Global Supply Chain October Issue 2018

October 2018 Issue 52

ENHANCING THE BUSINESS OF LOGISTICS

Cargo Insurance

RISK PROTECTING AGAINST

MAN Truck & Bus For the long haul

Combilift

Lifting businesses

Aviation

Uplifting lives

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Parts that take Parts that take Parts that you further you youfurther further Keeping your truck on the road, that’s what it’s all about. And Genuine Volvo Parts are vital to maximise your uptime and achieve the most profitable ownership possible. They are designed to fit and function Keeping on the road, that’s whatit’s it’sallallabout. about.And And Genuine Genuine Keeping youryour trucktruck on truck. the road, that’s what perfectly with your are vital to maximise your uptimeand andachieve achievethe the most most VolvoVolvo PartsParts are vital to maximise your uptime That’s whyownership we offer apossible. full 2 years fitted parts warranty when fitted by profitable They designed and function profitable ownership possible.

They areare designed totofitfitand function an authorized Volvotruck. workshop. It covers repair or replacement of parts. perfectly with your perfectly with your truck.

And even consequential damages.

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It coversRead repair or replacement of parts. an authorized Volvo workshop.

It covers repair or replacement of parts.

And even consequential damages.

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See it as a warranty on your business. Read more on volvotrucks.com

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

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

Bespoke Logistics Project of the Year 2017

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The most important aspect of a business perhaps is insuring it against unforeseen circumstances. Then why is there such a widespread overlooking or delay of this very important cost? Investment rather.

Despite the mode of transport, those are your dirhams riding the ocean waves, the highways or cruising the skies. The amount of money you put into this aspect of your business needs continuous review.

So instead of sending your cash riding into an unknown horizon, it’s beneficial to identify the risks beforehand and ensure your cargo and peace of mind.

More on this in our cover peice on page 27.

Moving on, every industry contributes to the economy in its own way, the aviation industry however is way ahead of other industries when it comes to exponential growth and monetary advantages. The global air transport sector supports 65.5 million jobs and US$2.7 trillion in global economic activity, according to new research released by the Air Transport Action Group (ATAG).

“There are over 10 million women and men working within the aviation industry to make sure 120,000 flights and 12 million passengers a day are guided safely through their journeys. The wider supply chain, flow-on impacts and jobs in tourism made possible by air transport show that at least 65.5 million jobs and 3.6 per cent of global economic activity are supported by our industry,”says ATAG’s Executive Director, Michael Gill. An intriguing read on page 56.

All of this and many more interesting topics in the next few pages. See you next month.

Munawar Shariff Managing Editor munawar@signaturemediame.com

OCTOBER 2018 3

October 2018 Issue 52

ENHANCING THE BUSINESS OF LOGISTICS

27 06 News 16 Country report - China China’s current account has recorded a surplus in every year since 1994

27 Cover Cargo Insurance: Protecting against risk Risk, loss and damage are facts of life when shipping ocean cargo, so why is the evaluation of cargo insurance so often overlooked?

32 FedEx joins Hyperledger FedEx joins growing Hyperledger global community

35 Gearing up for the long haul MAN Truck & Bus’s Managing Director, Franz Freiherr von Redwitz speaks about his company’s primacy in the region 4 OCTOBER 2018

38 The lift effect Global Supply Chain’s Munawar Shariff spoke with Martin McVicar, Managing Director, Combilift, about the company’s most important market in the region

44 Gold rush for managed service providers Cloud computing is the underlying platform for successful digital transformation

46 Airlines and airports invest to deliver seamless experience SITA CEO says collaboration is key to deliver secure and easy travel

48 Dubai’s new air cargo terminal RSA National’s new, commercial, airside cargo terminal

50 Digitalisation spurs disruption and growth OEM and Service Provider Revenue from downstream services will exceed US$3 trillion by 2030, finds Frost & Sullivan

54 Generics set to transform Abu Dhabi’s pharmaceuticals market New policies encouraging the use of generic drugs are set to reduce the cost of health care in Abu Dhabi

56 How aviation boosts an economy The global air transport sector supports 65.5 million jobs and US$2.7 trillion in global economic activity

DAE signs MOU with Emirates Aviation University Dubai Aerospace Enterprise (DAE) Ltd. announced that it has signed a Memorandum of Understanding with Emirates Aviation University (EAU) to jointly develop cooperative learning opportunities and work experience programs for EAU students. Also, as part of the cooperation agreement, DAE will participate in guest speaker opportunities at the University to further facilitate student learning and will support the University at conferences and career fairs.

The MoU was signed by Khalifa AlDaboos, Managing Director of DAE and Prof. Dr. Ahmad Al Ali, Vice Chancellor of EAU at the University in Academic City, Dubai.

DAE has already placed its first EAU student, a Bachelors in Aeronautical Engineering graduate, in an internship program in its leasing commercial support team in Dubai.

dnata completes busiest summer ever dnata, one of the world’s largest air services providers, has completed its busiest summer ever, marking outstanding growth all across its global operations. Providing quality and reliable ground handling, flight catering and travel services, the dnata team ensured a smooth travel experience for millions of customers in 85 countries.

Gary Chapman, President of dnata, said,“Forecasts for global aviation and travel demand have been on an upward trajectory, and dnata is proud to contribute

6 OCTOBER 2018

to the growth and success of these dynamic industries. Our investments to grow our capability and business footprint has always been underpinned by a laser focus on safety, reliability and quality. This solid business foundation has enabled dnata to smoothly and successfully complete our busiest summer ever, and I’d like to thank our global workforce for their dedication, as well our customers for their trust in us.”

Reflecting its significantly expanded international passenger handling operations,

dnata’s dedicated staff at 75 airports around the world marked a new milestone by supporting more than 40 million travellers from check-in to boarding and from disembarkation to baggage collection during the summer travel period.

Selecting impeccable produce and preparing it with flair, dnata’s catering team and Michelin star chefs at its 60 catering facilities served a whopping 29 million world-class meals to passengers of 103 international airlines travelling between June and August 2018, which represents a 16% increase year over year.

In Dubai, the dnata airport operations team successfully managed 107,000 aircraft movements and assisted 23.5 million passengers over the peak summer travel period.

On an average day, the company’s customeroriented staff handled 210,000 baggage with care using the latest technologies in the airport’s state-of-the-art facilities.

In addition, some 1,100 customers took advantage of the innovative baggage delivery service of DUBZ, a new member of the dnata family, and enjoyed the convenience of checking in their baggage and getting their boarding passes from their home or hotel.

In the three months from June till August, marhaba agents welcomed and assisted 65,000 passengers at Dubai’s two international airports, facilitating a swift and safe passage through the terminals for them and their families.

Emirates expands its travel and lifestyle partnerships to offer Dubai visitors an enhanced experience Emirates, has expanded its travel and lifestyle partnerships to continue offering exclusive benefits and greater convenience for its customers. The latest initiatives with global leading ride-sharing app, Uber and local premium retail developer, Emaar Malls, showcases the airline’s commitment to delivering a seamless and memorable customer journey.

Emirates’ partnership with Uber offers visitors coming from Australia, South Africa, Egypt, France and Saudi Arabia special airport transfer fares upon arrival in Dubai. Passengers who book their travel on Emirates’ Economy Flex Plus or Economy Flex fares can avail the special Uber promotion code on bookings made from 26th September until 10th December 2018.*

Cisco starts deploying intelligent, converged network for Expo 2020 Cisco announced that it is collaborating with Smartworld, a Cisco partner in the UAE, to design and implement a smart network infrastructure for the first world Expo to be held in the Middle East, Africa and South Asia (MEASA) region. Open from 20 October 2020 to 10 April 2021, Expo 2020 is expected to welcome 25 million visits, with 70 per cent to come from outside the UAE. Cisco is working with Smartworld to deploy parts of Expo’s digital IP network infrastructure, including Cisco® intent-based networking solutions. As a Cisco Premier

Partner, Smart Technology Services DWC LLC., (Smartworld) has skilled resources and expertise to build an intelligent and secure network for Expo 2020.

These solutions will support the digital experience offered at Expo 2020, helping visitors, participants and businesses connect from anywhere on the 4.38sqkm site, on any device – securely, reliably and seamlessly.

The network is also designed to support over 100,000 IoT devices during Expo.

In April this year, Expo 2020 Dubai announced Cisco as Digital Network Partner.

RAKEZ surprises clients with a new service centre in Abu Dhabi Ras Al Khaimah Economic Zone (RAKEZ) continues to level up its client support with the opening of its Service Centre – Abu Dhabi on the 3rd Floor of Abu Dhabi Mall’s West Tower. From visa, licensing, and leasing services to an array of support services, the new one-stop shop provides RAKEZ clients a quick and easy service delivery.

“At RAKEZ, our customers’ journey is always at the top of our priorities. So we ensure to invest extensive efforts into enhancing our services as well as our accessibility to our clients,”said Ramy Jallad, RAKEZ Group CEO.“With the launching of RAKEZ Service Centre – Abu Dhabi, our clients in the capital do not need to travel up north just to submit applications and request for support. They now have everything within their reach.”

“This is actually the third one-stop shop we launched this year with the first two in Ras Al Khaimah, and I believe that these client-

centric amenities go to show that we walk the talk,”Mr Jallad added.

Just recently, the economic zone has also improved its digital presence through the launching of RAKEZ Portal 360, an online platform that provides its clients with 24/7 access to its wide range of services.

OCTOBER 2018 7

Tadweer hosts workshop to improve OSH performance in Waste Management sector In a bid to ensure continued improvement in occupational safety and health (OSH) performance across the waste management sector, Abu Dhabi Waste Management Center (Tadweer) hosted a workshop at its headquarters in Abu Dhabi to enable companies operating in the field across the emirate to share industry best practices.

Held in collaboration with Abu Dhabi Occupational Safety and Health Center (OSHAD), the session drew the participation of representatives from 115 waste management entities nominated by Tadweer since December 2017 in line with its role as the Waste Sector Regulatory Authority (SRA) for the Occupational Health and Safety Management System in the emirate of Abu Dhabi.

The workshop comprised a presentation outlining the process of managing waste sector entities from the approval stage to performance monitoring and improvement. The center’s HSE team also briefed participating companies on their role in creating an

optimal work environment in the waste management sector in Abu Dhabi and explained the requirements specific to high-risk, medium-risk and low-risk entities.

Addressing the participants, Dr Salem Al Kaabi, Acting General Manager of Tadweer, said: “To promote a safe and healthy work environment in the waste management sector, it is imperative for top management of all entities to foster a sound OSH culture within their organizations. This, in turn, will improve the overall OSH indicators across the sector in Abu Dhabi.”

He added: “Tadweer has implemented an effective system to ensure the occupational health and safety of its employees and enhance service delivery. Today’s workshop enables us to share our technical know-how to help companies in the waste management sector boost their OSH profile, and we plan to organize similar events on a quarterly basis.”

How integrity sustains the business panorama in the Gulf region As part of a collaboration project with Siemens to raise awareness and encourage the adoption of integrity practices in businesses across the Gulf Region, the Pearl Initiative, the leading independent organisation that encourages Gulf businesses to adopt higher standards of corporate governance, organised a roundtable with SABIC and PepsiCo to discuss the value of implementing integrity practices towards contributing to more sustainable organisations.

Carla Koffel Titled“Business Integrity Principles: Driving Implementation for Sustainability”, the roundtable took place at the capital of the Kingdom of Saudi Arabia, Riyadh, and was composed of experts from SABIC, represented

by Waleed M Alghosoon Senior Manager,

8 OCTOBER 2018

international Trade Legal Affairs, and PepsiCo, represented by Yousef Walker, Director of Legal, PepsiCo GCC & Levant Foods; and was led by Carla Koffel, the Executive Director at the Pearl Initiative.

Opening the roundtable, Carla Koffel explained to attendees and participants on Pearl Initiative’s objectives and plans towards promoting positive corporate governance practices through integrity, highlighting current challenges faced by organisations in the Gulf Region, as well as the benefits of addressing these challenges. Koffel also presented key facts and remarks around the Pearl Initiative’s upcoming activities as well as recent findings throughout its integrity programme.

In addition to hosting events on this subject matter, the Pearl Initiative has developed the Gulf Integrity Indicator as a tool to measure integrity practices with an organisation and has also issued a series of reports as practical guides in Arabic and English on how to implement effective business integrity policies and initiatives.

