GLOBAL SUPPLY CHAIN NOVEMBER ISSUE 2018

November 2018 Issue 53

ENHANCING THE BUSINESS OF LOGISTICS

SUSTAINABILITY Sensitivity and Sensibility

Mercedes Benz Trucks Powering on

Frost & Sullivan A view from the helm

Globe Express Services Going Global

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MEXICO CITY

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

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

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Amid the din, drumbeat and clamour to stay green, increasing pressure is brought to bear on logistics companies and services providers by governments, regulators, watchdog bodies and the court of public opinion to stay the course on sustainability and be environmentally friendly.

Leaving a low carbon footprint, emissions and less dependence on fossil fuels is the new norm and the new normal. In this November 2018 edition, we examine the practical implications of operating sustainably and highlight a randomly chosen quartet—DEWA, the Tristar Group, Signify (formerly Philips Lighting) and EGA (Emirates Global Aluminium) for their contribution towards sustainability.

We look at India up close and personal in our ‘Country Focus’ segment. This South Asian giant and economic engine has been making inroads in every aspect of the logistics and supply chain continuum. The global industry across the board has been riveted on India.

Elsewhere, we have covered the launch, in verdant Ras Al Khaimah, in the northern fringes of the UAE, of the all new Mercedes Benz Actros and Arocs commercial vehicles– moving behemoths empowered by the expertise and experience of the powerful brand and heritage.

Global Supply Chain was also privileged to interview two visiting titans for their insights and perspectives on the regional logistics and supply chain industry. These were Aroop Zutshi, Global President and Managing Partner, Frost & Sullivan and Mustapha Kawam, President & CEO, Global Express Services.

Gulftainer has been making forays in the USA with the recent landmark deal with the Port of Wilmington, Delaware. A large US delegation led by Jeffrey Bullock, Secretary of State of Delaware, visited Sharjah recently to seal the Sister Port Agreement.

There’s plenty more to browse through in print and online. Global Supply Chain has its work cut out and we look forward to encapsulate and update our readers with developments, the innovations, the evolution, and the very best the industry is offering.

We will stay connected and continue our coverage of the course of the industry. We look forward to presenting you with more interesting input in our next, year end edition.

Malcolm Dias Editor malcolm@signaturemediame.com

NOVEMBER 2018 3

November 2018 Issue 53

ENHANCING THE BUSINESS OF LOGISTICS

27 06 News 20 Country Report – India Asia’s third biggest economy holds tremendous potential for the logistics and supply industry

26 Sustainability The ability to stay sustainable is both a virtue and challenge for logistics companies

32 Mercedes Benz Trucks The venerable German manufacturer of commercial vehicles is in high gear as its Actros and Arocs trucks rumble in the region

34 Saudi Automotive Sector The Kingdom’s automotive sector is 4 NOVEMBER 2018

on fast track to growth thanks to reformist policies and Saudi Vision 2030

38 Frost & Sullivan From his perch in Mountain View, California USA, Aroop Zutshi, Global President and Managing Partner provides insights on the regional logistics industry

42 Gulftainer Sharjah-headquartered international ports operator sails into the Port of Wilmington, Delaware, USA

44 Frost & Sullivan Gopal R, Global Vice President of the Transportation & Logistics Practice, on how new technologies are impacting the industry

48 Tom Craig – President, LTD Management It is imperative to understand and de-mystify supply chain complexities says a leading industry expert

52 Globe Express Services Mustapha Kawam, President & CEO, holds court with insights on the state of the industry and logistics services providers

58 DMCA Awards 2018 Dubai Maritime City Authority (DMCA) honours winners at the Dubai Maritime Summit 2018

60 RSA TALKE Company’s integrated chemical logistics hub opens new warehouse facility

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Swisslog reports strong growth in the Middle East

Emirates SkyCargo inks agreement to boost Vietnam trade Emirates SkyCargo signed a Memorandum of Understanding (MoU) with the Investment and Tourism Promotion Centre (ITPC) of Vietnam’s largest city Ho Chi Minh, to jointly explore opportunities to promote trade to and from the South East Asian country.

The agreement was recently signed in Dubai by Nabil Sultan, Emirates Divisional Senior Vice President, Cargo and the visiting Pham Thiet Hoa, Director, ITPC. Emirates SkyCargo has played a key role in supporting Vietnam’s trade internationally since the start of its operations in Hanoi in 2008. Over the last decade, the air cargo carrier has scaled up the number of freighter and

passenger flights to its principal cities Ho Chi Minh (formerly Saigon) and Hanoi, offering incremental support to Vietnamese businesses in reaching out to their global customers.

During the financial year 2017-18, Emirates SkyCargo transported 50,000 tonnes of Vietnamese exports and imports. This reflects an increase of 66% in the amount of cargo carried in the year 2015-16.

This trend is in keeping with the overall growth of trade in Vietnam. It is estimated that the value of exports and imports from the country grew by 13% in H1-2018, compared to the same period in 2017, the airline revealed in a press communiqué.

Abu Dhabi Ports and MSC collaborate on international blockchain solution Silsal Maqta Gateway, a subsidiary of Abu Dhabi Ports, announced that it is to carry out its first testing of international blockchain solution Silsal in partnership with Geneva, Switzerlandheadquartered leading maritime operator Mediterranean Shipping Company (MSC).

As a major carrier, MSC will provide vital information and feedback on the international pilot project, which will test the capabilities of the technology to exchange, identify, and acknowledge cargo documents and certificates between Abu Dhabi Ports and other ports.

“Abu Dhabi Ports is proud of the role that Maqta Gateway and initiatives such as Silsal are playing in helping to realize this vision and we will continue to harness the

6 NOVEMBER 2018

power of innovative solutions and emerging technologies to further facilitate trade in the future,”remarked Captain Mohamed Juma Al Shamisi, CEO, Abu Dhabi Ports. “We are delighted to be working with a world-class international partner such as MSC on such a milestone project for Abu Dhabi Ports, Silsal is the first unveiled blockchain solution of its kind between our Emirate and the world,”added Dr. Noura Al Dhaheri, CEO, Maqta Gateway.

First unveiled in June 2018, Silsal has been rolled out in phases and will be offered first to freight forwarders and their customers, and subsequently extended to the rest of the trade community as a complementary tool to Maqta Port Community System.

Swisslog, provider of robotic, date-driven and flexible automated solutions, has expanded its Middle East team and regional operations as part of its continual growth strategy.

Operating across multiple sectors including e-commerce, retail, food & beverage, Swisslog has signed to date a total of seven large-scale projects in the UAE, the Kingdom of Saudi Arabia (KSA), and Kuwait with a value of over US$ 100mn.

“Swisslog develops and delivers advanced automation solutions for businesses and offers integrated technology, backed by decades of industry experience. Our recent hires reflect our focus on growth with the aim to help local businesses stay competitive across automated logistics,”explained Alain Kaddoum, General Manager, Swisslog Middle East.

“We are seeing a steady increase in demand for our industry 4.0 and robotics solutions designed to address the challenges of tomorrow, as businesses in the Middle East continue to recognise the benefits of automation. Our recent commitment is a US$ 21mn fully automated storage solution for the UAE’s water-bottled company Mai Dubai later this year,”added Kaddoum.

Siemens and GE compete in Iraq’s power sector German giant Siemens has inked an informal agreement to provide electricity to Iraq, with a similar deal being signed by US competitor General Electric (GE), reportedly after intervention from the White House. GE said its 14GW power capacity plan for Iraq could result in 65,000 direct and indirect jobs.

Both the Federal Government of Iraq and Siemens stated that they had signed a memorandum of understanding to supply the country with electricity and resolve the long-standing power issues.

According to the agreement, Iraq’s capacity to produce electricity would increase by 11 gigawatts in the next four years. The“roadmap proposes cost savings in billions of US dollars and generating additional electricity 24/7 for 23 million people,”Siemens said in a statement, quoted by German Deutsche Welle.

The agreement includes establishing electricity generating plants and upgrading existing ones. “Our commitment to the Iraqi people stands strong. We promised to achieve affordable and reliable power supply, create thousands of jobs and pursue a robust CSR Strategy,”affirmed Joe Kaeser, President, Siemens.

Saudia Cargo pulls no punches to transport WWE equipment for Kingdom’s premium event Saudi Airlines Cargo Company has once again facilitated the World Wrestling Entertainment (WWE) event to the Kingdom by transporting all the equipment and supplies for the long-anticipated ‘Crown Jewel’ tournament to Riyadh.

The WWE event, which has a fan following of millions of wrestling enthusiasts, was possible thanks to its highly-advanced logistics capabilities of the cargo and supply chain stakeholders.

Organized by the General Sports Authority, the ‘Crown Jewel’ event recently concluded at King Saud University stadium in Riyadh with the participation of the best professional wrestlers in the world.

Saudia Cargo B747-8 transported the 100-ton equipment and machinery together with sound and lighting systems and other supplies from Maastricht, Netherlands, to Riyadh. Saudia Cargo boasts a large, advanced freighter fleet.

DHL Express seeks to raise profile in the global e-commerce market DHL Express is set to launch its global campaign ‘Where Everything Clicks’ in Middle East and North Africa (MENA) region, to guide online merchants to navigate and access the booming clobal e-commerce marketplace.

The campaign targets e-commerce merchants, enterprises, start-ups, and online entrepreneurs.

DHL Express aims for the campaign to reach companies ranging from start-ups to large enterprises, advising merchants on how to optimize their websites for international sales and to create a competitive advantage via shipping options offered.

A 2017 study by KPMG reports that consumers across Middle East and Africa were the most likely to import consumer products bought online, almost 50% of purchases,

showcasing the rise in cross-border shopping that is driving international retail trade.

“Cross border e-commerce presents strong growth opportunities that are yet to be tapped into by many businesses in the region,” commented Nour Suliman, CEO MENA, DHL Express. “We recognize that our customers’ success is closely tied to their buyers’satisfaction with the delivery experience and the delivery options offered,”noted Faysal Elhajjami, DHL Express Managing Director, Saudi Arabia.

“We aim to support local ecommerce startups by providing them with tailor made solutions that will allow them to easily address potential global consumers, therefore improving their e-commerce proposition within the current market,”observed Geoff Walsh, UAE Country Manager, DHL Express.

NOVEMBER 2018 7

Abu Dhabi Ports and Etisalat announce deal to harness telecoms technology Abu Dhabi Ports and Etisalat have signed a memorandum of understanding (MoU) focused on advancing technological capabilities and business opportunities in support of Abu Dhabi Economic Vision 2030. The partnership focuses on building shared electronic projects and networks, exchanging knowledge, simplifying procedures, securing fixed and wireless telecommunications coverage, and managing operational risk.

Etisalat will also help Abu Dhabi Ports to adapt to the latest telecommunications technologies, business models, and customer behaviours. The agreement will broaden Abu Dhabi Ports reach by

connecting the business to its ports, free zone, and technological entities. “Rapid technological growth is transforming the telecommunications sector. Collaborating with Etisalat will help Abu Dhabi Ports to stay ahead of industry developments,”commented Captain Mohamed Juma Al Shamisi, CEO, Abu Dhabi Ports.

“We work closely with the public and private sector to enable digital technologies and solutions to help boost their digital services,”Sultan Al Dhaheri, General Manager, Etisalat Abu Dhabi region. Abu Dhabi Ports also unveiled that it will begin an international blockchain pilot testing project in partnership with the Port of Antwerp, Belgium.

Turkish Cargo commences operations to Bangalore, India Turkish Cargo has announced the launch of its Airbus 330-200 freighter twice weekly flights to Kempegowda International Airport (BLR) in bustling Bangalore, the capital of India’s southern Karnataka state from its hub in Istanbul.

According to the carrier, Bangalore, India’s fifth most populous city, has an annual export potential of approximately 170,000 tonnes. Bangalore is also a major production centre for the aerospace, IT, computer and high-tech industries, with exports that include pharmaceuticals, perishables, electronics, engineered products, valuables and textiles.

Turkish Cargo currently serves a network of over 300 destinations in 124 countries. It will operate the IstanbulBangalore sector with different routings.

8 NOVEMBER 2018

ADNOC announces investments and upgrades in gas and oil production processes The Abu Dhabi National Oil Company (ADNOC) plans to launch a new integrated gas strategy and increase its oil production capacity to four million barrels per day (mmbpd) by the end of 2020 and 5mmbpd by 2030, following approval from the Supreme Petroleum Council (SPC), the highest governing body of the oil and gas industry in Abu Dhabi.

