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Economic Zones—Economy’s Backbone
SIGNATURE MEDIA FZ LLE P. O. Box 49784, Dubai, UAE Tel: 04 3795678 Email: info@signaturemediame.com Exclusive Sales Agent Signature Media LLC P.O. Box 49784, Dubai, UAE Publisher: Jason Verhoven jason@signaturemediame.com Editor: Malcolm Dias malcolm@signaturemediame.com Art Director: Johnson Machado johnson@signaturemediame.com Production Manager: Roy Varghese roy@signaturemediame.com
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With the summer on the wane in the region and the imminent start of the EXPO 2020 on 1 October, there is now chatter about the proverbial green shoots. There is talk of a new economic resurgence across the GCC as in many other parts of the world as quarantine and strict mandates are loosened amid claims of ‘herd immunity’ as vaccination percentages touch the 80+% threshold in several countries. It is now abundantly clear that Free Zones also varyingly referred to as Special Economic Zones (SEZs) or Export Processing Zones (EPZs) are poised to remain central elements of the post-pandemic economic recoveries in not only across the GCC and MENA but indeed all over the globe. Free zones are at the forefront of commercial activities and the traditional objectives associated with free zones, designated commercial areas with eased local rules and regulations aimed to stimulate business activities, include boosting exports in strategic sectors, attracting foreign direct investment, and generating employment. Free zones provide an array of commercial incentives for global firms and investors. SEZs can be an effective instrument to promote industrialization if policies, incentives are appropriately implemented and in the right context, as evidenced in emerging and developing countries including the Middle East. In this context we examine and explore the potential and promise of SEZs in multiple geographies and their long-term impact on the national economies. On a separate note the commercial truck industry is also a major driver and plays an important role in any national economy. The importance of the trucking sector in any nation’s economy cannot be underestimated. From farm to factory to warehouse to retailer to home, trucks dominate freight transportation. With trucks playing such an important role in the national economy, we put the focus on commercial vehicles with input from experts. To this end we empanel a quartet of the company’s top brass based in DWC led by Matthias Hoewer, Regional General Manager, to bring us to current on the latest developments with the company. Elsewhere, we shine the light on the latest technologies in Warehousing Management Systems; the Cold Chain in the context of the pandemic and the harnessing of hydrogen transportation solutions in addition to other content. Add to this our latest news roundup, updates, OpEds and a lot of carefully sieved and well-curated input to stimulate and satiate the readers’ quest for gainful insights in the logistics and supply chain arena. Happy reading! Malcolm Dias Editor malcolm@signaturemediame.com SEPTEMBER 2021 3
AL GHURAIR AUTOMOBILES
September 2021 Issue 83
20 SSI Schaefer
The Automation and Robotics major is on the fast track to regional growth.
06 DP World 28 30 Free Zones 38 Commercial Vehicles 44 Qatar Airways NEWS
Up to date news of the Global Suppy Chain industry
Progress Chronicles of the Dubai-based global ports operator.
Special Economic Zones are becoming the darling of Governments across the region. The demand for trucks GCC is poised to leap in the GCC. Bounce-back for the carrier with partnerships and recognition.
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46 ETELM 48 INFOR 50 54 AP Moller-Maersk 57 Blue Yonder report 58 Tom Craig OpEd Alstom Rail
Green-credentialed Hydrogen is now the fuel of choice. Radio Communications is critical for the transportation sector.
The challenges for developing an agile supply chain. Roundup from the world’s biggest shipping company. E-Commerce growth driving tech investments in Supply Chain systems The Cold and Pharma Chain under the scanner.
Moved by people qrcargo.com
Emirates SkyCargo transports 247 horses from Liege to Tokyo n Emirates SkyCargo recently operated eight charter flights to fly 247 horses from Liege (Belgium) to Tokyo. The first flight with 36 dressage horses landed at Haneda airport, Tokyo. Emirates operated an additional eight flights for the return journey from Tokyo to Liege. During the flights, the horses were comfortably settled inside specially designed horse stalls. Emirates SkyCargo flew 131 horse stalls to transport the 247 horses. In addition, 59 grooms flew with the horses on the eight flights to ensure that the horses were well cared for, fed and watered during the journey from Liege to Haneda via a brief stopover in Dubai. Emirates transported 20 tonnes of inflight food and drink for the horses along with 100 tonnes of special equipment for the onward journey from Liege. Emirates has decades of experience in transporting horses across six continents for international sporting events, a press communiqué said.
SOHAR Port and Freezone continues growth as an international logistics hub
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n Building on its momentum, SOHAR Port and Freezone has announced encouraging results for the second quarter of 2021. Among them, it reported that the Port’s handling of goods in and out of the Sultanate (throughput) increased by 14% over the same period in 2020 and Ship-to-Ship (STS) cargo increased by an impressive 168%. Meanwhile, the number of handled containers came in at 190,000 TEU in addition to 804 vessel calls, up by 18% from the same period in 2020. The land occupancy at the Freezone has also shown a rise of 10% since the same time last year. “SOHAR Port’s continual growth is a testament to the longterm value that we provide to our clients as we operate safely and efficiently to serve the industrial and economic sectors,” asserted Mark Geilenkirchen, CEO, SOHAR Port. “In alignment with the port’s impressive growth, we continue to make major investments in the Freezone, while promoting it, and Oman in general, as a favourable business destination,” commented Omar Mahmood Al Mahrizi, CEO, SOHAR Freezone and Deputy CEO, SOHAR Port.
Etihad Rail and Western Bainoona Group sign rail partnership agreement n Etihad Rail, the developer and operator of the UAE’s National Rail Network, recently signed a strategic partnership with Western Bainoona Group. Etihad Rail will deliver rail freight services to the Group for their construction materials from Western Bainoona Group’s facilities in Fujairah to Abu Dhabi and Dubai. The agreement comes following the directives of HE Sheikh Theyab Bin Mohamed Bin Zayed Al Nahyan, Chairman of the Abu Dhabi Crown Prince Court and Chairman of Etihad Rail, to enable a sustainable and efficient mode of transport that bolsters the UAE’s economy. The partnership is one of Etihad Rail’s largest commercial partnerships for Stage Two of the UAE’s National Rail Project. 4.5mn tonnes of Western Bainoona Group’s aggregates will be transported annually on 643 trains from the Group’s facilities in Fujairah to logistics hubs in the Industrial City of Abu Dhabi (ICAD) and Dubai Industrial City. The length of each train will be
Etihad Rail and Western Bainoona Group sign one of the largest commercial partnership agreements for Stage Two of the UAE’s National Rail Network.
around one kilometre. Etihad Rail is allocating 70 wagons for each train, with an approximate capacity of 7,000 tonnes per trip. The partnership will reduce road traffic by 120,000 truck trips annually. “We look to leverage the freight solutions provided by the UAE National Rail Network, bolstering and facilitating trade between the emirates,” commented
Mohammed Khalfan Al Hameli, Chairman, Western Bainoona Group. “Etihad Rail is pleased to sign the one of the largest agreements for Stage Two of UAE National Rail Network, adding Western Bainoona Group to our list of partners,” remarked Mohamed Al Marzooqi, Executive Director, Rail Relations Sector, Etihad Rail.
DP World completes trial of BOXBAY High Bay Storage System n DP World has completed testing of the BOXBAY high bay storage concept at the first full-size facility constructed at Jebel Ali port in Dubai. More than 63,000 container moves have been completed since the facility, which can hold 792 containers at a time, was commissioned beginning this year. BOXBAY is a joint venture between DP World and German industrial engineering specialist SMS group. The system stores containers in slots in a steel rack up to eleven high. It delivers three times the capacity of a conventional yard in which containers are stacked directly on top of each other, meaning the footprint of terminals can be reduced by 70 percent.
In BOXBAY containers are moved in, out and between slots by fully electrified and automated cranes built into the structure. Individual containers can be accessed without moving any others. The whole system is designed to be fully powered by solar panels on the roof. “BOXBAY is part of DP World’s vision to apply innovation to enable global
trade and be a provider of smart logistics solutions,” stated Sultan Ahmed bin Sulayem, Group Chairman and CEO, DP World. “BOXBAY’s important parameters such as performance, reliability, energy consumption and many more our goals have been exceeded by far,” commented Mathias Dobner, Chairman and CEO, BOXBAY.
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Duckhams lubricants brand launched in the UAE n Founded in 1899 by chemist Alexander Duckham, the British eponymous brand has been a leading lubricants technology brand for most of the 20th and 21st centuries. The brand has now been introduced in the UAE and will be represented by Abu Dhabi-headquartered Emirates for Universal Tyres, part of Abdulla Al Masaood & Sons Group. “The Duckhams team is excited to launch our iconic British brand in the UAE market. We intend to create a future as glorious as our past and the launch in the UAE will be an important milestone in that journey,” remarked Jabir Sheth, Chairperson, Duckhams. “Our data shows time and again that Duckhams is still one of the most recognised lubricant brands amongst automotive consumers and
trade professionals in many markets,” commented KR Venkataraman, Global CEO, Duckhams. “Duckhams is here to drive innovation and that fits perfectly with
our strategic plans — we are inspired by their values and aspirations and look forward to the journey ahead,” noted Shaun Smith, General Manager, Emirates for Universal Tyres.
CSP Abu Dhabi Terminal and Khalifa Port implement region’s First Autonomous Port Truck System n CSP Abu Dhabi container terminal, the first greenfield project of COSCO Shipping Ports Limited (CSP) operating within Abu Dhabi Ports’ flagship deepwater port Khalifa Port, has announced its terminal will be the first in the Middle East to implement an autonomous port truck system. Following a two-month trial period, a total of six electric Q-Trucks will be commissioned by CSP Abu Dhabi Terminal and tasked with supporting mother vessel loading and unloading activities within the facility’s container yard. The use of smart automation is another key step forward for one of the world’s most technologically advanced ports. “As well as being extremely efficient and cost-effective, the new vehicles enable us to sustain our container handling operations for longer periods and enable us to continue operating in cases where business continuity becomes an operational challenge,”
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noted Naser Al Busaeedi, Deputy CEO, CSP Abu Dhabi. The new Q-Trucks are expected to deliver reduced transformation and operating costs, a significant reduction in Co2 emissions as compared to traditional trucks and serve as a viable business continuity solution in the event of any manpower crisis.
“The addition of CSP Abu Dhabi’s Q-Trucks has not only accelerated Khalifa Port’s position as the Middle East’s leading maritime facility but also serves as a prime example of how innovative technologies can transform the maritime and logistics industries,” remarked Saif Al Mazrouei, Head of Ports Cluster, Abu Dhabi Ports.
Swisslog appoints David Dronfield as the new General Manager for the Middle East
n Swisslog recently announced the appointment of David Dronfield as the new General Manager for its Middle Eastern operations. Dronfield brings more than 35 years of professional experience in the warehouse automation sector with expertise across sales, marketing, business development, project management and in managing senior leadership roles. Having worked in the industry for more than three decades, Dronfield brings with him a wealth of experience and industry expertise. Prior to joining Swisslog Middle East, he has served as Founder & Managing Director of Intralogistic Solution, a company providing intralogistic design, supply chain consulting and turnkey equipment solutions. “The future of warehouse is automation, and there is a huge opportunity for increased growth. Swisslog’s proven innovative solutions can help businesses to overcome challenges, capitalize on digital transformation and scale their business,” affirmed Dronfield.
Agility-backed Shipa opens advanced E-commerce Fulfillment Centre
n Shipa, the digital logistics and e-commerce arm of Agility, recently announced the opening of a sophisticated e-Fulfillment Centre in Kuwait. Shipa’s 15,000 SQM e-fulfillment center gives merchants and brands the infrastructure and services they need to capitalize on the explosive growth in e-commerce and online sales across Kuwait and the GCC. Strategically located in Sulaibiya, near the country’s major transportation links, the facility contains 12,000 pallet positions and 30,000 bin locations. It leverages the operational expertise of Agility, a leading global logistics provider, and the integration technology of Shipa’s last-mile delivery network, serving GCC markets. “The ecommerce ecosystem in Kuwait is getting stronger every day. We are determined to help these businesses, including local small and medium-sized businesses, accelerate their growth,” commented Henadi Al-Saleh, Chairperson, Agility. The Shipa facility offers non-bonded, racked and bulk storage; inbound air and ocean stock replenishment; pick-and-pack services; customer technology integration and APIs; local and international returns services; and integration with cross-border and last-mile transportation. The facility also has temperature-controlled storage, including dry and refrigerated storage. Shipa adheres to rigorous Quality Health Safety, Security and Environment (QHSSE) standards. “E-commerce growth in Kuwait will be boosted by the right infrastructure and technology, including dedicated warehousing, fulfillment space and capacity. Merchants and brands have asked Shipa to help them tackle that challenge,” remarked Borhene Ben Mena, CEO, Shipa Delivery. Shipa’s value-added services include e-fulfillment solutions scalable for all GCC markets, including access to more than 1.2mn sqm of GCC warehousing, customs brokerage, express bonded road services, and delivery options that include COD, pre-paid and payment-at-door.