During Carla’s opening remarks at the roundtable in Riyadh, KSA

flydubai Cargo to offer animal transportation

Etihad Airways Engineering hosts Indian Ambassador Etihad Airways Engineering, the largest commercial aircraft maintenance, repair and overhaul (MRO) services provider in the Middle East, welcomed His Excellency Navdeep Suri, Ambassador of India to the UAE and Rajamurugan, Counsellor, Embassy of India in the UAE, to its Abu Dhabi base.

The Ambassador was received by Abdul Khaliq Saeed, Chief Executive Officer and senior executives from Etihad Airways Engineering and given a presentation showcasing the capabilities and achievements

of the organisation. The group enjoyed an extensive tour of Etihad Airways Engineering’s state-of-the-art facility which is located adjacent to Abu Dhabi International Airport.

The tour encompassed aircraft hangars at the facility which cover approximately 42,000 sq m, including 10,000 sq m of aircraft painting facilities and a custom-designed hangar that can accommodate up to three Airbus A380 aircraft simultaneously. The company has successfully completed maintenance projects for leading airlines around the world.

Lockheed Martin Appoints Joseph Rank to Lead Saudi Operations Lockheed Martin announced Brigadier General (Retired) Joseph (Joe) Rank as the Chief Executive for Lockheed Martin Saudi Arabia. Rank will lead the company’s growing business in the Kingdom with responsibilities for building and cultivating key partner relationships and supporting the Kingdom’s strategic business pursuits. Rank takes over the position from Alan Chinoda who will be returning to Lockheed Martin based in the United States.

“I am confident that under Joe’s leadership we will drive this strategic relationship to greater heights in the Kingdom,

supporting Vision 2030, while strengthening regional and global security,”said Richard H. (Rick) Edwards, executive vice president of Lockheed Martin International.“Joe brings a wealth of regional knowledge and experience to his new role as our chief executive in Riyadh. He will be an invaluable resource to our local operations as we continue to build new partnerships and grow our footprint in the Kingdom.”

Rank recently concluded 31 years of service in the U.S. Army, most recently in the Office of the Secretary of Defense where he served as the acting deputy assistant secretary of defense for

Middle East Policy. He has served almost a decade in the region to include positions as senior defense attaché in the United Arab Emirates (2015-2017), Jordan (20112014), Lebanon (2010-2011) and Yemen (2004-2006).

He speaks Arabic and has a Master of Arts in Islamic Studies from the University of Virginia.

flydubai Cargo has announced today that it will begin to offer live animal transportation across its network. The announcement follows flydubai Cargo’s successful transportation of two Saluki Dogs and seven Falcons for a recent competition held in Bishkek, Kyrgyzstan.

The project was undertaken in association with the Department of Culture and TourismAbu Dhabi to support the UAE’s participation at the event.

The project highlights flydubai Cargo’s capabilities to transport live animals and offers additional features for customers such as door to door, or airport to airport transportation and the option to book return flights for pets and other live animals. Live animal transportation services can also be used for agricultural and zoological purposes.

All transportation will follow the IATA Live Animals Regulations to ensure that all animals are transported safely and humanely. flydubai has a dedicated facility for live animals and offers specialised animal care during transits in Dubai.

Services include full physical check-ups, feeding, walking and administering medicine. Pet cleaning is also available upon request. flydubai Cargo has built a network that, due to interline agreements with other airlines and its partnership with Emirates SkyCargo, offers its services to more than 300 destinations globally, allowing the transportation of a variety of goods from Dubai across Africa, CIS, Central Asia, Europe, the GCC, the Middle East, Russia, and the USA. flydubai Cargo continues to innovate and last-year it became the first airline to complete a proof of concept using blockchain technology in the airfreight industry. In addition, the airline only uses electronic Air Waybills (e-AWB).

OCTOBER 2018 9

Dubai non-oil foreign trade rises to AED 645bn in H1, 2018 Dubai’s non-oil foreign trade recorded AED 645 billion in the first half of 2018; an in-crease of AED 5 billion from 2017 figures.

Dubai’s re-exports registered a AED 24 billion increase and grew 14 per cent to AED 203 billion, which reflects the robust and healthy position Dubai leads as a distinctive regional and international re-export hub, while imports touched AED 377 billion and exports to-talled AED 65 billion.

The emirate’s free zones foreign trade scored an increase of 20 per cent, AED 43 billion in the first half of 2018 to AED 257 billion. Re-export activity through free zones touched AED 112 billion; with a 31% increase from the same period in 2017, while exports through free zones made a 23% increase to AED 8 billion, and imports through free zones made AED 136 billion; an increase of 12% compared to the same period last year. Direct trade stood at AED 383 billion and customs warehouse trade weighed in at AED 6 billion. His Highness Sheikh Hamdan Bin Mohammad Bin Rashid Al Maktoum, Crown Prince of Du-bai and Chairman of the Dubai Executive Council praised the growth and said:“Dubai’s competitiveness plays a key role in attracting investments from around the world, which seek to take advantage of Dubai’s position as a regional and international trading hub.”

HH said that trade is one of the key sectors that drives Dubai’s growth as a major global trading hub, which is supported by the emirate’s long heritage of being a

Energy-efficient central cooling plant begins operations at Dubai South’s VIP Terminal in Aviation District The first central cooling plant serving the VIP Terminal, has officially begun its operations to provide the cooling needs of the VIP Terminal located in the city’s Aviation District, following the inauguration ceremony led by Tahnoon Saif, CEO of Aviation District and Ismail Al Marzooqi, CEO of South Energy.

The plant’s opening also witnessed the presence of senior executives from Johnson Controls, Claude Allain, VP & General Manager Middle East and Africa and Dr. Marcus Schumacher, VP & General Manager Gulf Countries.

The plant provides highly efficient air-cooled variable speed drive York chillers which meet Dubai South’s goals of tapping advanced energy-efficient cooling solutions that optimizes its energy footprint.

10 OCTOBER 2018

Ismail Al Marzooqi, CEO, South Energy, said:“South Energy’s vision is set to continuously expand its capability to provide advanced sustainable energy-efficient cooling solutions for the rapidly expanding Dubai South project.”

Tahnoon Saif, CEO, Aviation District, noted:“VIP Terminal is primed to meet the needs of global business travelers and is strategically positioned to become the world’s most frequented aviation hub designed with the most advanced technology solutions to provide the ultimate comfort and experience to our prestigious customers.”

Claude Allain, VP & General Manager Middle East and Africa, Johnson Controls, added:“South Energy and Aviation District are long standing partners whose visions are set to new technology benchmarks, which inspires us even more to serve such forward-looking clients, always wanting to be at the forefront of what is technically possible.”

gateway for global trade. “The current growth of Dubai’s non-oil foreign trade is an indication that we are on the right path of revenue diversification,”Shaikh Hamdan said.

“Dubai’s external trade growth reflects global economic trends, especially in the areas of communication and information technology. This is driven by the Ahmed Al-Faifi national economy’s focus on innovation and creativity, and our leadership in adopting artificial intelligence technol-ogies in various sectors. “There is no doubt that Expo 2020 will showcase our unique economic experience and will highlight our ability to establish global leadership across various development sectors.

Such events help towards a better connected world,”he added.

Dr Meshan Al Otaibi Sultan Ahmad Bin Sulayem, DP World Group chairman and CEO and chairman of the Ports, Customs and Free Zone Corporation, credited the performance of the foreign trade sector to Dubai’s advanced infrastructure and policies. He pointed out that Dubai Customs was the first to introduce many advanced systems and programmes in support of Dubai’s prep-arations to host Dubai Expo 2020.

Dubai’s airborne trade accounted for AED 302 billion while seaborne trade recorded AED237 billion. Trade conducted through land transportation weighed in at AED 106 bil-lion.

China maintained its position as Dubai’s biggest trading partner in the first half of 2018 with AED 69 billion worth of trade. This reflects the strong ties between China and the UAE which witnessed remarkable development underlined by the Chinese President’s re-cent state visit to the UAE. India came second with AED 56 billion, followed by the USA in the third place with AED 39 billion.

Saudi Arabia remains the largest Arab trade partner to the UAE and comes as its fourth largest global trade partner with AED 29 billion.

Gold topped the list of high-value commodities in Dubai’s foreign trade in the first half of 2018 with AED 76 billion worth of trade. Next on the list was phones with AED 75 billion worth of trade, followed by jewellery (AED 51 billion), diamonds (AED 47 billion), and cars with AED 33 billion.

Falcon Eye Drones record 10,000 flights in the Middle East Falcon Eye, Dubai based drone-powered solutions company, is celebrating 10,000 flights across the Middle East and Africa based projects. Company reveals its ambitious plans to double its operations in the next few years with the market promise of reaching the value of $1.5bn by 2022 only in the GCC according to the latest report. After covering the area of nearly 34,000 kilometers since company’s operational inception in 2014, Falcon Eye Drones are convinced that organizations that will adopt drone applications within their operations will play a central role in the development of the regional drone industry.

“Drones are becoming an instrumental technology for many industries such as

Infor delivers Coleman AI Digital Assistant Infor, a leading provider of industry-specific cloud applications, recently announced the general availability (GA) of its Infor Coleman Digital Assistant, which is designed to help maximize human work potential by enabling natural language extensibility and accessibility of Infor CloudSuite. From a user perspective, the Infor Coleman Digital Assistant can help make work more enjoyable and productive.

At its annual Inforum customer conference, the company also introduced its Infor Coleman AI Platform for embedded machine learning models, which it expects to deliver in the Spring of 2019.

Infor Coleman AI Digital Assistant The Infor Coleman Digital Assistant is the first in a series of new products rolled out under the Coleman AI umbrella and provides a conversational interface to the Infor OS platform, the underlying foundation of Infor CloudSuite. It offers custom skill building, a

oil & gas, utilities, telecom, construction, transportation, city infrastructure developments, agriculture, archeology, safety & security as well as photography & videography. Drone technology is quickly growing beyond its original military applications and is making a very big impact on the commercial sector”, says Rabih Bou Rashid, Managing Director of Falcon Eye Drones.

Rabih added:“In order to harvest the full potential smart city developments represent, it is important for all the industries that make an impact on this transformation, to become more cost-effective, agile and disruptive. Civil drones will help this region to excel by introducing drone applications to collect valuable data,

make measured decisions, capitalize on data automation and imaging capabilities.”

The proliferation of drone technologies in the region is also dependent on the various legislations and regulations that support them. Airspace regulators are conscious of the growth of drone technology and are looking for a balance between public safety and economic efficiency. The progress of drone legislation and regulation in the region is underway. The drone traffic control center will soon serve as a centralized authority to manage drone traffic and ensure regulations are followed. Following dynamic drone market expansion insurance companies will be able to soon unlock new market potential.

voice user experience (UX) and navigation, and natural language processing (NLP) extensibility.

As a digital assistant, Coleman uses a conversational UX and natural language processing – with deep domain and industry knowledge – to chat, hear, talk, and in the future, it is expected to analyze images to help people work more efficiently. The Infor Coleman Digital Assistant can help maximize human work potential by: Advising. It can provide intelligent insights designed to help users make decisions.

Augmenting. It can serve as a partner to help amplify one’s work and provide key information at critical decision points.

Automating. It can complete low-value, repetitive tasks to enable users to focus on more valuable work.

Conversing. It can offer a better user experience with more efficient interactions.

The Infor Coleman Digital Assistant also is expected to be integrated with Amazon Alexa for Business – which provides tools to manage Alexa devices, enroll users, and configure skills with added security across those

devices – by the end of 2018. The platform is specifically designed for non-technical, business users and is built upon a foundation of industry-specific data. The Infor Coleman AI modeling environment is“digestible,”in that it doesn’t require as complex of a skillset as other AI tooling, nor is it designed to require an exhaustive service engagement. Customers can better understand, relate, and trust the output, given the focus on user-experience and embedded connectivity to the entire applicable enterprise suite.

“The Infor Coleman AI Platform can help customers better analyze their data and give them the ability to start asking questions they didn’t even know they should be asking,”Rider said.“It can automate tasks that were errorprone, which can help organizations save money by avoiding certain issues or taking advantage of specific opportunities more quickly.”

Organizations can work to gain a competitive advantage by creating models from their proprietary data and experiences, and the Coleman platform enables them to pass along advantages, up and down stream, using their AI insights.

OCTOBER JUNE 2018 11

Etihad Cargo introduces new freighter network Etihad Cargo, the cargo and logistics arm of Etihad Airways, today announced a much-anticipated refresh of its global freighter network that will be implemented commencing 1 October, 2018, marking a key milestone in its strategy to simplify its route network and maximise freighterto-bellyhold flows.