The company also announced capital investment growth of US$ 132.33bn between 2019-20 and new discoveries of one billion barrels of oil.

ADNOC also announced new discoveries of gas, totaling 15 trillion standard cubic feet (tscf). The gas strategy will sustain LNG production to 2040 and allow ADNOC to seize incremental LNG and gas-tochemicals growth opportunities.

“We will continue to unlock and deliver increased and commercially viable production from our oil and gas reserves, in response

to the world’s growing demand for energy,” noted HE Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO. ADNOC’s integrated oil and gas strategy underpins its US$ 45bn downstream investment plans, announced in May, which will see the company triple production of petrochemicals to 14.4 million tons per year by 2025.

The discovery of significant new oil reserves endorses the Abu Dhabi government’s decision, earlier this year, to open six geographical oil and gas blocks for competitive bidding. Based on existing data from detailed petroleum system studies, estimates suggest these new blocks hold multiple billion barrels of oil and multiple trillion cubic feet of natural gas.

The first exploration and production licenses are expected to be awarded in the first quarter of 2019.

dnata achieves GDP certification for pharmaceutical cargo in Switzerland dnata has been awarded the Good Distribution Practice (GDP) certification for the pharmaceutical handling services at the company’s facility in Zürich.

GDP is a programme focused on systems for warehouses and distribution centres that store and distribute products that are medicinal or carry active pharmaceutical ingredients. Setting stringent standards, the scheme ensures that consistent quality management systems are in place throughout the entire supply chain.

In achieving the certification, dnata has proven its capability of handling pharmaceutical products

safely and reliably. In order to meet the requirements, dnata has completely refurbished one of its warehouses at Zürich Airport and made significant enhancements to its quality systems, operations documentation and facilities management practices.

“Over the past years we’ve significantly invested in our operations to meet the highest standards in quality and safety and with today’s announcement and the constant growth of our customer base our efforts are clearly paying off,”said Roger Gutzwiller, GDP/Pharma Manager Cargo, dnata, Switzerland.

NOVEMBER OCTOBER 2018 9

Tristar wins Daman Happiness Award Tristar is the only oil and gas logistics service provider in the UAE recognized for instituting positivism and for promoting employee health and wellness Oil and gas logistics service provider Tristar Group was declared the winner of the Corporate Happiness Award—Private Sector at the Daman Corporate Health Awards 2018 held in Abu Dhabi recently.

The Daman Corporate Health Awards recognise companies that place importance on employee health and wellness through various programs and initiatives.

Earlier in April, the company received the “Best Workers Welfare Programme” award at the Happiness @ Work award ceremony organised by Sustainable Mindz in Dubai.

The Happiness @ Work Award recognizes forward thinking firms that institute positivism and a sense of belonging at the workplace and believe that happy employees create high performing institutions.

Tristar takes good care of its drivers and ground staff with the ‘Drivers’ Professional League’ (DPL) Programme which encourages drivers to be more proactive in HSE activities as well as recognises and rewards safe drivers.

Tristar has implemented programs to upgrade the skills of drivers and ground staff such as facilitating Computer and English classes. Nineteen of them just ‘graduated’ from the SmartReading program which developed their English language skills

10 NOVEMBER 2018

for almost five months conducted at the company staff accommodation in Jebel Ali. The company is encouraging its office and admin staff to be healthy by introducing the ‘Walk, Lose Weight and Be Healthy’ program.

Last year the initiative saw almost 90 staff participate. Their weight was recorded at the start and end of the 63-day period in the last quarter and they were given wrist pedometers to record their daily steps.

“Each one of you and your collective power continue to be our number one strength and your happiness and well-being will continue to be a top priority for us,” remarked Tristar Group CEO Eugene Mayne.

He instituted the ‘Recreation and Happiness Committee’ in 2017 whose aim is to get employees together and organise events which create a happy and conducive atmosphere within the company.

Emirates SkyCargo commemorates two years of freighter operations to Oslo Emirates SkyCargo has completed two years of operating its Boeing 777 freighter aircraft to Oslo. The air cargo carrier operates a weekly freighter service to the Norwegian capital offering close to 100 tonnes of cargo capacity per flight.

Norway is one of the world’s largest exporters of seafood and exports of Norwegian salmon were valued at around US$ 4bn for the first six months of 2018.

Over the last two years, Emirates SkyCargo has helped transport close to 35,000 tonnes of Norwegian salmon from Oslo to a number of important export markets in the Middle East and East Asia.

In addition to salmon, Emirates SkyCargo’s freighter service also helps transport considerable volumes of other cargo. Over more than 100 scheduled freighter flights since October 2016, large items including

aircraft engines, ship propellers weighing more than 10 tonnes apiece and other outsized spare parts for the marine industry have been carried by the carrier’s Boeing 777 freighter aircraft to and from Oslo.

In December 2017, Emirates SkyCargo’s freighter aircraft also carried thoroughbred horses from Oslo to Dubai for the Dubai racing season. The Oslo freighter service also carries pharmaceuticals and other general cargo.

Schneider Electric and Dubai Municipality explore ‘Smart Cities’ innovations

to enhance citizen happiness and its customer services in the water field.

As Dubai’s population grows, water is a vital resource for homes, offices, and government agencies. In line with government goals, the digital transformation of Dubai Municipality’s water infrastructure

with Schneider Electric is enabling more efficient planning, development, and management of a sustainable city.

Supporting digital skills development, Schneider Electric is training government engineers at the Schneider Electric regional headquarters in Dubai Silicon Oasis.

Schneider Electric announced that Dubai Municipality will explore ‘Smart Cities’ innovations to drive water efficiency.

Dubai Municipality’s digital transformation is expected to enhance water and sewage efficiency. The announcement was made at the opening of the recently concluded Water, Energy, Technology, and Environment Exhibition (WETEX 2018).

Enhancing water efficiency is one of the key pillars of the UAE Water Security Strategy 2036 which aims including to reduce total demand for water by resources by 21%, increase productivity and water sustainable water access, and increase the reuse of treated water to 95%.

In line with the Dubai and UAE government digital transformation agendas, Dubai Municipality’s Command Centre plans to incorporate big data analytics across drainage and sewage networks. Dubai Municipality aims

NOVEMBER 2018 11

Emirates SkyCargo is top carrier of Sri Lankan exports Emirates SkyCargo is a leader in Sri Lankan exports, transporting 23%, or 27,000 tonnes, of the island’s total of 118,000 tonnes in exports in the 2017-18 fiscal year.

Sri Lanka is a major exporter of fruits, vegetables, flowers and seafood, which are in demand all over the world, from Northern Europe to Southeast Asia to East Africa.

“In 2017-18, Emirates SkyCargo carried more than 7,500 tonnes of fish, which is about 40% of the 17,500 tonnes of edible fish that Sri Lanka exported to USA and Europe,” commented Kapila Santhapriya, Emirates Cargo Manager Sri Lanka & Maldives.

The types of fish exported on Emirates SkyCargo include tuna, shrimp, prawns, crabs, and lobster to markets including the

UK, France, Italy, Netherlands and the USA. Sri Lankan exports of fish are valued at close to US$ 250 million.

The Middle East is one of the main import markets of fruits and vegetables from Sri Lanka. The Maldives, UK, Italy, France, Germany, Switzerland and Seychelles are also regular importers of the country’s fresh produce.

Dubai Metro train to acquire new Alstom trains in November 2018 Mattar Al Tayer, Director-General and Chairman of the Board of Executive Directors of Dubai’s Roads and Transport Authority (RTA), announced that the first of the new Dubai Metro trains would arrive in Dubai in November 2018, and the last one would arrive by the end of October 2019.

Al Tayer made this announcement after attending the technical test run of the first train on a 500m test track at Alstom Company’s factory in Poland. The new metro carriages manufacturing progress had reached 10% at the facility.

The train rolled over the test track at varying speeds, and multiple tests were carried out on the safety systems, electric

12 NOVEMBER 2018

propulsion, braking system, emergency stops and the train doors operating systems. Attendees included Abdul Mohsen

Ibrahim Younes, CEO of Rail Agency and Abdul Rida Abu Al Hassan, Executive Director of Rail Planning and Projects in addition to

directors and engineers from RTA and Alstom.

Al Tayer inspected the interiors of the new rail carriages, which are being manufactured under a contract for the supply of 50 trains, 15 of which will be deployed to serve Expo 2020 and 35 will be used to enhance Dubai Metro service.

Seats will be transversal in the Gold Class, and longitudinal in the Silver Class as well as women and children’s carriage. The improved design will increase the intake of trains by 8% from 643 riders to 696 riders. The exterior design of trains will remain unchanged to maintain the design identity of Dubai Metro and its familiar colours to the public,” said Al Tayer.

Emirates SkyCargo attains a new milestone Emirates SkyCargo has announced that it has transported the one millionth Unit Loading Device (ULD) through its bonded corridor trucking service connecting Dubai International Airport (DXB) and Dubai World Central (DWC).

Emirates SkyCargo launched the trucking corridor in April 2014, when the air cargo carrier first commenced freighter flights from Dubai World Central. A fleet of 49 trucks, including 12 refrigerated trucks for temperature sensitive goods, link cargo between the two airports on a 24X7 basis.

Emirates SkyCargo facilitates global trade by connecting cargo across 160 international destinations through its hub in

Dubai where it has two state of the art Emirates SkyCentral cargo terminals. Cargo arriving in Dubai often need to connect from passenger flights to freighters or vice versa for their onward journey.

“Emirates SkyCargo is the only air cargo carrier to operate a two-airport cargo hub. Our fleet of 49 trucks function similar to a continuously rolling conveyor belt allowing connection times of 4.5 hours between cargo arrival at one airport and departure from the other, thereby effectively integrating two airports into a single hub,” said Henrik Ambak, Emirates Senior Vice President, Cargo Operations Worldwide.

Over the last four years, the trucking service has helped connect more than one million ULDs over more than 272,000 trips between the two airports. A total of over 1.2 million tonnes of cargo, ranging from temperature sensitive pharmaceuticals and perishables to luxury cars, has been shuttled by the fleet of trucks.

Dubai Customs hosts Jeddah Airport counterparts A visiting Saudi delegation from the customs of King Abdul Azziz International Airport in Jeddah led by Bandar Al-Rahili, its Customs Director General, has appreciated the work of Dubai Customs on a recent visit to the Emirate.

The visitors toured the sections of the Passenger Operations Department and viewed the latest technologies and devices used in thwarting smuggling attempts.

The delegates also viewed the latest innovations developed in-house including the smart luggage inspection system and ‘Al Kashif’Vehicle.

Ibrahim Al Kamali, Director of Passenger Operations Department, Dubai Customs, pointed out that Dubai Customs has made travel an easy hassle-free experience

through the application of smart technologies.

“Terminal 3 is equipped with 41 inspection devices and 320 highly trained customs inspections officers”Al Kamali noted.

On his part, Shuaib Al Suwaidi, Director of Customs Intelligence Department gave a detailed presentation on the advanced systems used in the control room at the head office.

The control room was established in 2007 to cope up with the growing flow and traffic of trade and passenger to the emirate. A total of 500 control cameras are distributed over 20 entry points in Dubai and there are plans to raise the number to 1700 cameras, he explained.

The control room manages 23 security customs programs around-the-clock to ensure highest levels of security in the airport.

NOVEMBER 2018 13

Saudi Aramco, Total ink US$ 9bn deal for giant petrochemicals complex in Jubail The project represents an investment of approximately US$ 5bn and is scheduled to go functional in 2024.

Saudi Aramco and Total recently signed a joint development agreement for a giant petrochemical complex in the Jubail Industrial City in the Kingdom’s Eastern Province.

Aramco and Total have signed the agreement in Dhahran to build the worldclass complex announced last April.

President and CEO of Saudi Aramco, Amin H. Nasser, and the CEO of Total, Patrick Jean Pouyanné, jointly signed the agreement in Dhahran to build the worldclass complex announced last April.

The site will be located next to the advanced Saudi Aramco Total Refining and Petrochemical Co (SATORP) refinery and will be joint operated by Saudi Aramco and Total. It will comprise a mixed-feed cracker, the first in the Arabian Gulf to be integrated with a refinery, with a capacity of 1.5 million tons per year of ethylene and related high-added-value petrochemical units. The project represents an investment of approximately US$ 5bn and is scheduled to start operating in 2024.