SEPTEMBER 2021 9
Maersk secures green e-methanol for the world’s first container vessel n AP Moller-Maersk has identified its partners to produce green fuel for its first vessel to operate on carbon neutral methanol: REintegrate, a subsidiary of the Danish renewable energy company European Energy. REintegrate and European Energy will establish a new Danish facility to produce the approx. 10.000 tonnes of carbon neutral e-methanol that Maersk’s first vessel with the ability to operate on green e-methanol will consume annually. “This type of partnership could become a blueprint for how to scale green fuel production through collaboration with partners across the industry ecosystem, and it will provide us with valuable experiences on our journey to decarbonise our customers’ supply chains,”affirmed Henriette Hallberg Thygesen, CEO, Fleet & Strategic Brands, AP Moller-Maersk. REintegrate has a proven track record for producing green e-methanol in its test laboratory in Aalborg. The new facility will be its third e-methanol facility, as they are
also constructing an e-methanol facility in Skive with startup in 2022: “This agreement marks a milestone in the journey towards green transition in the shipping industry,” stressed Knud Erik Andersen, CEO, European Energy.
Aramex & DB Schenker sign strategic MoU n MoU will focus on driving collaborations in freight forwarding solutions in Abu Dhabi and the region Aramex and Germany-based DB Schenker, recently today announced the signing of a strategic Memorandum of Understanding (MoU) with the aim to drive forward synergistic opportunities in supply chain solutions across multiple critical industries to and from Abu Dhabi and the wider MEA region. By leveraging DB Schenker’s extensive global experience in specialized freight forwarding solutions across multiple industries, the partnership will seek to further boost Aramex’s capabilities and offerings in the region, including, but not limited to, the aerospace, defense, infrastructure, and healthcare industries. “By joining forces with DB Schenker, a global logistics company we regard as truly complementary to ours in the region, we will accelerate the realization of our goals in the freight forwarding business,” affirmed Othman Aljeda, CEO, Aramex “We believe our alliance with Aramex was a natural choice given their history, expertise, knowledge, and extensive network in the region. I am confident that together, we will be able to grow our footprint in Abu Dhabi and the wider MEA region,” asserted Christopher Smith, CEO, DB Schenker, Middle East & Africa.
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The world’s first methanol feeder will be 172m long and it is expected to join the Maersk fleet in mid-2023. It will sail in the network of Sealand Europe, a Maersk subsidiary, on the Baltic shipping route under the Danish flag.
Proven Consult and Saudi Arabia’s United Warehouse Company sign MoU to digitalize operations n Proven Consult, a leading automation technology firm in the GCC region, recently announced the signing of a Memorandum of Understanding (MoU) with United Warehouse Co Ltd (UWC), a warehousing logistics service provider in Saudi Arabia, to help accelerate digital transformation in the logistics industry. Under the terms of agreement signed on 1 July, both companies will collaborate in advancing technological transformation through the deployment of latest technologies. Committed to creating smarter businesses with its team of experts, Proven Consult, in partnership with UWC, will work to create value through implementation of digital technologies. Proven Consult aims to enhance business performance and implement Intelligent Business Automation as a core functional area within UWC in order to further enable technological
efficiencies and achieve uniformity, integrate digitization, and improve functionality across various verticals within the organization. This joint venture between two industry pioneers aims to realize Saudi Vision 2030 with the combined goal of promoting technological advancement in the Kingdom, while at the same time placing Saudi Arabia on the world map in terms of technological advancement. “We believe this partnership will mark the beginning of a long-standing business association as we embark on the journey of digital transformation for UWC,” commented Anas Abdul-Haiy, CEO and Deputy Director, Proven Consult. “With the signing of this MoU, we hope to strengthen our ecosystems and drive digital transformation for our clients, bringing them value through the implementation of latest technologies,” asserted Fathi Abdullah Ba-Isa, Managing Director, UWC.
Continental tests tyre prototypes for E-Trucks n Together with leading vehicle manufacturers and technology companies, Continental is working on tyre solutions for special requirements. In particular, the premium tyre manufacturer is currently performing test drives in Germany with an electric truck produced by specialist for electric commercial vehicles, Futuricum. The 19-ton truck is equipped with the largest truck battery in Europe on board, which allows a range of up to 760km without freight. The current test series are about increasing efficiency even further. In particular, the focus is on extending the range by reducing rolling resistance. In addition to the original tyres, the Conti EfficientPro and brand-new prototypes are used in direct comparison, the company revealed in a press release. The Conti EfficientPro is a proven product that was developed in particular for long-distance transportation and emphasizes fuel efficiency. Balancing the conflicting goals, especially mileage, braking and handling performance, at an ever-higher level is technically demanding. At the same time, in view of the rapid development of the e-mobility segment, the engineers are in a race against time, according to a press communiqué.
“The weight and weight distribution of the tractor are increased by the particularly powerful battery. Therefore, the tyres must not only have a low rolling resistance, but also withstand heavier loads than tyres for comparable vehicles with internal combustion engines,” explained Hinnerk Kaiser, Head of Tyre Development Bus and Truck Tyres, Continental.
SEPTEMBER 2021 11
DB Schenker breaks ground on its third facility at Dubai South Logistics District n DB Schenker, a global supply chain and logistics provider, has announced the start of construction of its third expansion phase with another mega logistics centre at Dubai South’s Logistics District, bringing the total contract logistics footprint in Dubai to 84,000sqm by June 2022. The groundbreaking ceremony was attended by Khalifa Al Zaffin, Executive Chairman, Dubai Aviation City Corporation; Christopher Smith, CEO, DB Schenker Middle East Africa; Mohsen Ahmad, CEO, Logistics District, Dubai South and Ako Djaf, Vice PresidentContract Logistics / SCM Middle East and Africa, DB Schenker; among other senior executives from both organizations. The new state-of-the-art, green logistics centre will have a 37,000sqm warehouse space that includes a 5,000sqm mezzanine area dedicated for value-added services and spare-parts operations, in addition
to temperature-controlled areas and ambient-temperature zones. It will also utilise 100% renewable energy and act as a distribution hub for the GCC. “The project also confirms our commitment to operating sustainably, and we want to underpin our leading ecological position in the UAE market by reducing CO2 emissions and costs,” affirmed Djaf. Dubai South has been at the forefront of the e-commerce and logistics sectors in delivering Dubai’s first dual-licensed, hybrid-bonded facilities. Its success can be demonstrated with its host of global and
regional players that benefit from Dubai South’s customer-centric processes with its seamless, multimodal connectivity between road, air and sea transportation. “DB Schenker’s expansion at Dubai South is a testament to our bespoke, customised services and fast-paced ecosystem that benefits from centralisation and economies of scale, servicing the region as well as local markets,”asserted Mohsen Ahmad. DB Schenker is one of the fastest growing logistics service providers in the region expanding the total area of its operated logistics canters from 40,000 to 325,000sqm in the last seven years.
Turkish Cargo transports Turkish rose products worldwide n Possessing one of the world’s strongest cargo flight network and building the trade bridges between continents, Turkish Cargo also contributes greatly to Turkey’s exports. For over the last 60 years, the country’s flag carrier air cargo brand has been carrying the rose products produced in Anatolia’s Lake District and Isparta to various destinations such as the prominent countries in perfume and essence industry like Germany, France, China and United States. Meeting the 65 percent of the world’s demand for rose oil, Turkey is ideal for growing first class roses when it comes
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to quality with its favorable climate conditions. Considered as an indispensable raw material of perfume and essence industry, industrial rose products have an export capacity of 10mn Euros in Turkey, the carrier said in a press statement. Meeting one third of this demand, Gülbirlik (Rose, Rose Oil and Oil Seeds Cooperative) conducts 75 percent of its rose oil exports via air cargo. “We transport our rose products, which are an indispensable part of the world’s perfume and cosmetic sectors, to outside of our borders via Turkish Cargo,” commented Hasan ÇELİK, General Manager, Gülbirlik.
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Alain Kaddoum appointed Managing Director, Savoye Middle East
Al-Futtaim Toyota Material Handling supplies environment-friendly forklifts n Global warehouse automation integrator and software publisher Savoye recently announced the appointment of Alain Kaddoum as its Middle East Managing Director. With Kaddoum on board, Savoye will enhance its longterm strategy to become one of the leading providers of supply chain solutions in the region, combining hardware and software according to customer needs such as manual, mechanised, automated, or robotised installations, a press communiqué stated. “Knowing Alain’s leadership calibre and industry expertise, paired with our support and ambitious vision, we are confident that Savoye is ready to positively impact the region’s supply chain industry,” commented Frédéric
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Zielinski, Managing Director, Savoye EMEA. “I am excited to join Savoye and strengthen our presence in the Middle East through our innovative warehouse automation and software offerings,” remarked Kaddoum. The recent designation of Kaddoum has dedicated over six years of his professional career in the intralogistics industry in the Middle East, providing him with technical background on automation and warehouse management, which will be beneficial to Savoye’s daily operations. Kaddoum holds a Bachelor’s degree in Electrical and Electronics Engineering and a Master’s degree in Automatics, Informatics, and Decisional Systems from INP Toulouse, France.
n Al-Futtaim Toyota Material Handling has announced it has supplied a new line-up of environment-friendly forklift trucks to Al-Futtaim Parts Distribution Hub (PDH) making it the first such delivery to an Al-Futtaim group company. The lithium-ion battery-operated forklift trucks are currently being used in three shifts at the PDH warehouse located in Dubai Investment Park. Lithium-ion batteries offer end users a massive reduction in their operating costs and are more environmentfriendly than conventional lead-acid batteries as they do not emit any hazardous fumes while charging, according to a corporate press release. “With these lithium-ion batteryoperated forklift trucks, not only are we offering the latest technology but also an environmentally-friendly solution,” remarked Ramez Hamdan, Managing Director–Industrial Equipment.
Engr. Hesham Bin Abdulla Alhussayen appointed Acting CEO, SAL n SAL Saudi Logistics Services (SAL) recently announced the appointment of Eng. Hesham Bin Abdulla Alhussayen as Acting Chief Executive Officer (CEO). Former CEO, Omar Hariri, will be leaving SAL to become the CEO, Saudi Ports Authority (Mawani), effective July 1. “Eng. Hesham Alhussayen has gained the trust of the Board throughout his time as SAL’s Chief Operations Officer (COO) and has over 25 years of experience holding leadership positions at multiple prominent Saudi companies. We are confident Eng. Hesham and his team will continue to deliver exceptional results and reach new milestones,”remarked Fawaz Bin Mohammed Al Fawaz, Chairman, SAL. “It has been a privilege leading SAL and strengthening its position as a major player in the Kingdom’s air cargo handling sector. I am fully confident in the ability of Eng. Hesham and his team to deliver on the Company’s growth strategy and wish SAL all the best,” commented the departing Hariri. “I am grateful to the Board for entrusting me with this great leadership responsibility. SAL is moving ahead with our vision to be the logistics partner of choice in a dynamic and globally connected Saudi Arabia as per Vision 2030,” affirmed Engr. Alhussayen
SAMI and Bahri ink agreement to support Defense Logistics localization n The Saudi Arabian Military Industries (SAMI), a wholly-owned subsidiary of the Public Investment Fund (PIF), recently signed a logistics services agreement with Bahri, a global leader in logistics and transportation. Under the terms of the agreement, Bahri will provide wide-ranging internal and external logistics services, including sea, air, and land transport, as well as freight services to the various business units and affiliated companies of SAMI. The agreement was signed at the headquarters of SAMI in Riyadh by Eng. Walid Abukhaled, CEO, SAMI, and Eng. Abdullah Aldubaikhi, CEO, Bahri. The contract includes the provision of complete door-to-door logistics and transportation services to facilitate the smooth execution of the projects and programs of SAMI and its affiliates, besides supporting the localization of defense logistics.
“The agreement demonstrates the Kingdom’s dynamic efforts to develop its military industries and logistics sectors,” asserted Eng. Abukhaled. “Bahri is honored that our contributions are aimed at ensuring Saudi Arabia’s security, especially in our role as the exclusive logistics provider for the Kingdom’s Ministry of Defense, Ministry
of Interior as well as the Presidency of State Security and all its divisions,” observed Eng. Aldubaikhi. Though the agreement presently covers the Saudi market, the two companies are working to expand its scope to include the global defense and logistics sector in the future.