This means redeploying freighter capacity on core trade lanes that connect its hub in Abu Dhabi, the capital of the United Arab Emirates, and select global markets in Asia, Europe and the United States to meet growing customer demand.

The new freighter network will see the airline increase existing Boeing 777 freighter frequencies into key markets in China and India, adding

12 OCTOBER 2018

one weekly rotation each into Shanghai (x5) and Chennai (x3). The carrier also reinforced its commitment to customers in its core markets as it continues to service Amsterdam (x3), Frankfurt (x3), Columbus Ohio (x3), Hong Kong (x2), Hanoi (x2), Mumbai (x2), Dhaka (x2), East Midlands (x2), Dammam (x2), Delhi (x1), Bangalore (x1) and Chittagong (x1) on a weekly basis.

Abdulla Mohamed Shadid, Etihad Airways Managing Director Cargo and Logistics, said: “Etihad Cargo continues to cement its position as a major player in the international air cargo market, leveraging Abu Dhabi’s strategic positioning at the centre of the world’s busiest trade lanes to serve these key markets. Our freighters are central to this strategy, and the new

network will ensure we maximise the cargo flows between main deck cargo and belly-hold capacity on our strong fleet of passenger jets that service our global network.”

“This network strategy is yet another step in the continuous evolution of Etihad Cargo’s service offering to strengthen our customer value proposition while delivering value to the Etihad Aviation Group,” added Shadid.“It further compliments our ongoing efforts to maximise premium product verticals such as our SkyStables (equine), FlyCulture (arts and music) and FastTrack (mail and courier) products, while prioritising investments in digital and physical infrastructure to reaffirm our place as a true air cargo partner of choice”.

Schneider Electric strengthens partnerships with suppliers Schneider Electric has shared its vision of creating the most flexible and competitive supply base in the industry, wherein strategic partnerships, quality, co-innovation, growth and sustainability continue as key company priorities for customer satisfaction in the Digital Economy. At the same time, the company celebrated the contributions and achievements of key partners and suppliers over the last two years.

Sharing bold ideas to enhance customer satisfaction Held at the Singapore’s Marina Bay Sands Hotel and Convention Centre, Schneider Electric’s Global Supplier Day 2018 - its fifth in the past 10 years - saw the company hosting over 120 suppliers.

Schneider and top supplier partners participated in panel and workshop discussions to share best practices and ideas to enhance customer satisfaction and deliver quality solutions together with the company’s Global Supply Chain leaders.

The day’s program also focused on kickstarting innovative and breakthrough thinking to inspire more collaborative concepts and brainstorming with partners for quick adoption and execution in the Digital Economy.

Schneider’s Chief Supply Chain Officer Annette Clayton, who is also the President & CEO of its North American operations, opened the Supplier Day program, focusing on partnership and collaboration as the key foundation to driving innovation and creating business growth and win-win outcomes for Schneider, its customers and its supplier ecosystem.

“The transformation of our supply chain would not be possible without a supplier ecosystem which rises to meet the quality, innovation, and sustainability standards that we have in place to

UAE runs first intermodal transport under TIR The United Arab Emirates is an important trade hub with a robust economy. TIR (www.atcuae.ae/ tir-system/) offers huge potential for improving transit connectivity between ports and borders with free zones and integrating them into the global logistics chain.

The UAE’s strongest trading partners are India and China – both part of the TIR network – reinforcing the potential for the transit tool to transform trade along these corridors.

Today’s intermodal TIR transport leaves the SAIF Zone in Sharjah, bound for Olomouc in the Czech Republic via Jebel Ali

Port in the UAE and the port of Hamburg, Germany. The goods are travelling by land and sea using TIR, the global customs transit and guarantee system.

IRU (www.IRU.org) Secretary General, Umberto de Pretto, comments“TIR’s potential for improving transit connectivity in the UAE is in the spotlight today with this first intermodal TIR transport. Once traders see the time and cost savings, TIR will become the go-to solution in the UAE and the region.”

Mohammed Jumaa Busaiba, Director General of the Federal Customs Authority in Dubai adds,“Using TIR in our intermodal transport increases

benefit our customers,” said Annette Clayton, CEO & President, North America Operations, and Chief Supply Chain Officer.“Global Supplier Day 2018 recognizes the strong supplier contribution towards our supply chain excellence and what we can do together to deliver even more value to customers.”

In 2017, its Global Supply Chain Operations - comprising 207 manufacturing plants in 44 countries and 98 distribution centers - saw its 86,000-strong workforce manage over 260,000 product references and process over 150,000 order lines daily.

substantially the UAE’s global competitiveness.”

The first TIR intermodal transport operation is the result of cooperation across the public and private sectors, with work from IRU together with UAE member ATCUAE, Federal Customs Authority (FCA), German member BGL, Czech member CESMAD Bohemia and the Czech customs administration. It involved the opening of a new customs office for TIR at Sharjah – the SAIF Zone.

Preparations for roll-out across all seven Emirates are proceeding, with plans for further TIR intermodal transport operations in the pipeline. This latest development for improved

logistics in the region, marked at ceremonies at Sharjah SAIF Zone and then Jebel Ali port, highlights the dynamic road transport landscape across the GCC states – which will take centre stage at the IRU World Congress, to be held in Muscat, Oman from 6-8 November.

The transport operator behind the intermodal transport of Miele goods is Kuehne + Nagel, UAE, one of the world’s leading logistics companies. Metrans, Germany will take over on the leg from Germany to the Czech Republic. Kuehne + Nagel is also participating in the World Congress, sharing insight into innovation and disruption in the logistics sector.

OCTOBER 2018 13

Dematic launches Auto Bagging Solution for faster ecommerce Dematic has launched a turnkey, automated packing and labelling solution for consolidating and bagging ecommerce orders for dispatch. Working with packaging machine specialist, Adpak, and labelling solutions provider, Logopak, Dematic has developed the intelligent software needed to manage and consolidate orders, print labels and seamlessly integrate the solution with client warehouse management systems (WMS).

Suitable for end-of-line applications for automated goods-to-person picking processes or as a standalone system for more manual warehouse operations, the Dematic Auto Bagging Solution will enable omni-channel businesses to reduce operating costs, upgrade customer services through later cut-offs for next-day delivery, and reduce shipping costs by optimally tailoring pack sizes.

The Dematic Auto Bagging Solution subsystem operates through a single interface to the client’s WMS, providing a solution to automatically: load goods, scan delivery notes, measure goods, envelope-trim and seal goods, and label packages. Picked items are either manually placed on the feed belt – or in the case of an end-of-line process, automatically channeled in sequence – consolidated as per order, measured for optimal pack size and then bagged using bespoke packaging material that is cut and sealed, all in one automated process.

Order accuracy and customer satisfaction are assured with Dematic iQ software. Every

14 OCTOBER 2018

delivery note is scanned and verified against the dispatch label, ensuring the right order is delivered to the right customer.

Working at a rate of up to 1,320 packages per hour, the Dematic Auto Bagging Solution has the potential to reduce the requirement for manual packing resources by up to 90%. In addition, the compact footprint (35 – 50 sq m) needed for the machine frees up warehouse space for other value-adding processes.

Simon Houghton, Sales Manager, Product Solutions, Dematic Northern Europe, explains how the subsystem brings greater consistency, productivity gains and cost savings to e-fulfilment operations.“The typical rate at which a manual packer can select the right size bag, place the goods in the bag, make sure the dispatch note is included and then print the label and apply it, is around 120 packs per hour – whereas, the Dematic Auto

Bagging Solution offers up to 1,320 packages every hour. With this level of productivity the labour force can be redeployed to focus on service enhancing activities, such as picking goods much later in the day and so pushing back order cut-off times for next-day deliveries. In ecommerce, later cut-offs can offer a powerful competitive edge.”

Dematic has already integrated the solution for a leading UK department store, helping the business to achieve significant productivity gains for its ecommerce operations.

Simon Houghton says,“The Dematic Auto Bagging Solution offers an exciting new opportunity for Dematic, especially where existing ecommerce customers could benefit from its liberating technology – freeing up space, resources and cash.”Adding: “The subsystem also has great potential as a standalone solution for heavily manual warehouses, where automating the packing operation has big benefits in terms of removing packing desks and enabling the redeployment of staff.”

Over 50 technical experts from some of the UK’s leading retailers, 3PLs and automation consultancies attended a series of special customer days on the Dematic Auto Bagging Solution, held on two days, last month, at Dematic’s state-of-the-art offices in Adderbury, Oxfordshire. Attendees were treated to seminar sessions on the new technology and a live demonstration of the Dematic Auto Bagging Solution.

Gulftainer Signs 50-year, $600 million concession to Operate and Expand Port of Wilmington in Delaware, USA Gulftainer finalised a 50-year concession with the State of Delaware in the USA to operate and develop the Port of Wilmington, significantly expanding the company’s global footprint and reach. The agreement, signed by Gulftainer’s subsidiary GT USA, will see an expected investment of up to $600 million in the port to upgrade and expand the terminal and to turn it into one of the largest facilities of its kind on the Eastern Seaboard.

The port deal represents the largest operation ever run by a UAE company in the United States, as well as the largest investment ever by a private UAE company in the country.

The 50-year concession follows a year of

negotiations and a thorough evaluation of Gulftainer’s capabilities globally, including in the USA, where it currently operates the Canaveral Cargo Terminal in Port Canaveral, Florida and provides services to the U.S. Armed Forces as well as the US Space Industry. The Delaware concession agreement completes a preliminary agreement between Gulftainer and the State of Delaware, as well as the completion of a formal review by the Committee on Foreign Investment in the United States (CFIUS), granting Gulftainer exclusive rights to manage the Port.

Gulftainer plans to invest up to US$600 million in the port, including $400 million on

a new 1.2 million TEU (twenty-foot equivalent units) container facility at DuPont’s former Edgemoor site, which was acquired by the Diamond State Port Corporation in 2016.

Badr Jafar, Chairman of Gulftainer’s Executive Board, said:“We are proud to be making this long-term commitment to the State of Delaware, its community and its economy. This landmark agreement builds on Gulftainer’s 43-year track record of delivering excellence and dependability in ports and logistics operations around the world, and we are confident that this public-private partnership will propel the Port of Wilmington towards becoming the principal gateway of the Eastern Seaboard.”

ADVANCED WAREHOUSE AUTOMATION SOLUTIONS At Swisslog, our scalable future-ready automation systems and SynQ warehouse management software are designed to give you the insight and flexibility you need to meet your company’s changing demands. So they’ll make as much sense tomorrow as they do today.

OCTOBER 2018 15

COUNTRY REPORT - CHINA

China solid inside and out

China’s current account has recorded a surplus in every year since 1994.

The capital account followed suit and only recorded two deficits in the last 20 years.

Focus Economics’ economists report on China’s position on the global scale

Outlook The Chinese economy is holding up well despite escalating trade tensions with the United States and a cooling domestic economy. Both retail sales and industrial production figures improved in August, while property sector activities - although cooling slightly - remained strong. On the flip side, infrastructure investment continued to drag on overall fixedasset investment, suggesting that recent policy easing and increased infrastructure funding will take some time before they start to kick in.

Meanwhile, ongoing trade disputes with the United States worsened following U.S. President Donald Trump’s decision to impose a 10 per cent tariff on USD 200 billion of Chinese imports, effective 24

16 OCTOBER 2018

COUNTRY REPORT - CHINA

The Great Wall of China

OCTOBER 2018 17

COUNTRY REPORT - CHINA

Chinatown outdoor market, China

September, which will be increased to 25 per cent on 1 January 2019. Moreover, Trump warned that his administration will impose tariffs on USD 267 billion of additional imports if China takes retaliatory action.

Economic growth Despite mounting economic headwinds, the Chinese economy is expected to comfortably meet this year’s growth target of 6.5 per cent. A full-blown trade war with the United States, a sudden slowdown in the property market and potential corporate defaults are the main downside risks to China’s economic outlook. Stronger-than-expected policy support, however, could push GDP higher in the coming quarters. FocusEconomics panelists see the economy growing 6.6 per cent in 2018. In 2019, the economy is seen expanding 6.3 per cent, which is unchanged from last month’s forecast.

