformation has also seen it automate solutions at its state-of-the-art Cargo Control Centre, which monitors and steers its global cargo flows round-the-clock. Smart solutions adopted include the automation of customers messaging, prealert messages to inform stakeholders at its hub and outstations, service level monitoring of handling providers and live tracking of trucking services. “Throughout 2021 Etihad Cargo will continue to review its offerings and consumable items to deliver a best-in-class service with customised products driven by flexibility to respond to ever more demanding customer requirements,” asserted Blech. FEBRUARY 2021 41

VACCINE LOGISTICS ALLIANCE

Four Dubai logistics and transportation entities to expedite global distribution of vaccines Emirates SkyCargo, Dubai Airports, DP World and International Humanitarian City join hands to distribute vaccines by air, land and sea through Dubai to developing countries In a joint move, the combined expertise and forces of four premier logistics and transportation institutions along with global air routes, sea ports and logistics networks, will speed up vaccine deployment, especially to developing countries. Dubai’s vaccine storage and distribution facilities have been extensively ramped up, building on existing position as a global hub for the pharmaceutical industry.

nder the directives of Vice President and Prime Minister of the UAE and Ruler of Dubai HH Sheikh Mohammed Bin Rashid Al Maktoum, Dubai recently launched the ‘Vaccine Logistics Alliance’ to speed up distribution of Covid-19 vaccines around the world through the emirate. In support of the World Health Organization’s (WHO) COVAX initiative and its efforts to equitably distribute two billion doses of Covid-19 vaccines in 2021, the ‘Dubai Vaccines Logistics Alliance’ combines the expertise and global reach of Emirates airline with DP World’s worldwide network of ports and logistics operations, along with the infrastructure of Dubai Airports and International Humanitarian City to distribute vaccines worldwide. The distribution will particularly focus on emerging markets, where populations have been hard-hit by the pandemic, and pharmaceutical transport and logistics are challenging. The alliance is working with a broader set of stakeholders including pharmaceutical manufacturers, forwarders, government agencies and other entities for transportation of vaccines.

Pivotal point “We currently stand at the cusp of a historic moment with the rollout of vaccines for countering Covid-19, a pandemic that has disrupted the lives of people around the world. The UAE 42 FEBRUARY 2021

is leading the world in terms of rolling out the vaccine, and in line with vision of the Ruler of Dubai to facilitate a global solution for the wellbeing of communities, the Dubai Vaccine Logistics Alliance brings together key organizations to expedite the worldwide transport of urgently needed vaccines through Dubai,” asserted HH Sheikh Ahmed Bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority, Chairman of Dubai Airports and Chairman and Chief Executive of Emirates Airline and Group “Each alliance partner brings to the table a specific and complementary set of strengths and capabilities in vaccine distribution, allowing us to build a 360-degree solution that harnesses the combined logistical and infrastructural advantages of Dubai as a hub. Together, we are able to store a large volume of vaccine doses at a time and bring in and distribute vaccines to any point around the world within 48 hours,” HH Sheikh Ahmed continued. International Humanitarian City, the world’s largest hub for humanitarian logistics based in Dubai will be a vital partner in the Dubai Vaccine Logistics Alliance bringing its vast expertise in humanitarian logistics for aid materials such as food and medicine in markets with limited infrastructure. IHC and Emirates SkyCargo have already partnered on many humanitarian cargo flights and earlier in 2020, also signed an MoU for closer collaboration for humanitarian assistance flights.

International Humanitarian City “International Humanitarian City, based in Dubai, has evolved to become the largest humanitarian hub in the world, playing a pivotal role in facilitating first responses to humanitarian crises across the globe. Since the current global crisis began, the IHC has facilitated the distribution of over 80% of the WHO’s global medical response in the fight against the pandemic,” commented Mohammed Ibrahim Al Shaibani, Chairman, Supreme Committee for the Supervision of International Humanitarian City.

VACCINE LOGISTICS ALLIANCE

“We are able to distribute vaccines to any point around the world within 48 hours” — HH Sheikh Ahmed

DP World DP World, a leader in global supply chain solutions with ports, terminals and logistics operations on every continent, is joining Dubai’s initiative to transport, store and distribute vaccines. DP World logistics operations will facilitate the collection of vaccines from manufacturing sites in places like Europe, the US and India and deliver them to airports, seaports and dry-ports for onward transportation. DP World’s global, GDP-compliant, network of warehousing and distribution hubs will be used to store vaccines for time and temperature sensitive

distribution to hospitals and clinics. DP World will deploy its track-and-trace technology, such as Cargoes Flow, to give real-time information on the location of shipments, and continual temperature control and monitoring. DP World’s ports and terminals, including Jebel Ali in Dubai which is one the largest in the world, will be used to ship, store and distribute medical devices, such as syringes and wipes. “DP World is proud to use our ports, terminals and smart logistics operations to distribute vaccines and medical devices to contribute to fighting the pandemic,” remarked Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World.

DP World-UNICEF partnership Recently, DP World and UNICEF also announced a wide-ranging partnership to support the global distribution of vaccines and related immunization supplies in low- and lower-middleincome countries. The new partnership, with a multi-million dollar value, is the largest to date to support UNICEF’s lead role in procuring and supplying 2 billion doses of pandemic vaccines and auxiliary vaccination supplies on behalf of the COVAX Facility. Emirates SkyCargo is a global leader in the air transportation of temperature sensitive pharmaceuticals, including FEBRUARY 2021 43

VACCINE LOGISTICS ALLIANCE

“We recently activated the world’s largest airside hub dedicated to the storage and global distribution of pandemic vaccines at Dubai South.” — Nabil Sultan vaccines. The air cargo carrier has over two decades of experience in transporting pharmaceuticals across the world and has developed extensive infrastructure and capabilities for the secure and rapid transportation of temperature sensitive pharmaceuticals.