The project will also provide feedstock for other petrochemical and specialty chemical plants located in the Jubail

13th Annual GPCA Forum returns to Dubai with new speaker line-up

industrial area and beyond, representing an additional US$ 4bn on investment by third party investors, benefitting the Saudi economy.

Overall, the complex represents an investment of approximately US$ 9bn and is expected to create 8,000 local direct and indirect jobs.

“The petrochemicals sector has been undergoing significant growth globally and is one of the future growth engines,” Nasser remarked.

“We are delighted to write a new page of our joint history by launching a new giant project, building on the successful development of SATORP, our biggest and most efficient refinery in the world,” commented Pouyanné.

Etihad Rail invites tenders for Stage Two development Stage Two to connect Ghweifat on Saudi Border to Al Ain on the Oman border Etihad Rail, the developer of UAE’s integrated railway network, has invited tenders from leading construction companies and contractors to provide design and build services for the Stage Two of the mega project.

The Stage Two involves the construction of a rail network in the Abu Dhabi that will connect to the Saudi border at Ghweifat and the Omani border at Al Ain, and also vital areas such as Mussaffah, Khalifa Port and Jebel Ali Port in Dubai, stated the company.

Etihad Rail said the tender is open to only those companies who have

14 NOVEMBER 2018

international/local experience in executing major design and build freight rail projects covering civil and track works, bridges and drill and blast tunnels to the required high quality and schedule.

The Emirati rail operator has recently signed up Egis, an international group offering engineering, project structuring and operations services, to provide project management consultancy (PMC) services for the Stages 2 and 3.

As part of the work, the existing and currently operated network of 264 km will be expanded between now and 2024 by over 600 km in Stage 2 and 250 km in Stage 3

The Gulf Petrochemicals and Chemicals Association’s 13th Annual GPCA Forum is returning to the Madinat Jumeirah, Dubai, on 26–28 November 2018, with an exciting new line-up of speakers set to address the theme of ‘Executing transformation and investing in growth’.

For the first time the forum will be inaugurated by HE Shaikh Mohammed Bin Khalifa bin Ahmed Al Khalifa, Minister of Oil, Kingdom of Bahrain, with Yousef Al-Benyan, Vice Chairman and CEO, SABIC and Chairman, GPCA, set to deliver the opening session and welcome address, and keynote speaker Amin Hassan Nasser, President and CEO, Saudi Aramco.

Other distinguished speakers include Musabbeh Al-Kaabi, CEO, Petroleum and Petrochemicals, Mubadala; Mutlaq H. AlMorished, CEO, TASNEE, and global chemical CEOs – Mark Lashier, President and CEO, Chevron Phillips Chemical Company; Daniele Ferrari, CEO, Versalis and Steven Demetriou, Chairman and CEO, Jacobs Engineering.

“To ensure a steady and sustainable supply of high value chemicals to the world, the GCC industry must invest in innovative technologies, intensify the move towards consolidation to build critical mass, and integrate its refinery and petrochemical operations to maximize the value of the crude oil barrel,”observed Dr. Abdulwahab AlSadoun, Secretary General, GPCA. The Annual GPCA Forum is the biggest and highest profile gathering of chemical industry leaders in the Arabian Gulf, consistently attracting over 2,000 delegates from almost 600 companies in over 50 countries.

Abu Dhabi Customs and Abu Dhabi Ports unveil standardised digital solutions Abu Dhabi Customs unveiled MAMAR, a modernised online single-window platform to facilitate trade for the Emirate of Abu Dhabi across sea ports at first followed by land, air, and post, in collaboration with Maqta Gateway, an Abu Dhabi Ports subsidiary.

In a UAE first, MAMAR utilizes existing features from Abu Dhabi Customs’ e-services and the Maqta Port Community System (mPCS), creating a fully integrated system that allows seamless handling of import, export, and transshipment

transactions, as well as the payment of customs duties for all types of cargo, whether via land, air, or sea.

The system is designed to increase transparency, reduce costs, and provide customers with speedy and efficient access to information regarding transactions, shipments, and logistics in real time.

This platform will offer over 14 additional digital services including pre-clearance, exit and entry certificates for transit shipments, customs declarations for sea, air, land, post and free zones, along other financial services

relating to ‘Maqasa’ clearing services, customers’ accounts, and statistics.

“This innovative digital solution will combine the strengths of both government entities to be a powerful tool in fuelling trade at accelerating rates to benefit Abu Dhabi’s economy,”commented Fahad Ghareeb Al Shamsi, Acting Executive Director of Administration Affairs, Abu Dhabi Customs The MAMAR system will now be able to access trade, customs, and logistics services for sea, land, air, and post through a single online window.

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Etihad Cargo migrates to new iCargo technology platform

Etihad Cargo has fully migrated to SPRINT, an IBS iCargo fully integrated technology platform offering the digital answer to its evolving cargo management needs. The new platform will enable Etihad Cargo to enhance its capacity- and pricing management processes Etihad Cargo joins a growing number of global carriers migrating their traditionally telephone and paper-based services online, through its new-look and revamped etihadcargo.com website, as well as digitalizing

processes across all critical business functions, offering Etihad Cargo’s customers a platform to seamlessly manage all air cargo needs.

“This represents a giant leap forward for our customer value proposition and allows us to embrace a whole new realm of digital services to further differentiate ourselves,” said Abdulla Mohamed Shadid, Managing Director Cargo and Logistics Services, Etihad Airways.

SPRINT, based on IBS’s iCargo technology platform, enables Etihad

Cargo to enhance its capacity- and pricing management processes whilst offering real-time shipment monitoring and quality control, helping drive maximum efficiency.

Services that are now available at the customer’s fingertips span online bookings across all Etihad’s product portfolio, including general cargo as well as its signature TempCheck (pharmaceutical), SafeGuard (valuables), FreshForward (perishables), FlightValet (automotive) and FlyCulture (arts and music), among others.

Amana commences operations in KIZAD Construction City Modular construction builder establishes a 50,000 sqm facility the Industrial Zone

Leveraging Khalifa Industrial Zone Abu Dhabi’s (KIZAD) strategic location, lower operating costs and optimal road networks, Amana, a prominent regional industrial and modular construction leader, recently established a 50,000sqm facility to serve the GCC construction market.

The facility located in KIZAD Construction City will serve as Amana’s central storage and logistics headquarter to store and distribute a range of construction products to its large-scale industrial, modular and commercial projects across the UAE and region.

Established in 1993, Amana has delivered over 1,500 commercial, modular and industrial projects across the region.

“KIZAD is the ideal location for setting up our storage and logistic facilities due to a number of key factors including, competitive pricing, lower operating costs, proximity to our projects, easy access to the UAE’s road networks, and closeness to Khalifa port,”affirmed Bassam

16 NOVEMBER 2018

Bsaibes, General Manager, Plant & Logistics, Amana.

“With increasing demand for improved material sourcing, storage and distribution solutions, KIZAD Construction City is well positioned to serve the construction industry,”remarked Samir Chaturvedi, CEO, KIZAD. Launched this year, KIZAD Construction City’s ideal location offers logistical savings and supply chain efficiency for imports as well as strategic connection to 90% of the UAE’s main construction projects. Uncongested highways offer easy truck route access right across the Emirates.

DP World breaks ground at Port Berbera in Somaliland Construction work on the development of the multi-purpose Berbera port in the Republic of Somaliland recently commenced with a special ground-breaking ceremony to mark the occasion.

The President of the Republic of Somaliland, Muse Bihi Abdi and DP World Group Chairman and CEO Sultan Ahmed Bin Sulayem launched the first phase of work and thanked attending government officials and partners for their support at the start of a new era of growth for the country.

The first phase will consist of building a 400-metre quay and 250,000sqm yard extension as well as the development of a free zone to create a new regional trading hub. DP World Berbera, the joint venture company, will also serve land locked countries in the Horn of Africa such as Ethiopia which has a 19% stake in the project as a shareholder.

Phase two would involve an additional US$ 320mn in construction and equipment, and would expand Berbera’s containerized

cargo capacity to about 450,000 TEU per year. The plan also calls for a US$ 100mn roadway to connect Berbera to the border with Ethiopia. The port will also serve landlocked Ethiopia which has acquired a 19% stake in the project.

in Saudi Arabia (Dammam, Jeddah and Riyadh), and in the UAE Oman and Bahrain, which have a combined capacity exceeding 40,000sqm. of storage space. It also holds open yard storage facilities in Saudi Arabia, comprising over 325,000sqm.

The network provides storage for a variety of products including the petrochemicals and automotive industries, as well as fast

moving consumer goods (FMCG) and has a specialised hazardous chemicals facility in Dammam.

Kanoo Logistics opens distribution hub in Dammam Kanoo Logistics has launched its brand new, sophisticated logistics facility near the King Abdul Aziz Port in Dammam in Saudi Arabia’s Eastern province.

T The new distribution centre features a 100,000sqm. yard and a 10,000sqm. warehouse. The multipurpose facility contains 500sqm. of elevated staging area and 5,000sqft. of parking space.

“Kanoo Logistics chose this strategically situated venue with close proximity to the port to build the new warehouse since it is an ideal location to store both imported and exported goods,” said Fawzi Ahmed Kanoo, YBA Kanoo’s acting CEO. Kanoo Logistics’ network includes both dedicated and multipurpose warehouses

NOVEMBER 2018 17

Turkish Cargo upgrades pharmaceutical transportation standards Turkish Cargo, one of the fastest growing air cargo brands serving 122 countries in the world, is now part of Pharma.Aero, which fosters collaboration between CEIV certified airport communities.

The “Pharma.Aero full membership certificate” was presented to Mr. Turhan Özen, Chief Cargo Officer Turkish Airlines at the ceremony held at TIACA Air Cargo Forum.

Pharma.Aero organization, which aims to achieve excellence in reliable end-to-end air transportation of pharmaceutical products,

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focuses on; • Advocate the best interests of the pharma industry • Develop air cargo as a reliable transport mode for pharma • Become leaders in developing cool chain solutions • Grow the pharma business at member airports The main aim of the association is to create content towards the entire industry of lifescience airfreight. Bringing both the pharmaceutical companies and logistic

service and solution providers at the table, leads to the devlopement of projects, of which the outcomes aim to imporve the entire industry.

Turkish Cargo, thanks to its sophisticated cargo products specially designed for pharmaceuticals and healthcare shipments, continues to meet the world’s most reputable pharma manufacturers with Turkish Cargo’s high quality services while developing its successful operations and quality standards at more than 300 international destinations.

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COUNTRY REPORT - INDIA

India Shining Economy maintains momentum but vulnerabilities persist Investment into India’s planned logistics and supply chain infrastructure is gaining ground. A trio of measures including the introduction of the Goods and Services Tax (GST), liberalising Foreign Direct Investment (FDI) rules and, and increased government spending and renewed realisation following industry engagement has helped stimulate growth in the sector

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I

ndia’s economy is gaining steam and growth potential looks encouraging, thanks in part to the implementation of recent landmark policies with far-reaching consequences, such as the much-debated and much-considered national Goods and Services Tax (GST).

Meanwhile, India’s strong economy continues to lead global growth, reveals a recent report by the International Monetary Fund (IMF). It continues on a note of consistent though cautious optimism.

The report noted that as one of the fastest growing economies in the world accounting for around 15% of global growth, India’s economy has been instrumental in raising living standards of millions of its citizens.

However, to sustain rapid growth and raise incomes for the country’s 1.3 billion people, India will need to build and consolidate on the success of its reforms, the IMF observed in its just published annual assessment of the Indian economy. In an interview following the publication of the report, Ranil Salgado, the head of the IMF team for India likened the Indian economy to an elephant starting to run. Explaining the analogy, he reiterated that India’s economy is surging, thanks to the enactment of the long-awaited GST and the country opening up more to foreign investors.

Based on several economic indices and monetary parameters, IMF expects economic growth to pick up to about 7.3% for fiscal year 2018/19 – from April 2018 through March 2019 – from 6.7% in the corresponding year prior.

To sustain and build on these policies and to harness the demographic dividend associated with a growing working-age population (which constitutes about two-thirds of the total population), India needs to reinvigorate reform efforts to keep the growth and jobs engine running. This is critical in a country where per capita income is about US$ 2,000, still well below that of its BRICS peers other large emerging economies.

The GST has largely created a virtual level playing field and unified national market for the first time by lowering internal barriers to trade – effectively establishing a free trade agreement for a market of over 1.3 billion people. The tax is also expected to increase the amount of economic activity taking place in the formal sector of the economy – leading to better quality and more reliable jobs.