Overview The Chinese economy experienced astonishing growth in the last few decades that catapulted the country to become the world’s second largest economy. In 1978

18 OCTOBER 2018

most other countries. In November 2008, - when China started the programme of the State Council unveiled a CNY 4.0 economic reforms - the country ranked ninth trillion (USD 585 billion) stimulus package in nominal gross domestic product (GDP) with USD 214 billion; 35 years later it jumped in an attempt to shield the country from the worst effects of the financial crisis. The up to second place with a nominal GDP of massive stimulus program fueled economic USD 9.2 trillion. growth mostly through massive investment Since the introduction of the economic projects, which triggered concerns that the reforms in 1978, China has become the country could have been building up asset world’s manufacturing hub, where the bubbles, overinvestment secondary sector (comprising and excess capacity in industry and construction) Despite some industries. Given the represented the largest share solid fiscal position of the of GDP. However, in recent mounting government, the stimulus years, China’s modernisation economic measures did not derail propelled the tertiary sector China’s public finances. and, in 2013, it became the headwinds, The global downturn and largest category of GDP with the Chinese the subsequent slowdown a share of 46.1 per cent, while in demand did, however, the secondary sector still economy is severely affect the external accounted for a sizeable 45.0 expected to sector and the current per cent of the country’s total account surplus has output. Meanwhile, the primary comfortably continuously diminished sector’s weight in GDP has meet this year’s since the financial crisis. shrunk dramatically since the China exited the financial country opened to the world. growth target of crisis in good shape, with China weathered the global 6.5 per cent GDP growing above nine economic crisis better than

COUNTRY REPORT - RUSSIA AND CIS

Benxi, Liaoning, China

per cent, low inflation and a sound fiscal position. However, the policies implemented during the crisis to foster economic growth exacerbated the country’s macroeconomic imbalances. Particularly, the stimulus program bolstered investment, while households’ consumption remained relatively low. In order to tackle these imbalances, the new administration of President Xi Jinping and Premier Li Keqiang, beginning in 2012, have unveiled economic measures aimed at promoting a more balanced economic model at the expense of the once-sacred rapid economic growth.

Balance of payments China’s external position is extremely solid.

The current account has recorded a surplus in every year since 1994. The capital account followed suit and only recorded two deficits in the last 20 years. This situation of surpluses in the both the current and the capital

20 OCTOBER 2018

put pressure on the national currency and prompted the Central Bank to sterilize most of the foreign currency that entered the country. As a result, China’s foreign exchange reserves skyrocketed to almost USD 4.0 trillion in 2014. The current account surplus reached its peak in 2007, when it represented 10.1 per cent of GDP. Since then, however, the surplus has since narrowed as the currency strengthened and domestic demand increased.

China’s capital account has bold controls, which implies that the country lacks the freedom to convert local financial assets into foreign financial assets at a marketdetermined exchange rate and vice versa.

The new Xi-Li administration and the People’s Bank of China vowed to accelerate interest rate liberalization and capital account convertibility. In this regard, Chinese authorities have started to implement some measures, such as removing a cap on foreign-

currency deposit rates in Shanghai and releasing some controls on the currency.

The capital account benefited from strong inflows of Foreign Direct Investment (FDI).

FDI has performed strongly in the last decade, with record inflows of USD 118 billion in 2013, thereby becoming the second largest recipient of foreign investment. Among the countries that invest more in China are Hong Kong, Singapore, Japan, Taiwan, and the United States. In addition, China’s outward investment soared in recent years and, according to some analysts, the country could become a net exporter of capital in the coming years.

Trade structure China has experienced uninterrupted trade surpluses since 1993. Total trade multiplied by nearly 100 to USD 4.2 trillion in only three decades and, in 2013, China surpassed the United States as the world’s biggest trading nation.

COUNTRY REPORT - CHINA

The opening of the country and the government’s massive investment programs have prompted the country to become a major manufacturing hub.

This situation fostered trade growth, particularly after China joined the World Trade Organization in 2001. As an economy highly integrated into the global trade system, the country benefited from a steady improvement in its terms of trade since 2000. However, the global economic downturn in 2008-2009 led the country to reduce manufacturing output, thus dragging on China’s trading sector.

Moreover, the country has engaged in several bilateral and multilateral trade agreements that have opened new markets for its products. In 2003, China signed the Closer Economic Partnership Arrangement with Hong Kong and Macau. A Free Trade Agreement (FTA) between China and the ASEAN nations came into effect on January

2010, which created the world’s third largest free trade area in terms of nominal GDP. China also established, among others, FTA with countries such as, Australia, Chile, Costa Rica, Korea, Pakistan, Peru, New Zealand, and Singapore. Moreover, there are other FTAs under negotiation with the Gulf Cooperation Council, Japan, Norway and Sri Lanka.

Exports Electronics and machinery make up around 55 per cent of total exports, garments account for 13 per cent and construction material and equipment represent seven per cent. Sales to Asia represent over 40 per cent of total shipments, while North America and Europe have an export share of 24 per cent and 23 per cent, respectively. Although exports to Africa and South America expanded rapidly, they only account for eight per cent of total shipments.

The global downturn and the subsequent slowdown in demand did, however, severely affect the external sector and the current account surplus has continuously diminished since the financial crisis OCTOBER 2018 21

COUNTRY REPORT - CHINA

22 OCTOBER 2018

Due to favorable global trade conditions and China’s accession to the World Trade Organization in December 2001, the country has experienced an astonishing growth of 26.9 per cent annually in real goods and services exports during the 2002-2008 period. Imports to China In order to supply factories and support China’s rapid development, the country’s imports are mostly dominated by intermediate goods and a wide range of commodities, including oil, iron ore, copper and cereals.

China’s soaring demand for raw materials pushed global commodity prices up leading up to 2015, thereby boosting the coffers of many developing nations and commodityexporting economies. However, since the end of the commodities super cycle at the end of 2014, global commodities prices have fallen partially due to a decrease in demand from China. The acceleration that many of those same developing and commodity-exporting economies experienced has dramatically decreased since the end of 2015.

Supply of imports into China is mostly dominated by Asian countries, with a combined share of around 30 per cent of total imports.

Purchases from Europe and the U.S. account for 12 per cent and 8 per cent, respectively. As a major global buyer of commodities, imports from Africa, Australia, the Middle East and South America have increased strongly in the last decade to represent a combined share of around 50 per cent.

In parallel with skyrocketing exports, growth in imports of real goods and services soared in the 2002-2008 period, recording an annual average expansion of 24.4 per cent. Imports experienced a contraction in 2009 due to the global crisis, but recovered quickly in 2010 and 2011. In the 2012-2013 period, imports recorded a modest increase of 7.2 per cent.

As the construction boom fades in China, fewer natural resources are demanded. This has pulled down global prices for base metals, energy products, as well as other resources.

Imports contracted a sharp 14.3 per cent in 2015 as the Chinese economy adjusted to its new growth dynamics.

Economic policy Economic growth soared in the last few decades mainly due to the country’s increasing

Dawn scene of Shanghai

OCTOBER 2018 23

COUNTRY REPORT - CHINA

integration into the global economy and the government’s bold support for economic activity. However, the successful economic model that lifted hundreds of millions out of poverty and fueled the country’s astonishing economic and social development has also brought many challenges. Severe economic imbalances, mounting environmental issues, rising economic inequality and an aging population are the key questions that the new administration lead by President Xi Jinping will have to tackle in the near future in order to ensure the China also country’s sustainability.

Fiscal policy

established, among others, FTA with countries such as, Australia, Chile, Costa Rica, Korea, Pakistan, Peru, New Zealand, and Singapore

Before 1978, China had a highly centralized fiscal system, which mainly reflected the country’s planned economic system. The central government collected all revenues and allocated all the spending of the administration and public institutions. In parallel with the reforms implemented in the country for Deng Xiaoping, the government started to decentralize the fiscal system.

In 1994, the government launched a bold fiscal reform in order to struggle against a rapid decline in the tax/GDP ratio, which dampened the government’s ability to conduct macroeconomic and redistribution policies. The flagship of the reform was a new taxation system and the adoption of a tax-sharing scheme, where the most lucrative sources of tax revenues, such as the Value-Added Tax and the Enterprise Income Tax, were administered by the central government.

The result of this reform was a steady increase in revenues, which jumped from 10.8 per cent of GDP in 1994 to 22.7 per cent of GDP in 2013. While expenditures followed suit and increased at a doubledigit rate in the same period, the fiscal deficit was kept in check. In the 1994-2013 period, the government’s fiscal deficit averaged 1.4 per cent of GDP. The new system, however, left local governments with fewer sources of revenue.

24 OCTOBER 2018

Car Assembly Plant in Chengdu, China

As a result they had to rely on land sales and indirect borrowing (mostly so-called “shadow banking”) to finance their activity. In addition, local governments put in place off-budget local government financing vehicles to raise funds and finance investment projects.

Although debt is still at manageable levels, an increase in the reliance on shadow banking and the rapid pace of debt accumulation is worrisome. In an effort to increase revenue sources for local governments, in August 2014, the National People’s Congress passed amendments

COUNTRY REPORT - RUSSIA AND CIS

to the budget law, allowing provincial government to issue bonds directly and increase transparency. This move paves the way for local governments to raise debt in the bond market.

China’s government debt is almost entirely denominated in local currency

rovider of leading p a is s ic nom sis on the FocusEco and analy ts s a c re icators fo nomic ind economic macroeco t n East, a rt le o d p the Mid most im untries in o d the c n y a e a k ic 7 for 12 haran Afr a -S b u s S , pe companie Asia, Euro -thinking rd a ation to rw rm o fo F . timely in d Americas n a le b ions. a ch reli ess decis require su ght busin ri e rk th o e k tw ma bal ne help them tensive glo x e s ’ a s n ic io m it no h its pos FocusEco upled wit o e c , th ts f o is s m on of econo re indicati y leader, a a reliable s a n o an industr ti ta olid repu and owned by domestic institutions. In s ’s y e among n c a n p com s intellige s e in s ns, u addition, the government has cash savings b r l institutio source fo r financia jo a ment equivalent to six per cent of GDP in the m rn e ’s v d o the worl ies and g n a p m o c People’s Bank of China. This situation nal s.com multinatio -economic ww.focus shields the economy against government w . s ie c n e ag debt crises. In 2015, public debt amounted to 15.6 per cent of GDP.

ICS M O N O C E FOCUS OCTOBER 2018 25

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COVER

Cargo Insurance:

Protecting against

Risk, loss and damage are facts of life when shipping ocean cargo, so why is the evaluation of cargo insurance so often overlooked?

Risk consultant, Rosemary Coates, Blue Silk Consulting, offers practical tips that can protect from catastrophic loss

“I

t was a dark and stormy night on the high seas. The captain and crew were desperate to save the ship from sinking as the high swells and waves caused shipping containers to tumble overboard….”

This might be a good opening for a suspense novel, but it’s the last thing you want to hear from the steamship line with your milliondollar cargo aboard. In the transportation world, risk, loss, and damage are simply facts of life. So how do you protect your company’s cargo from the risk of potential loss? You have several options.

Depending on the mode of transport – rail, truck, sea, or air – cargo insurance can provide protection against all risks of physical loss or damage from any external cause during shipping. You could also decide to forgo purchasing outside cargo insurance and “self-insure”the cargo, assuming all risk of loss. But is that a wise decision? It’s always a trade off of cost vs. risk.

As anyone who has moved freight over the years knows, it’s not all that uncommon for

OCTOBER 2018 27

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containers to fall overboard or to be released by the ship during a dangerous storm. Keep in mind that approximately 130 million freight containers were transported by the international shipping liner industry last year, with an estimated value of over $12 trillion according to the World Shipping Council.

Of those shipped containers, more than 10,000 containers fall into the ocean every year due to severe weather and high seas, accidents, or incorrect stowage, as ships lose containers when they begin to roll side-toside at more than a 55-degree angle. While 10,000 containers is a small percentage of the total, it could be catastrophic if they’re your cargo containers – and that’s where cargo insurance comes in – helping to protect you against all types of risk.

Indeed, today’s supply chain executives conduct risk assessment for suppliers, contract manufacturers, logistic and

28 OCTOBER 2018

warehousing partners as well as field service.

This work in evaluating various types of risk, such as financial stability of a service provider, political unrest and disaster planning, can help to minimize down time and deflect the impact of major disasters.

However, evaluating the need for and currency of cargo insurance coverage is often overlooked. Unfortunately, when disaster strikes, companies can be faced with potentially devastating damages.

Planning and evaluating the costs and

benefits of various types of cargo insurance, deductibles, and the possibility of selfinsuring should be included with your risk assessment processes and your annual strategic planning. At a minimum, your cargo insurance, or self-insurance, should be reviewed annually.

As business conditions change and your products evolve, you need to make sure your cargo insurance coverage changes in response. In addition, insurance carriers may introduce new features and take others away.