Emirates SkyCargo “We recently activated the world’s largest airside hub dedicated to the storage and global distribution of pandemic vaccines at Dubai South. With our modern widebody aircraft fleet and extensive network, we are well placed to work with our partners in the Dubai Vaccine Logistics Alliance in order to make sure that the vaccines are reaching every corner of the globe, especially cities in emerging markets,” said Nabil Sultan, Emirates Divisional Senior Vice President, Cargo. Emirates SkyCargo has over 15,000sqm of cool chain space for pharmaceuticals across its terminals in Dubai and has already had a head start for vaccine logistics, having already moved vaccines on its flights during the month of December. 44 FEBRUARY 2021

“Dubai’s central location is easily accessible to almost 80% of the world’s population within just four hours” — Paul Griffiths Dubai Airports Dubai Airports, operator of Dubai International (DXB) and Dubai World Central (DWC), will be contributing to the efforts of the newly formed Dubai Vaccine Logistics Alliance by providing additional space at dedicated facilities at Dubai International (DXB). The repurposed cargo facilities will act as storage for vaccines that will be transported through its interlinked operations at DXB and DWC.

Dubai Health Authority interface Working closely with Emirates SkyCargo and Dubai Health Authority, Dubai Airports will ensure that the additional capacity for vaccine storage meets all the stringent regulatory guidelines for transportation of vaccines, and that related processes are streamlined with stakeholders and business partners. “Dubai’s central location means it is easily accessible to almost 80% of the world’s population within just four hours, making the decision to join forces and develop the world’s preeminent distribution hub a very strategic one. This alliance is timed perfectly and will not only support a global need, but also support the future of travel,” concluded Paul Griffiths, CEO, Dubai Airports.

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FIATA LEARNING ACADEMY

SUSTAINABILITY: ZERO CARBON EMISSIONS

The route to zero carbon

Volvo Trucks: Heavy-duty electric concept trucks

How supply chain organizations can make the journey Climate change affects us all; and when looking at the causes of climate change, supply chains and supply chain organizations are far from blameless, writes Dr. Omera Khan in a recent Whitepaper.

The 10 point plan

the World Resources Institute, in 2016, limate Change is real, and it has now the transport sector for the first time turned into a severe global threat surpassed the electric power industry as as we experience aggravated and the single greatest source of greenhouse frequent droughts, heat-waves, forest GREEN PUBLIC TRANSPORT, OFFSHORE WIND AND WALKING gases in the United States. fires, hurricanes, floods,CYCLING and storms in In Europe, where most other sectors of every corner of the globe.

the economy have reduced their carbon This white paper focuses on the central dioxide emissions since 1990, emissions role of Supply Chain Organizations in NUCLEAR POWER HYDROGEN from transport have risen—and continue climate change and the rise of the issue to climb. due to emissions of carbon dioxide as a result of their business operations and what motivates them to dealJETwith toGREEN SHIPS GREENER BUILDINGS ZERO it AND Slashing emissions reduce their impact effectively. Dr. Omera Khan has carried out in-depth Cutting those emissions is a major global research on the topic and has carefully priority. As consumers, many of us are ZERO EMISSION VEHICLES CARBON CAPTURE, USAGE formulated the white paper, covering every already making a difference—I know that & STORAGE (CCUS) relevant aspect of the relationship between I am. You probably are too. But it is the Supply Chain Organizations and the world’s businesses and industries which ongoing climate crisis. collectively contribute a major proportion PROTECTING OUR NATURAL GREEN FINANCE AND In 2018, 24% of global greenhouse ofINNOVATION the carbon dioxide emissions that are ENVIRONMENT gas carbon dioxide emissions came warming the atmosphere. about from transportation. According to Factories, offices, data centres,

NET ZERO INNOVATION PORTFOLIO - PRIORITY AREAS

Advanced Modular Reactors

Floating offshore wind

Hydrogen

Bioenergy

Industrial fuel switching

Advanced CCUS

Homes

Disruptive technologies

Direct air capture

Energy storage and flexibility

46 FEBRUARY 2021

warehouses, various transportation modes—collectively, they are significant consumers of energy, and significant emitters of carbon dioxide. And it isn’t enough for businesses to simply reduce their emissions: that will merely slow the pace of climate change. For atmospheric carbon dioxide concentrations to stabilise, and then actually reduce, net new emissions of carbon dioxide need to be zero. Hence the goal of ‘zero carbon’, a mantra that is increasingly being heard within supply chain organizations

Zero carbon ‘Zero carbon’? Is that even possible, I hear you exclaim? Well, maybe not immediately, for sure. However, there’s nothing wrong with having audacious goals. There is nothing wrong with being encouraged by progress that is already being made towards zero-carbon around the world. Look at the United Kingdom: in the first three months of 2020, renewable energy made up an impressive 47% of the country’s electricity generation. Here in Denmark, where I’m living right now, the use of renewable energy is even higher, with over half the country’s energy usage in 2019 already being met from renewable sources, chiefly wind power. And in terms of transport, the authoritative Energy Transitions Commission concluded in a

SUSTAINABILITY: ZERO CARBON EMISSIONS

skills—the skills required to influence, persuade, collaborate, and communicate.

Constant interaction

report published in 2018 that the decarbonisation of a lot of transport was also indeed attainable over the longer term—through developments such as electrification, bio-fuels, improved energy efficiency, and modal shift.