As a result, the goods and services tax should improve productivity and boost medium-term potential growth, while also creating room for the government to increase much needed social and infrastructure spending, providing the much needed boost

for the country’s logistics and supply chain industry sectors.

India is also prioritising the flow of Foreign Direct Investment (FDI) and the nation can benefit from improving its integration and cohesion with global markets. To this end the country has made substantial progress and most foreign investments are now permitted to enter sectors of the Indian economy under what is known as ‘the automatic route’. This amounts to a meaningful reduction in bureaucratic oversight, and greatly increases access to the Indian market for foreign investors.

However, more can be done to sustain the recent foreign direct investment inflows and remove trade barriers – which remain significant in the country. These include reducing trade documentation requirements and procedures; lowering tariffs; continuing to improve the business climate; and improving governance.

Meanwhile, The World Bank in a published 2018 report said while India’s GDP growth rate will return to 7.5% in two years’ time, to sustain an 8% GDP growth rate, India requires a decisive structural reform momentum that succeeds in stimulating investment and export growth while maintaining macroeconomic stability.

The world’s tallest statue of Indian independence leader, Sri Sardar Vallabhai patel, near Vadodara in Gujarat

However, to sustain rapid growth and raise incomes for the country’s 1.3 billion people, India will need to build and consolidate on the success of its reforms, the IMF observed in its just published annual assessment of the Indian economy

NOVEMBER 2018 21

COUNTRY REPORT - INDIA

According to another recent joint AT The Indian economy regained its Kearney and the Council of Supply Chain momentum in the December quarter, Management Professional (CSCMP) recovering from disruptions caused by published report, India is likely to be a demonetisation and implementation of GST global economic powerhouse by 2025. As to expand at 7.2%, the fastest in five quarters.

Based on the fiscal third-quarter gross domestic the economy surges and the ecosystem and operating environment evolves, several product (GDP) data, the full year’s growth macro trends will shape the future supply has been raised to 6.6%. The World Bank has chain design. projected economic growth to accelerate to By 2025, the report highlights that the 7.3% in 2018-19 and 7.5% in 2019-20.

Indian economy will have grown multi-fold ‘Maintaining the hard-won and consumers will have become increasingly macroeconomic stability, a definite and heterogeneous, that will present corporate durable solution to the banking sector issues, institutions particularly those in the logistics realisation of the expected growth and fiscal realm with a unique set of opportunities and dividend from the GST, and regaining the challenges. The supply chain will be impacted momentum on an unfinished structural by multiple evolving macro factors. reform agenda are key components of this. Accelerating the growth rate will also require continued integration into the global These include the following: economy,’ the bank indicated.

Increased urbanisation and more India is in a period of unprecedented mega cities: Urbanisation and growing opportunity, challenge and ambition in its populations will lead to several cities development. Already the world’s third becoming mega demand centres. Density largest economy in purchasing and increased congestion parity terms, India aspires to fuelled by space constraints India is also better the lives of all its citizens will require organisations and become a high-middle to create a different supply prioritising income country by 2030, well chain model to serve these the flow of before the centenary of its cities. Going vertical, common independence. carrier deliveries, harnessing Foreign Direct Long-term GDP growth has of electric vehicles and Investment (FDI) flexible unloading are some become more stable, diversified, and resilient. Over the next considerations in designing and the nation few years, India is expected to supply chains for these cities grow at well over 7% annually, can benefit from in the Indian context. with progress being buttressed Proliferation of improving its by dynamic reforms in the Segments: Increasing macroeconomic, fiscal, tax and integration and consumer segments, the business environments. emergence of new channels cohesion with While the country’s and a greater number development trajectory is of products will lead to global markets strong, challenges remain. multiple new segments Economic performance has been strong, being created. Organisations will have but development has been uneven, with the to wean away from the ‘cookie cutter’ gains of economic progress and access to approach and will need to tailor activities opportunities differing between population across their supply chain to be able to deal groups and geographic areas. with these new categories.

Despite regulatory improvements to spur Improved Supply Chain Infrastructure: competitiveness, levels of private investment Following planned investments in road, and exports continue to be relatively low, rail, ports and transport infrastructure, and undermining prospects for longer term the supply chain continuum is expected to growth. The country’s human development become faster and more connected across all indicators, ranging from education outcomes modes. This will bring scale to the operations to a low and declining rate of female labor and drive a more consolidated supply chain. force participation, underscore its substantial Better Oversight Environment: Regulatory development needs. changes are inevitable but the timing will

22 NOVEMBER 2018

Container vessel alongside in the new Mbharat Mumbai Port, Mumbai, India

COUNTRY REPORT - INDIA

NOVEMBER 2018 23

continue to remain uncertain. GST, fiscal incentives, activism and sustainability are some of the parameters that will be impacted. Planning will be required to help in preparedness.

Increased Globalisation: India will become more connected globally with higher imports and exports and an increase in the share of the global trade pie. More organisations will have a regional manufacturing footprint.

Managing risk, traceability, provenance, compliance and responsiveness will be critical to success.

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Affordable Technologies and Big Data: Decreasing technology costs will make available a large volume of data on supply chains. Organisations will need to build capacity to leverage this data and create analytical capabilities to benefit from this.

While the industry will witness changes by 2025, some ‘hang-ons’ will linger as they are presently. Volatility in supply and demand will continue making risk management critical. Pressure to deliver optimally, efficiently and speedily will continue driving the supply chains to further increase

Pressure to deliver optimally, efficiently and speedily will continue driving the supply chains to further increase efficiency and balance customisation with consolidation

COUNTRY REPORT - INDIA

efficiency and balance customisation with consolidation.

Skill gaps in talent will continue to drive organisations towards selective automation, a focus on skills development and improved work environment.

Economic Outlook India’s ability to achieve rapid, sustainable development will have profound implications for the world. India’s success will be central to the world’s collective ambition of ending extreme poverty and promoting shared

prosperity, as well as for achieving the mandated 2030 Sustainable Development Goals (SDGs). Indeed, the world will be only able to eliminate poverty if India succeeds in lifting its citizens above the poverty line.

For international trade and the health of the global economy too, India’s growth will be an ever more important. In addition, the carbon footprint India leaves as it propels its high growth will have a significant influence on the planet’s ability to keep global warming within the 2-degree threshold.

On crucial issues ranging from managing

scarce water resources, to modernising food systems, to improving rural livelihoods, to ensuring that megacities become engines of sustainable economic growth and inclusion, India’s development trajectory will have a major influence on the rest of the world.

At the same time, India’s growing economic and political stature and the relevance of its experience, know-how and investments for the development efforts of other nations well-position the country to play a greater leadership role in the global arena.

(Sources: The IMF and World Bank Reports: India)

Worli sea link, Mumbai, India

NOVEMBER 2018 25

SUSTAINABILITY

26 NOVEMBER 2018

SUSTAINABILITY

E-Sayyara

on fast track to empower E-car drivers in Dubai Whether you are a mall hopper or a mileage maniac, Dubai’s Drive Clean Movement is determined to provide an E-Vehicle for everyone.

T HE Saeed Mohammed Al Tayer

he Dubai Supreme Council of Energy (DSCE) launched at the recently concluded World Green Economy Summit, a government-backed campaign to increase the number of E-Vehicles driven by the private sector and residents on the roads of Dubai.

Entitled ‘E-Sayyara’, meaning E-Car in Arabic, the new campaign is to encourage residents of Dubai to join the ‘Drive Clean’ initiative, by using fun, audience segmented marketing to drive the message home.

The event was attended by HE Saeed Mohammed Al Tayer, Vice Chairman of Dubai Supreme Council of Energy, HE Ahmed Buti Al Muhairbi, Secretary General, DSCE and a number of officials from the local government departments.

“In line with the vision to make Dubai one of the world’s most sustainable cities, we have also implemented the Dubai Clean Energy Strategy 2050, which aims to achieve sustainable development, create a low carbon economy and promote the use of clean energy technologies, including the use of hybrid cars and electric vehicles,”remarked HE Al Tayer.

Long term green vision “E-Sayyara initiative comes in line with the Dubai Green Mobility Strategy 2030, UAE

NOVEMBER 2018 27

SUSTAINABILITY

Vision 2021 and Dubai Plan 2021 which supports the efforts of Dubai Emirate to enhance sustainability, air quality and fuel efficiency,”he continued.

This initiative is also in line with the objectives of Dubai Green Mobility Strategy 2030 which seeks to accelerate the penetration of hybrid and electric vehicles.

Dubai has taken the lead and started implementing it at the level of government departments.

He said the DSCE set a target for government organisations represented in having at least 10% of annual leased or purchased cars to be electric or hybrid, starting from 2016, in order for the penetration of electric and hybrid cars to reach 2% by 2020, and 10% by 2030.“This supports the Dubai Carbon Abatement Strategy to reduce carbon emissions from transportation sector,” he said.

To support the effective implementation of these targets, the Supreme Council of Energy in Dubai, in partnership with the Dubai Electricity and Water Authority (DEWA), the Roads and Transport Authority (RTA) and Dubai Municipality, launched a number of incentives designed to promote

28 NOVEMBER 2018

the acquisition of hybrid and electric vehicles to build an awareness aimed at encouraging sustainable green transport.”

Green incentives “These incentives coupled with an increase in electric charging stations across Dubai, in malls, hotels, and key tourist locations contributed to a clear increase of e-vehicles on our roads. Dubai has more than 4,000 electric and hybrid vehicles, and we have doubled charging stations, 200 were installed

by DEWA, with many more in the pipeline,” observed HE Al Muhairbi.

Having successfully introduced E-Vehicles to Dubai, DEWA offered registered users free charging for their electric vehicles through DEWA’s Green Charger stations. This will be exclusive to public charging stations.

The RTA has provided incentives for electric vehicles including free assigned parking, exemption from RTA electric vehicle registration and renewal fees, exemption from Salik’s tag fee, and a distinguished license plate for EVs. RTA also plans to transfer 50% of its fleet to hybrid cars by 2021 and operates 50 electric limousines at Dubai International Airport.

Green vision triggers Public Partner Partnership As a spin-off, the Government’s green vision is also spawning PPPs. To create a market for hybrid and electric vehicles with the engagement of the private sector, the Dubai Supreme Council of Energy is exploring with car dealers, vehicle manufacturers and banks to offer additional incentives through Green Auto loans and other means.

Divided into six consumer categories that highlight each target audience in this nationwide initiative, The E-Sayyara campaign has a variety of benefits for everyone moving across to an E-Vehicle. The ‘Car Enthusiast’, ‘Environmentally-Woke’ and the ‘Tech Geek’ are just some of the target audiences of the campaign, as well as the ‘Cost Conscious’ who, for example, can make significant savings on maintenance, fuel and purchasing costs by adopting an E-vehicle.

The Mall Hopper, with increased trunk space due to chassis mounted batteries and exclusive parking spots with free charging stations at malls across Dubai is perfect for the run-around-town mum, and the Mileage Maniac is ideal for Dubai to Abu Dhabi commuters.

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Tristar engages with external stakeholders for its comprehensive sustainability report

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eading fully integrated liquid logistics service provider Tristar recently conducted an External Stakeholder Consultation Workshop for its forthcoming sustainability report.

The workshop was attended by customers, suppliers, government regulators, community partners and a representative of the United Nations Global Compact (UNGC).

The external stakeholders were asked to complete a Materiality Assessment form that contains the 10 principles of the UNGC covering labor, human rights,

S

environment, and anti-corruption. “In order for the information presented in the forthcoming sustainability report to be meaningful, it is crucial that the report reflects the organisation’s significant economic, environmental and social impact, factors that substantively influence the assessments and decisions of stakeholders,”explained Balaji Nagabhushan, Tristar Group Chief Administrative Officer.

He added that Tristar will include in its report topics that have a direct or indirect impact on its ability to create, preserve

igh in the 2018 h s re o c s y if n ig S tainability Index s u S s e n o J w o D

ignify has announced that it achieved the status of Industry Leader in the ‘Electrical Components and Equipment’ category of the 2018 Dow Jones Sustainability Index (DJSI). Signify achieved ‘Best in Class’ grades in three key dimensions.

The company’s overall score was 88 out of 100 points, demonstrating that sustainability is central to Signify’s company strategy and purpose. This is the second year in a row that Signify has been named Industry Leader and the second year the company has been included since it became an independent company.

“We’re extremely proud to be recognized for the continuous progress that we’re making on sustainability, which is central to our

30 NOVEMBER 2018

or erode economic, environmental and social value for itself, its stakeholders, the environment, and society at large.