With this in mind, it’s important to be aware of these changes and how they will affect your business.

Types of cargo insurance National and international treaty restrictions as well as the U.S. domestic Carmack Amendment limit the monetary liability of most carriers. These restrictions are intended

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to help the carrier stay in the business of providing transportation, and not get tied up fighting damage claims.

Shippers also need to keep in mind that transportation is considered a public utility and, as such, is protected from all kinds of liability. Always refer to a carrier’s Bill of Lading, tariff or other Terms and Conditions for specific limits of liability.

You should not depend on the legal liability of carriers for your cargo loss.

Their liability is restricted to such low levels and has so many escape clauses that reimbursement for a cargo loss could be as low as $100. Here is a quick overview of some of the types of insurance you may need to consider as part of your improved strategic planning.

Land Cargo Insurance - This type of insurance provides coverage for your cargo carried by trucks and small utility vehicles

such as those driven by FedEx and UPS. This level of insurance will cover you for theft, collision and related risks.

All truck carriers are also required to carry a minimum amount of insurance, known as carrier liability insurance. However, carrier liability insurance provides very little – if any – coverage should your cargo be damaged or destroyed in transit or awaiting transit. If your shipments via domestic trucks are high value, you should consider buying additional cargo insurance.

Marine Cargo Insurance (Ocean and Air) – Despite its name, marine cargo insurance covers transportation by sea or air. Coverage includes damage during loading/unloading, weather, piracy and disaster.

There are three sub-types of marine cargo: Open Cover Cargo Policies that cover all cargo during a specific period of time (i.e.: 1 year); Specific Cargo Policies or Voyage

Policies that cover a specific freight shipment; and Contingency Insurance Policies, or secondary insurance with typically smaller premiums in case the primary insurance doesn’t pay.

General Average Loss – Cargo insurance for ocean shipping is somewhat different from other type of insurance because the loss of a container is amortized over the entire load and all shippers with cargo aboard pay a calculated share.

In the event of an emergency and the safety of the crew is at risk, the captain may jettison some of the cargo containers to save the ship. Even if your goods remain aboard and undamaged, you will still be required to pay a percentage of the loss before your goods will be released from the port. This is known as a“general average”loss. You can, of course, purchase cargo insurance to cover general average loss.

OCTOBER 2018 29

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No cargo insurance?

There is no requirement to buy cargo insurance, but that means you assume all of the risk. If you chose no cargo insurance, then your company should be prepared for potential losses and for any collateral damage that may occur.

This is a decision that should be thought through very carefully – and one to be made after the costs and benefits are carefully analyzed. For companies that may be very cost-sensitive, a combination of low-value self-insured shipments together with high-value insured shipments under a specific cargo or voyage cargo policy may be the way to go.

As with most insurance plans, it may also be possible to buy a low-cost plan with a very high deductible and then self-insure

30 OCTOBER 2018

for the first $50,000 or $100,000 before cargo insurance kicks in.

Cargo insurance may not be as exciting as a suspense novel, but the ongoing threat of cargo loss may keep you up at night because overcoming a large loss could be very difficult for your company. Losing inventory could result in lost sales and damage to your customer relationships. But that’s not all.

Until the claim is paid, you should consider these additional costs to your company: cost of replacement of raw materials for replacement production; factory costs, time and scheduling to produce replacement goods; potential loss of business as you recover; if your is freight damaged other shipments or the environment you may have liability;

if you must file a lawsuit to recover damages it’s going to take time and be expensive; if you have decided against cargo insurance, your cargo losses could be substantial; however, even if you did purchase cargo insurance, it will take time and effort to process the claim.

Minimizing risks, avoiding claims To avoid insurance claims altogether, you should make every effort to minimize your global supply chain risks. This means maintaining positive control over your global supply chains with oversight, monitoring and audits. In addition, you should be planning for how your supply chain is going to respond in case of a disaster.

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Here are a few key tips for minimizing risks and avoiding claims: Educate your supply chain staff about how to identify and avoid cargo theft and damage risks. Don’t assume that everyone will automatically know what to look for.

Conduct frequent audits and business reviews with your supply chain partners.

Stay informed about changes in their processes, leadership, and be sure to conduct on-site visits and tours of the operations, especially when they’re handling your cargo.

Remove identifying marks from outer packaging of your goods if your items are considered high risk for theft, such as consumer electronics.

Choose the best type of transport for your

cargo. Can you minimize risk by shipping air versus ocean or truck verses rail?

Utilize visibility and cargo tracking systems and sensors including location, temperature, humidity, high value and shock monitoring.

Make sure that loads are secured correctly.

Determine the concentration of risk in individual shipments and consider distributing products across several loads, carriers, or modes of transport.

Monitor and expedite shipping times and use direct shipping routes. Use visibility software to determine where your cargo is at all times.

Pack and stage loads at secured facilities.

According to SensiGuard’s Supply Chain Intelligence Center, 75% of U.S. cargo thefts in 2017 took place within unsecured parking areas.

Is cargo insurance worth it?

With all risks considered, you will have to make a final decision regarding purchasing cargo insurance or selfinsuring your shipments.

The best approach is to consider all potential costs of a loss versus the cost of insurance. But at the end of the day, cargo insurance is the best way for businesses to reduce financial exposure and mitigate supply chain risks.

There are various plans and insurance companies that can help you decide, but ultimately the decision is a cost/benefit analysis. Policies and coverage can vary, and it’s best to use the services of an insurance broker to help you decide. www.logisticsmgmt.com

OCTOBER 2018 31

FedEx joins Hyperledger blockchain hub Hyperledger, an open source collaborative effort created to advance cross-industry blockchain technologies, has announced that 14 members have joined its growing global community including FedEx and Honeywell International Inc

32 OCTOBER 2018

FedEx and Hyperledger According to a press release published recently, and as reported by FreightWaves, FedEx the US courier company, proactive adopter of blockchain technology and Blockchain in Transport Alliance BiTA member, has joined Linux hosted opensource project Hyperledger to further advance the use of distributed ledger in logistics and transportation.

Hyperledger, which was started in December 2015 by The Linux Foundation and now has 270 members, was set up to enable member organizations to build blockchain-based industry-grade applications, platforms and hardware systems in the context of their individual business transactions.

FedEx Proactive Blockchain Adopter Fred Smith, FedEx CEO said earlier in the year he believes that blockchain is the “next frontier” for global supply chains.

In February this year, FedEx joined BiTA,

and Dale Chrystie told FreightWaves,“We want to work on developing common standards around blockchain technology in the transportation industry, and we continually try to enhance the customer’s experience, and blockchain is tied to that.”

Kevin Humphries, Senior Vice President of IT at FedEx Services told Cointelegraph. com that blockchain technology has ‘big implications’ for supply chains, logistics, and transportation.

Distributed Ledger Technology Hyperledger Executive Director Brian Behlendorf has previously stated that distributed ledger technology (DLT) will diminish the power of tech giants like Google, Facebook, and Amazon. In a recent press release he said - “We are gaining traction around the world in market segments from finance to healthcare and government to logistics. This growth and diversity is a signal of the increasing recognition of the strategic value of enterprise blockchain and commitment

TECHNOLOGY

to the adoption and development of open source frameworks to drive new business models.”

Hyperledger is a multi-project, multistakeholder effort that includes 10 business blockchain and distributed ledger technologies.

Hyperledger enables organizations to build robust, industry-specific applications, platforms, and hardware systems to support their individual business transactions by creating enterprise-grade, open source distributed ledger frameworks and code bases.

The latest general members to join the community are: BetaBlocks, Blockchain Educators, Cardstack, Constellation Labs, Elemential Labs, FedEx, Honeywell International Inc., KoreConX, Northstar Venture Technologies, Peer Ledger, Syncsort and Wanchain.

Blockchain Meets Supply Chain Blockchain, the technology for cryptocurrencies, may soon start to have supply chain benefits in areas like tracking fresh

foods. Because Blockchain uses distributed ledger technology, which can store transactions among many trading partners in a secure, immutable way that’s easy to view for authorized partners - giving it the potential for chain of custody over the movement of goods.

According to a survey last fall of thirdparty logistics providers (3PLs) from Penske Logistics, Infosys Consulting and talent advisory firm Korn Ferry, 30 per cent of 3PLs and 16 per cent of shippers see blockchain as having potential supply chain application.

Shanton Wilcox, a partner with Infosys Consulting, says traceability of goods such as fresh foods, high-value items, or items subject to the risk of counterfeiting, are likely applications.

Late last year, IBM, Walmart, and Chinese retailer JD.com launched a Blockchain Food Safety Alliance collaboration to improve food tracking and safety in China.

Additionally, IBM and Maersk are working on a joint venture to apply blockchain to global trade, while the Blockchain in

Trucking Alliance (BiTA) is working on blockchain standards for the freight industry.

Wilcox estimates that it will be 24 to 36 months, however, before blockchain starts being used by supply chains. First, says Wilcox, pilots need to prove out the value, and consensus needs to be reached about what type of data will be shared - as well as the tricky issue of who will pay for storing data.

“Once a major company and its supply base gets operational with blockchain, or it starts to happen within a product category, companies can use that as a template, and that will propagate the momentum.”

Supply chains need to assess whether blockchain is a better way of controlling chain of custody versus more established technologies like bar codes and messaging between systems, Wilcox acknowledges.

However, he contends that it promises value to extended supply chain networks because there’s no integration to iron out between systems. www.supplychain247.com

OCTOBER 2018 33

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MAN TRUCK & BUS

Gearing up for the long haul MAN Truck & Bus’s Managing Director, Franz Freiherr von Redwitz speaks with Global Supply Chain’s Malcolm Dias in an exclusive interview about MAN’s primacy in the region, its forays in new territories and the ambitions and challenges on the road ahead

M

AN Truck and Bus Middle East, international manufacturer of commercial vehicles, renowned for their toughness, trustworthiness and performance, has logged accelerated growth since its deep-rooted presence in the GCC, specifically Lebanon and the Levant, for over 90 years.

It is documented that in 1928, German engineer Zacher travelled over 1,600 km from Beirut to Tehran through the Empty Quarter with one MAN heavy-duty truck and his Arab co-driver. Today, MAN Truck & Bus Middle East, which formally established operations in 2006, continues to maintain its lead, providing comprehensive, innovative total solutions for road transportation of both passengers and freight through its light, medium and heavy-duty ranges of trucks, and MAN and Neoplan buses that provide basic to high-end transport.

OCTOBER 2018 35

MAN TRUCK & BUS

MAN’s Managing Director, Franz Freiherr von Redwitz, keeps the company in the forefront as he administers a vast geographical swathe where the regional subsidiary operates through an extensive network of 35 authorised dealers and importers in 14 countries.

Staying ahead Given the brand’s solid track record, von Redwitz presents a picture of confidence.

“The Middle East is very significant for MAN Truck & Bus given our long-standing presence and roots in the region,”he affirms.

“Our legacy and precedents here date back to almost a century and we are proud to be associated with the region’s public and goods transportation industry where we enjoy a reputation that is strong and solid, much like the trucks and buses we manufacture,”he continues.

“Providing durable, dependable vehicles that meet the highest rigourous standards of performance and maintenance is a very demanding, challenging business. We operate in the B2B realm and to this end MAN is very well connected with the professional transportation community with a cohesive network of national dealers and partners across the region,” he asserts.

According to von Redwitz, with its fastgrowing economies and ongoing public transport projects worth more than US$ 100billion, the Middle East region presents an excellent opportunity for commercial vehicle manufactures.“MAN’s vehicles are built to meticulous, exacting German and European standards and these are further customised for regional compliance,”he notes.

As a case in point, von Redwitz cites the example of MAN’s safest-ever Lion’s coaches that are equipped with advanced technology to reduce accidents, improve passenger comfort and ensure efficient and safe driving.

The advanced and emergency-braking MAN Lion’s coaches use industry-leading accident prevention features, such as Emergency Brake Assist (EBA), Lane Guard System (LGS) as well as Adaptive Cruise Control (ACC), Furthermore, the Adaptive Cruise Control (ACC) and Emergency Brake Assist (EBA) systems use radar and onboard cameras to detect the speed and distance of other vehicles ahead of the MAN Lion’s Coach on 36 OCTOBER 2018

Adaptive Cruise Control (ACC) and Emergency Brake Assist (EBA) systems use radar and onboard cameras to detect the speed and distance of other vehicles ahead of the MAN Lion’s Coach on the road

the road. The vehicle automatically adjusts speed to ensure a safe distance is maintained at all times, and the Emergency Brake Assist will initiate braking if the driver fails to react to warnings of potential collisions. Likewise, the Lane Guard System (LGS) will warn drivers if they are drifting out of their lane.