Fresh start Supply chain organizations can make a start towards zero carbon right now. This is owing to the fact that decisions about where—and how—products are sourced, manufactured, warehoused, and transported have a significant impact on carbon dioxide emissions. We also have the same scenario with outbound supply chains, of course. The journey from the assembly line to the final customer may involve a chain of custody stretching through multiple intermediaries—distributors and logistics partners alike—each with their own handling and storage operations. At each stage, as goods move between these various intermediaries, transport is required: road, rail, air, or sea as appropriate, each with different carbon footprint. So yes, one aspect of zero carbon is undeniably about technological developments, some of which are admittedly far off in the future. Electrifying the world’s truck and van fleets won’t be either easy or quick. And cleaning up air freight and sea freight is probably even further off.

Roadmap Importantly, the route to zero carbon is also about things that supply chain organizations can make a start on right

now: sourcing differently, changing outbound and inbound supply chain practices and designs, and making conscious efforts to invest in energyefficient factories, warehouses, and distribution hubs. As I point out in a just-published paper for The Supply Chain Academy, The Route to Zero Carbon plenty of companies are doing just that. Across five continents, Unilever is already using electricity from renewable energy sources in all of its manufacturing and distribution operations, with the goal of them relying entirely on renewable energy by 2030—just a decade away. Maersk, the world’s largest shipping container company, aims to have carbon neutral vessels in commercially viable operation by 2030, replacing older vessels with new and efficient ones. As another example, UK facilities management outsourcing firm Mitie has committed to transitioning its entire 5,300 strong vehicle fleet to zero emission electric by 2023, with 20% of them having made the switch to all electric by the end of 2020.

Why? This is because supply chain organizations—and the leaders of supply chain organizations—don’t operate in a vacuum. At every stage, there are people to talk to, people to persuade, and people to convince. The long list includes employees at multiple levels, CFOs, Boards of Directors, customers, suppliers, logistics partners and other multiple constituents and stakeholders. Ed Weenk, of Maastricht School of Management, summed it up well when I interviewed him for the whitepaper. “The world is changing, and it’s changing fast. Cross functional thinking, creative problem solving, influencing skills, being able to ‘speak the language’ of other functions: It is soft skills like these that will determine progress, and deliver success.” How right he is!

People centric Yet one of the biggest barriers to achieving such things lies not in technology, but in people—in other words, equipping our supply chain organizations with the leadership, skills, vision and direction to take ownership for making this happen, and accelerating its pace. Talk to supply chain professionals, and there’s widespread agreement with this. What is more, there is also widespread agreement that it’s not ‘hard’, technical skills that matter most, but so-called ‘soft’

Prof. Dr. Omera Khan is recognised as global thought leader in Supply Chain Risk Management and Resilience. She is Professor of Supply Chain Management at Royal Holloway, University of London, and Executive Strategy Advisor for Supply Chain Academy. FEBRUARY 2021 47

ENERGY-ADNOC

Abu Dhabi Pension Fund to Partner with ADNOC in new Investment Partnership

ADNOC Trading Office.

Partnership allows ADNOC to unlock further value from non-oil and gas strategic infrastructure Abu Dhabi Pension Fund to gain further financial exposure to high-quality ADNOC assets with superior, long-term risk-adjusted return and income profile

he Abu Dhabi National Oil Company (ADNOC) recently announced that it has signed and completed a strategic real estate investment partnership with Abu Dhabi Pension Fund (ADPF). The partnership will enable ADNOC redeploy into its core business and strategic growth projects.

Global Management and its subsidiaries, one of the world’s largest alternative investment managers, and a group of institutional investors, for an underlying real estate portfolio valued at US$ 5.5bn.

The transaction is ADPF’s third successive energy infrastructure and real estate asset partnership with ADNOC and marks ADPF’s largest single transaction with ADNOC to date. The ADPF partnership follows the announcement by ADNOC in September 2020 that it had entered into a long-term strategic investment with accounts and entities owned and / or advised by Apollo

Under the terms of the agreement, ADPF will acquire a 31% holding in Abu Dhabi Energy Real Estate Company, the company created to hold ADNOC’s 51% stake in Abu Dhabi Property Leasing Holding Company, for a consideration of US$ 900mn. “This innovative partnership reinforces ADNOC’s ability to unlock and drive incremental value from our unique

48 FEBRUARY 2021

ADPF stake

energy infrastructure and real estate asset base, while simultaneously creating attractive opportunities for the long-term financial well-being of the UAE,” affirmed Dr. Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO. For ADPF, this new investment presents another opportunity to access high-quality lease assets with superior, risk-adjusted returns and income profiles, and lock in long-term, recurring and stable cash-flows. The portfolio of assets is expected to achieve strong future occupancy and rental rates. “This agreement aligns with the Fund’s investment strategy, aimed at investing in high-quality diversified portfolios to

ENERGY-ADNOC

achieve the maximum possible value,” remarked Jassim Buatabh, Chairman of the Board of Directors, Abu Dhabi Pension Fund.

Investment transactions Since announcing the expansion of its partnership and investment model and its assets and capital optimization in 2017, ADNOC has entered the debt capital markets for the first time, issuing a US$ 3bn bond backed by the Abu Dhabi Crude Oil Pipeline; partially floated ADNOC Distribution, the first-ever IPO of an ADNOC Group company; and entered into several strategic investment partnerships in its drilling, refining, fertilizer and trading businesses, amongst others. ADNOC has also closed landmark investment partnerships with leading global institutional investors and operators in its oil and gas pipeline infrastructure.