Tristar Group CEO Eugene Mayne also shared with them the company’s thrusts in supporting the Dubai Police’s goal to reduce to zero the number of fatalities on Dubai’s roads by the year 2020.

Tristar has partnered with the Roads and Transport Authority’s (RTA) Traffic Department and Dubai Chamber’s Center for Responsible Business in offering road safety public awareness seminars since 2014.

company purpose,”commented Eric Rondolat, CEO, Signify. In its annual evaluation, DJSI recognized Signify’s strong performance through the launch of its ‘Brighter Lives, Better World’ program, focusing on sustainable operations and sustainable revenues. As part of that program, Signify has made significant progress toward its commitment to become carbon neutral in 2020, reducing its carbon footprint by 20% over the course of 2017.

Top scores (100/100) were obtained by Signify in the categories Environmental Reporting, Operational Eco-Efficiency and Innovation Management.

To rcapitulate, Signify became the new company name of Philips Lighting as of May 16, 2018.

SUSTAINABILITY

World Future Energy Summit 2019 to emphasise sustainability

T

he World Future Energy Summit (WFES) has made significant changes for its 2019 edition, combining all aspects of sustainability under one global brand. The annual event, hosted by Masdar, and an integral part of Abu Dhabi Sustainability Week, will see its summit, forums and six co-located exhibitions integrated under the powerful WFES brand, with business and innovation in sustainability as the common theme.

The 2018 event attracted 33,000 attendees and saw the announcement of more than

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USD 15 billion worth of projects and business deals.

WFES 2019 will take place from 14-17 January at the Abu Dhabi National Exhibition Centre and under the new format will have five main pillars: The Future Summit, WFES Expo, WFES Forums, WFES Initiatives, and WFES Hosted Events.

WFES Expo will feature more than 850

exhibiting companies from 40 countries, within the specialist sectors of energy, water, solar, eco-waste, green buildings and mobility.

WFES will retain its high-level global summit, and will introduce WFES Forums, which will be focused discussions covering topics impacting the industry, from disruptive technologies and artificial intelligence to future cities.

rst EGA launches fi port sustainability re

mirates Global Aluminium, has launched its first 2017 sustainability report detailing the organisation’s values, commitments, aspirations and achievements in environmental, social and economic performance.

EGA aspires to be measured amongst the world’s leading metals and mining companies in meeting its environmental and social responsibilities.

EGA’s sustainability report charts the company’s performance in areas including emissions, safety, technological innovation, community engagement, waste and effluent management and social responsibility.

The disclosures made in the report are the outcome of a materiality analysis to identify sustainability topics that warrant the greatest levels of transparency and accountability, as

well as EGA’s values and commitments.

“We recognise that our role must extend beyond simple compliance or keeping up with our peers. Working with our customers, regulators, shareholders and stakeholders, we intend to be an innovator and a leader in sustainability,”remarked Abdulla Kalban, Managing Director and Chief Executive Officer, EGA, EGA’s sustainability report has been prepared in accordance with Global Reporting Initiative standards, the most widely recognised framework for sustainability reporting.

Last year, EGA became the first Middle East headquartered company to apply to join the Aluminium Stewardship Initiative, a global programme to foster greater sustainability and transparency in the aluminium industry.

NOVEMBER 2018 31

COMMERCIAL VEHICLES

Mercedes-Benz all-new Actros and Arocs trundle into Ras Al Khaimah Tranquil, picturesque Ras Al Khaimah in the northern fringes of the United Arab Emirates, woke up to the roar of the powerful engines of the Mercedes Benz Actros and Arocs trucks as they debuted in the Emirate

T

he Gargash Group introduced the newly launched heavyduty truck generation of the Mercedes-Benz Actros and Arocs to its premium fleet of durable vehicles in the Middle East.

The high-profile launch event took place at the newly refurbished Ras Al Khaimah showroom in the Northern Emirates where the trucks were unveiled before VIPs, media and selected customers.

Attendees at the exclusive reveal witnessed a showcase of the spectacular new trucks. Vowing to be “Trucks you can trust”, Mercedes-Benz developed the

32 NOVEMBER 2018

all-new Actros to efficiently and reliably serve long-distances and distribution haulage, while the all-new Arocs has been engineered to bring power, reliability and robustness in a unique way, continuing the tradition of Mercedes-Benz in the industry.

“We are thrilled to be expanding our product offering in the region and especially excited to introduce our advanced vehicles, the New Actros and Arocs,” commented Thomas Rothe, General Manager, Gargash Group, Commercial Vehicles Division on the occasion.

“We understand how much it takes to completely rely on trucks operations,

especially in this region, so we gave our trucks an extensive testing at our testing centre in the UAE. We crossed six million kilometres test mileage on the road, just to understand the needs and gain the trust of the Middle East region,”remarked Marc Legeay, General Manager, Mercedes-Benz Trucks, Daimler Commercial Vehicles MENA.

Reliability features According to Legeay, the all-new Actros and Arocs have an exceptional level of reliability: they are built to withstand the harshest operating conditions in the region.

As a highlight, the new Actros and Arocs

set a new benchmark when it comes to safety and assistance systems, supporting the driver and saving lives, said the manufacturer in a press communiquĂŠ.

The most impressive safety feature is the optional available Active Brake Assist 4: this radar-based emergency braking system initiates maximum full-stop braking ahead of moving and stationary obstacles if necessary and can therefore save lives. It also warns the driver of any potential collision with pedestrians, triggering partial braking at the same time, a statement said.

Another optional feature, the Stability Control Assist, is available for the new

truck generation, and acts to redress the balance by adjusting the truck in potentially dangerous driving situations such as skidding or swerving.

Safety Monitoring Working in tandem with the Attention Assist, is the Lane Keeping Assist, which is also an optional recognition system that detects if the truck strays too close to the edge of a lane and alerts the driver to adjust course. Both systems work together to warn the driver with an audible alert and via the dashboard if it detects the driver stopped paying attention, the press note continued.

A heavyweight name in the commercial vehicles industry globally, Mercedes-Benz Trucks is also introducing the efficient in-line 6-cylinder engines model. The new truck generation comes with two different Euro 5 engine options with displacements of 12.8l and 15.6l.

All variants of the New Actros and Arocs come with the fully automated and fast-shifting 12- or 16-speed Mercedes PowerShift 3 transmission. It makes the driver’s job much easier, be it on the road or in tough off-road conditions. Gear shifting is by means of a convenient steering-column stalk, noted Legeay.

NOVEMBER 2018 33

SAUDI ARABIA’S AUTOMOTIVE SECTOR

Saudi’s automotive sector set for rapid transformation

Saudi Arabia’s automotive domain is bracing for high growth in the short term says an industry report

S

audi Arabia’s automotive ecosystem is set for a rapid transformation in the coming years, with 20% of the female population, or three million drivers, expected to be added to the Kingdom’s roads by 2020, a recent whitepaper released stated.

An October 2018 report said the lifting of the ban on women driving in Saudi as of June 2018, along with recovering oil prices and economic policies aimed at boosting consumer spending, will result in an 8% per annum increase of passenger vehicles sales until 2022.

The whitepaper, published by global research, analytics and advisory company

34 NOVEMBER 2018

Aranca, added that in addition to new car sales, the positive impact of a new customer segment over the next 1-3 years will be felt in the Kingdom’s automotive aftermarket, which was valued at US$ 7.4bn in 2017.

According to Aranca, the number of automotive vehicles in operation in Saudi Arabia stood at 7.3mn in 2017, with 438,000 new passenger cars and 110,000 new commercial vehicles sold during the year. Tyres accounted for the greatest slice of revenue in the Saudi’s spare parts market, with a 30% share in 2017 (US$ 2.2bn), followed by lubricants (US$ 1.4bn), batteries (US$ 400mn), and other components (US$ 3.4bn).

Many of these opportunities will arise in Saudi’s western regions of Madinah and

Makkah, where more than one million women are expected to get behind the wheel by 2020.

Meanwhile, rising vehicle numbers are setting the stage for solid growth in the Kingdom’s aftermarket. Aranca said 10 million vehicles will ply Saudi roads by 2022, including 6.5 million passenger vehicles and 3.5 million commercial vehicles. As a result, demand for spare parts and related auto services will grow 6% annually, reaching a value of US$ 9.8bn in 2022.

Aranca’s whitepaper was published ahead of the 3rd edition of Automechanika Jeddah 2019 to take place in Saudi Arabia’s Red Sea commercial port city in February of next year.

GLOBAL PERSPECTIVE

36 NOVEMBER 2018

GLOBAL PERSPECTIVE

Driving change through disruptive technologies and digital transformation Frost & Sullivan recognised renowned regional companies in Logistics and Supply Chain among other trade sectors at a special awards gala ceremony amid much pomp and panache.

The Frost & Sullivan initiated and inspired ‘2018 Middle East Best Practices Awards’, the fourth in the continuing series, were presented at a glittering ceremony and gala dinner reception hosted at The Atlantis, The Palm, Dubai. In attendance at this by-invitation only occasion were the crème de la crème from the industry – C-suite executives, top government officials and elite professionals.

T

his year, the now annual fixture, the ‘Frost & Sullivan Middle East Best Practices Awards’ programme provided a fitting tribute to recognise and honour companies driven by visionary growth, innovation, and leadership, the essential and critical catalysts transforming industries in the future.

This year, a total of 31 Awards were presented including eight in the ‘Transportation & Logistics’ category and the remainder across five other important industry sectors.

These Awards followed a rigorous measurement and multiple parametersbased methodology to select recipients in each category. These companies showcased exceptional accomplishments and demonstrated superior performance in areas of leadership, technological innovation, customer service, strategic product development and other parameters.

Global Supply Chain conducted an exclusive interview on the sidelines of this effervescent event with Mountain View, California, USA-based Aroop Zutshi, Global President & Managing Partner, Frost &

NOVEMBER 2018 37

Sullivan Inc., USA, who especially flew down for this ceremony. The following are excerpts from that interview.

Global Supply Chain (GSC): Now in the fourth year since its inception, the Frost & Sullivan initiated and spearheaded ‘Middle East Best Practices Awards’ have become a benchmark for performance by companies in key industry sectors. Briefly, what are the thinking digits (the why) behind the institution of these flagship awards in the first place?

Aroop Zutshi: One of the core and key strengths of Frost & Sullivan is research and as a global corporate institution we put a lot of emphasis on this very vital activity.

38 NOVEMBER 2018

Research and analyses are our prized assets.

From our vantage position we continually examine and monitor megatrends, emerging and disruptive technologies, new business trends, industry convergence, thought leadership and other micro and macro developments across several geographies including the Middle East.

Internationally we harness the services of over 800 trained and competent analysts and experts to track markets and trends and identify the most promising research, innovations, solutions and best practices in a variety of industry sectors and portfolios.

More specifically, the ‘Middle East Best Practices Awards’ have been instituted to note, call out and recognise the most

prominent service providers, both corporate and individual, of solutions and exemplary performance.

GSC: What were the parameters, benchmarks considered when awarding these prestigious awards?

AZ: Our vetting process is very rigourous, intensive and exhaustive. Integrity is our hallmark. We have adequate checks and balances and every entry is carefully sieved and examined. Our in-house, internal experts and analysts go to extraordinary lengths to study and scrutinise every entry and recommendation involved.

We then invite a carefully and especially constituted external independent and

GLOBAL PERSPECTIVE

GSC: Provide us a snapshot of the 2018 Jury Panel that constituted the ‘think-tank’ for deciding the Awards?

AZ: The jury we empanelled comprised 11 eminent professionals and individuals with integrity and roots in the industrial community and experts in their respective fields. These typically were thought leaders with vast exposure to the industry and influencers and harbingers of change.

The Middle East is high up on the totem pole and in many instances on par with the finest in the world as far as automotive, logistics and transportation infrastructure and technology is concerned impartial jury comprising experienced experts and go-to professionals for their observations and analyses and eventual sign-off for the winners.

GSC: How meticulous were the procedures, controls, adherence to standards and methodology in the judging process?

AZ: Our methodology is both holistic and thorough. Our processes are clearly defined and have to meet the exacting standards and criteria. The efforts are both individual and composite and we ensure nothing slips through the net. As I mentioned earlier, our work is inspected and ratified by an external jury panel so there is reinforcement of values and principles.

GSC: Briefly, what do the Awards mean for the recipients? Beyond the professional recognition and encouragement, what implications do the Awards entail for the awardees?