Saudi Arabia, UAE lead markets Earlier this year, in partnership with UAE distributor United Motor and Heavy Equipment Company (UMHE), MAN Truck

& Bus reached a landmark agreement with the Road Transport Authority (RTA) Sharjah to deliver 10 of its safest-ever coaches. RTA Dubai has also been a consistent client.

To provide enhanced comfort and safety, the coaches are further equipped with new generation shock absorbers and optimised vehicle configuration.

In addition to providing greater driving comfort and improved handling, the new features also contribute to further increase in fuel efficiency as well as a 20 per cent improvement in aerodynamics Sales of MAN Trucks have also maintained their drive in the region. Saudi Arabian Food and dairy producer Almarai’s current 1,700-strong fleet comprises of the MAN TGS type MAN long-haul trucks. Almarai conducts the distribution of its chilled foods and dairy products single-handedly and operates the vehicles around the clock to deliver heat-sensitive perishable goods across the entire far-flung Gulf region as well as to Jordan and Egypt.

Adaptation to the Middle East The MAN TGS trucks are specially designed to meet the requirements of the Middle East regions and are thus optimally suited for the climatic conditions in the extreme heat and sand of the desert. It is also not uncommon for MAN trucks to have logged over 4,000,000 km over their life-span.

As a result of increased market demands, Saudi Arabian MAN Truck & Bus distributor Haji Husein Alireza Co. (HHA) announced plans to build 3 new service centres in the Kingdom’s cities of Jubail, Madinah and Khamis Mushait. MAN has also established a local vehicle assembly facility in the Red Sea commercial port city of Jeddah.

Expansion is very much on the cards for MAN and von Redwitz foresees greater role for the company as it continues to make inroads into the Saudi Arabian, UAE and Kuwait markets.

“We are committed to this region and to retaining our market position. We are determined to make MAN trucks and buses the preferred and commercial vehicle of choice in the region,”assures von Redwitz.

Given the lead, there is no stopping MAN from maintaining that momentum in the Middle East.

COVER

OCTOBER 2018 37

MANAGEMENT

38 OCTOBER 2018

MANAGEMENT

The lift

effect Forklifts literally lift businesses. The regional industry for this imperative warehouse machine is steadily on its growth curve. Global Supply Chain’s Munawar Shariff spoke with Martin McVicar, Managing Director, Combilift, about the status of the market and the company’s most important market in the region

T

“

he GCC market is quite a mature market,” says Martin McVicar, Managing Director, Combilift. The forklift market has suffered in the GCC over the last three to four years as a result of the fall in the price of oil however Combilift has continued to grow its market share. This has been achieved by targeting new industries and introducing new products.

McVicar continues,“And the warehousing market in the GCC continues to grow.”This is a particularly strong product segment area for Combilift given their focus on providing their customers with a free warehouse design service.

“Many of the other MENA countries are still in a development stage,”he says.“I foresee growth in these markets especially OCTOBER 2018 39

MANAGEMENT

in light of the increase in the price of oil. This will bring significant growth in the North African markets.”

The versatility and the ability to work unhindered in harsh environments are Combilift hallmarks, which make the trucks a popular choice with companies involved in the manufacturing, service and maintenance areas where terrain is not so developed. The all wheel drive gives clients the ability to operate both indoors and outdoors.

In terms of Combilift sales in the region, the larger established markets are Saudi Arabia, UAE and Algeria. They have shown substantial growth over the last 12 months for them.

“Before we invented the Combilift – the world’s first IC engine powered, all-wheel drive multi-directional forklift - operations which needed to handle and store long loads had to rely on a combination of other types of forklifts. None of these were actually designed for their specific requirements.

This resulted in a compromise on safety procedures, it was also time consuming and required large areas to be set aside

40 OCTOBER 2018

The forklift market has suffered in the GCC over the last three to four years as a result of the fall in the price of oil however Combilift has continued to grow its market share

for manoeuvring and storing products,” continues McVicar.

The ability to handle ever longer loads with Combilift’s range has changed practices.

It has driven the market forward in a wide number of sectors such as the aluminium, steel, plastics, logistics, oil and gas industries to name but a few. Materials can now be delivered and offloaded in longer sizes to cut costs and increase productivity. The availability of additional storage space allows stock such as steel to be bought in when the price is advantageous and stored for later use.

Whereas companies previously used a number of types of trucks depending on the task in hand, they can now benefit from using a Combilift for universal use on the premises – for offloading, taking product to manufacturing areas, and for space saving storage. This reduces capital expenditure, saves on training, overheads, maintenance and fuel costs.

“Our products have had a substantial impact worldwide on materials handling procedures – and not just for long loads. Our ever-growing portfolio includes the Straddle

Carrier range which has enabled much more cost effective and efficient handling of containers and oversized loads compared to using other traditional forklifts,”says McVicar.

Warehousing products such as the Aisle Master articulated brand can double storage density in any given area thanks to narrow aisle operation couple with versatile indoor/ outdoor ability.

Warehouse design If a customer is building a new warehouse that is the ideal time to consult with Combilift about how best to maximise the footprint.“We can also advise on the reconfiguration of space, again, to make the most of it in any given scenario – by reducing aisle widths for example. We always say that we do not just manufacture forklift trucks but we are in the business of selling space as well,”he says.

Space always comes at a premium, and Combilift’s free logistic and warehouse design service enables customers to see the benefit that the products will bring to client’s businesses. “Our engineers

proactively design, plan and produce material flow analysis and 3D animations - 150 to 200 per day for our worldwide customers - which clearly illustrates the capacity potential as well as the optimum flow of materials on their site. We are one of the only companies to offer this comprehensive service. Compared to less manoeuvrable forklifts such as reach or counterbalance trucks, Combilifts can fit easily into so called problematic places due to their multi-directional ability,” continues McVicar.

The Combi C-5000 XL is very popular in the GCC region. The Combi C-series doubles the storage capacity of a customer’s site dramatically. It is the most productive, safe and reliable way to handle long and specialised loads. The Combilift is a sideloader, counterbalance and narrow aisle forklift in one. This revolutionary design eliminates costly double handling of material and improves productivity. It has the ability to change quickly the direction of its wheels and move in any direction.

This four-way movement gives this forklift

OCTOBER 2018 41

MANAGEMENT

the versatility to transport long loads through narrow doorways.

As the truck has the ability to operate as a side loader carrying long loads in narrow aisles and has the agility to move around the entire site with confidence, considerable gains in storage density and throughput can be achieved.

The future

the risks of accidents. We now Whereas have a number of pedestrian companies trucks in our portfolio and are previously used committed to adding to this.”

Electric powered forklifts are a number of also more in demand and as technology has improved types of trucks battery it has been possible to offer high capacity trucks that perform depending on equally as well as. the task in hand, they can Investment “We invest a substantial now benefit amount (seven per cent of annual turnover) in R&D, from using a which allows us to launch at Combilift for least one new model every year. Since we opened our universal use new factory earlier this year we on the premises are the world leaders in “mass

The conventional forklift has not changed very much over the last 50 years. As health and safety considerations continue to grow the need for material handling equipment will continue to grow worldwide.“However since space spacing has become more critical there is an increased required for solution focused forklifts like Combilift and our narrow aisle forklift - Aisle Master,” saya McVicar.

Despite advancements in automation, manufacturers will need to continue to be innovative and offer the best possible ROI on equipment and look at versatility of use.“At Combilift we also react quickly to emerging trends and initiatives or changes in policy or directives. One recent example is the preference for pedestrian operated forklifts over ride on trucks wherever possible due to safety reasons. These offer a higher level of protection for the workforce as they operate at slower speeds, and operators are more aware of their surroundings which reduces

42 OCTOBER 2018

customisation” of innovative products,” he says. Mass customisation is the new frontier for both the customer and the manufacturer as customers are increasingly expecting products to be tailored to their requirements.“We listen to and take feedback on board from our customers to identify solutions that best match their individual specific needs. We can also bring new products to the market very quickly.

We work closely with a worldwide network of dealerships who have been chosen for their expertise and experience and who have specialist and in-depth knowledge of their geographical market.

“This has always been our philosophy from day 1 - to create customer led solutions – and it has set us apart from other

manufacturers. Collaboration with clients has been the impetus for much of our new product development; they come to us with a handling problem, we come up with a customised solution which can then often result in a new product range.

Combilift has worked very closely with a number of their Middle East clients.“In particular we have been working very closely with Agility Logistics over the last two to three years and have adapted a number of our products including the Combi-RT and the Straddle Carrier around their specific requirements.

Gulf Steel Works are a very long standing Combilift customer in the region for whom we have developed products around their particular structural steel handling needs.

The willingness to listen to customers to determine actual market demand and to supply tailor made machines is one of the reasons for our rapid growth and global success.

We also use standard and readily available components so that our products can be easily maintained and serviced wherever in the world they are being used,”he continues.

Combilift works through a network of Combilift specialists and dealers in each country in the GCC and MENA countries which ensures a focused after sales service.

“Our specialists have the knowledge and experience to recommend the right Combilift for every application and provide assistance on sales, hire and after-sales service. Our trained service engineers offer first class customer service with swift response times,” concludes McVicar.

Subscribe today October 2018 Issue 52

September 2018 Issue 51

July/August 2018 Issue 50

ENHANCING THE BUSINESS OF LOGISTICS

ENHANCING THE BUSINESS OF LOGISTICS

ENHANCING THE BUSINESS OF LOGISTICS

MATERIAL HANDLING In the digital factory

TECH TIMES Keys to better business

Cargo Insurance

RISK PROTECTING AGAINST

Who run the world? Girls!

Heléne Mellquist, Volvo Trucks

Sourcing the Ruby

Women drivers

A look at the supply chain

Future cities

Now in Saudi Arabia

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Connected aviation

Smart and indispensible

9/9/18 13:38

Saving cash and the environment

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MAN Truck & Bus

Combilift

For the long haul

Fleet management technology Better driver performance

7/8/18 5:15

Aviation

Lifting businesses

Uplifting lives

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10/5/18 11:58

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GUEST COLUMN

Gold rush for managed service providers

Cloud computing is the underlying platform for successful digital transformation and is both an opportunity and challenge for Managed Service providers, explains Yasser Zeineldin, CEO from eHosting DataFort (provider of Managed Services, Cloud Infrastructure and Managed Hosting in the Gulf region) 44 OCTOBER 2018

T

he rush to the Cloud is adding a layer of challenge in an already overloaded and overcharged digital transformation environment. Major Public Cloud service providers like Microsoft, Google, AWS, release close to 50 new features every month, according to global consulting firm Gartner. An average enterprise may require only a handful of new cloud features every month, throwing a challenge to them on how to best select the few suited for their business.

On one hand, this pace of innovation is refreshing and allows the best of breed to come forward. On the other hand, the sheer pace of change and rate of transformation taking place up front, opens up the opportunity for Managed Service Providers to provide trusted advice and services around Cloud computing for their end-customers.

Across the region, small and medium enterprises are beginning to embrace various aspects of digital transformation, whether Cloud or mobile or data driven. However, there is no doubt that embracing Cloud Computing remains the basis for large scale and successful digital transformation.

Cloud provides the underlying platform to successfully build new business models and enable a new generation of mobile ready

GUEST COLUMN

customers to come on-board and receive new customer experiences.

So important is Cloud Computing and Cloud technologies for businesses, that the number of Managed Service Providers providing Cloud related services will triple globally by 2020, according to Gartner. Traditional IT services that have always been the backbone for financial sustainability of professional service providers, will be overshadowed by the growth of Cloud related services, that can be delivered by Managed Service Providers. This is a huge opportunity for Managed Service Providers to grow their wallet share in coming years.

However, like many reality checks, the emerging gold rush to the Cloud, where IT decision makers are opening up budgets to spend, also includes a priority list of what to do first and a number of questions. Managed Service Providers may be asked a variety of questions by their end-customers. How do we migrate our data to the Cloud; which applications should we use from the Cloud and which should remain on-premises; what is the timeline and decision matrix for any migration to the Cloud; which applications are best

Major Public Cloud service providers like Microsoft, Google, AWS, release close to 50 new features every month, according to global consulting firm Gartner suited to be Cloud native and which ones need to follow a lift and shift approach; what will work best for me - Public or Private or Hybrid, amongst others.