ADNOC announces new Downstream Industry Marketing and Trading Directorate

New Directorate key to driving downstream expansion, post-Covid growth and In-Country Value Abu Dhabi National Oil Company (ADNOC) has created a new Downstream Industry, Marketing & Trading Directorate, effective January 17, 2021, that integrates the company’s existing Downstream & Industry Directorate and Marketing, Supply & Trading Directorate. Khaled Salmeen, who previously held the role of Executive Director Marketing, Supply and Trading, will lead the new Directorate. This strategic organizational change, the latest in ADNOC’s transformation journey, will enable greater value chain optimization across ADNOC’s Downstream and Trading operations, improving performance, profitability and efficiency. The new Downstream Industry, Marketing & Trading Directorate introduces a more integrated operating model that will help ADNOC provide a better service to its customers, while expanding it’s downstream operations, cataylizing the UAE’s industrial and post-Covid economic growth, and further advancing its focus on In-Country Value. As a central and integrated unit, the new Directorate will deliver a more aligned and coordinated effort between customer and market demand and product supply. It will enable a more agile response to market dynamics and customer needs, while supporting ADNOC’s goal to drive

synergies and maximize value from every barrel and molecule that the company produces, refines, ships and sells. Smart growth strategy As ADNOC delivers on its 2030 smart growth strategy and its ambitious Downstream expansion plans, the new Directorate will be a critical enabler of the company’s goal to responsibly deliver the energy and energy products that the world needs, particularly in its core Asian market, where demand for refined and petrochemical products are set to grow over the next ten years. The Directorate will also drive ADNOC’s activities to catalyze the UAE’s industrial development and economic diversification, overseeing the development of TA’ZIZ and the Ruwais Derivatives Park. This will strengthen the UAE’s position as a globally competitive chemicals hub and destination for foreign direct investment. The Directorate will also lead ADNOC activities to capitalize on the emerging global market for hydrogen, building on the company’s existing position as a major producer with existing infrastructure, partnerships and customer relationships. The new Directorate will govern ADNOC’s interests across its refining, gas processing, petrochemicals, product sales, shipping and integrated logistics and trading portfolio.

FEBRUARY 2021 49

SAUDI RAILWAYS

Alstom innovates for rail transport and mobility in Saudi Arabia Sustainability for the future is a key consideration

lstom, a global player in rail transport and sustainable mobility, is supporting and facilitating Saudi Arabia’s goal to comprehensively enhance the interconnectivity of the Kingdom and the development of major rail and metro projects, in line with its Vision for 2030. Having been an integral part of Saudi Arabia’s history for almost 70 years, Alstom is now playing a pivotal role in shaping the future of transport systems and infrastructure in the Kingdom, by delivering best-in-class mobility solutions and projects. In alignment with the Kingdom’s overall growth and in response to the ever-increasing public demand for the expansion of land transportation services, Saudi Arabia has continuously reiterated its commitment to developing an additional 10,000km of rail and metro by 2030. A key factor in this commitment is the country’s ambition to lead the way in reducing transport emissions, relieving traffic congestion, improving residents’ health and quality of life, and progressively decarbonising rail transit in the Middle East. 50 FEBRUARY 2021

Major investment By 2024, Saudi Arabia is expected to have spent over US$ 48bn on rail projects throughout the Kingdom. At the forefront of this major investment in rail transport is the Riyadh Metro: the largest single-phase metro system project ever launched in the world. An ongoing project, the Riyadh Metro’s lines 4, 5 and 6 have been built from scratch by Alstom and its civil partners, as part of the FAST consortium, and the fully integrated metro system is set to provide comprehensive, citywide, masstransit coverage. Alstom has supplied 69 Metropolis based Riyadh Metro trains and an Urbalis signalling system. As a leader in the improvement of environmental performance of rail across the region, Alstom has also implemented highly advanced and innovative HESOP (Harmonic Energy Saver) technology in the project.

Energy conservation HESOP recovers the electrical energy generated by trains during braking, which, in addition to reducing operational costs, will cut about 3mn kilograms of carbon emissions and decrease power consumption by 6.6mn kilowatts per annum.

“We continue our support of the Kingdom’s economic growth and development, alongside its Vision for 2030, through the enhancement of infrastructure and the supply of sustainable solutions such as the Riyadh Metro,” commented Yasser Omar, Managing Director, Saudi Arabia, Alstom. Alstom is a dedicated and longstanding partner of Saudi Arabia’s transportation and mobility development. Having originally played an integral role in the Kingdom’s energy sector, installing its first gas turbine in 1951, Alstom has gone on to become a key contributor to the advancement of the region’s transport infrastructure. A committed supporter of its investment in rail transport systems, Alstom remains a leading supplier of sustainable mobility solutions in the Kingdom.

HYPERLOOP-DP WORLD

Virgin Hyperloop unveils passenger experience vision

Groundbreaking design shows end-to-end passenger experience for the 21st century

ust months after their first passenger testing, Virgin Hyperloop recently unveiled its vision for the future hyperloop experience. DP World is a major investor in Virgin Hyperloop. “We have demonstrated the maturity of our technology. We are getting closer to commercialization of what will be the first new mass-scale transportation mode in a century,” asserted Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World, and Chairman, Virgin Hyperloop. “Designing a new mode of transportation from scratch is both an opportunity and a responsibility,” remarked Sara Luchian, Director of Passenger Experience, Virgin Hyperloop. “Hyperloop technology and what it enables is paradigm-shifting. It follows that the passenger experience should be nothing short of extraordinary,”she added.

Accelerating mobility “Virgin Hyperloop can accelerate the future of mobility on land. The new mode of travel at supersonic speed rethinks transportation and the perception of space, landscape, time, and distance,”observed Bjarke Ingels, Founder & Creative Director, BIG-Bjarke Ingels Group.

Mass transportation “We leveraged decades of experience designing how people and things move across various modalities – taking some of the best aspects from aviation, rail, automotive, and even hospitality to create a new and better passenger experience that is distinct to Virgin Hyperloop,”noted John Barratt, CEO & President, Teague. “Daily high-speed transport is currently not feasible for most people, but we want to change that notion. Imagine being able to commute between cities that are currently hours apart in minutes and the endless possibilities that opens up,” said Jay Walder, CEO, Virgin Hyperloop.