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Tradeling launches Fulfillment Centre to expand its operational capabilities n Tradeling, the eMarketplace focused on business-to-business (B2B) transactions in the MENA region, has set up a Fulfillment Centre in Dubai CommerCity further expands its business and its commitment to the UAE. The move aims to extend Tradeling’s operational capabilities to provide a superior and faster service to its customers while keeping up with increasing demand and driving down costs. The Tradeling Fulfilment Centre will facilitate domestic and cross-border transactions where high-demand products are stored and fulfilled by Tradeling as part of its extended commitment to the customer. It is an added boost to sellers on the platform that enables them to ship their products to a dedicated warehouse in bulk. In Addition, The sellers can store their goods and sell them in smaller quantities while saving significant shipping costs, which can be passed on to the buyer. Small and medium-sized enterprises (SMEs) will be able to further benefit from highly competitive wholesale prices. The Fulfillment Centre serves as a central hub in the 2.1mn sqft e-commerce free zone, where products can be sold and distributed at speed across other GCC countries with ease, according to a corporate press communique. “As an incubator for technology and innovation, Dubai is a good location to serve our customers in the region,” observed Marius Ciavola, Chief Executive Officer, Tradeling. “Tradeling will leverage the world-class infrastructure offered by the region’s firstof-its-kind e-commerce free zone, enabling them to drive their business advancement further,” remarked DeVere Forster, Chief Operating Officer, Dubai CommerCity.
Jafza completes US$ 677mn infrastructure projects n DP World, UAE Region’s flagship Jebel Ali Free Zone (Jafza) improved and elevated the roads and infrastructure within its premises over the last five years, with the aim of offering top-notch facilities and amenities to those operating in the free zone. The projects include sustainable developments and major construction works valued at approximately AED 2.484bn (US$ 677mn). In line with the Dubai Demand Side Management (DSM) 2030, sustainability has been an integral part of Jafza’s core business values. While doing so, it has consistently encouraged its customers to reduce energy consumption, conserve natural resources and reduce carbon emissions. “It is truly a moment of pride for us when Jafza is touted as the preferred location to conduct business and is chosen by multinationals and Fortune 500 companies as their regional headquarters,” asserted Abdulla Bin Damithan, CEO & Managing Director, DP World-UAE Region and Jafza. Key features of the upgrades include improvements in the Jafza One complex that is valued at AED 1.2bn and construction of accommodation comprising of 13 buildings, each G+10 floors for 35,000 occupants and a Food Court, both costing AED 689mn. A new set of Light Industrial Units (LIU’s) and warehouses worth AED 130mn, new bridges, upgrading of roads and Jafza North stormwater improvement valued at AED 280mn are a part of the development works.
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Siemens Mobility AG opts for space saving storage and order picking solution n The company, which is active in the areas of rail vehicles and rail automation solutions, will move into its new materials and spare parts warehouse in Wallisellen, Zurich in the coming months. “We are incredibly pleased to announce Siemens Mobility AG has entrusted Swisslog to install an innovative AutoStore storage and picking system for small parts. With our agile local realization and service teams, we can implement the system for Siemens very quickly and efficiently,” commented Dr. Christian Baur, CEO, Swisslog. With over 270 AutoStore projects worldwide, Swisslog is the leading provider of this solution. In Switzerland alone, there are over 30 Swisslog installations. The main components of the automated logistics solution in Zurich include AutoStore storage system with 10,000 bins and 4 robots installed in the basement for optimal space utilization; ergonomic picking stations on the first floor with plenty of daylight for the operators; Tote conveyor technology in the basement, first floor and connecting tote lift and Swisslog SynQ software, which controls the entire automated solution. “By separating the warehouse in the basement and the pick station on the first floor, we enable our colleagues to work in daylight, which is of course very important for their comfort,” noted Gerd Scheller, CEO, Siemens Mobility AG.
Qatar Airways Cargo & WiseTech Global implement direct data connection n Qatar Airways Cargo, the world’s leading air cargo carrier, and WiseTech Global, a leading provider of software solutions to the logistics industry, have commenced implementation of an extensive direct data connection between their global operating systems The direct data connection between WiseTech’s leading CargoWise platform and Qatar Airways Cargo management system, CROAMIS, streamlines the exchange of critical operational data that reduces risk, complexity and costs for forwarders as well as airlines. “This initial step delivers a strong foundation for on-going product and technical connectivity between Qatar Airways Cargo and its substantial pool of customers,” remarked Guillaume Halleux, Chief Officer Cargo, Qatar Airways Cargo.
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“As the air cargo industry continues to adapt to the rapid and immense changes from 2020, it is important we work together to continuously streamline processes and improve efficiencies where there are obvious far-reaching benefits,” commented Scott McCorquodale, Chief Automation Officer, Air Cargo at WiseTech Global. Following IATA Recommended Practice, through the CargoWise connection, Qatar Airways Cargo offers an assurance that the single source of air waybill data from the forwarder will be immediately available to the global Qatar Airways ground handling network, reducing the technical and financial burden for forwarders that can otherwise occur and has traditionally often been the case, a press communiqué concluded.
Asia’s fastest growing B2B Commerce unicorn Moglix enters the UAE n Moglix recently raised its Series E round of funding led by Falcon Edge Capital through their Abu Dhabi based Alpha Wave Ventures, making it the first B2B Commerce unicorn in the manufacturing sector, with a total funding of US$ 220mn and a valuation of US$ 1bn. Moglix has established its operations in the Khalifa Port Free Trade Zone (KIZAD). It is collaborating closely with large manufacturing enterprises across the country to simplify indirect procurement and enable tech-led supply chains. It has also launched its B2B e-commerce platform, moglix.ae which will start to provide a digital catalog of 500,000 industrial products across 50+ categories over the next few months, the company announced via a press communiqué. “Our vision to build the operating system for commerce is closely aligned with the Digital UAE initiative to make the UAE a Smart Country and we are looking forward to empowering stakeholders to achieve this goal,”emphasized Rahul Garg, Founder & CEO, Moglix. “Moglix will bring the same engine of innovation and excellence to the manufacturing ecosystem in the Middle East, creating growth opportunities for suppliers and manufacturers,”noted Navroz D. Udwadia, Co-Founder, Falcon Edge Capital, investor in Moglix. Through their digital platform, supplier and buyer network, and logistics strength, Moglix brings down cost, enhance sales, improve operational efficiency, and make the supply chain touchless, the press note concluded.
Etihad Cargo and CargoAi agree worldwide partnership n Etihad Cargo and CargoAi, the SaaS application which provides air cargo digital solutions, have partnered to elevate the carrier’s API accessibility for freight forwarders as part of its digitalisation strategy. During the past few years, Etihad Cargo has accelerated its development of technology advancements which have provided simplified customer experiences through a number of partnerships. This has culminated in the launch of its brand new digital platform. Their latest collaboration with CargoAi will further enhance this through the provision of brand-new API accessibility for freight forwarders the world over. “Our partnership with CargoAi supports this vision, and provides an additional tool which delivers a rapid and fluid digital booking services platform,” explained Martin Drew, Senior Vice President Sales & Cargo, Etihad Aviation Group.
“Etihad Cargo is a cutting-edge, highly innovative carrier in the field of digital air freight. We are fortunate to have the chance to be the first provider to use their latest modern APIs,” noted Matthieu Petot, CEO, CargoAi With CargoAi’s expertise in the areas
of air freight and tech, integration is taking place at a record pace. By beginning of August, all aspects of the company’s offer of capacity, including rates, schedules, quotations and bookings, will be available via the platform, a press communiqué concluded.
SEPTEMBER 2021 19
Riyadh Airports Company launches KKIA Energy Efficiency Project with ENGIE n Riyadh Airports Company (RAC), which manages and operates King Khalid International Airport (KKIA) in Riyadh, and ENGIE recently launched the Energy Efficiency project at KKIA to identify and develop cost-effective and smart energy conservation measures, identifying the optimal mix of clean energy sources. According to a press statement, the project will provide the best solutions to reduce energy demand and costs, ensure reliable supply through clean and renewable energy sources. The project covers all passenger terminals including the private aviation terminals, the Airport’s industrial zone, support facilities, water transfer and treatment plants, substations, airfield and district cooling plants. ENGIE will perform an energy audit and consultancy work to identify and develop energy-saving measures that will reduce the facility’s energy use, cost of operation and
maintenance. The project comes as part of RAC’s efforts to enhance energy efficiency at KKIA as per the standards of the International Civil Aviation Organization (ICAO), the General Authority of Civil Aviation (GACA), the Saudi Electricity Company (SEC) and the Saudi Standards, Metrology and Quality Organization (SASO). “We are partnering with a global low-carbon energy provider to achieve our vision and contribute positively to the environment and keep it safe for future generations,” remarked Eng. Mohammed bin Abdullah Al-Maghlouth, CEO, RAC. “The Riyadh Airport project is key to enabling the Kingdom to house a sustainable and energy-efficient worldclass international airport at the heart of Saudi Arabia,” commented Turki Al Shehri, CEO, ENGIE in Saudi Arabia
Tristar Group reports strong H1-2021 performance n Tristar Group, the global integrated energy logistics company, recently announced its management results for the half year ended 30th June 2021. The Group’s performance in the six months ended 30th June 2021 continues to be positive and demonstrates the resilient business model of Tristar. The Group’s consolidated revenue grew by 9.1% in comparison with the same period in 2020 and EBITDA and net profit both reported a significant increase year-onyear by 26.0% and 66.5%, respectively, the company said in a press communiqué. “Our performance in the first half of 2021 reflects improving market conditions and our ability to be a resilient and diversified business model. We continue to have strong pipeline of growth opportunities across all our business segments, which we are confident of leveraging upon to deliver attractive returns to our shareholders,” affirmed Eugene Mayne, Group CEO, Tristar.
20 SEPTEMBER 2021
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SSI SCHAEFER
Unlocking growth through sustainable innovation and radical technologies SSI Schaefer’s core focus is to build long lasting and supportable solutions for its customers and partners
22 SEPTEMBER 2021
SSI SCHAEFER
Presently, companies operate in a business environment that is both challenging and competitive, characterized by trade disputes, rising protectionism, complex regulatory regimes, unprecedented technological changes and evolving consumer demand. In an exclusive engagement, Global Supply Chain connects with the eminent quartet from SSI Schaefer International Middle East based in Dubai World Central (DWC) to get the lowdown on improved automation and robotic technologies that power productivity and performance in warehouses, factories and in agri-tech industries. Matthias Hoewer
W SSI Schaefer has been in the lead for increased agility and intelligence for robotics and automation in warehouse
ith the global growth outlook remaining uncertain, there is a stronger need than ever for companies to look for new ways to grow and add value. Creating new and evolving old business models to drive innovation is one way companies can respond to new risks and opportunities. SSI Schaefer has been in the lead for increased agility and intelligence for robotics and automation in warehouse and other diverse operations. From greater flexibility and scalability to productivity gains, a faster ROI compared to other automation solutions and better resource management, the company has spearheaded the use of automated machinery and control systems, computers and the latest in Information Technology in handling processes and mechanisation in industry. To explain and elucidate the latest forays in SSI Schaefer’s quest
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SSI SCHAEFER
Carsten Spiegelberg
Our customers in the Middle East have always been at the forefront of energy efficient solutions, in particular with semiautomated solutions for temperaturecontrolled operations in the food and beverage industry. for excelling in its key robotics and automation operations, Global Supply Chain empanelled a core group comprising Matthias Hoewer, Regional General Manager, Carsten Spiegelberg, General Manager Logistics Solutions, Alexander can den Oever, Regional Manager Customer Service & Support, Cosmin Sebastian Ilie, Country Manager UAE. Global Supply Chain (GSC): SSI Schaefer has made Innovation and Sustainability the centerpiece of its current strategy. Talk to us about the why and briefly how SSI Schaefer plans to use Robotics and new sophisticated solutions to foster innovation and sustainability objectives? Matthias Hoewer (MH): Innovation and Sustainability are decisively forming part of an end-to-end concept for our comprehensive solutions. Starting with the product design and manufacturing processes to harnessing the highest efficiency classes for motors, bearings, other eco-friendly recycled materials and
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ending with long lasting customer support to maintain this high level of efficiency throughout decades of operations, every aspect of our operations is geared to meet our exacting standards. Smart solutions and Robotics are used to support the optimization of resources within warehousing operations. They allow us to achieve better utilizations rates by smarter resource management and shorter turnaround times of orders within a distribution centre. The equation is quite simple: Smarter warehousing allows better utilization and therefore less equipment, materials and energy have to be used to achieve the same output. GSC: As a logistics and materials handling specialist what role do you see for SSI Schaefer “to meet the growing expectations and demands of your customers more efficiently and sustainably” in the words of your CEO, Steffen Bersch? MH: The demand to design and act more efficiently and sustainably is visible across many industries nowadays. As outlined before it
is our role to support our clients along the design process of their warehousing facilities. Adding another feather to our long list of accomplishments, SSI Schaefer has joined the ‘50 Sustainability & Climate Leaders’ initiative a few years back and as a family owned business looking back at more than 80 years of company history, it is certainly in the nature of our DNA to build long lasting and sustainable solutions for our customers and partners. GSC: Do you sense the same fervor for modernization, digitalization and sustainability in automation and materials handling sectors in the region? Carsten Spiegelberg (CS): We do indeed see a strong trend for modernization and digitalization towards automation of intralogistics processes and sustainability plays a significant role in all areas, not only in terms of using sustainable equipment to provide sustainable solutions, but also use automated solutions to facilitate sustainable processes and structures. This includes the implementation of semiand automatic solutions in warehousing and order fulfillment in general, the use of sustainable solutions with energy efficient mechanisms and components, the provision of solutions to facilitate sustainable warehousing and order processing and finally the provision of solutions to support sustainable processes such as vertical farming and others. GSC: How then specifically is SSI Schaefer replicating this strategy for the Middle East and how is the region responding to these new initiatives? CS: With its international presence, its comprehensive portfolio and strong innovation capabilities, SSI Schaefer is well prepared to adapt and respond effectively to the specific needs of individual
SSI SCHAEFER
customers. Our customers in the Middle East have always been at the forefront of energy efficient solutions, in particular with semi-automated solutions for temperature-controlled operations in the food and beverage industry. At the same time SSI has put the sustainable increase in energy efficiency, low energy consumption and minimal wear of the individual components in focus when developing its latest ranges of automated storage and transportation systems. Our growing local workforce, in close co-operations with the competence centers in our European and Asian headquarters assures that our customers in the region have full access to these innovations, whilst maintaining individual consultation in the local context. GSC: How has this new focus influenced and affected your performance in the region? CS: Our continuous focus to provide sustainable solutions and systems has been well received all over. Our energy efficient automated warehouses ensuring sustainable supply chain operations can be found across Asia, not only in places like Korea and Singapore, but also Taiwan, Vietnam, and others, and have most recently been complemented by two cold store ASRS system in the Philippines, dubbed to provide ‘Resilience against climate change and unpredictable events such as the Covid-19 pandemic’. Whilst warehouse operators in the Middle East are still taking a more cautious approach towards major investments, we can also here see an increase of our business towards sustainable semiand fully automated warehouse and other supply chain related solution. GSC: How is the extraordinary growth of E-commerce impacting your business?