For Managed Service Providers, being ready with answers and well tested services, is critical for the them to leverage the gold rush to the Cloud. Managed Service Providers need to be well trained and prepared for migration to the Cloud, have ready with them preplanning and consulting services and optimal pricing models. They need to be closely aligned with their end-customers and must be fully aware of the decisions being taken by them on what should be Cloudready, Cloud-only, and Cloud-first.

No single Managed Service Provider can provide the full range of Cloud Computing services for their small and medium enterprise

customers. For this reason, Managed Service Providers also need to actively build their role as Cloud brokers, where they are well versed with what is available, how to onboard and how to offer. Onboarding of Cloud services already accounts for more than 15% of IT Cloud spending. By being part of this onboarding service as Cloud brokers, Managed Service Providers can continue to expand their role as trusted advisors for their end-customers in their Cloud transformation journey, right from the onset.

Another critical area for Managed Service Providers is to be well aware of the required business outcomes linked to various digital transformation journeys within their end customers. By being proactive of what is expected by business decision makers, and by building suitable competency as Cloud brokers, Managed Service Providers can stay ahead of end customer expectations and ahead of competition.

The gold rush to cloud will also draw in additional competition, growing by a factor of three times by 2020. Differentiation and suitability of offerings for end-customers, depending on their business size and vertical markets, will also help managed service providers ride out the next phase of shakeout and consolidation.

OCTOBER 2018 45

Airlines and airports invest to deliver seamless experience SITA CEO says collaboration is key to deliver secure and easy travel

A

irlines and airports are investing to deliver secure and easy travel for passengers, with biometric technology a key priority. This is according to research released today by global IT provider SITA. The SITA 2018 Air Transport IT Insights show how biometrics are being incorporated into the evolution of self-service at the world’s airports. Over the next three years, 77 per cent of airports and 71 per cent airlines are planning major programs or R&D in biometric ID management.

Barbara Dalibard, CEO, SITA, said:“Secure and seamless travel is a must for the air transport industry. It is encouraging to see that both airlines and airports are investing in biometric technology to deliver a secure, paperless way to identify passengers across

multiple steps of the journey. We have already seen great success where we have implemented it at airports across the world.

“As the research shows, integration causes challenges and the variety of legislative demands can be daunting for airlines and airports. To deliver a seamless passenger experience, we must all collaborate – airlines, airports, governments and industry suppliers – and use technology to automate, and even eliminate, tedious processes. We achieve the best results when we work together, this has been most apparent when we incorporate secure biometrics into the passenger journey.”

SITA already delivers identity management solutions, including biometric systems, that eliminate the need for manual checks.

These improve the passenger experience while helping airlines and airports across the

New technologies offering airlines strategic and operational benefits by 2021

46 OCTOBER 2018

world meet the variety of regulations from Governments and border agencies. The most common of these is identity verification at self-service check-in kiosks. This is already in use at 41 per cent of airports and 74 per cent have plans to deploy the technology by the end of 2021. Self-boarding gates using biometrics with ID documentation, such as a passport, are also set to become commonplace over the next three years, with 59 per cent of airports and 63 per cent of airlines expecting to use them.

SITA’s research shows that the industry faces some challenges for the full adoption of biometrics for passenger identity checks. More than one third of airlines cite integrating the tools and technologies at airports, and a lack of standards for processes and technologies for integrating

More self-service investment at airports to tackle disrup and ID management

PEOPLE LOGISTICS

checks, as the major challenges. For airports, the situation is similar, though 39 per cent of them say meeting government and legislative requirements is also a major challenge.

Airlines and airports are also considering new technologies for passenger identity management. One example is blockchain; 40 per cent of airlines and 36 per cent of airports believe the main benefit that blockchain can provide is to streamline this process, for example by reducing the need for multiple ID checks.

Overall, investment in technology is rising.

SITA’s research shows investment by airlines over the past two years has been stable but future predictions for both operating and capital spend are very strong in 2018 with a forecast of 3.67 per cent IT spend as a per cent of revenue. Airport spend will be strong

too, with a forecast of 5.69 per cent of revenue for this year.

Airlines are also investing in new technologies which offer them strategic and operational benefits. Artificial intelligence (AI) is seen as beneficial across a range of airline operations with 84 per cent of airlines planning to have major or R&D programs in place by 2021. This is up from 52 per cent in last year’s survey. Airports too are investing in AI with 61 per cent planning a major program or R&D over the next three years, up from up from just 34 per cent in 2017.

While both airlines and airports are investing in AI, their uses are different.

Airlines are looking at the potential of using AI for virtual agents and chatbots with 85 per cent planning to use it here by 2021. Some 79 per cent of airports are currently using, or

A step towards automation with self-boarding

planning to use, AI for predictive analysis to improve operational efficiency.

Dalibard added:“It is clear that the will of the industry is to change the way we travel by improving efficiency and making the passenger journey as secure and seamless as possible. This requires a concerted and aligned drive, true collaboration, and SITA is fully committed to this.”

SITA’s Air Transport IT Insights are well established as the global benchmark research for the air transport industry. Over 180 senior IT executives at the top airlines and airports, representing 39 per cent of global airport and 27 per cent of global airline passenger traffic took part in the 2018 research. The 2018 results once again provide a clear insight on the air transport industry’s IT strategic thinking and developments.

Airline it spend static in 2017 but now set to grow

OCTOBER 2018 47

R Dubai’s new air cargo terminal

RSA National’s new, commercial, airside cargo terminal takes off to drive UAE’s soaring aviation and logistics industries

48 OCTOBER 2018

SA National, the joint venture between US-based National and UAE-based RSA Global, recently inaugurated its new, flagship air cargo terminal, located airside at Dubai World Central (DWC). In support of the UAE’s vision to become the world’s leading aviation and logistics hub, the opening of this multimodal smart transit hub for road, sea and air, will drive growth in the logistics sector, which is set to increase by 4.8 per cent by 2021.

RSA National’s vision is to operate as a onestop, boutique integrator offering multimodal supply chain solutions: specialising in innovative and quality services for its customers in established and emerging sectors as well as niche products including perishables and dangerous goods. To mark the occasion, an exclusive ceremony was held at RSA National’s new cargo terminal with the attendance of His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman of Dubai Airports; President of the Dubai Civil Aviation Authority; Chairman and CEO of Emirates Group, and Paul Griffiths, CEO, Dubai Airports.

Dubai is within an eight-hour flight of two thirds of the world cementing its strong position to lead the global logistics industry and help fulfil the UAE’s aviation and logistics vision for 2045 with RSA National playing an integral role. Its location on the Dubai Logistics Corridor linking DWC to Jebel Ali port reinforces its commitment to a multimodal approach for customers but through one single supplier. As an Authorised Economic Operator and with Dubai Police

and Customs situated on-site, customers will experience faster clearances and inspection prioritisation for a smoother transaction.

RSA National specialises in innovative and tech forward solutions for the retail, ecommerce, and perishables sectors, as well as government and humanitarian programmes. All sectors are growing in this region due to its continued reliance on imported perishables and goods; the increased adoption of ecommerce; and the impact of preparing for, and running, Expo 2020 and other major events. The company

AVIATION

has successfully completed 13,000 sq m of built up area, and has the ability to scale up within its 56,000 sq m footprint in DWC, in line with the growing demand forecast.

HE Sheikh Ahmed bin Saeed Al Maktoum, President of the Dubai Civil Aviation Authority said,“Today we are delighted to celebrate the inauguration of RSA National’s air cargo terminal at DWC. The RSA National air cargo terminal is an impressive and welcomed development and supports Dubai’s efforts to remain at the forefront of aviation and logistics globally.”

Abhishek Ajay Shah, Co-Founder and Group CEO of RSA Global said,“RSA Global is a home-grown brand and we have been inspired by the UAE leadership’s vision to build the aviation capital of the world.

We believe the launch of RSA National’s flagship air cargo terminal is a game changer for the UAE’s aviation and logistics industry to claim the number one spot. We have designed this smart facility to deliver innovative multimodal, tech-forward supply chain solutions and plan to expand as the region’s demands grow. The sky’s the limit.

“We are honoured to celebrate this moment in the presence of HH Sheikh Ahmed bin Saeed Al Maktoum, Paul Griffiths, CEO of Dubai Airports and all our distinguished guests.”

Jacob Matthew, President – ME and Pac Rim and Board Member, National said, “The completion of the first phase of the first commercial cargo terminal at DWC is an important step for RSA National in the context of the UAE aviation industry, a vital driving force of the country’s economic diversification plan. Non-oil sectors such as manufacturing, aviation and logistics are important contributors to the GDP with a contribution expected to account for nearly 90 per cent of the economy by 2025. The cargo industry itself is witnessing major developments and recently recorded robust growth. Innovation in the transport industry is important, and as logistics providers with our own aircraft fleet, we constantly strive to improve efficiency around the movement of goods and also customer service.”

Paul Griffiths, CEO Dubai Airports said, “We have witnessed impressive freight growth at DWC since it first opened in 2010. The airport has quickly ascended the global rankings for international freight volumes and is now ranked in the top 20.

We have achieved this by developing and implementing leading-edge customer centric processes, technology and infrastructure.

RSA National’s innovative and tech forward mindset is fully aligned with this approach and we are honoured to celebrate this great achievement with them today.”

OCTOBER 2018 49

50 OCTOBER 2018

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igital disruption is revolutionizing the automotive industry, enabling a value shift from individual consumption to collaborative consumption.

As a result, original equipment manufacturers (OEMs) are looking at alternative sources of revenue, such as shared mobility, connected car services, financial services, and logistics services. The demand for shared mobility services, such as car sharing, ride hailing, and dynamic shuttle, is increasing, with these services expanding globally. To compete effectively, OEMs are launching their own mobility services, partnering with mobility start-ups that are providing these services, as well as launching their own mobility sub-brands under which all mobility-related projects will be unified.

“We observe increasing efforts from OEMs, Tier 1 suppliers, and startups to enter the car data monetization space through various verticals, such as developing new apps, hardware/interfaces (smartphone pairing), and offering services related to the type of data collected,”said Abhishek Iyer, Mobility Research Analyst at Frost & Sullivan.“OEMs are partnering with technology companies to share data (with customer consent) to recommended third-party service providers, such as insurance companies and smart parking service providers. Tier 1 companies are investing in start-ups that focus on datadriven platforms, AI, and machine learning to leverage IoT applications.”

Frost & Sullivan’s recent analysis, Mobility and Other Downstream Services Market,

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Forecast to 2030, provides a comprehensive analysis of trends, perspectives, and market forecasts through 2030. As OEMs continue to focus on Connected, Autonomous, Shared and Electric (CASE) strategies and automotive technology companies shift toward becoming providers of mobility and related services, the core focus of the mobility industry will be on providing a completely shared and connected ecosystem for the future.

Between 2017 and 2022, OEMs will seek to develop capabilities from a suite of solution providers and aggregators of data to offer effective information to consumers across industries and smart city projects.

There are three key strategies Frost & Sullivan experts identify as growth paths for automotive companies in the shared mobility market: Be a shared mobility operator Serve as a fleet provider to operators Manufacture custom-made vehicles for shared mobility operators “In addition, OEMs in the shared mobility space need to transition to subscriptionbased, event-based, and revenue-sharing business models,” said Iyer.“The automotive supply chain is changing drastically, driven by new players and big bets in new technology areas. OEMs need to take appropriate steps now to fill the gaps and stay on par with the competition.”

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IIoT drives electronic test equipment vendors to explore novel servicebased business models With Industrial Internet of Things (IIoT) or Industry 4.0 transforming manufacturing and operations ecosystems across the aerospace and defense (A&D) industry, electronic test equipment (ETE) vendors have begun to evolve their technologies to keep pace. A&D

companies are ready to support the latest technological developments with substantial investments in R&D as new technology adoption vendors are responding to the surge in opportunities for asset management, condition monitoring, and data analytics services with expansions in the frequencies, bandwidth availability, and functionalities of their existing systems.

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“ETE vendors are not only rolling out next-generation measurement and instrumentation equipment but are also adopting novel business models,”said Sambaran Das, Senior Research Analyst, Measurement & Instrumentation.

“Software-as-a-Service(SaaS)-based models, in particular, are likely to gain traction as A&D customers across applications automate their processes. It can prove to be a highly significant value addition delivered by hardware vendors selling software.”

Frost & Sullivan’s recent analysis, Global Electronic Test Equipment Market in Aerospace & Defense, Forecast to 2024, provides a detailed analysis of the current and evolving opportunities in the A&D industry for the electronic test, measurement, and instrumentation market. This assessment includes forecasts, an overview of the competitive structure, competitors’ market share, market trends, and product analysis. It also identifies market drivers and restraints, key growth opportunities, challenges, and possible threats.