AZ: By acknowledging and awarding these companies and awardees our purpose is threefold. By recognizing their input, we are making their peers and the wider industry and the community at large aware of their stellar professional contribution and this serves as a considerable boost to their work and reputation.

Secondly, it helps acquire capital and resource to inventors and initiators for their projects especially if there is funding involved thanks to the credibility our awards carry. Finally, it is also a tremendous morale booster to these outstanding winners at a personal level and to their families who can be legitimately proud of their accomplishments.

GSC: What do the Awards say about Frost & Sullivan’s involvement in the region and how is the company driving change and sentiment in the region?

AZ: The awards spell trustworthiness and prestige. We have been in the region for a long time and work closely with our constituents to drive change and catapult them to a higher level. We are the drivers of that change through our expertise, experience and keen insights. We are in the region for the long haul.

GSC: Specifically with regard to the Automotive-Transportation & Logistics sectors, how does the Middle East stack up vis-à-vis the rest of the world?

AZ: The Middle East is high up on the totem pole and in many instances on par with the finest in the world as far as automotive, logistics and transportation

Aroop Zutshi is the Global President and Managing Partner, Frost & Sullivan Inc, USA, based in Silicon Valley, California, and sits on the corporate board of Frost & Sullivan Inc. With over 30 years of experience, Zutshi, a mechanical engineer, has been involved in developing the growth strategy for the company. Aside from driving the globalisation of Frost & Sullivan, he has also been responsible for Frost & Sullivan’s expansion of business across 48 office locations globally.

Besides being responsible for managing Frost & Sullivan, he also works with Fortune 500 companies in designing their growth strategies by evaluating new opportunities for growth. As a global leader he has been working with many local, state and national government agencies in helping their economic transformation agenda and initiatives.

Zutshi has played a key role in building the life sciences business for the company.

A management consultant, he has worked extensively in the Life Sciences industry focused on transformational health issues.

He has also worked in the space of ‘hospitalto-home’ healthcare delivery models, instrumental in working on building the strategy and vision for several biotechnology parks, closely involved in urban development and planning for healthcare cities as well as driving entrepreneurship best practices in emerging markets.

He is also closely associated with global majors in the field of sustainable and smart manufacturing, IIoT (industrial internet of things), Industry 4.0, Intelligent Mobility and Infrastructure, Smart and Safe cities.

NOVEMBER 2018 39

GLOBAL PERSPECTIVE

infrastructure and technology is concerned.

Leaders in the region have put their weight behind changes for good through ambitious and radically progressive individual ‘National Visions’ and governments have been at the helm earmarking and allocating enormous budgets to remedy, steer and make the much needed changes happen.

GSC: What opportunities and potential await and what challenges confront the region in this industry segment?

AZ: I foresee multiple opportunities and good potential in this region and internationally as long as the ecosystem, and by that I mean the political ambience, remains stable. As long as we have stability and steadiness and no major uprisings and upheavals, there is promise and profit for the future. That way we can help corporate to offer wise counsel and help our clients grow their business, survive and even thrive.

The challenge is to ensure that there are no big social or political shakeups or disorder.

When law and order is maintained, it will lead to progress and growth for all participants.

GSC: How is the region adapting and adopting new trends and technologies in the automotive, transportation, logistics and supply chain arenas?

AZ: Like several other trade verticals, the logistics and supply chain industry is undergoing a tremendous transformation and all for the better.

Sweeping and numerous changes are occurring Our vetting GSC: What are Frost & that is changing the face process is Sullivan’s vision-goalsand landscape of the transportation and mobility very rigourous, objectives for the wider Middle East as an agent and enabler of segment. intensive and transformation?

The old system was fraught AZ: In the Middle East as with inefficiencies and exhaustive. with the rest of the world, operations at the macro level Integrity is our our corporate philosophy in a that can best be characterised nutshell is to have a big impact on as unwieldy. The old school hallmark. We planet Earth. So, to this end we sought to transport goods have adequate work very closely with regional and make a single operator governments, corporate, financial responsible for deliveries checks and institutions, partners and other from source to recipient. That multiple stakeholders to deliver is clearly changing now. The balances and value to every customer and composite value chain has every entry is citizen through sustainability, been broken into smaller segments, more manageable carefully sieved conservation as appropriate, an improved lifestyle and thereby the processes that can be more and examined quality of life. That continues to efficiently operated and easily remain our long-term objective. monitored.

For the short-term, we continue to I like to use the phrase ‘death by a 1000 work with our constituents, preparing and cuts’. This implies that we breakdown the grooming them for the future. We seek to entire process into fractions to allow players empower, enable and encourage. I must leverage technologies and proven, developed emphasize, digital transformation is the key, efficiencies play their part. This cheaperthe way forward. better-faster model, when appropriately I am happy to report that an increasing applied, is a boon to the transportation, number, an overwhelming 90% plus of logistics and transportation industry. our customers and corporate clientele and Take the last-mile-delivery (LMD) as partners are bracing for and embracing the a case in point. No one single operator technological and disruptive changes and can today effectively manage the entire that is the path to the future. Technologies transportation on its own. This function can are being competently harnessed to usher now be outsourced to more nimble, localised positive and beneficial changes, efficiencies players more familiar with neighbourhood and professionalism. In my opinion, this locations, indigenous strengths and adequate bodes well for the future in the region. logistics prowess.

40 NOVEMBER 2018

GLOBAL PERSPECTIVE

NOVEMBER 2018 41

PORT OPERATOR

Gulftainer and US State of Delaware forge closer trade relations with Sister Port Agreement Move positions Gulftainer as the only Middle East terminal operator to manage port operations in the USA

G

ulftainer recently hosted the formal signing of a sister port agreement between the Department of Seaports & Customs of the Government of Sharjah and the Diamond State Port Corporation (DSPC), a corporate entity of the State of Delaware, USA. Under the terms of the partnership, the two entities are mandated to cooperate in the development of international trade and logistics, exchange information, and build mutually beneficial commercial, technological and cultural synergies.

42 NOVEMBER 2018

The agreement also enables private companies within the catchment area of the respective port authorities to collaborate on trade and investment prospects.

The signing took place in Sharjah following the official handover of the Delaware-based Port of Wilmington from the Diamond State Port Corporation to Gulftainer to operate and develop the port over a 50-year concession period.

Gulftainer plans to invest US$ 580mn in developing the cargo terminal capabilities of the Port of Wilmington to enhance its overall productivity. The company’s

remit includes the construction of a new 1.2 million TEU container facility worth approximately US$ 410mn at DuPont’s former Edgemoor site that Diamond State Port Corporation acquired in 2016.

This landmark deal represents the largest investment ever by a private UAE company in the USA. HE Sheikh Khaled Bin Abdullah Bin Sultan Al Qasimi, Chairman of the Department of Seaports & Customs, Sharjah Airport International Free Zone and Hamriyah Free Zone Authority, and Jeffrey Bullock, Secretary of State of Delaware, signed the agreement at the Sharjah Chamber of Commerce. Peter Richards, Group CEO, Gulftainer, and senior leadership from the Gulftainer group also attended the ceremony.

“In line with Gulftainer’s commitment to generating cross-border socio-economic impact across the globe, this sister-port agreement facilitates strategic trade and knowledge exchange between the UAE and the USA, and further boosts bilateral relations between our countries,”affirmed Badr Jafar, Chairman, Gulftainer’s Executive Board.

Subscribe today November 2018 Issue 53

October 2018 Issue 52

ENHANCING THE BUSINESS OF LOGISTICS

September 2018 Issue 51

ENHANCING THE BUSINESS OF LOGISTICS

SUSTAINABILITY

ENHANCING THE BUSINESS OF LOGISTICS

Sensitivity and Sensibility

MATERIAL HANDLING In the digital factory

Cargo Insurance

RISK PROTECTING AGAINST

MAN Truck & Bus For the long haul

Combilift

Lifting businesses

Aviation

Who run the world? Girls!

Uplifting lives

Heléne Mellquist, Volvo Trucks

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10/5/18 11:58

Mercedes Benz Trucks

A look at the supply chain

•GSC_September_2018_Cover.indd 1

Frost & Sullivan

Powering on

Sourcing the Ruby

Women drivers Now in Saudi Arabia

9/9/18 13:38

Globe Express Services

A view from the helm

Going Global

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11/15/18 15:14

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REGIONAL LOGISTICS REVIEW

Logistics on a roll in the Middle East Emergence of latest technologies and new business models are a game changer for the industry

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lobal Supply Chain (GSC) engaged in a prolonged, one-on-one conversation with Gopal R, Global Vice President of the Transportation & Logistics Practice, Frost & Sullivan, on the sidelines of the ‘2018 Middle East Best Practices Awards’ event where top awardees were recognised and feted for their performance and accomplishments. The following are excerpts from that interview.

GSC: Specifically with regard to the Transportation & Logistics sectors, how does the Middle East stack up vis-à-vis the rest of the world in terms of infrastructure, efficiencies and performance?

Gopal R (GR): The Middle East and specifically the GCC fares well in terms of

44 NOVEMBER 2018

transportation and logistical efficiencies, infrastructure and performance on the global scale, it is relatively high up on the index. The UAE peaks the scale with highly developed transportation networks and processes.

Other countries such as Saudi Arabia and Oman, among the largest in the GCC, also rank high on the pecking order.

To begin with, let me put the industry in perspective on the economy canvas.

In general, internationally, the cost of transportation and logistics accounts for around 15% of the aggregate trade costs. This can soar up to 25% and even possibly 30% for some developing and under-developed countries given the tough geographical terrain and poor transportation infrastructure.

Furthermore, it is our observation that across the globe, in value terms, the

composite organised logistics and supply chain industry typically constitutes around approximately 5-8% of a country’s GDP. For logistics hubs such as Dubai and Singapore for example, this percentage is upwards of 8% possibly even 10%.

Naturally, this percentage will be relatively higher for countries with a big manufacturing base or movement of commodities, given the extent of logistics and transportation required to move raw materials and finished goods.

It must be remembered that the cost of logistics usually is the sum of the costs of transportation, warehousing, forwarding and other related value-added services.

To keep costs low, the model currently being successfully followed involves the institution of a fulfillment centre where consolidation occurs and then routed

REGIONAL LOGISTICS REVIEW

to customers through logistics services providers and last-mile deliverers.

GSC: How is the region adapting and adopting new trends and technologies increasingly being bandied around such as blockchain, self-driving vehicles, telematics, prognostics and hyperloop, in the automotive, transportation & logistics arena?

GR: This indeed is a loaded question and but let me break it down to three broad categories,, namely trends, technologies and the much-talked about hyperloop.

Let me take the subject of hyperloop first since it is the easiest to tackle. Hyperloop in essence is the high-speed transportation of passengers and freight using electromagnetic levitation engineering to carry pods at 1,200kph. Today this is not just a

concept but a reality and well on track to be successfully implemented. Abu Dhabi has an agreement with California-based Hyperloop Transportation Technologies (HyperlooopTT), while DP World recently announced its partnership with Virgin Hyperloop One to build ultra high-speed transportation system for cargo delivery. This is a revolutionary development set to change the logistics industry and landscape in the region.

The blockchain phenomenon is also well and truly upon us and here to stay.

An increasing number of companies are joining the blockchain fold. Some Government departments have also joined the fray. Blockchain for now has proven to be safe, secure, almost foolproof and virtually immune to errors, amendments and manipulation.

The UAE peaks the scale with highly developed transportation networks and processes. Other countries such as Saudi Arabia and Oman, among the largest in the GCC, also rank high on the pecking order NOVEMBER 2018 45

REGIONAL LOGISTICS REVIEW

The big breakthrough and take-off for blockchain will come when governments fully embrace and adopt this emerging technology. Blockchain is then expected to grow exponentially. It is also of great importance to government stakeholders including regulators, customs and the security regimen.

Specifically, blockchain involves a single document operation where all constituent partners and authorities have equal access simultaneously and can only work on those parameters and parts of the document that directly affect the stakeholder concerned.

The technology ensures that all aspects of the process works in harmony and unity

46 NOVEMBER 2018

without the need for multiple documentation and supervision.

With regard to trends, logistics is being increasingly impacted by e-commerce is becoming increasingly ubiquitous and gaining rapid momentum. The geographical axis for trade is also moving to Asia where 60% of the population accounts for 40% of the total e-commerce trade.