SSI Schaefer at Expo 2020 Dubai SSI Schaefer is the official partner of the German Pavilion Expo 2020 Dubai Consortium with partner Infarm Vertical farming solution supplies megacities with fresh food At Expo 2020 Dubai, SSI Schaefer will present a sustainable solution developed in partnership with Infarm to locally supply metropolitan areas with fresh food. As the backbone of the economy, logistics is challenged to shape the future with efficient as well as sustainable processes and structures. SSI Schaefer, a leading provider of modular warehousing and logistics solutions, is aware of this responsibility. As the official partner of the German Pavilion Expo 2020 Dubai Consortium, SSI Schaefer presents a vertical farming solution designed in collaboration with Infarm in the Future City Lab within Campus Germany. Sustainability and efficiency In view of the increasing global urbanization, the sustainable as well as efficient supply of fresh food to metropolitan areas is of fundamental importance. Compared to traditional farming, the innovative solution designed by Infarm in collaboration with SSI Schaefer is up to 400 times more efficient. For example on 25sqm, farmers are able to produce the equivalent of almost two acres of farmland. It needs 95% less water, 90% less transportation and zero chemical pesticides. In the Future City Lab, the scalable food system is represented in the form of two skyscrapers. While the first tower shows a vertical farm inside a glass façade, the second building is used for playful exploration of the topic via video clips, infoboards and experiencing the vertical farm with all the senses.
CS: Even before the coronavirus pandemic, the retail landscape was changing quickly. E-commerce has been on a stable growth trajectory for some time, with retailers and manufacturers planning their operations and fulfillment strategies to meet future online market demands. This did force us at an early stage to come up with streamlined, yet flexible fulfillment solutions, modular, efficient and fast and easy to implement. GSC: What are your expansion plans for the region? What are the top three countries in the Middle East in business prospects and potential? MH: We are in the unique and enviable situation to say that we can support our clients throughout the entire MEA region already! We do this either through our own inhouse teams located in the UAE,
Saudi Arabia and South Africa, or through one of our partners within SSI Schaefer’s wide distributor network across the Middle East Africa region. The highest potential for larger automated solutions is definitely within the three core markets where we are already directly represented and I believe this will remain the same at least for the next 3-5 years. Automation is either driven by volumes or by high operational costs, so it wouldn’t surprise me if countries like Egypt, Nigeria or Pakistan will show a growing demand for automated solutions in the near future as well. GSC: What are the current opportunities in store, competition and challenges for SSI Schaefer in the region going forward? MH: Globally the outlook for the
SEPTEMBER 2021 25
SSI SCHAEFER
logistics industry is excellent. The demand clearly outweighs the available resources, which also brings us directly to the challenges for our region. Central Europe, North America and other countries seem to move faster out of the current pandemic than the broad MEA region. Investment plans are approved quicker and with a longer ROI’s in mind. In times where steel prices or shipping rates rise in double digits on monthly basis, where semi-conductors and electrical components are facing a global shortage, quick and controlled decisions are the key to secure the scarce available resources. I have to admit, I wish our markets would move quicker in this regard. To counter these shortages, we are pushing towards optimization of existing resources as well. We accomplish this either by retro-fitting or upgrading existing customer sites or by maintaining them in the best possible way through our Customer Service teams. GSC: Talking about Customer Service, how does SSI Schaefer approach this topic with its automation customers in particular? Alexander van den Oever (AvdO): Customer Service has become one of the main business drivers for the last couple of years. The Schaefer Maintenance Philosophy (SMP) to our clients is 100% flexible and available to all our customers and it is not limited to automated systems. From simple Service Level Agreements (SLAs) for annual rack maintenance programmes, to the fully customized ‘all inclusive’, resident maintenance solutions, it is an individual task to pick the right service solutions from our catalog of services for each customer site. It is important to point out though, that SSI Schaefer’s
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The Schaefer Maintenance Philosophy (SMP) to our clients is 100% flexible and available to all our customers and it is not limited to automated systems. strength lies in the local availability of service engineers. By now close to 40% of our job roles in the MEA region are somehow related to Customer Service and Support. GSC: You mentioned a topic called Resident Maintenance, which we hear more and more in regards to larger automated solutions. Can you explain the concept in more detail for us? AvdO: The concept of RM or Resident Maintenance has been very common in other parts of the world for many years. Now with the development of larger and more complex automation sites in the MEA region the demand for such services is increasing year by year. In this concept, SSI Schaefer, as the supplier and manufacturer of the provided automated systems and equipment, takes over the technical service and maintenance with its own technicians and site engineers and becomes a permanent part of our clients’ operational team on site. Starting with the hiring and onboarding process, team setup and training, up to spare parts management and IT services, the RM team can provide all required technical services which allows our customers to put their own focus on the daily operations. This constitutes a clear win-win situation, especially for customers that have not been exposed complex automated solutions in the past. GC: What trends and advent of technologies do you foresee in intra-logistics for the region?
Alexander van den Oever
MH: Returning back to the topic of sustainability another global trend, with a huge potential for the logistics industry, is the topic of food security or especially urban farming. On one hand we see regions like the Middle East with a major shortage of water or agricultural soil, On the other hand we see traditional agricultural countries being exposed to climate change driven droughts or flooding. Both are facing the same issues, with common farming technologies, the risks of highly fluctuating harvests are increasing year on year. The technological improvements in the sector of vertical farming in recent years are amazing and in combination with automated or semi-automated logistics solutions it will become a game changer for sure. GSC: Agricultural sustainability and vertical farming are clearly the new ‘mantra’ in the present
SSI SCHAEFER
scenario…..what is your contribution to this sector in the region and what prospects do you foresee? Cosmin Sebastian Ilie (CSI): SSI Schaefer has been active in the AgriTech sector for a number of years now. We position ourselves as a technology partner and have globally been very successful with our partnership with the German urban farming pioneer Infarm. Combining Schaefer automation technology with Infarm’s concepts and expertise for urban farming have shown great results and if you ever visit some of the major German food retailers, the delicious Infarm greens and herbs are displayed there! You may not have to travel all the way to Germany to witness the taste. The great news is that SSI Schaefer and Infarm will showcase a small exhibit at this year’s Expo 2020 Dubai within the German Pavilion! GSC: How are you preparing for the upcoming Expo 2020 and what is your level of participation and exposure in the same? What are you planning to highlight? CSI: We are very excited to be a partner for this prestigious and important event. Located within the German Pavilion, SSI Schaefer together with Infarm and other German companies will showcase a small snippet of sustainable urbanization. Unlike usual exhibitions where the focus is on products and solutions, the Expo 2020 experience is aiming at education and entertainment for the entire family. We hope to meet our potential customers there and demonstrate our vision of a sustainable future. GSC: What potential do you foresee in the agriculture and food security segments going forward? CSI: I believe especially the start of
Combining Schaefer automation technology with Infarm’s concepts and expertise for urban farming have shown great results the Covid-19 pandemic has shown us the weaknesses of the current and traditional food supply chain structures. Carrying fresh fruits and vegetables halfway around the globe, might not be the best idea after all. Especially long-term urban farming will allow us to reduce water consumption, grow healthier food and reduce the carbon footprint by reducing transportation distances between the source of the produce and the consumer. The technology is still in a startup phase for many products. Focus today is on leafy greens, fish or protein-based animal feed. The outputs are constantly growing, the product range is constantly growing and the overall energy consumption versus the output is constantly decreasing from generation to generation. I believe there is still a lot more to expect in the coming years. GSC: What are the other intended areas / verticals of growth for SSI Schaefer in the region? MH: I strongly believe the region is still in a bit of a ‘catch-up mode’ in regards to automation technology in general. Traditional market sectors like Food & Beverage, Fashion, Pharma or Retail has not yet reached 100% saturation and it will become more common to upgrade from conventional warehousing solutions to AS/RS, shuttles or conveying solutions. Being in the region for almost 14 years now, I have witnessed a constant growth in interest
Cosmin Sebastian Ilie
and demand for such solutions. Automation is not the solution for everything, but for a growing number of our clients, it does become a viable option worth pursuing. GSC: What have been some of your recent major introductions and accomplishments in the region? Please elaborate? MH: Outside of contracts, customers and orders, I personally feel that our biggest accomplishment throughout the pandemic is that we did manage to keep the team together and that every single employee did her or his utmost to adapt to the new situation and perform under sometime very difficult conditions and challenges. A huge thank you to my team at this point! Our stamina as a company in these unforeseeable times is now helping us to be ready and grow the business in post-pandemic conditions.
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DP WORLD
Jebel Ali Port performs mega transportation feat through tactical floating crane operations Four large reactors, largest weighing 227 tons, were shipped from Jebel Ali Port to Rotterdam in collaboration with the CMA CGM Group
DP World expands Africa operations with acquisition of Imperial Logistics Strategic move to enhance DP World’s capabilities along supply chains DP World recently announced an offer to acquire JSE-listed Imperial Logistics, an integrated logistics and market access company with operations mainly across the African continent and in Europe. Imperial is an integrated logistics and market access solutions provider with a presence across 25 countries, including a significant footprint in the high growth Africa market. The acquisition of Imperial will add new capabilities to DP World, particularly in Africa. Combining the companies will create the continent’s best network across inland logistics, ports & terminals, economic zones and marine logistics, DP World aid in a press statement.
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“The acquisition of Imperial will help DP World to build better and more efficient supply chains for the owners of cargo, especially in Africa,” said Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World. The acquisition will also build on Imperial’s contribution to the South African economy. Integration with DP World will strengthen South Africa’s position as a logistics hub for Africa. DP “This transaction will be valueenhancing for Imperial from DP World’s leading technology, global networks and key trade lane volumes, while enabling us to build on our Gateway to Africa strategic and growth ambitions,” remarked Mohammed Akoojee, Group CEO, Imperial Logistics.
D
P World UAE Region’s flagship Jebel Ali Port, shipped four oversized mega polyethylene reactors, the largest weighing 227 tons, to Rotterdam in collaboration with the CMA CGM Group, a world leader in shipping and logistics. The shipment was handled with the help of a floating crane from Drydocks World and was loaded on two consecutive sailings. As one of the largest project cargoes loaded on a container ship in the Middle East, the operation mobilised more than 100 specialists across the entire supply chain and involved methodical planning and safe execution. In total, 839 tons of cargo, measuring 35m in length, 7m in height, and 7m in width, were transported, occupying 424 TEU slots. “Our collaboration with the CMA CGM Group, and the completion of this operation underscored the importance of DP World UAE Region’s advanced capabilities, reaffirming the faith of key players in the industry,” commented Shahab Al Jassmi, Commercial Director of Ports and Terminals-DP World, UAE Region. “This shipment is a milestone achievement for Jebel Ali, and the container sector in the UAE,” stated Romain Vigneaux, Dubai Agency General Manager, CMA CGM Group. As the 12th largest port globally and the region’s largest poly-functional seaport, Jebel Ali Port has the capacity to handle 22.4mn TEUs.