The A&D industry has seen renewed growth due to increasing defense spending and budget allocations by national governments all over the world.

“While the North American and European markets continue to lead the ETE market due to their historically dominant position in

the A&D industry and enthusiasm to adopt new technologies, Asia-Pacific is emerging as a popular investment hub,”noted Das. “The presence of leading ETE manufacturers in high-growth countries such as China, India, and South Korea has already taken this region ahead of the market leaders in terms of growth rate. The greater defense spending in China and India and the record rise in commercial air traffic have further boosted the adoption rates of ETE in the region.”

Globally, the US$3.25 billion ETE market is expected to touch US$4.19 billion by 2024, once vendors make the most of the market expansion opportunities inherent in: Portable/handheld testers: With the advent of IIoT, portable testers need to offer benchtop-level accuracy and compatibility with wireless network connections. The advancements in chip technologies will enable vendors to deliver testers with superior RF performance, longer battery life, and greater ruggedness.

5Gand millimeter-wave (mmWave): 5G evolution will present vendors with opportunities to develop devices with faster communication and better network connectivity. Also, the demand for mmWave frequencies and higher modulation bandwidths will encourage them to provide cost-effective testing of bandwidth-rich mmWave frequencies.

Hardware-in-loop (HIL) testing: With

HIL simulation testing, engineers can cost-effectively test aircraft components such as electronic control units (ECUs) and line-replaceable units (LRUs). As A&D HIL systems have different needs than traditional automotive HILs, they need to be more reliable, highly scalable, and tightly synchronized with a large number of sensors and actuators.

NewSpace: Rapid developments in space and satellite industry with the emergence of more than 30 companies in the past five years will drive the demand for testing solutions.

Radar: Radar will continue to dominate the market due to the rising need to support an array of antennae with multichannel synchronization and coherent operations.

“Adaptability to evolving technologies, ability to address greater bandwidths, and providing software-defined instrumentation are the most important requirements for T&M in the A&D industry,” said Das. “With the growing complexity of end-user systems and testing needs, upgradable and flexible platforms are the focus of leading companies for enhancing the longevity of test equipment and reducing the cost of test. Mega Trends such as Industry 4.0 or IIoT and evolving business models will change the market dynamics and test solution offerings by leading T&M vendors.”

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Generics set to transform Abu Dhabi’s pharmaceuticals market New policies encouraging the use of generic drugs are set to reduce the cost of health care in Abu Dhabi, which is likely to attract more investment to the pharmaceuticals manufacturing industry.

Oxford Business Group’s report highlights how this move will enhance pharmaceutical manufacturing in the country 54 OCTOBER 2018

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nder reforms that came into effect on September 1, patients in the emirate are now able to access generic treatments through their pharmacies, and medical professionals can use generic products in health facilities, thereby cutting retail and wholesale costs.

The change, announced by the Health Authority - Abu Dhabi (HAAD) in a circular issued on July 23, means that patients can now choose between namebrand products or generics, with health insurance covering the cost of the latter.

Those wishing to buy branded products will be required to pay the difference from the generic option’s listed price.

In a subsequent statement on July 31, HAAD said the increased use of generics would not only improve access to health care, but also create new opportunities for domestic production.

Wider generics use set to shift the market According to estimates from some pharmaceuticals players, the switch from name-brand to generic products could result in cost savings of up to 60 per cent. Locally produced generic drugs would bring even greater benefits, allowing for substantially lower logistics costs and more control over the supply of vital treatments.

Unlocking the potential of this market could bring significant opportunities, as national demand for pharmaceuticals is set to rise steadily in the medium term. Spending on pharmaceuticals in the UAE is estimated to increase from Dh9.61bn (US$2.6bn) in 2016 to Dh14.11bn (US$3.8bn) by 2020 and Dh21.74bn (US$5.9bn) by 2025. At least part of this extra demand is set to be met by domestic production.

According to estimates by the UAE’s Ministry of Health, the number of

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pharmaceuticals production facilities in the country will more than double by 2020, with up to 34 production centres scheduled to be in operation, up from 16 last year. The ministry reports that generic drugs should play a key role in supporting this expansion.

Key players undertake local expansion efforts Pharmaceuticals producers are positioning themselves to capture part of this market by increasing their investment in production capacity in Abu Dhabi.

Late last year local firm Neopharma launched feasibility studies into developing a second manufacturing hub at the Khalifa Industrial Zone Abu Dhabi (KIZAD). The proposed US$100m investment would bring Neopharma’s KIZAD facilities to a total of 160,000 sq metres.

Company officials say this is part of a larger push to expand Neopharma’s role in the region

and beyond, as it looks to add more generic and value-added drugs to its repertoire of general products and beta lactams, a class of broadspectrum antibiotics. In March the firm was granted EU GMP certification, which should further facilitate efforts to branch out into new markets in the European bloc.

Additionally, by the end of 2018 Dubai-based Life Pharma aims to begin production at a new facility, which has been under development since 2014 at KIZAD. The plant, built on a 158,000-sq-metre plot, will have four units.

One will be dedicated to oncology treatments and research, while the others will be used as manufacturing centres for vaccines, sterile injectors and oral solid dosage products.

Cost savings to further bolster production HAAD’s decision to broaden the use of generics has been largely welcomed by

industry stakeholders, with this move set to attract more pharmaceuticals players to the local market and stimulate product expansion.

“With the ruling, more affordable medicines could extend treatment options in the public health sector, where fixed budgets place limits on treatment,”Jerome Carle, GM of UAE-based pharmaceuticals manufacturer Julphar, told local media. These cost savings could be directed towards the research and development of new treatments, which, along with stronger demand for local products, would further bolster the market.

While largely welcomed, some analysts believe there could be initial resistance to the wider use of generics, with information programmes likely required to ensure widespread public understanding that generic products are as safe and effective as their name-brand counterparts. www.oxfordbusinessgroup.com

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aunching the report at the ATAG Global Sustainable Aviation Summit in Geneva, ATAG’s Executive Director, Michael Gill, said, “Let’s take a step back and think about how advances in air transport have changed the way people and businesses connect with each other - the reach we have today is extraordinary. More people in more parts of the world than ever before are taking advantage of safe, fast and efficient travel.”

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How aviation

boosts an economy The global air transport sector supports 65.5 million jobs and US$2.7 trillion in global economic activity, according to new research released by the Air Transport Action Group (ATAG). The report, Aviation: Benefits Beyond Borders, explores the fundamental role civil aviation plays for today’s society and addresses the economic, social and environmental impacts of this global industry.

“There are over 10 million women and men working within the industry to make sure 120,000 flights and 12 million passengers a day are guided safely through their journeys. The wider supply chain, flow-on impacts and jobs in tourism made possible by air transport show that at least 65.5 million jobs and 3.6 per cent of global economic activity are supported by our industry.”

The report also looks at two future scenarios for growth in air traffic and

related jobs and economic benefits.

With an open, free-trade approach, the growth in air transport will support some 97.8 million jobs and US$5.7 trillion in economic activity in 2036. However, if governments create a more fragmented world with isolationism and protectionist policies, over 12 million fewer jobs and US$1.2 trillion less in economic activity would be supported by air transport.

“By working with one another, learning from each other’s cultures and trading

openly, we not only create a stronger economic outlook, but we also continue the conditions for peaceful interaction across the globe. Aviation is the key driver for this positive connectivity.”

The Middle East Every person directly employed in the aviation sector and in tourism made possible by aviation supported another 4.3 jobs elsewhere in the Middle East.

Similarly, US$3.90 of economic activity

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was supported elsewhere in the Middle East for every US$1 of gross value added directly created by the air transport sector.

The aviation sector in the Middle East directly employed an estimated 553,700 people in 2016. A sub-sectoral analysis of these workers suggests that: » 192,900 of them (35 per cent of the total) were employed by airlines or handling agents as, for example, flight crew, check-in staff, maintenance crew, or head office staff;

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» 24,800 (five per cent) had jobs with airport operators in, for example, airport management, maintenance, and security; » 326,700 (58 per cent) worked on-site in airports at, for example, retail outlets, restaurants, and hotels; » 4,400 (one per cent) were employed in the manufacture of civil aircraft (including systems, components, airframes, and engines); and » 4,900 (one per cent) worked for air navigation service providers in, for example, air traffic control

and engineering. Airlines, airport operators, retailers and other on-site businesses at airports and air navigation service providers and civil aircraft manufacturers also contribute to GDP in the Middle East.

In 2016, the operations of these businesses directly generated a US$32.9 billion contribution to GDP. The aviation sector’s spending with suppliers is estimated to have supported a further 389,500 jobs and a US$20.9 billion gross value added contribution

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to GDP. In addition, wage payments to staff – by the aviation sector and businesses in the aviation sector’s supply chain – supported 183,400 more jobs and a US$9.8 billion gross value added contribution to GDP. The aviation sector also facilitates a substantial amount of tourism in the Middle East.

This stimulates still more economic activity, as tourists spend their money with restaurants, hotels, retailers, tour operators, and other providers of consumer goods

and services. In 2016, spending by foreign visitors who flew to Middle Eastern countries supported an estimated 1.3 million jobs and a US$66.1 billion contribution to GDP. In total, accounting for the sector’s direct impact, its supply chain impact, its wage expenditure impact, and the impact of tourism made possible by air transport, the aviation sector supported an estimated 2.4 million jobs and a US$130 billion contribution to GDP in the Middle East in 2016.

Air travel in the Middle East is expected to continue to grow at about 5.8 per cent per year over the next two decades. This increase will, in turn, drive growth in the economic output and jobs that are supported by the air transport industry over the next 20 years.

Oxford Economics forecasts that by 2036 the impact of air transport and the tourism it facilitates in Middle Eastern countries will have grown to support 4.3 million jobs (78 per cent more than in 2016) and a US$345

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billion contribution to GDP (a 166 per cent increase). The Middle East continues to consolidate its position as a hub region connecting the European and Asia-Pacific markets. Airlines from this region are some of the most ambitious in the world, with the likes of Emirates, Etihad and Qatar boasting modern fleets.

However, significant investment is required in infrastructure, as is political commitment to market liberalisation. The Middle East is home to some of the world’s largest hub airports, but with traffic expected to increase dramatically in the coming decades capacity, in the air and on the ground, urgently needs addressing. According to a 2015 assessment, the average flight in the region is delayed by 29 minutes (and this could reach 59 minutes by 2025 without action) due to air traffic control capacity and staffing issues. That assessment also concludes that the benefits of investment in air traffic management could be over US$16 billion over the next ten years

Airlines and airports join forces to combat wildlife trafficking The aviation industry has taken on a leadership role in the fight against wildlife trafficking. The illegal trade of wildlife is the fourth most lucrative black market in the world – worth around US$20 billion a year and impacting more than 7,000 species of animals and plants.

Criminal organisations involved in wildlife trafficking are often directly connected to other trafficking networks, including the smuggling of narcotics, arms and people, and exploit the increasing connectivity of global air transportation to traffic the endangered species.

The air cargo industry is therefore one of the key aviation sectors acting to break the supply

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chain from source to consumer.

One of the initiatives is the United for Wildlife Transport Taskforce Buckingham Palace Declaration, which IATA, along with around 50 of its member airlines and ACI, has signed. Signatories have committed to raise awareness of wildlife trafficking among passengers, train staff to help spot trafficked species, establish a system to share information on illegal wildlife trade and improve cooperation between transport bodies and regulatory and enforcement organisations.

Airlines and airports devote resources for extensive passenger awareness campaigns to educate potential buyers of illegal wildlife products, including exhibits at Dubai, Johannesburg and Kuala Lumpur International Airports, onboard videos and feature-length articles in in-flight magazines.

Two Emirates A380s have even taken to the skies with special liveries featuring wildlife threatened by poaching and the illegal wildlife trade to communicate the need for urgent action. Airlines are further rolling out training programmes to improve the capacity of their cargo and customer-facing staff to be on the alert for suspicious signs relating to illegal wildlife transportation and to detect and report them.

Etihad Airways developed its own online module designed to inform its employees of the business risks associated with the illegal wildlife trade and ways to prevent them. Among others, Kenya Airways, Singapore Airlines, Turkish Airlines and LAM Mozambique, together with airports, train cabin crew, ground handlers, cargo processors, and staff from regional airports to help detect and stop smugglers carrying ivory, rhino horn, and other wildlife products.