On demand and direct to destination, the hyperloop system would be able to transport thousands of passengers per hour, with the capacity of each vehicle being about 28 passengers. This high throughput is achieved by convoying, where vehicles are able to travel behind one another in the tube within milliseconds, controlled by Virgin Hyperloop’s machine intelligence software. Following their successful passenger testing, Virgin Hyperloop is currently paving the way for the regulation and certification of hyperloop systems around the world. The company aims to achieve safety certification by 2025, with commercial operations beginning in 2030. FEBRUARY 2021 51

TECHNOLOGY AT THE CROSSROADS

Rise above the Marketing Technology Quagmire Without skilled people and the right processes, marketing technology will waste money rather than gain customers In this Opinion Piece, a trio of experts Juerg Kronenberg, Partner, Bain & Company Middle East; Nikhil Raj, Expert Partner, Bain & Company, Silicon Valley, and John Helstrip, Director, Bain & Company, London, examine controversies centred around marketing technologies whilst making the case for optimizing the appropriate use of the same — Editor.

arketing technology has suddenly become both more important and more problematic. With the surge of online search and shopping in response to Covid-19-induced lockdowns, many companies are pushing their chief marketing officers (CMOs) to build up their digital customer acquisition while curtailing their spends on technology, media and staff. The challenge in accomplishing these goals nearly always involves curbing the sprawling marketing technology that CMOs preside over. Marketing software is typically either procured and licensed, or built at a brand, market or divisional level.

Lack of governance There is little governance over selection or integration with other systems in the organization. As a result, marketing groups often suffer from duplication of technical functions. Other parts of the marketing organization may also have significant gaps in the technologies they need, such as making sure their display ads are actually viewable on approved publisher websites, bringing together a single view of a customer or having near-real52 FEBRUARY 2021

time access to marketing performance data tailored to specific roles within the organization. Given the ascendance of digital channels, combined with heightened competition from digital insurgents in most markets, optimizing the choices and use of marketing technology has become critical for reining in costs while increasing customer value during the pandemic.

Optimizing Marketing Technology For several companies in consumer markets, Bain & Company estimates that optimizing their use of marketing technology typically improves the marketing budget’s return on investment (ROI) by up to 27%. A global retailer, for instance, merged in-store purchase data with online browsing and purchase data to better understand consumer behavior. By incorporating this data into the marketing optimization process, the retailer boosted sales significantly. While CMOs and other marketing executives consider ways to overcome the profusion of technology and harness it to work more effectively, they can tackle the problem by answering

Juerg-Kronenberg

high-gain questions in three key areas; spending less money, increasing returns on advertising spends and leveraging technology and data to create new revenue streams.

Need for skilled staff Useful answers to these topics involve not just technology, but also a skilled staff deployed in processes that use the technology effectively to create a powerful experience for customers. Technology works best when it has the following characteristics: • Functionality to deliver a great customer experience • Integrated with data flowing throughout the system • Strong governance that meets the process, legal and privacy requirements • Measurement of advertising performance, including the efficiency of delivering ads; and • The ability to anticipate future shifts Technology remains the foundation of digital transformation to reduce costs, improve ROI and tap new growth opportunities. However, to make real strides, technology needs skilled people to steer it and the right processes to make it effective.

Subscribe today February 2021 Issue 77

ENHANCING THE BUSINESS OF LOGISTICS

GCC Logistics & Supply Chain Landscape Industry poised for takeoff

Infrastructure Development, Digitalization, Start-Ups and Vaccines to enable business resurgence UD Trucks

Vaccine Conduit

Spirited Performance

Dubai in Forefront

DP World Hyperloop Speeding Ahead

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E-COMMERCE FULFILLMENT

E-commerce fulfillment is a key competitive advantage and a pivot to success Over the last few years, as e-commerce sales have increased and customer expectations have shifted, there has been a steady race to move fulfillment closer to the customer, affirms Alain Kaddoum, General Manager, Swisslog Middle East.

oday’s consumer has a four-pronged fulfillment mandate: fast, free, sustainable, and branded shipping. Globally, 64% of consumers want their orders shipped for free, while peak-level ecommerce and strict same-day shipping cutoff times have made it difficult to meet rising customer demands.

Something once as innovative and de rigueur as two-day delivery has led to next-day delivery, which is quickly becoming obsolete as consumers demand same-day delivery. In a recent survey, 67% of U.S. consumers expect the same-, next-, or two-day delivery, while 72% of global consumers want brands to use sustainable packaging. With the cost to fulfill orders soaring, brands must turn fulfillment into a strategic asset. Fulfillment must be smarter, closer to the consumer, and automated. 54 FEBRUARY 2021

Free shipping at a premium Proprietary data from Shopify shows the number of brands offering free shipping has increased 5.3% since the pandemic began. To answer consumer demand while maintaining profitability, brands are setting free-shipping thresholds. A full 65% of consumers check free-shipping thresholds before adding something to their cart. Interestingly, free shipping is just the tip of the iceberg: 39% of U.S. shoppers expect two-day shipping to be free, while the same-day shipping market in the U.S. is forecast to top US$ 9.6bn in 2022. This trend has accelerated during the Covid-19 pandemic, especially as more consumers become comfortable with online ordering of perishable items and groceries. One of the significant changes in supply chain strategies we are seeing

Swisslogs work on the site in East Midlands will commence in March 2021

as a result of this is the rise of fulfillment centres that bring fulfillment closer to the consumer.