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MENA FREE ZONES & ECONOMIC ZONES
Making the case for attracting investments in GCC Free Zones Freezones or Special Economic Zones (SEZs) were established to accelerate development by creating an efficient business environment and encouraging foreign direct investment (FDI). The UAE track record in developing freezones has been excellent borne out by number of special economic zones in the country and the volume of local, regional and international investment. This model is effectively now also being replicated across several GCC and MENA nations with positive outcomes even in the face of stiff competition and new and emerging challenges in the current context.
I
t is now well documented that Freezones attract businesses through cost advantages and preferential treatment, and they foster skills development and technology transfer, particularly from foreign firms. Successful SEZs, moreover, source goods and services from domestic companies, and they sell to them as well. They thus contribute to transforming the national economy as a whole. It moves on from being a labour-intensive economy to a skills- and technology-intensive one. Moreover, SEZs have also been successful test-beds for economic reforms as has been demonstrated in many parts of the world and the GCC. Meanwhile, according to multiple reports, the UAE and several other GCC and Middle Eastern countries have taken several initiatives to boost export and re-export trade The pandemic has brought an
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additional set of challenges to the economies of the Middle East and North Africa (MENA). The region has been struggling to attract more and better FDI, constrained by investment climate weaknesses and regional geopolitical tensions.
Short-term declines While the projected short-term declines are expected to hit the MENA economies hard, the crisis could also bring new opportunities to benefit from global trends, such as reshoring and restructuring of global and regional value chains. The extent to which this is possible will depend on sustaining existing reforms underway, enacting targeted new strategies and measures for the post-Covid-19 context, and reinforcing regional cooperation. In a study prepared by the MENA-OECD (Paris
The Programme covered 18 economies of the region: Algeria, Bahrain, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, the Palestinian Authority, Qatar, Saudi Arabia, Syria, Tunisia, United Arab Emirates and Yemen
MENA FREE ZONES & ECONOMIC ZONES
headquartered 38-member Organization for Economic Co-operation & Development) Competitiveness Programme and reviewed by the Investment Division of the Directorate of Enterprise and Financial Affairs – including inputs and data on FDI statistics, with the financial support of the Swedish International Development Agency (Sida) and the European Union. The Programme covered 18 economies of the region: Algeria,
Bahrain, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, the Palestinian Authority, Qatar, Saudi Arabia, Syria, Tunisia, United Arab Emirates and Yemen
Key takeaways Global foreign direct investment is expected to decline sharply due to the Covid-19 crisis by at least 30% in 2020 in the most optimistic scenario. MENA countries are
likely to be even more impacted due to the large share of FDI in primary and manufacturing sectors, and the direct and indirect effects of the oil price drop. MENA governments quickly enacted policy responses to address the situation. In addition to supporting policy measures, some set up crisis units to inform and retain foreign investors. Although counterbalancing the impact of the pandemic on investment is difficult, relevant
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MENA FREE ZONES & ECONOMIC ZONES
strategic policy reflections are emerging to assess the role of investment promotion agencies, the disruption of value chains and the future positioning of the region. Investment recovery measures should focus on the developmental impact of FDI and engage MENA economies into wider reforms towards more inclusive, green and resilient growth. Governments in the MENA region, just like many worldwide, enacted containment measures to avoid the spread of the virus and directed specific support to mitigate the economic impact of the crisis. While it is difficult to estimate the magnitude of repercussions on MENA economies, severe disruptions to economic activity are expected to be accompanied by a sharp
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contraction in foreign direct investment (FDI) flows.
Supply Chain disruptions Based on the containment measures implemented by MENA economies and the subsequent disruption in global supply chains and the structural characteristics of individual economies, the International Monetary Fund (IMF) forecasts that all MENA economies, with the exception of Egypt, will contract in 2021. However, the IMF predicts a relatively rapid V-shaped recovery for the region, with nearly all MENA countries expected to recover in 2021. Attracting more and better FDI to the region will be critical to the success of MENA’s post-pandemic
economic reconstruction. Besides being a much needed source of private investment, FDI would help countries in the region strengthen the resilience of their economies and enhance participation in value chains. It would also help spur more sustainable, inclusive and technological growth, as multinational enterprises (MNEs) tend to be larger, more innovative and more productive than domestic firms. It could also play an important role in accelerating economic diversification and stimulating small and mediumsized enterprises (SMEs) through business linkages.
IMF predicts a relatively rapid V-shaped recovery for the region, with nearly all MENA countries expected to recover in 2021.
MENA FREE ZONES & ECONOMIC ZONES
FDI priority Governments in the region see FDI as a key priority and have already started to think about revamped attraction strategies in a global economy transformed by the pandemic. The immediate and long-term effects of FDI flows will depend on the global recovery and effective economic policy responses. This note provides an overview of trends in foreign direct investments in the MENA region. It also showcases information collected through research and consultations with in-country stakeholders on immediate policy responses to the crisis and policy considerations for recovery.
Covid-19 impact on investment: Sharp decline in FDI The OECD expects a drop in global FDI flows by at least 30% in 2020 (most optimistic scenario) compared to 2019 before returning to pre-crisis levels by the end of 2021. The resulting demand and supply shocks, coupled with the drop in oil prices and lower confidence of investors, are expected to lead to an even more significant decline of FDI in MENA. The UN’s Economic Commission for West Asia estimates that the Middle East region is likely to lose 45% of its FDI inflows in 2020.5 In 2019, global FDI increased by 12% to US$ 1426bn but was still stalling when Covid-19 hit, remaining below the levels recorded between 2010 and 2017. During the same year, FDI inflows in MENA also amounted to US$ 17.2bn, a 10% increase compared to 2017, but still less than half of the level recorded in 2008, which was a peak year for FDI inflows in the region With the advent of Covid-19, there will be an immediate impact on FDI globally and in MENA from
a reduction in equity investments, as investors put greenfield investments and mergers and acquisitions (M&A) on hold. Preliminary estimates suggest that the value of M&A deals already decreased by 71% in the first four months of 2020, from US$ 89.6bn to US$ 26.2bn compared to the same period in 2019.
Greenfield Investments Greenfield investments represent more than 80% of total FDI projects in most oil-importing MENA economies, while M&A mostly take place in the countries of the Gulf Cooperation Council (GCC). The distribution of FDI inflows across the eight MENA economies surveyed by IMF and OECD shows that Egypt remains the main destination for FDI inflows, with US$ 9 billion in 2019, a slight increase from US$ 8.1bn in 2018, but the largest since 2009. Morocco has also been an attractive destination for FDI in recent years, with FDI inflows reaching US$ 3.5bn in 2018, up from US$ 2.7bn in 2017. For most of the economies surveyed, FDI inflows have been volatile compared to other regions, particularly due to the political instability experienced by these countries since the 2011 uprisings. As a proportion of GDP, FDI inflows into MENA over the past ten years have underperformed the average for both emerging markets and developing economies, and advanced economies.
Investment drop in major industries and source countries A sectoral breakdown of announced greenfield investments to the eight countries surveyed for the MENA region between 2003 and 2019 shows that real estate and coal, oil and natural gas accounted for 32% and 25%
respectively of a total of US$ 525.8bn in investment. Manufacturing of chemicals, services such as hotels and tourism, and renewable energy also account for an important share of investments in the region. Egypt dominates the investment landscape with nearly half (US$ 245 billion) of the announced greenfield FDI in the eight countries. The extensive lockdown measures, implemented widely across the region, are likely to have severe repercussions on greenfield FDI in many strategic sectors for the economies in the coming months. The region is expected to suffer large declines in the manufacturing sector, in line with the trends in non-OECD countries since the beginning of 2020.
No major disinvestment trends According to recent consultations with MENA Investment Promotion Agencies (IPAs), there are as yet no significant divestment trends or cancellations of projects, but important investment delays are expected. The drop in oil prices is also expected to lead to fewer investments from neighbouring Gulf countries, which were the largest source of greenfield FDI in the eight surveyed MENA economies between 2003 and 2019. Total announced greenfield FDI from GCC countries totalled US$ 193bn, with investments primarily in real estate (65%) and coal, oil and gas (14%). Most of these investments came from the UAE (55%), followed by Bahrain (17%) and Saudi Arabia (12%). With 28% of greenfield projects, the European Union also remained a key source of FDI to the region (28%), while Chinese investments have significantly increased from US$ 1.4bn during 2008-13 to US$ 34.9bn during 2014-2019, driven
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by the launch of China’s Belt and Road Initiative in late 2013. In addition, intra-regional investments among the eight surveyed economies have been low at only 3% of total announced greenfield FDI. The crisis may offer further scope for investments among these countries. UAE: Governments of several emirates have introduced financial assistance measures. Dubai proposed a refund of 20% of customs fees on imported goods and a 10% reduction in water and electricity bills. The government of Abu Dhabi has reduced or suspended various government fees and penalties and granted substantial rebates to lease payments for companies in the tourism, hospitality and entertainment sectors. The offshore free zones apply fee reductions to companies. The Abu Dhabi’ Global Market implemented 100% waiver on commercial licence, business activity and data protection renewal fees for a limited period.
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Dubai sops The Dubai International Financial Centre also waived annual licences for new companies until the end of 2020 and lowered of 10% the renewal fees for existing licences. The Dubai Free Zone Council announced an economic stimulus package on 28 March 2021 that includes the postponement of rents for six months, improved facilitation instalments for payments, refunds of security deposits and guarantees and cancellation of free zones applied fines. Some MENA countries have been imposing local market access limitations on foreign investors, which can in turn benefit from specific incentives (e.g. status of totally exporting companies in Tunisia, specific legislations in special economic zones). With the crisis, some MENA countries decided to provide larger access to their local market to foreign investors under specific conditions or in specific sectors to release their operations. For example:
UAE: Dubai Free Zones Council has launched economic stimulus initiatives, including allowing intra-corporate transfer of labour between companies and sectors operating in the free zones through permanent or temporary contracts without penalties during 2020. These advantages benefit workers who are under unpaid leave. The government economic package includes cutting labour charges and reducing work permit fees for companies with up to six registered employees.
Reorganisation of supply chains: reshoring and nearshoring? The disruptions caused by the pandemic may affect MNEs’ decisions to reorganise the geographical and sectoral spread of their production activities, providing possible opportunities for the MENA region. MNEs could shorten their supply chains and reduce the distance between
MENA FREE ZONES & ECONOMIC ZONES
suppliers and clients (nearshoring), or chose to move manufacturing activities back to the home country (reshoring). Similarly, some companies may diversify their supply networks in order to increase resilience to shocks, which will involve divestments from some locations but expansion in others. The Covid-19 crisis also comes at a time when global trade tensions are causing companies to reconsider their supply chains due to concerns about possible vulnerabilities of GVCs (Global Value Chains). The pandemic may also increase demand by consumers and companies for more sustainable and inclusive production methods. MENA countries are starting to reflect upon ways to take into account the implications of such considerations and respond to the new possible configuration of value chains, in line with the position of their main trading partners.
Reflections on continental value chains The MENA region (not including the Gulf countries) is one of the least integrated region in terms
of trade and investment in the world. The implementation of the African Continental Free Trade Area (AfCFTA), which entered into force in May 2019, could be an opportunity for the MENA region to build resilience and promote more trade and investment with the rest of Africa. As the largest free trade area in the world, comprising of a market of over 1bn people and worth US$ 3.4bn, the AfCFTA is expected to increase intra-African trade by 52% by 2022. Currently, only 6.5% of MENA’s total trade is with the rest of Africa and only 3.9% of North African exports go to sub-Saharan Africa (SSA). Such limited intra-regional integration is the result of policies and strategies favouring developed and emerging markets and looking to the North.
MENA-Africa nexus The expected decline of MENA’s trade and investment flows with its main trading partners such
as China and the EU, due to the Covid-19 crisis, could be an opportunity for further economic integration between MENA and the rest of the African continent. Already, there is a growing interest by MENA governments to facilitate businesses’ access to African markets. Promotional conferences are regularly organised by North African countries. Morocco is becoming one of the largest investors in West Africa and has applied for membership to the Economic Community of West African States (ECOWAS) in order to benefit from preferential tariffs. Tunisia has signed tax and investment agreements with several sub-Saharan African countries. Egypt’s membership in COMESA has boosted exports in essential oils, electrical materials and hydrocarbons. The implementation of the AfCFTA is likely to be delayed due to the crisis. Trading rules in goods and services, originally
Comprising of a market of over 1bn people and worth US$ 3.4bn, the AfCFTA is expected to increase intra-African trade by 52% by 2022.
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MENA FREE ZONES & ECONOMIC ZONES
scheduled for July 2020, are currently postponed. Negotiations on the protocols on investment, competition and intellectual property rights, expected to be completed in December 2020, will also suffer delays. While the immediate focus is dealing with the public health crisis, it is important that countries maintain the political commitment and reflect on how the AfCFTA can help economies and businesses build regional value chains that will boost intra-African trade and investment.