In the Middle East, 70% of products consumed are attributable to cross border trades within the GCC or outside of it. A notable feature of e-commerce, as I have said previously is the consolidation of the business to centralised depots or hubs thereby lowering transportation costs

particularly for last-mile-deliveries. In this context it is pertinent to note that rail services will receive a fillip. Rail transportation is relatively ‘green’ and eco-friendly in addition to being very economical too.

It is also interesting to know that as a fallout of digital disruption, 60-70% investment in (new) technological startups is happening in the transport aggregation space. Delivery by drones may go well in suburban, rural areas but last-mile-deliveries are a challenge in densely populated urban centres.

Another extraordinary development is delivery that can be attributable to ‘crowd sourcing’. In some countries particularly in

GLOBAL PERSPECTIVE

‘indigenisation’ rather than import. This has also taken the shine off international trade.

Imports of traditional industries specifically automotive and electronics are in marginal decline for multiple reasons.

However, this has been offset by a surge in e-commerce and as a case in point—the healthcare industry which has spawned the ‘cold-chain’ genre of logistics.

GSC: Several Governments in the region have announced grand futuristic, imaginative plans—Saudi Vision 2030; the US$ 500bn Neom Sci-Fi City; Abu Dhabi Economic Vision 2030 and many more.

What will be the bearing on the logistics segment for the region both short and long-term?

RG: It is imperative that Governments continue to invest in developing infrastructure because it is essentially this aspect that will drive energy and momentum into the logistics industry.

These well enunciated National Vision plans provide tremendous resource and impetus to development plans as are evident in the UAE and Saudi Arabia.

Developments of new industrial cities, ports, airports, rail and road infrastructure is indispensable to the growth of any economy and certainly a boon to the logistics sector.

the Far East for example, the drivers of one of the ride-hailing companies have also been harnessed to make deliveries of packages at comparatively lower costs in addition to transporting passengers. Drivers thus make additional income on the side.

GSC: Is the Transportation & Logistics segment in the region in growth mode? If so by how much is it growing?

RG: This region has traditionally benefitted from regional and international trade but given the global economic slowdown and recession, growth has been relatively slow.

There is also the inclination to produce and manufacture locally and promote

GSC: What opportunities and potential await and what challenges confront the region in this industry segment?

RG: Lack of seamless connectivity and poor infrastructure are the top primary challenges for the generic logistics industry in the region. Other challenges include compliance, rigid bureaucracy and a strict regulatory regime. Inadequate storage and lack of warehousing facilities or improper transportation arrangements will stifle trade and choke the logistics industry.

Adoption of new technologies and digitalisation is also important to facilitate smooth operations and thereby the growth of the logistics sector.

On the other hand, the economies of the region are surely bouncing back and that signals confidence and growth. Prudent policies are also in place for industrial and overall growth and that bodes well for the logistics sector.

Gopal R. heads Frost & Sullivan’s Transportation & Logistics practice globally.

Responsible for developing the transportation and logistics consulting capabilities across regions as well as managing the business unit, he is actively involved in the execution of client defined engagements and syndicated research studies.

Gopal has worked on several strategic market consulting assignments for local, regional and global clients. He also works with industry associations and event producing companies to plan and implement value added business programs in industry events.

His expertise in the regional markets has helped in developing relationships with local and regional companies, augmenting networks, capabilities and research focus.

His regional expertise is backed well with his knowledge and experience of working with global third party logistics companies.

Gopal has also been instrumental in conceptualising and developing new research products for Frost & Sullivan that focus on the economic implications affecting industry segments.

Prior to joining Frost & Sullivan, Gopal was the Commercial Director with an international third party logistics company, responsible for business development in the region. He has also worked with a leading financial institution and handled the responsibility of market assessment and company analysis in project financing.

NOVEMBER 2018 47

SUPPLY CHAIN COMPLEXITY

48 NOVEMBER 2018

SUPPLY CHAIN COMPLEXITY

Understanding and de-mystifying Supply Chain Complexity -For lower costs, increased velocity & improved performance

Supply chains for retailers and manufacturers are under pressure to reduce costs and improve performance. The low-hanging fruit has been picked.

It requires new ways and new initiatives. It starts with recognising and addressing supply chain complexity, avers Tom Craig, President, LTD Management, Pennsylvania, USA and a leading authority and consultant on logistics and supply chain management

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othing in business is more complex than end-to-end supply chain management, especially ones with and in international segments.

This is not hyperbole. It is fact. It must be understood that it is vital to manage the supply chain and complexity can be a barrier to achieving the needed supply chain velocity. Therefore it is important in the expanding omni-channel scenario.

Manufacturers and retailers are in a period of disruption. Velocity is clearly required.

This also includes supply chain velocity, inventory velocity and order-delivery velocity.

A problem with achieving these is that companies, regardless of their age, are using

a supply chain template that is over two decades old with emphasis on logistics costs and not on velocity.

There are obvious ways to see the endto-end intricacy. These are length and time.

Supply chains with international sourcing and/or export sales are long. That length means the time to move products through the supply chain may take inordinately long.

Time is a multi-occurring issue. There are times to deliver perfect orders; to meet production schedules; time for this and time for that. It is a common supply chain topic.

However, there is more than meets the eye.

Inventory is impacted by the time from a product is needed to be replenished from the supplier until it is restocked in warehouses.

NOVEMBER 2018 49

SUPPLY CHAIN COMPLEXITY

Longer time adds uncertainty and requires more inventory to be carried as a buffer and more working capital to cushion sales or incur stock-outs and lost sales. Companies can at times become inventory rich.

The excess working capital is critical if funds are not available in other areas of the business, including transforming the supply chain to compete in the new selling reality of omni-channel and e-commerce for both B2C and B2B platforms.

Holistic Approach

Additional recognition must be given as to: Participants: No group in an organisation

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The river however is not a single entity.

It is fed by

7,000 streams, water basins, and smaller rivers.

has more participants and players than supply chain management. This includes both inside and outside the company. Supply chain management crosses the company and interacts with almost every department in a company. As for external, the supply chain extends both directions – toward suppliers and customers. For example, an international supply chain could have 15 or more players with each order and shipment.

Upstream: Much attention is paid to the downstream supply chain with distribution centers, stores, and factories. The weakness here is that the supply of supply chains begins upstream. Upstream has been often

SUPPLY CHAIN COMPLEXITY

Comprehensive Understanding There is a multiplier effect with multi-variant elements. Namely, the more the components, the more the complexity. The challenge is to achieve critical supply chain performance success. That is an underlying factor with supply chain management.

The greater the end-to-end supply chain complexity, the following are its direct implications: 1) Increased supply chain risk 2) More inherent lean waste 3) Challenge to control 4) Greater likelihood that supply chains processes are under-designed and under-managed Understanding complexity is the first step.

Addressing it is important for achieving supply chain velocity and its inventory and order delivery velocities. This is especially so with manufacturers and retailers achieving needed supply chain speed that are still using essentially monolithic supply chains. These are not agile and lack supply chain duality in the new omni-channel reality.

overlooked except for the emphasis with sourcing and with purchasing and inbound freight costs.

Non-linearity/Supply chains within supply chains: The straight-line supply chain is an illusion. It ties to the ‘agile’, one-size fits all view. Every firm has a supply chain – and more. Think of the Mississippi River in the US. It is very long and runs from Minnesota down through Louisiana and into the Gulf of Mexico.

The river however is not a single entity.

It is fed by 7,000 streams, water basins, and smaller rivers. These smaller bodies of water flow through 31 states and two

Canadian provinces. The great river is not a single entity. Neither is the supply chain.

That is how supply chains are – many branches of inventories and activities – and how they evolved.

Horizontal process: It flows across a vertical organisation. The directional conflict between supply chain management and the company structure is more than just a silo matter. It impacts the process both inside the particular company and with suppliers and customers as it extends upstream and downstream. Additionally, those suppliers and customers have the same flow challenge.

The new way to lower costs, increase velocity, and improve performance is to: 1) Attack the complexity: This can create significant improvements.

2) Move upstream: Go to where supply chains begin. Think of it, many downstream problems start upstream. By the time they get downstream, the problems are compounded as to affect. A note of caution, the upstream has much of the supply chains within supply chains and nonlinear parts.

3) Assess, identify, segment and prioritise: Focus where the needs and financial returns are greater. Remove bottlenecks and flow delimiters.

4) Evaluate the players and participants: Both external and internal, their roles, and value.

Reduce where possible. Integrate to reduce process gaps and blind spots in technology.

5) Compress time: With time and its lean international waste impact, this is important. Value stream mapping is a viable tool to use here.

The demands for greater velocity will increase. Think Velocity2 – velocity squared.

The longer it takes to start, the further behind firms fall in catching up.

NOVEMBER 2018 51

GLOBE EXPRESS SERVICES: EXCLUSIVE INTERVIEW

Digitisation, differentiation and new demands driving growth For the past over four decades, Globe Express Services has offered globally integrated, end-to-end logistics and supply chain management solutions through a current network of over 70 corporate offices overseeing over 100 countries across Asia, Europe, the Middle East and the Americas

M

ustapha Kawam, President and CEO, Globe Express Services, is spearheading the company’s meteoric rise internationally.

Following a long and chequered career, Kawam has been in the top apex position of Globe Express Services since June 2015. He joined the third party logistics provider in 1995 and has held a wide range of leadership positions in the company.

Global Supply Chain (GSC) interviewed Kawam on a recent visit to the UAE and on the eve of Globe Express Services’ expansion into Latin America with the opening of its new Peru new office in the commercial port city of Callao as part of a thrust to meet the growing demand for logistics services in the one of the continent’s fastest growing economies.

Global Supply Chain spoke extensively and exclusively to him on a recent business visit to the UAE on a wide range of industry subjects.

GSC: As a Global Express Services (GES) veteran and now at the helm, what briefly is your take on the current progress of the company under your watch?

Mustapha Kawam (MK): Leading GES into a new era of logistics

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where digital transformation and quality management are key determinants in global competitiveness, I strongly believe that we are on the right track to become a partner of choice by providing sustainable solutions and customer-driven experience, delivered by people who care.

There were developments under way including the completion of our industrial warehouse and office in Jebel Ali Free Zone which vastly improved our regional and global logistics reach.

However, one of my key priorities is the engagement of employees in training and development and we have successfully done it in many levels. Another key aspect of the business is raising our quality management systems to international standards, which we achieved with the ISO 9001:2015 certification.

GSC: How did GES perform in 2017 compared to 2016 and what is your forecast for 2018?

MK: While 2016 saw the development of GES road map for the next three years, the year 2017 was one of the most remarkable years for us in terms of ongoing improvements within the company.

Last year’s accomplishments have left the GES team with increased motivation and enthusiasm for improved performance while effectively navigating challenges along the way. I attribute our constant revenue growth to the team’s efforts and key initiatives that were rolled out to fully optimise opportunities for the benefit of the company and to our customers for their trust in our services.

GSC: Comment briefly on the present state of the logistics industry in the region, GCC, wider Middle East and globally?

MK: The UAE’s strategic geographic location as a main global trade hub along with the launch of initiatives such as the ‘Authorised Economic Operator’ programme, makes it one of the 63 countries worldwide that facilitates smooth functioning of trade, customs operations and supply chains.

An evaluation of the past trends and observation of the present allows an extrapolation of what might be in store for logistics and supply chain management

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GLOBE EXPRESS SERVICES: EXCLUSIVE INTERVIEW

in the future. The increasing emphasis on globalisation, free trade, and outsourcing, all contribute to a continued and growing interest in logistics and supply chain trends.

According to market studies, by the year 2020, 80% of the goods in the world will be manufactured in a country different from where they are consumed, in contrast to the current 20%.

We see a tremendous shift in the movement and consumption of goods in store, giving rise to a demand for better management of the associated supply chain processes. The focus of logistics and SCM has been on efficiency in the past and physical distribution was highlighted as the last frontier of cost economies.

advancements in ICT industry, economic diversification and the customer-centric approach to services create immense opportunities for the sector.

With its highly specialised free zones of international standards, network of industrial areas, business parks, advanced telecommunication systems, world class seaports, and a major international airport and cargo village, the UAE is the most developed business hub in the region.

The players in the rapidly evolving logistics sphere here are evaluated on the basis of how well they deliver technology innovations, real-time solutions, integrate with their customers, and drive efficiency gains into the supply chain as they scale.

GSC: What are the opportunities and challenges for the logistics industry going forward?

MK: The spike in trade and economic activities ahead of the upcoming Expo 2020, compounded by the country’s determined efforts to achieve UAE Vision 2021 goals,

GSC: How are digital disruptions and transformations impacting the logistics industry? Please cite one or two examples?