Warehouse / Distribution Centres Typically, one of the dominant components in a company’s supply chain is the large warehouse or distribution centre that acts as a central hub from where products are shipped to retail outlets. These are now being joined by a network of fulfillment centres that focus on localized, direct-to-customer service. They are designed to primarily get online orders to the customer quickly. These facilities have become a powerful tool in conquering the last mile and helping maintain a pleasant, seamless customer experience.

E-COMMERCE FULFILLMENT

Swisslog AutoStore

Micro-fulfillment centres One relatively new type of fulfillment centre that is gaining a lot attention is the micro-fulfillment centre. Micro-fulfillment centres are a simple and compact lastmile delivery solution that can be quickly deployed anywhere, especially where real estate space is limited or cost-prohibitive. While they are generally smaller in size than regional or metro-fulfillment centres, they can be virtually any size, providing the needed flexibility to meet customer needs and fit nicely into a wide range of supply chain strategies. Micro-fulfillment centres can be built as a standalone facility, or built inside or bolted onto an existing location to expand fulfillment capacity, especially within limited footprint. They are also well suited for automation technology, bringing it to the lowest supply chain level. While they can be used in a number of market segments and industries, micro-fulfillment centres have gained the spotlight as a result of the accelerated demand in e-grocery fulfillment. Microfulfillment has shown to be an ideal solution for streamlining e-grocery fulfillment. For instance, Swisslog is working with H-E-B to deploy multiple automated micro-fulfillment centres to support the supermarket chain’s curbside grocery pick-up at more than 40 stores in the San

Swisslog CarryPick

Antonio area. The new micro-fulfillment centres feature AutoStore empowered by Swisslog’s SynQ software, pick stations and integration.

Integral component of supply chain Micro-fulfillment centres are quickly becoming an essential part of the supply chain. They hold much promise for helping reduce delivery costs and shorten the last mile and the time to consumer. They are also an ideal solution for fulfilling online orders for curbside pickup. With the right approach and automation technology, they can help you meet changing expectations and enhance customer experience. Swisslog has a comprehensive portfolio of solutions to meet the needs of retail, e-commerce and e-grocery customers. From large distribution centres to smaller fulfillment centres, there is a wide range of technologies available to address the today’s challenges and demands. Brands have little choice but to creatively re-imagine fulfillment. In the first half of 2020, ecommerce spurred a blistering 51% increase in large fulfillment centre demand. Around the world, businesses are prioritizing fulfillment to fight rising costs and meet consumer expectations.

Alain Kaddoum is General Manager, Swisslog Middle East, a company which is shaping the future of logistics automation and transforming warehouses and distribution centres to achieve maximum efficiency, flexibility and agility. The brand’s portfolio consists of different key technologies, such as conveyor systems, ASRS, AGVs, shuttle systems, monorails, robotics and warehouse management software.

FEBRUARY 2021 55

E-COMMERCE FULFILLMENT

RM Resources consolidates supply chain with Swisslog automation

The Tornado solution will feed ergonomic goods to person stations

Swisslog selected to build a new automated distribution centre for education resources provider

M Resources, the established provider of education resources for early years, primary schools and secondary schools, has selected Swisslog’s Tornado miniload cranes to power its new build warehouse in Hucknall, East Midlands in the UK. RM Resources develops and supplies resources which help bring the curriculum to life in both UK and international markets via its two brands, TTS and Consortium.

allowing sufficient space for RM Resources to expand in the future,”remarked Shane Faulkner, Head of Sales, Swisslog UK. Transportation throughout the solution will be facilitated by Swisslog’s QuickMove conveyor. Goods will be conveyed to the Automated Storage & Retrieval System (ASRS), provided by a seven aisle Swisslog Tornado miniload solution. The ASRS will store cartons or totes double deep providing dense but rapidly accessible storage.

Swisslog SynQ software will provide all the necessary WCS functionality, while also integrating with RM Resources’ WMS & ERP systems. SynQ will deliver greater stock accuracy, as well as increased visibility of order progress. It will also provide RM Resources operators with the ability to pick from available new stock immediately as it enters the warehouse.

Partnership

Single point fulfillment

Together with Swisslog and the storage density of its system, RM Resources will be able to consolidate its warehouse operations in the UK, which is currently spread across four different sites. As part of the KUKA Group, Swisslog covers the entire automation value chain with robotic and data-driven automated solutions for forward thinking businesses. “This project merges four warehouse operations together, while simultaneously

The Tornado solution will feed ergonomic goods-to-person stations, each allowing up to six open orders to be picked at a time thereby facilitating an increased hit rate, improved order fulfilment time, and reduced throughput requirement in the system. With a single level pick-to layout, each goods-to-person station will benefit from one-touch fulfilment, enabling RM Resources to dramatically shorten lead times.

“We are delighted to be progressing with our plans to consolidate our warehouse portfolio, which will deliver a number of efficiencies across the business as we move to one automated site,”commented Monique Louis, Managing Director, RM Resources. Swisslog’s work on the site in East Midlands will commence in March 2021 and is due to complete at the start of 2022, to allow RM Resources to work on the curriculum line before the following school year.

56 FEBRUARY 2021

Automated material flow

VACCINE LOGISTICS

Vaccine distribution: What needs to be improved quickly? The key challenges outlined in this assessment analysis by Eelco Dijkstra (Europhia Consulting); Franck Toussaint (Biolog Consulting) and Laurent Foetisch (Supply Chain Operations), relate to the production delays in ramping up the required production volumes and in the ‘final mile’ challenges in distribution.

here is no doubt in anyone’s mind that the challenges and roadblocks towards streamlined distribution of available Covid-19 vaccines now needs to be met heads on.

Not just with a clear roadmap but with an even greater sense of urgency to execute and deliver on getting vaccines produced and distributed to people around the world quickly.