Enhancing investment facilitation through digitalisation The pandemic provides strong incentives to accelerate digital transformation. The measures
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to contain the pandemic have prompted government and businesses to move towards greater digitalisation and online operations and services. Governments and administrative bodies, in particular IPAs, can leverage digital technologies to alleviate administrative burdens on firms and reduce bureaucratic hurdles to increase delivery of needed products in the short-term and to support and facilitate investment processes in the long-term. While some MENA countries, particularly in the Gulf, are already advanced in digital services, some others are lagging behind and face implementation challenges, in particular at the sub-national level. Regardless of their status as leaders or laggards going into the crisis, however, most have already
taken rapid measures to alleviate burdens on businesses in response to the crisis. For example: UAE: Free zone authorities have further enhanced their already strong digital channels, while slashing business fees and rolling out economic special incentives. In many of 50 free zones and special economic areas hosted by the UAE, the business set-up process, right from registration to payment and documentation, can be completed remotely. UAE: The 2018 FDI Law enables an increased participation of foreign investors, allowing foreign shareholders to own up to 100% of companies in certain designated sectors (122 economic activities across 13 sectors). Oman: The new Foreign Capital Investment Law, issued in January 2020, enables investors to establish
MENA FREE ZONES & ECONOMIC ZONES
a company in some permitted activities and does not require for any minimum share capital requirement, nor any general limit on foreign ownership of an Omani company. Qatar: Full foreign ownership is now permitted in all sectors with the exception of banking, insurance and commercial agencies, following the issuance of the 2019 investment law. Special economic zones (SEZs) have been mushrooming in recent decades. Globalization-induced offshore production and an everexpanding WTO membership have accentuated global competition for the identification of a comprehensive regulatory framework that can attract and promote foreign investment flows. Driven by the desire to create jobs, increase revenues, ameliorate export performance, and create the conditions for positive spillovers to the national economy, governments carefully design such industrial enclaves with a view to boosting economic growth. Typically, SEZs create ‘jurisdictions-in-a-jurisdiction’, whereby a government delimits a geographical area in which firms, once they receive a license to operate in an SEZ, are subject to more favourable, businessfriendly laws and regulations when compared with those applied to the rest of the national territory. In developed countries, although, SEZs are not necessarily tied to a specific location, nor are they focused primarily on export performance. Rather, they may be used to offer protection to certain selected industries domestically.
Economic distortions Although SEZs create distortions within economies and allow foregoing valuable tax revenues, they appear particularly appealing to politicians who strive to boost
SEZs offers a detailed overview in that identifies patterns, successes, and limits of regulatory practices within the SEZ ecosystem that shape trade in financial services and decisions made by financial institutions. growth rates in an increasingly competitive economic landscape at the regional level. For instance, China would create the Shenzhen SEZ to compete with Hong Kong and Singapore. In other instances, tax havens within a tax haven would be created as the case of Cayman Islands amply demonstrates .5 Such phenomena accentuate regulatory fragmentation already within national borders, and shape the contours of SEZ unilateralism. The new industrial revolution and changing patterns of international production, including the servicification and digitization trends, call for a reappraisal of the current rulebook, including domestic economic law and global trade law. Services SEZs, in particular, can be inscribed within the qualitative transformation of SEZs driven by these trends and is an expression of contemporary services unilateralism, in an attempt to gain global competitive advantage in the digital era.
Attracting FDIs Against this backdrop, this model aims at identifying and critically reviewing the general regulatory framework and associated modalities that are present in SEZs with a view to attract foreign investment in services generally, and specifically in financial services. It offers a detailed overview in that identifies patterns, successes, and limits of regulatory practices within the SEZ ecosystem that shape trade in financial services and decisions made by financial institutions.
OECD identifies potential issues of General Agreement on Trade in Services’ (GATS) inconsistency that may arise with respect to SEZs and discusses the limited possibilities for legal challenge of SEZ-related incentives under the GATS. While modest at first blush, such a task covers an important gap in the existing literature, which, for the most part, has focused on the economic effects of SEZs within SEZs without specifically reflecting on the repercussions of potential inconsistencies with the GATS of certain services-related rules within SEZs.
Services and Special Economic Zones Why incentivizing the inclusion of services in SEZs? Services-related activities within SEZs have existed for a long time in certain SEZs. Initially, services supplied in SEZs aimed at addressing infrastructure-related weaknesses, including red tape, reliability, and continuity of certain services such as public utilities. As a general rule, no SEZ could ever survive international competition for attracting manufacturing (or service-related) investment without world-class infrastructure and a business-friendly environment. Progressively, as part of intermediation services for the hosted manufacturing activities, human resources, catering and housing services, as well as one-stop-shop facilities for administrative processes are among the SEZ beneficiaries started being offered.
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COMMERCIAL VEHICLES-GCC
Market dynamics and current trends driving growth and demand in the GCC Market According to GMI Research, with offices in the USA, Europe and India, the major factors that are driving the growth of the GCC Commercial Vehicle market include the growing preference for connected commercial vehicles and the increasing demand for commercial vehicles from logistics, tourism, infrastructure, and public transport industry.
T
he commercial vehicle is defined as a vehicle that is used to carry goods, materials, or passengers. The commercial vehicle can be truck, bus, van, or car and is used in transportation, logistics, mining, industrial, and other industries. Passenger commercial vehicles are registered to a specific company and are capable of carrying more than 15 passengers. The GCC region countries are aiming to diversify its economy to reduce its dependence on the oil sector, which will help to prevent the oil price from having such a significant impact on its economy. The governments are heavily investing in mega projects, such as Dubai Expo 2020 and FIFA World Cup 2021 in Qatar, to boost tourism across the region, which will further increase the demand for the commercial vehicles such as van, buses, and cars.
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Demand for commercial vehicles The demand for commercial vehicle is also impacted by the increasing number of ongoing and upcoming infrastructure projects in GCC countries, such as Smart cities project, the red sea project in Saudi Arabia, and development of rail infrastructure in GCC countries, which require commercial vehicles to transport goods and material from one place to another. Growing population and increasing per capita income are fuelling the higher consumption of goods. The economy of GCC countries is highly dependent on importing goods, thus the growing consumption pattern will drastically increase the demand for transportation and logistics activities. In addition to this, the development of a rapid transit system and metro rails in
GCC countries are likely to surge demand for commercial buses. However, the growth of railway network in GCC region and the high dependence on private cars for communicating will hinder the growth of the market. Based on product offerings, the light commercial vehicle segment is expected to grow at a higher CAGR during the forecast period owing to the increasing usage of light commercial vehicles, such as pick-up vans and small size buses, driven by its dynamic features which enable the owners to modify the vehicle.
Higher CAGR Based on end-use, the logistics segment is projected to grow at a higher CAGR in the market during the forecast period owing to the high dependency on import of goods due to increasing demand from rising population and high disposable income, which increase
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the demand for logistic vehicles to transport goods and material. According to London-headquartered market intelligence and consultancy services provider Future Markets Insights, the MENA Commercial Vehicles (Trucks) Market Projected to reach US$ 8,500mn by 2017–2027. These developments are also related to the large scale international events that are going to be held in this region such as World Expo 2020 to be held in Dubai and the FIFA World Cup 2022 to be held in Qatar. A new report published by Future Market Insights titled ‘Commercial Vehicles (Trucks) Market: Middle East & North Africa (MENA) Industry Analysis 2012–2016 and Opportunity Assessment 2017-2027’ studies the performance of MENA Commercial Vehicles (Trucks) Market over a 10 year assessment period from 2017 to 2027. The report presents the value and volume forecasts of the MENA commercial vehicles (trucks) market and provides key insights into the factors driving market growth as well as the factors restricting the market growth. The estimates point to a revenue growth from nearly US$ 5,250mn in 2017 to nearly US$ 8,500mn by 2027 end, resulting in a CAGR of 5.0% during the period of assessment. In terms of volume, the MENA commercial vehicles (trucks) market was pegged at 152,191 units in the year 2017 and is poised to reach a figure of 212,232 units in 2027, and display a CAGR of 3.4% in the forecast period.
2016 from US$ 88bn in the year 2013 and due to this upward growth, the market for heavy trucks is likely to boost in this country.Also, due to the rising urbanization, the construction industry is experiencing rapid growth in rest of the countries in the Middle East which is further expected to boost the demand for commercial vehicles in building and construction activities
in the region. Countries in the region like UAE and Oman are also becoming attractive markets for commercial vehicles due to their vast use in end-use industries such as the petrochemical industries, and this is expected to boost the overall demand for trucks in the Middle East region.
MENA Commercial Vehicles (Trucks) Market: Segmentation and Forecast
East (Saudi Arabia, Turkey, rest of the Middle East) and North Africa. The heavy duty segment was estimated to be valued at nearly US$ 3,200mn in 2017 and is likely to reach a valuation of nearly US$ 5,300mn in 2027 and in the process exhibit a CAGR of 5.1%. The medium duty segment was estimated to be valued at nearly US$ 1,850mn in 2017 and is anticipated to reach a valuation of nearly US$ 3,000mn in 2027 and exhibit a CAGR of 4.8%. n
The MENA commercial vehicles (trucks) market is segmented on the basis of class type and region. On the basis of class type, the market is segmented into light duty, medium duty and heavy duty. On regional basis, the market is segmented into Middle
Rapid development and growth of oil and gas industry in the rest of Middle East region to boost market revenue growth Commercial vehicles are commonly used as a medium of transport for different types of end use industries and they are helping in tasks such as unloading, loading and transportation of goods. The construction industry is exhibiting a fast growth due to the vast number of projects in the pipeline in each country of the Middle East and this also has connection with the plans of the countries in the Middle Eastern region to diversify their economies. The construction industry in Iran was estimated to be valued at US$ 154.4bn in SEPTEMBER 2021 39
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MENA Commercial Vehicles (Trucks) Market: Regional Forecast The commercial vehicles (trucks) market in Saudi Arabia was estimated to be valued at nearly US$ 560mn in 2017 and is likely to reach a valuation of nearly US$ 900mn in the year 2027 and exhibit a CAGR of 4.6% during the assessment period. The commercial vehicles (trucks) market in Turkey was estimated to be valued at nearly US$ 1,350mn in 2017 and is anticipated to reach a valuation of nearly US$ 2,150mn in 2027 and exhibit a CAGR of 5% during the period of forecast.
Market Overview The GCC Automotive Logistics Market is estimated to grow at a CAGR of approximately 4.5% during the forecast period. The Middle East is one of the most important markets for automotive manufacturers across the globe. Right from entry-level carmakers that focus on mass-market products to companies with a premium product lineup, every brand wants to gain and increase its market share in this region. Saudi Arabia remains a very important market for U.S. automakers. Gulf Cooperation Council (GCC) countries like Saudi Arabia and the United Arab Emirates are expanding import and premium vehicle markets and seeing rising aftermarket and second-hand vehicle volumes. Logistics will thus be key to further unlocking the automotive industry’s potential in the region. Manufacturers and distributors depend on seamless flows to satisfy customer expectations and just-in-time supply chains, as well as to access the technology driving change across the global automotive industry, including electrification, autonomous, and connectivity.
Changes on the horizon The automotive and transport mobility sector across the GCC is set for big changes post-Covid-19, with new business models likely to emerge in the region, the movement restrictions and other health 40 SEPTEMBER 2021
safety precautions caused by the Covid-19 pandemic have intensified online and e-commerce purchases in the automotive and transport mobility sector across the GCC. A complete background analysis of the global automotive logistics market, which includes an assessment and contribution of the sector in the economy, market overview, market size estimation for key segments, key countries and emerging trends in the market segments, market dynamics, and key component flow statistics are covered in the report. The report also covers the impact of Covid-19 on the market.
Spotlight on Saudi Arabia Market Saudi Arabia already accounts for about 40% of total vehicles sold in the Middle East. With the benchmark international oil price rebounding to an average USD 66 in 2019, overall automotive sector investments into the kingdom are expected to rise, leading to an increase in demand for trucks as well as buses used for the transport of labor. The Middle East as a whole, Saudi Arabia is primarily an import-driven automotive market, with sales of all vehicles amounting to approximately 422,000 units in 2018, including 340,000 cars and 82,000 commercial vehicles. Local vehicle production in Saudi Arabia is largely limited to heavy-duty commercial vehicles (from
completely or semi-knocked down kits).
Increasing Penetration of Electric Vehicles in Gulf Countries Electric and hybrid modes of transport are gaining momentum in the Gulf region and particularly in Israel, Jordan, Oman, Saudi Arabia, and UAE. The UAE government has already started making efforts to reduce the contribution of road transport to its footprint; so that it makes the country an ideal location to push the adoption rate of green mobility solutions (objectives to reach 10% of EV by 2030 in Dubai). The Middle East is known for its oil and gas but an era of electric cars whizzing, along the region’s superhighways. Low fuel prices and the passion for speed, luxurious automobiles in the region have meant that drivers have been relatively slow to shift to electric vehicles especially compared to their counterparts in markets, like China. However, the adoption of electric cars is set to enter the fast lane in the Gulf, especially in tech-savvy urban hubs like Dubai. As the EVs are in the nascent stage in the country, the country has not yet set out incentives for the deployment of EVs, such as free charging stations, Greenbank loans and more. EV incentives are yet to be developed, especially when EV deployment starts on a commercial scale. However, the
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country has taken a few initiatives which are likely to boost the EV demand in the country. For instance, Saudi Electricity Company has signed a deal with Nissan Motor, Takaoka Tokyo and Tokyo Electric Power Company for the first EV pilot project in Saudi Arabia. Reportedly, the agreement provides for the development of fast-charger EV stations. Saudi Arabia has signed a memorandum of understanding (MoU) with the UK in a move to reduce carbon emissions and support Saudi Vision 2030. The MoU commits both countries to cooperate and share expertise to develop technologies including smart grids and EVs.