MK: Both individual and industrial customers now expect faster shipments, more flexibility, and increased transparency at a lower price, putting both operating

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models and profitability under strain. Large manufacturing and retail customers may experience a faster pace of transformation, compared to private final consumers.

In the B2B sector, manufacturing industries are facing far greater expectations around efficiency and performance factors than ever before. Customers are increasingly expecting faster time-to-market, lesser defect rates and customised results. Eventually, the result may be a goal that was once deemed impossible, where each product is manufactured to the specifications of a specific end-customer.

The ongoing shift to automation and data exchange in manufacturing technologies, also known as the ‘Industry 4.0,’ is allowing manufacturing companies to redefine everything, from the way they interact with customers to how they structure supply chains. This will have a huge impact on transportation and logistics.

The need to integrate data analytics and social supply chains for better traceability, predictability and lower costs must not be overlooked by LSPs, 3PLs and 4PLs. Being

digitally sound is becoming the most integral aspect of every logistics company.

Logistics companies that serve individual customers are still facing challenges in that area as consumers are more digitally evolved than retailers. The leading players are adopting what we call ‘total retail’, which is an operating model across bricks and mortar, online mobile and other retail channels.

‘Connected retail,’ where retailers align personalised marketing, the physical store, the digital experience, and the payment options to create one seamless brand experience, is very essential to complement total retail.

emerge winners.

Again, defining a clear digital strategy that is integrated into your business approach is crucial, as there are so many technologies competing for management’s attention and investment.

Advanced IoT solutions are capable of providing improved supply chain transparency, safety and efficiency and environmental sustainability, while data analytics provide improvements in customer experience and operational efficiency; greater inventory visibility; management and better predictive maintenance.

GSC: How far has GES come on the digitisation curve?

MK: As you can see, technology is changing every aspect of how logistics companies function. ‘Digital fitness’ has become imperative for success. Businesses that understand how to leverage a whole range of new technologies, from data analytics to automation and platform solutions will

GES: What are GES’ expansion plans for the region? How significant is the GCC for GES? MK: We currently enjoy strong market presence in the GCC, especially in KSA and the UAE. The MENA travel and leisure (T&L) industry generated US$ 73 billion in 2015, of which the GCC’s transport and logistics industry accounted for US$ 12.8

Mustapha Kawam

Mustapha Kawam has been leading the growth and development of Globe Express Services as President and CEO since 2015.

He first joined the ISO 9002-certified company in 1995 in charge of business development and subsequently managed the company’s branch in Dammam, Eastern Province, Saudi Arabia.

He later moved to Dubai to serve as Country Manager for UAE in 2001 and took charge of the company’s further expansion across the Gulf region including the establishment of GES Kuwait. Under his stewardship, GES won the Maersk Platinum Award as one of the best performing logistics providers in the UAE. He was also instrumental in overseeing the completion of the company’s industrial warehouse and office at the Jebel Ali Free Zone and the opening of the firm’s Dammam Terminal Yard in Saudi Arabia.

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GLOBE EXPRESS SERVICES: EXCLUSIVE INTERVIEW

billion. T&L is emerging as one of the key drivers of economic activity in the region, especially in the GCC, whereby it now constitutes a major industry sector. Saudi Arabia’s logistics market is the largest in the GCC, accounting for nearly 40% of the total market size in the region.

The GCC’s highly business-friendly environment has also helped in the growth of companies building their distribution operations based out of here. E-commerce is rapidly growing in the region and is now becoming a key growth driver for the logistics industry. The MENA e-commerce industry, where players are diversifying their product portfolios, is experimenting with new

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segments and as a result, several start-ups are emerging.

The number of online buyers has increased by nearly 21% from 2016 to 2017, thanks to increasing smart-phone penetration and changing consumer behavior and access to technology.

GSC: In which countries do you foresee growth in the logistics sector? Comment specifically on Saudi Arabia and UAE and the wider GCC? MK: The UAE and Saudi Arabia are the most promising targets for logistics investments and easiest markets to operate in the region. Oman, Kuwait and Bahrain, along

with Morocco, Jordan are also emerging as potential investment destinations. The presence of 34 free trade zones, non-existent corporation tax, full ownership and the sanction for repatriation of profits make the UAE an extremely alluring business location for producers, manufacturers and logistics service providers alike.

The advent of technology is driving intelligent supply chains and is transforming the future of the global logistics industry.

The UAE is home to a growing population that is way ahead in the adoption of new technologies, making it a key market for the transportation and the logistics industry in the future.

GLOBE EXPRESS SERVICES: EXCLUSIVE INTERVIEW

entrants. Mergers and acquisitions in the industry might become integral for companies to achieve growth, along with integration of new technology, and expansion of offerings.

GSC: Briefly talk about your partners and agents? What in your opinion constitutes the key strengths of GES? MK: We consider our unwavering commitment to core values of professionalism, constant adoption of modern technology and its integration, and increasing customer confidence in our global logistics expertise as the key strengths.

Dynamic international trade activities are fundamental to our growth and our capacity to address the increasing demand for top logistics services in support of the rising global trade activities influenced our solid financial performance during the first half of 2017. We have also placed huge importance on the education and training of our employees, where we constantly invest.

The rapid growth of the logistics sector demands constant human capital development as knowledge, skills and navigation of challenges evolve together with the technology.

GES offers a unique blend of size and scope with unmatched flexibility. We have made it a practice to regularly tailor our services, from operating procedures to systems, to fit the needs of our customers.

We differentiate ourselves through our customer service. Dubai’s reputation as a logistics hub in the Middle East and globally, gives us an advantage in bidding for big projects.

A large segment of the UAE’s economy is going through digitisation through technological innovation, including artificial intelligence, 3D Printing and automation.

This creates tremendous business prospects for the logistics sector to benefit from private and public-sector initiatives that aim to redefine speed and operational efficiency.

GSC: Is consolidation a possible way forward for the logistics sector in these lean times?

How about mergers and acquisitions?

MK: Despite an increasing demand for services, the GCC’s logistics industry is seeing fierce competition, difficulties in attracting talent, and challenges posed by new market

GSC: How competitive is the logistics industry in the UAE and the GCC? Is the growth sustainable?

MK: Our four logistics scenarios for the future of the industry are based primarily on different ways of collaboration and competition that could evolve within the sector.

Sharing the Physical Internet or PI, a dominant theme in this scenario, is the growth of collaborative working, which allows the current market leaders to retain their dominance. This could for example see a greater use of PI solutions, based on a move towards more standardised shipment sizes, labelling and systems.

A start-up, shake up scenario is when new entrants in the form of startups make a bigger impact. The most challenging and costly ‘last mile’ of delivery becomes more fragmented, exploiting new technologies like cloud platforms and crowd-sharing.

A complex competition occurs when competitive sets evolves in a different direction, as large industrial or retail customers and suppliers become players in the logistics market themselves, not just managing their own logistics but turning that expertise into a profitable business model.

In the ‘scale matters’ scenario, the current market leaders compete for a dominant market position by acquiring smaller players, achieving scale through consolidation, and innovation through the acquisition of smaller entrepreneurial start-ups.

The UN report ‘Roadmap to a Sustainable Logistics Industry,’ provides a focused set of recommendations on how the transportation sector can contribute to sustainable development, which includes integration of sustainable transport planning efforts with an appropriately balanced development of transport modes.

This can be supported both by the development of multimodal transport solutions that address customer needs while reducing emissions and by increased collaboration and capacity sharing initiatives between transport companies across their respective networks.

Where does GES go from here? What is your vision for the future?

Maintaining and nurturing clients’ and employee satisfaction, along with sustained business growth and expansion will always remain our priority. The basis for competitive advantage in the logistics industry is changing fundamentally.

An established network may become a deterrent rather than becoming an advantage.

New approaches based on new technologies, concepts and dynamic pricing may take capacity utilisation more fully into account.

Businesses need to ensure that they possess the distinctive capabilities they need to compete. They must develop these capabilities, use collaboration to succeed and focus on ‘digital fitness’, cost efficiency, asset productivity, and innovation if they want to meet changing expectations.

NOVEMBER 2018 57

MARITIME AWARDS

DMCA honours winners at Dubai Maritime Summit 2018

Top regional and international companies are recognised for their contributions to reinforce Dubai’s leading position in the global maritime sector

T

he winners of the 2018 Dubai Maritime Innovation Awards were revealed and recognised in a special awarding ceremony held at Dubai Maritime Summit 2018, an industry gathering of experts at the recently concluded UAE Maritime Week 2018.

The award recipients, comprising national, regional, and international companies were honored for their pioneering efforts to advance creativity and innovation in the local maritime sector. The attendees were

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appreciative of Dubai’s pioneering position as an incubator for innovation and creativity in the maritime sector, an important and vital source of the global economy.

“The contributions and initiatives of this year’s winners have further driven the sector’s growth, development, and prosperity, using innovation and creativity as tools to achieve their objectives. We thank them for helping us steer Dubai and the UAE towards becoming the leading maritime centers in the world,”noted HE Sultan Ahmad Bin

Sulayem, Chairman of Ports, Customs and Free Zone Corporation and Chairman, Dubai Maritime City Authority (DMCA).

HE Bin Sulayem recognised the efforts and exemplary leadership of HE Dr. Eng. Abdullah Balheif Al Nuaimi, UAE Minister of Infrastructure Development, who has been instrumental in the continuing development of the UAE maritime industry.

The Minister played an important role in the UAE’s winning of Category-B Membership in the International Maritime

MARITIME AWARDS

A section of the audience at the 2018 Dubai International Maritime Awards presentation ceremony

Organisation Council–a first accomplishment of its kind in the Arab world.

Maritime heavyweights The ceremony included the distribution of awards of appreciation for companies that included Bahri from the Kingdom of Saudi Arabia, Clarksons Platou from the United Kingdom, Gulf Energy Maritime from the UAE, Lukoil Marine Lubricants from Russia, and the Maersk Group from Denmark.

International Decision and policy makers,

The winners pose for a group photograph

government officials, experts, and maritime leaders gathered for the summit to discuss the latest industry developments and explore the most promising solutions and opportunities across Dubai’s maritime sector.

Besides the summit, other ongoing events occurring in tandem wee the Maritime Future Leaders Seminar; the Emirates Maritime Arbitration Conference; the Sea Trade Middle East Maritime Exhibition, the largest maritime exhibition in the Middle East and the Maritime Innovation Day organised by

the DMCA in cooperation with Det Norske Veritas GL (DNV GL) and the Overseas Conference organised by ClarksonsPlatou.

“We value the efforts directed towards promoting the sector’s growth, development, and prosperity using innovation and creativity, which is aligned with our continuing efforts to achieve the objectives of Dubai Innovation Strategy to make the Emirate among the most innovative cities in the world,”concluded Amer Ali, Executive Director, DMCA in prepared remarks.

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RSA-TALKE EXPANSION

RSA-TALKE’s integrated chemical logistics hub opens new warehouse facility

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The chemical warehouse will accommodate 13,000 pallet positions, adding to the hub’s current capacity of 1800 TEU tank containers, both approved to store dangerous goods of nearly all classes.

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SA-TALKE, a joint venture of Dubaibased third party logistics provider RSA Global, and Germany-based TALKE Group, announces the expansion of its portfolio of services for customers across the GCC with the completion and opening of its new dangerous goods warehouse.

The latest facility is part of RSA-TALKE’s plan to systematically expand its tank container terminal in the Jebel Ali free zone, thus creating the only integrated chemical logistics hub of its kind in the region, approved for storage, handling, cleaning and filling of nearly all dangerous goods classes.

By providing storage, tank cleaning, maintenance and repair and specialist workshop services all at the same physical location, this milestone expansion creates a comprehensive chemical bulk liquid supply chain destination for the United Arab Emirates, and the region.

“Our chemical and petrochemical customers quite rightly attach great importance to their supply chain being flexible, reliable and appropriately equipped while meeting the highest standards of safety,”explained Markus Koepsel, General Manager at RSA-TALKE. “The new chemical facility will provide further convenience to our existing customer base across the GCC, as well as an integrated solution for new players in the market,”remarked Abhishek Ajay Shah, CoFounder and Group CEO, RSA Global and Board member of RSA-TALKE. With the completion of the warehouse, installation work will begin on a filling station for transferring chemicals of various hazard classes into drums and IBCs. RSA-TALKE already operates a tank cleaning station at its container terminal in Dubai.