Production Challenges So what are the key challenges? First, annualized production capacity based on the production output figures announced by the vaccine manufacturers seems well short to deliver vaccines to the whole world in 2021.

Based on the above numbers, the current annualized production capacity comes to 9.3bn vaccines. This is annualized production capacity much of which still needs to be turned on in the first half of 2021. Based on the production lag in ramping up to these volumes, experts predict less than 20% of the world’s population can be vaccinated in 2021 at the current rate of production.

Production output Second, production output across all manufacturers is way behind what was promised earlier. In 2020, we were told that vaccine manufacturers were producing vaccines at risk whilst

finalizing the clinical trial studies and awaiting approval for their vaccines from the regulatory authorities. Vaccines are big business. The EU and some other governments this week have suggested suing companies like AstraZeneca over delays and shortages in delivery. Pfizer has reported a short-term drop in production. Others have simply not yet been able to ramp up commercial production capacity. Many pharmaceutical companies rely on external capacity at CMO’s to beef up their throughput. Much of the fill and finish production capacity is outsourced. The vaccine manufacturing process is a delicate and complicated process involving a number of manufacturing steps often across various production FEBRUARY 2021 57

VACCINE LOGISTICS

partners and facilities. In recent months, many manufacturers have had to reach out to sub-contract or partner with other pharmaceutical companies to scale up and create additional production capacity. This sends a clear signal that more production capacity is needed and that manufacturers should work harder and faster together to produce more vaccines from more facilities around the world. An example this week of collaboration suddenly coming off the ground is between Sanofi and Pfizer. Sanofi announced in a surprise move that it will make production capacity available to be able to start producing Pfizer vaccines by July 2021. This would increase annualized production by a further 100 million vaccines.

Distribution Challenges The second set of challenges centers around the distribution of the vaccines. In December 2020, pictures of courier deliveries led us believe that the vaccines were being rolled out quickly at least across some parts of the world. The sad reality is that the distribution process has not delivered what it should have. President Biden called the coronavirus vaccine rollout effort on January 20 ‘a dismal failure so far’. In most other countries, government

vaccine programs have also seen a slow and rocky start. There lies the issue, the biggest bottleneck is in the last mile in getting the vaccines to the actual points of dispensing. This is currently a weak spot in the whole distribution model which needs to be sorted out as soon as possible. Vaccine manufacturers will probably argue that the ‘last mile’ is a responsibility for governments to organize as part of their own domestic immunization strategy. However, in the regular commercial model of pharmaceutical distribution, the dispensing of medicines and drugs to hospitals, pharmacies and other points of dispensing is typically organized by the manufacturers. They also manage the forecasting, the replenishment models and have the tools and technologies in place to manage supply planning more effectively through their supply chain organization and logistics partners. Governments traditionally do not have the knowledge nor the people in place in organizing the supply chain for pharmaceuticals. Given the enormous scale of this pandemic, most governments simply do not have the required expertise to manage any of this. It is therefore imperative for governments and manufacturers alike to accept that the final mile bottlenecks

need to be fixed and that they need professional supply chain support to do so quickly.

Recommendations It’s now critical to learn from the mistakes made, put possible egos aside and to adjust existing distribution models quickly. Typically, pharmaceutical companies utilize supply chain consultancy expertise to set up their initial distribution model of a new medicine. In fact, the distribution model of about 80% of all new drugs launched by pharmaceutical companies are designed with the support of specialized pharmaceutical supply chain consultants and not by logistics service providers or courier companies. Integrating the final mile into the distribution model will require greater collaboration between manufacturers and governments. Although each country and government will face unique distribution challenges there are a set of standard universal supply chain principles which require more thought. One element is building more intelligence into the supply chain using data and demand planning tools to ensure there is more information to plan and manage the end-to-end inventory points

THE COMPLEX JOURNEY OF A VACCINE R&D

APPROVED

MANUFACTURING CHAIN

Safe & effective by a regulatory authority.

DAY "0" Vaccine manufacturing involves 6 basic steps. Each step can be performed in different sites situated in different countries.

RAW MATERIAL RECEPTION

BULK ANTIGEN MANUFACTURING

All incoming raw materials are checked for conformance with the quality specifications.

The active ingredient of the vaccine is manufactured. This is the most critical step in the production of high quality, safe and efficacious vaccines.

FORMULATION

FILLING

PACKAGING

LOT RELEASE

The active ingredient is mixed with other ingredients to enhance the immune response and ensure product stability.

The vaccine is filled into the final container. This could be a vial or a prefilled syringe.

The vaccine in the final container is labeled in accordance with regulatory requirements and packed, ready for shipping to the customer.

Quality assurance confirms the product has been manufactured and tested in accordance with the correct procedures. The national regulatory authority gives final authorization to distribute the vaccine.

+/- 24 MONTHS Vaccine of consistent quality.

Testing done by the manufacturer Testing done by the exporting country Testing done by the importing country

Quality Control represents up to 70% of manufacturing time.

Leaving no-one behind with immunization is a shared goal of Gavi, the Vaccine Alliance, IFPMA*, and DCVMN* and contributes to 58 FEBRUARY 2021 the advancement of Sustainable Development Goals.

A vaccine typically travels through several different sites before being ready for shipment.

• Vaccine manufacturing is a challenging, specialized process, with inherent variability; • Vaccines require a long lead time due to stringent quality control, taking from several months up to 3 years from the time production

A vaccine undergoes up to several hundred quality control tests during its manufacturing journey.

• Highly skilled and trained personnel are essential to ensure a consistent manufacturing process; • Compliance with diverging local and international regulations. For example, post

SHIPMENT

DISTRIBUTION

SECURING SUPPLY THROUGH SHARED UNDERSTANDING • Foster and sustain early dialogue with manufacturers to help align Gavi’s goals with industry strategic planning.