UAE-EVs UAE is another most developed market for EVs, not only regarding sales but also regarding charging infrastructure, with Dubai having some 200 charging stations and Abu Dhabi around 20. The UAE government is targeting to have 42,000 electric cars on the roads in a few years. According to the US Grand View Research the global commercial vehicles market size was estimated at US$ 1.26tn in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 5.2% from 2021 to 2028. The Covid-19 pandemic affecting the automotive industry, the market witnessed
a decline in growth as a result of low automotive sales or new requirements. Implementation of vehicle scrappage programmes; aggressive investments in infrastructure development and rural development; drafting of stringent regulatory norms for vehicle length, and loading limits, among other parameters, are anticipated to fuel the growth. The resumption of mining activities in some parts of the world, which has triggered the demand for tippers, is also expected to drive growth. The rising levels of disposable income in both developing and developed countries and the continued infrastructure development are also projected to bode well for the growth of the market. n SEPTEMBER 2021 41
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Policies & Regulations Several government authorities worldwide have implemented various policies and drafted various regulations aimed at efficient management of the extent of goods being transported in a commercial vehicle. For instance, in the U.S., the Federal Motor Carrier Safety Administration (FMCSA) is accountable for preventing fatalities and injuries related to commercial vehicles. The FMCSA has drafted a regulation regarding the size of goods being carried in a vehicle. Such regulations are expected to trigger the demand for new commercial vehicles for the transportation of goods, thereby driving market growth over the forecast period. Having realized the potential of connectivity and telematics to revolutionize transportation and logistics operations, several Original Equipment Manufacturers (OEMs) have introduced commercial vehicles featuring connectivity features, such as accident warnings, traffic data, weather reports, and updates on road works. Connected vehicles provide multiple benefits, such as enhanced safety by preventing unauthorized access to vehicles, thereby avoiding wear and tear, and vehicle abuse. The growing preference for connected commercial vehicles is anticipated to drive market growth over the forecast period.
EV advancements Advancements in the development of electric and semi-autonomous commercial vehicles also bode well for the growth of the market. The adoption of Electric Vehicles (EVs) for commercial transportation is expected to increase gradually owing to the numerous benefits they can offer over ICE vehicles. Favorable policies to encourage the adoption of EVs, particularly in developed nations, are expected to drive the adoption of EVs for commercial purposes, thereby contributing to the market growth over the forecast period. The outbreak of the Covid-19 pandemic has taken a severe toll on the global 42 SEPTEMBER 2021
economy and adversely affected several industries and industry verticals, including the automotive industry. Production at several manufacturing facilities was halted with the restrictions enforced in various parts of the world to arrest the spread of the disease. This led to severe supply chain disruptions. The automotive industry is not an exception, with the demand for automobiles, including commercial vehicles, plummeting significantly. Europe led commercial vehicle sales in the past. However, the adoption of commercial vehicles in Europe has been plummeting in line with the dwindling
automotive sales in the region. At this juncture, Europe is poised for mixed recovery cycles in the wake of the restrictions still in place in some parts of the region and the economic stimulus packages being announced by governments in the region. According to the Organisation Internationale des Constructeursd’Automobiles (OICA), 2.5 million units of commercial vehicles were registered in Europe in 2020, down 14.9% year-on-year from 2.9mn units in 2019. The sales for commercial vehicles in the U.S. also dropped by around 10.3% year-on-year in 2020.
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Product Insights The Light Commercial Vehicles (LCVs) segment accounted for the largest revenue share of around 75% in 2020. The LCVs are considered a cost-effective option for the transportation of goods and passengers. LCVs offer numerous tax benefits and also aid in reducing emissions. Moreover, these vehicles are highly dynamic and can be modified for transporting both goods and passengers. They are also cost-effective, which is expected to bode well for the growth of the segment. The buses and coaches segment is projected to register a CAGR of over 4% from 2021 to 2028. The growth of the segment can be attributed to the increased adoption of buses and coaches in the healthcare and tourism industries.
Cost-effective transportation Buses and coaches are the most cost-effective mode of transportation, thereby driving their sales. The growing adoption of electric buses in both developed and developing countries to curb vehicular emissions also bodes well for the growth of the buses and coaches segment. The passenger transportation segment is estimated to register a CAGR exceeding 5% from 2021 to 2028. The increase in the adoption of public transportation is anticipated to drive the demand for commercial vehicles. Public transportation is often well developed in urban areas and individuals find it effective as compared to commuting by cars in terms of time and cost. The accessibility and affordability of
passenger transport coupled with the rising total cost of ownership of personal vehicles in developed and developing economies are essential contributors to the passenger transportation market.
Regional Insights According to a report, North America accounted for the largest revenue share of the commercial vehicles market in 2020 and is anticipated to continue leading over the forecast period registering a CAGR exceeding 4%. The highly unified supply chain network in GCC will connect manufacturers and consumers efficiently through multiple transportation modes, including freight rail, air, and express delivery services; maritime transport; and particularly truck transport; thereby driving the growth of the market. Easy availability of convenient financing options, a strong emphasis by the governments in the region to ensure in-house automotive production, and aggressive investments in infrastructure development are some of the factors that are expected to contribute to the growth of the regional market. The GCC regional market is expected to experience significant growth over the forecast period in line with the growing demand for transportation, warehousing, and unified logistics solutions. The strengthening road infrastructure, easy availability of cost-effective labor and raw materials, and subsequently the rising number of manufacturing facilities coming up, especially in developing economies, such as in the GCC nations, are some of the factors that are expected to contribute to the growth of the regional market. n SEPTEMBER 2021 43
QATAR AIRWAYS CARGO
Qatar Airways Cargo expands the implementation of WebCargo by Freightos Cargo carrier introduced eBookings by WebCargo in Europe, South Africa and the USA
Qatar Airways Cargo joins Pharma.Aero Collaboration between members of Pharma.Aero will strengthen the pharma supply chain Qatar Airways Cargo has become a member of Pharma.Aero, a worldwide platform catered to excellence in pharma transportation, effective 5 July 2021. Both organisations share a common goal of achieving excellence in reliable end-to-end air transportation for pharma shippers. Through the membership, the airline will also participate in Pharma.Aero’s board meetings and focus groups to contribute its expertise. The non-profit organisation with its headquarters in Brussels, Belgium, brings added value for the shipper by placing them as strategic priorities of Pharma.Aero, providing insights into the capabilities of the air cargo industry, as well as facilitating direct collaboration with the different air cargo stakeholders in the supply chain. “The full membership with Pharma.Aero will allow us to share
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and receive market knowledge and also collaborate with different air cargo stakeholders in the supply chain which will ultimately lead to continuous improvement of life science, medtech and the pharma air cargo supply chain,” affirmed Guillaume Halleux, Chief Officer Cargo, Qatar Airways. “The onboarding of Qatar Airways Cargo underlines our worldwide impact as a neutral collaboration platform for the global air cargo industry and pharma and life science sector,” asserted Nathan De Valck, Chairman, Pharma.Aero. Qatar Airways Cargo has invested considerably in quality handling, infrastructure, digitalisation, facilities, people and procedures at each of its 85+ pharma stations including the Doha hub, adhering to high operating standards for transporting temperature-controlled products.
Q
atar Airways Cargo announces the further rollout of third-party eBooking platform, WebCargo by Freightos across several countries effective 23 August 2021. Forwarders in the carrier’s worldwide network will be able to place eBookings from both, its online and offline origins with access to live rates and capacity on the WebCargo platform. This will enhance their booking experience with the airline, resulting in higher efficiencies and real-time responses for availability. “At Qatar Airways Cargo, the customer is at the core of all our activities and we will continue actively with our digitalisation initiatives for the benefit of our customers,” stated Guillaume Halleux, Chief Officer Cargo, and Qatar Airways. “Qatar Airways Cargo is proud to expand our partnership to include an additional 39 countries, allowing key markets such as India, Japan, and Latin America direct access to real-time pricing, capacity, and bookings on the world’s largest cargo airline,” commented Ziv Schreiber, CEO, Freightos Group. Since launching WebCargo in February 2021 across France, Germany, Italy, South Africa, Spain and the Netherlands, the airline has been quick to implement WebCargo across several countries in Europe and most recently, the USA in July 2021. The global implementation across the carrier’s network will cover 72 countries where customers will have instant access to capacity and pricing.
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RAIL: HYDROGEN TRANSPORTATION AND TECHNOLOGIES
The Age of Hydrogen within Transportation The global pandemic has challenged the modern global cold supply chain like never before. Alstom pioneers hydrogen mobility for rail to forge a sustainable future for transportation Tackling climate change and reducing greenhouse gas emissions requires a holistic review of how we live and travel.
R
ail is at the heart of sustainable mobility—there is simply no cleaner collective transportation system. In terms of energy efficiency per passenger kilometre, it is the most efficient mode of public transport, as well as the most effective. To meet the climate challenge, we need to get more people out of their cars and onto public transport. Rail can achieve this objective—it is the only ‘green’ solution that also solves the problem of congestion in cities and towns worldwide. Creating the greenest, most sustainable rail network is only part of the answer,
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however. Potential users also need to be motivated to use it. To make rail more attractive, we need to accelerate the transition towards reliable, seamless transportation in the most timely and cost-effective way possible.
Greening thebtransport sector That includes increasing capacity to cater for these potential new users. The transport sector represents nearly 25% of world-wide emissions from fuel combustion. Rail is the lowest emissive mode in the motorized segment emitting 10 times less CO2 / pass.km than plane.
Hydrogen technologies and solutions in transport will play a very important role in transitioning to a cleaner more sustainable future accelerating the Middle East and North Africa Green Economy vision. Hydrogen train is a revolution in rail transport, as it represents a genuine economical and clean alternative to diesel when overline electrification represents a too significant investment for customers. Alstom, a global leader in rail transport and sustainable mobility, is working closely with many regional transportation authorities to ensure the most advanced
RAIL: HYDROGEN TRANSPORTATION AND TECHNOLOGIES
and sustainable technology innovations are in place to safeguard the health, wellbeing, and mobility of communities across the Middle East and North Africa.
Low-carbonbtransport system In line with the aim to facilitate a global transition to a low-carbon transport system, Alstom has pioneered several sustainable mobility solutions. The Coradia iLin is a perfect illustration for the commitment to designing and delivering innovative and environmentally friendly solutions making Alstom the first company to have developed and put into operation hydrogren trains. The region’s government is taking major strides towards reducing greenhouse gas emissions, cutting down on the use of fossil fuels, and decarbonising transportation. Supporting the UAE Vision 2021, the National Agenda focuses on improving the quality of air, preserving water resources, increasing the contribution of clean energy, and implementing green growth plans. Consequently, outlining Dubai’s commitment to transitioning to a green economy, the leadership inaugurated the Green Hydrogen Project at the Mohammed bin Rashid Al Maktoum Solar Park–a first of its kind project in the MENA region that aims to produce ecofriendly hydrogen using renewable energy.
As a part of Vision 2030, Saudi Arabia aims to move towards an economy less dependent on oil by launching several projects and initiatives to promote clean and affordable energy. The Kingdom has committed to developing an additional 10,000km of rail and metro by 2030 as a part of the National Renewable Energy Program initiatives within the transport sector.
Transport and mobility focus With Alstom’s sole focus being transport and mobility, we continue our support of the Kingdom’s economic growth and development, through the enhancement of infrastructure and the supply of sustainable solutions such as the Riyadh Metro. In September 2020, Saudi Arabia became the first country to export blue hydrogen for zero-carbon power generation and signed an agreement to develop and operate a $5 billion facility to supply green hydrogen to the world outlining the Kingdom’s effort in implementing the circular carbon economy framework and supporting the global energy transition. “The railway industry is already one of the cleanest sectors in the field of transport. As a dedicated and long-standing partner of the region’s transportation and mobility development, Alstom will continue to
play an integral role in improving the environmental performance of rail across the region,” says Mama Sougoufara, Managing Director, Alstom MENAT. Known as a global driver of innovation towards carbon neutrality in rail transport – Alstom places a huge focus on greener and smarter mobility solutions. Alstom has been the first company worldwide in 2018 to introduce a new regional train based on hydrogen fuel cells and batteries.