VACCINE LOGISTICS

The Exciting Journey of Vaccines

SECURING SUPPLY THROUGH SHARED UNDERSTANDING

From Lab to Regulatory approval

From approval to sustained access

From unmet need to vaccine concept

and the whole replenishment model. Another key aspect is thinking more carefully about points of dispensing to ensure more vaccines reach people more quickly. Planning the whole supply chain more holistically to ensure that not only the vaccines arrive on time but also the other medical supplies needed such as needles, syringes, the dilution liquids, as well as the medical staff required to conduct the actual vaccinations. This too requires smarter planning solutions. Technology and use of big data should play a far bigger role in the management of the whole distribution and replenishment model related to the Covid-19 vaccines. The pharmaceutical industry in recent years has invested heavily in bar-coding technology to improve visibility and traceability at item level. One key enabler would be in making greater use of this technology. It would also enhance security around the supply of vaccines. This barcode technology can easily be used to better track products at item

level, including the consumption levels at place of dispensing and therefore help to better manage the whole distribution process more dynamically. This will help manufacturers and governments with improved visibility and insight on what is consumed per dispensing point to be able to better organize the replenishment model based on real demand and inventory data. Having a centralized logistics control room manage such a replenishment model is imperative to the whole solution. There needs to be recognition that the Covid-19 distribution challenge will not go away by itself and will not be resolved with well-intentioned but half-baked measures. Demand, supply, and inventory must be managed more holistically and more intelligently. It cannot be that the supply chain for this critical global vaccination program continues to be fragmented and disjointed. This is a massive multi-level global, national, and local distribution exercise

Making Vital Partnerships a Reality… Where do we go from here?

never seen before on such a scale. Eelco Dijkstra, Managing Partner, Europhia Consulting has worked in supply chain and consultancy for over 25 years and in recent years has focused his expertise on the global pharmaceutical sector. Franck Toussaint of Biolog Consulting has extensive experience in the life sciences industry in Belgium and internationally. Laurent Foetisch of Supply Chain Operations has extensive experience as a supply chain executive responsible for managing a global bio-pharmaceutical company in Switzerland for more than 20 years. FEBRUARY 2021 59

KING SALMAN PORT-SAUDI ARABIA

Honeywell’s control and security systems selected for the Middle East’s largest shipyard Company’s software-based power management and telecommunications technologies for Kingdom’s King Salman Port

oneywell has been awarded a major contract by SEPCO Electric Power Construction Corporation (SEPCO) to supply connected control, telecommunications, safety and security systems for the King Salman International Complex for Maritime Industries and Services shipyard being developed by Aramco in Ras Al-Khair, Saudi Arabia. When completed, the complex will be one of the largest shipyards in the world. It will be automated using a range of Honeywell technologies designed to make the facility’s operations safer, more efficient and secure. The suite of systems will be integrated into the complex by SEPCO, the project’s main engineering procurement and construction contractor.

International presence “Our global presence enables us to work closely with international engineering, procurement and construction companies, including our valued partners SEPCO, to deliver highly innovative infrastructure projects around the globe. We are proud to extend our relationship with both SEPCO and Aramco on this landmark development,” remarked Norm Gilsdorf, President, Honeywell, High Growth Regions, Middle East, Russia, Turkey, Central Asia, Customs Union and ASEAN. “Through the combined capabilities of Honeywell, Aramco and SEPCO, the King Salman International Complex for Maritime Industries and Services is set to become one of the most advanced, efficient, innovative facilities of its type in the world,” he added. Honeywell will provide SEPCO with a suite of connected systems for the complex, including a portfolio of integrated, cyber-secure automation control systems that give facility 60 FEBRUARY 2021

operators complete visibility of processes across the site to reduce workload and improve efficiency. This includes Honeywell’s integrated telecom and security systems, including local communications and network security systems, closed circuit television (CCTV) and access control technologies to help facility operators maximize onsite security. Also included are fire and gas detection systems, including fire and gas controllers and automatic smoke detection systems to help isolate areas in the event of an emergency and safely minimize facilitywide shutdowns.

Delivering engineering excellence “As one of the world’s largest contractors, we are proud to be contributing engineering excellence to the development of the world’s largest shipyard, a project that reflects our ability to deliver global-scale infrastructure and construction opportunities,” commented

SEPCO Project Manager Zhang Zhongxiang. The King Salman International Complex for Maritime Industries and Services was inaugurated in November 2016. The maritime complex complements the growth of the Saudi energy industry and helps meet the development and diversification objectives outlined by Saudi Vision 2030. The complex will be a world-class maritime facility providing a broad portfolio of services spanning vessel and rig build, maintenance, repair and overhaul, and will establish Saudi Arabia as one of the world’s elite shipbuilding nations. Active in Saudi Arabia for more than 60 years, Honeywell continues to play a vital role in supporting and advancing the Kingdom’s industries. In June 2020, the company announced a new gas detection equipment manufacturing facility in Saudi Arabia, the latest milestone initiative in support of the In-Kingdom Total Value Add (IKTVA) programme.

WHO GIVES YOU THE COMPLETE STORAGE SOLUTION? SSI Schaefer is the total solution provider in Intralogistics. Your one-stop shop for warehouse storage and automated systems needs in the MEA region and worldwide. P.O. Box 37600 Dubai Logistics City – Plot WB54 | Dubai South, Dubai United Arab Emirates | +971 4 804 8100 | ssi-schaefer.com

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Global Supply Chain February 2021 Issue

Articles inside

Europhia Consulting

Marketing Technology

King Salman Port

Swisslog

DP World Hyperloop

Sustainability

ADNOC

Riyadh Metro