Hydrogen-powered train Developing a train powered by hydrogen fuel cells is the most illustrative example, in addition to offering an extensive portfolio of sustainable solutions adaptable to the different challenges of customers and to local specificities. Railway applications are ideally suited for the use of hydrogen, as the quantities of hydrogen required are large, predictable, localized and constant over a long period of time. It can cover ranges up to 1,000 kilometres. Through innovations in electric transport and hydrogen fuel, Alstom aims to shape the future of the region’s mass transit and mobility for the better. In doing so, it remains dedicated to significantly reducing emissions, minimising land use and carbon footprint, and decarbonising rail transport.
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WAREHOUSE MANAGEMENT SYSTEMS
The Transport Industry’s migration to new Communications Technology
A
Following the unprecedented economic impact of the Covid-19 pandemic, many future investment strategies for upgrading communications technology in the transport sector will have had their brakes put on.
ll across the globe we are witnessing a gradual though cautious reopening of the economy when individuals will once again be able to travel in safety will also be a time to consolidate, not to stand still. With such a difficult balancing act between reduced budgets and value added critical services through technology, how can transport companies best manage their communications upgrade? In this OpEd, Nicolas Hauswald, CEO, ETELM explores some of the ways in which it is possible to adopt OPEX rather than CAPEX solutions to solve this conundrum. Following the unprecedented
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economic impact of the Covid-19 pandemic, many future investment strategies for upgrading communications technology in the transport and logistics sector will have had their brakes put on.
Economies opening up However, the reopening of the economy when individuals will once again be able to travel in safety, and when global supply chains can get back up and running to pre-pandemic levels, will be a time to consolidate, not stand still. With such a difficult balancing act between reduced budgets and implementing value added critical services through technology, how can transport and logistics companies best
manage their communications upgrade? While demands for next generation, ever-faster, ever-higher bandwidth LTE technologies will continue to abound throughout industry, it is Private Mobile Radio (PMR) technologies such as TETRA that remain the choice of reason for not only transport, but also all critical national infrastructures (energy, utilities, oil & gas), emergency services, government agencies and public safety. In this article we’ll take a look at why TETRA is still one of the most reliable cornerstones of critical communications technology, and the advantages that this offers to planned upgrades by enabling a more gradual phase-in of advanced broadband services as part of a hybrid solution.
WAREHOUSE MANAGEMENT SYSTEMS
OPEX (operational expenditure) solution as opposed to CAPEX one (capital expenditure), making it more financially viable as we emerge from a relatively turbulent economic period. A hybrid solution also has a much more tempered learning curve, allowing mission-critical workers for example, on the railways, to carry on using TETRA trackside - a technology they are familiar with - while stations and distribution centres gently phase in LTE.
TETRA keeps you connected PMR is what most people know as the “push to talk”or ‘Walkie Talkie’ technology. The majority of transport operators, from airport operators to metro/rail organisations and logistics companies, will still specify TETRA as the best fit for their operational needs in 2021. When travelling long distances, through tunnels or across remote terrain, for example, TETRA’s narrowband capabilities will keep transportation vehicles and hubs connected at all times, even in areas without cellular coverage. When dealing with secure and critical communication needs, TETRA’s end-toend encryption ensures that the private network can remain secure. It’s for these reasons that it is favoured for use in secure and private communications. From the London Underground to Charles De Gaulle airport, the industry employs TETRA due to its resilience, security and dependability, metrics by which it continues to exceed the capabilities of public mobile phone networks. TETRA offers a complete, service-rich solution that can be integrated seamlessly with IP-based infrastructure, fixed units, mobile and handheld devices and more.
Robust technology The robustness of the technology was demonstrated emphatically over 10 years ago with the still-standing world speed record on rail by French railways, SNCF. During this event, an uninterrupted TETRA call was made which showed how TETRA could be relied upon even in extreme conditions at a speed of 574,8km/h, contending with a huge Doppler effect and other challenges such as very fast cell handovers. At the same time, however, it is the next generation 4G/5G and later even 6G broadband services that are providing much of the focus for future digital transformation. Advances in these technologies will open up a great deal of opportunity for high speed data transfer and with it advanced new applications. Within the transport and logistics sector, these could include IP video
Integrating technologies Nicolas Hauswald, CEO, ETELM.
With a 4GLinked system, it is possible to develop localised high bandwidth communications, such as freight terminal, depot or train station monitoring, remote engine management and diagnostics, automated driver registration systems, body temperature detection systems or faster WiFi connectivity, taking maintenance and security to the next level. However, these advanced data rich applications will also rely on 4G/5G LTE coverage, which will not be universally available.
A hybrid approach to operational communications So with one eye on the benefits of these future applications and the other on the need to maintain a reliable and robust service, ultimately it is a combination of both TETRA and LTE technologies that offers the best solution. This dynamic is extremely helpful in planning for upgrades. TETRA will ensure that communications can continue uninterrupted while advanced new, complementary high speed data services afforded by LTE can be introduced more gradually. This type of phased approach that allows businesses to retain the value of TETRA while also layering new broadband technologies provides an
There is a key addition required to bring this all together, and that is a system of combining both narrowband and broadband under a single transmission system. Integrating different technologies on the same LTE core network offers the chance to have the best of both worlds, allowing TETRA to feed into the same 4G backhaul network as eNodeB broadband with complete interoperability. With a 4GLinked system in place, it is possible to develop localised high bandwidth communications, such as in a freight terminal, depot or train station, for example, where advanced new applications can be introduced, while secure and robust narrowband communications will continue to provide connectivity with the wider dispersed network. This could include staff and vehicles that are remote, on the move and outside of range from the LTE network. And this can all be achieved with users enjoying seamless interoperability between the different technologies. Making the investment in this type of cross-over technology, therefore, should be the first step towards future-proofing communications investment. With this approach, transport and logistics companies can manage a much more effective upgrade as they gradually phase in the next generation of communication technology while maintaining those that they have come to rely upon. (ETELM is a French company with over 40 years experience in the field of professional radio communications infrastructure. 50% of its systems are exported globally.)
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WAREHOUSE MANAGEMENT SYSTEMS
How a cloud-based WMS can future-proof your warehouse Even when your warehouse operations seem to be running smoothly, there is always room for improvement and a need to stay up to date with innovation, emphasizes Khaled AlShami, Senior Director, Solution Consulting, Middle East & Africa, Infor.
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Khaled AlShami, Senior Director, Solution Consulting, Middle East & Africa, Infor.
WAREHOUSE MANAGEMENT SYSTEMS
W
hile steps are taken to keep warehouse operations at peak performance, when fulfilment times and levels are jeopardized, it’s still up to you and your team to race to recover, to ensure actions to get back on track are taken correctly so that product can make its way out the door, and time is always working against you. If your organization previously reviewed and dismissed the value of moving your warehouse management system (WMS) to the cloud, it’s time to re-evaluate. Decisions that seemed to make sense last
year or even last quarter, likely look very different with new challenges emerging over the past several months.
Cloud capabilities By empowering critical systems like a WMS with cloud capabilities, your organization can scale quickly, maximize productivity, and minimize outages and downtime to prevent bringing the company’s mission-critical operations to its knees. Losses caused by system outages can be initially staggering and ultimately far-reaching, impacting not only revenue and productivity but also long-term brand value. It’s been estimated that the average cost of IT downtime is US$ 5,600 per minute, with US$ 140,000 per hour on the low end and as much as US$540,000 per hour at the higher end. Internally absorbing the actions to resolve the issue on-premise and then putting in place actions across the organization to recover from the critical failure and its consequences can derail an organization even further.
SaaS model However, what if you could offload that preparation, training, and responsibility to a solution partner you can trust to manage it all for you? With choosing a software-as-a-service (SaaS) model for your WMS, experts who are contractually committed to ensuring your warehouse stays up and running are shouldering that burden. Not only can you remove this timeconsuming responsibility from your list, but when a failure of some kind inevitably occurs, you will likely never even experience a disruption. Such is the type of redundancies and fail-safes that SaaS organizations put in place. But also, with that shift of responsibility, your team can instead focus additional time on other strategic initiatives with higher business value. By moving from on-premise WMS to the cloud, you can avoid a potentially devastating business impact while simultaneously optimizing your workforce.
Ageing technology stacks An Infor customer recently found themselves facing an all too familiar story with ageing technology stacks. They relied on a legacy on-premises solution for over 30 years. While it had been dependable for decades, the day the system failed, there were no longer any in-house technicians familiar with the solution and no feasible way to recover. The organization realized the only logical step forward in that critical moment was a move to the cloud, which not only allowed them to recover, but has now set them up to scale accordingly as the business grows. In hindsight, it would have been ideal to begin that transition to the cloud years earlier, but they are now benefitting from more than peace of mind. As warehouse operations grow increasingly complex, making sure your system is always up to date has never been more important to your business.
How to create an agile supply chain Supply chains must adopt a ‘network approach’, connecting all partners to shared processes, data and metrics, managed within a single platform to succeed Competitive supply chains must enable a new level of coordinated performance that creates a high-fidelity picture of in-process flows across your extended network. Building the continuous supply chain supports contextual deviations, conveys alerts and drives continuous planning via sense & respond capabilities.
Optimizing multi-party business processes Supply chains are complex networks where over 80% of the data and processes sit within partner systems. To see and act on the latest picture of your supply chain, your company needs that data from each of your partners, but the
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WAREHOUSE MANAGEMENT SYSTEMS
problem is most companies rely solely on an enterprise-centric approach to solve a multi-enterprise problem. The only way to overcome those limitations is to adopt a ‘network approach’. Connecting all partners to shared processes, data and metrics managed within a single platform creates a single version of truth for all parties. This allows supply chains to eliminate the data silos and inherent latency in order to reduce the root causes of friction, variability and costs in today’s supply chains, both internally and externally.
Managing product flows Balancing customer service levels and supply chain costs is nothing new, but customer expectations are more demanding than even before due to how quickly products need to be in market to capture sales and quickly turnaround delivery. Your customers are under their own pressure to meet on-time and in-full (OTIF) delivery and that flows all the way back upstream. These challenges highlight that today’s supply chain structures simply aren’t equipped to deal with the high demands if partners and systems aren’t providing ‘single truth’ visibility. With solutions that provide real-time visibility and machine learning to assist with predictive sensing of product availability issues, your company can make the needed adjustments to meet customer service agreements.
Advancing supply chin visibility maturity in the organization How do we define supply chain visibility today? Leaving aside long-term forecasting and planning that depends on insight to meet demand, the operational aspects of the supply chain that we can materially impact with improved and multi-dimensional visibility involve orders, shipments, and inventory. Obviously, supply chain visibility can’t be achieved from a single data source, or a single set of participants. Just as the old-fashioned supply ‘chain’ is more accurately described as a network today,
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Cloud-based WMS Collaboration with trading partners is the only way to gain the higher levels of visibility that can significantly improve global supply chain planning and fulfilment operations. so a networked solution to building multi-dimensional visibility to that ecosystem offers the best path to value. A networked visibility approach means that business benefits can be realized across many cross-functional and crossdomain areas.
The value of visibility Supply chain visibility frameworks need to recognize the milestone components that make international product flow successful as well as transparency of outbound truck shipments constrained by connectivity to many different carriers. Collaboration with trading partners is the only way to gain the higher levels of visibility that can significantly improve global supply chain planning and fulfilment operations. To keep production running and customers happy, it is critical to know when expected product availability for fulfilment or consumption is in jeopardy.
Finance & Trade Flows Volatility in supply chains makes it hard to profitably meet demand. Sourcing is complex, often involves hundreds of partners, and suppliers often don’t have access to adequate capital, causing instability in the supply base. The majority of inventory, costs, and risks are outside of a single enterprise’s control. Too many siloed systems and not enough shared data make it impossible to reliably meet consumer demands.
Companies, with only a few pieces of the puzzle, must scramble to track inventory and provide accurate ETAs. Automation of supplier payment can help improve supplier relations, optimize working capital, and reduce fees and inefficiencies along the financial supply chain. To automate supplier invoice payments and standardize documentation, companies must transform themselves from silo-based, inward-facing corporate operators to interconnected, highly agile business network orchestrators.
End-to-end visibility & orchestration Incorporating your supply chains’ ability to sense and respond, orchestrate finance and trade flows, and utilize advanced data centres and artificial intelligence is crucial for providing transparent visualization of supply chain dynamics. In addition to these pillars, next generation control towers, or control centres, deliver pervasive end-toend visibility by capturing impact, interconnections, repercussions, and options. They synchronize participants to help dissolve a functionally siloed approach to fulfilment. Once organizations adopt a networked solution that allows all parties to share and see real-time updates, the heightened sense and response capabilities allow them to further close the loop and develop the continuous supply chain—Khaled AlShami.
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AP MOLLER-MAERSK GROUP
Maersk Saudi Arabia and King Abdullah Port enter strategic partnership Deal to establish Maersk’s first petrochemical hub in the Kingdom
M
aersk Saudi Arabia recently announced that it has entered into a strategic partnership with King Abdullah Port, the region’s first privately owned, developed and operated port, to enhance the Kingdom’s logistics capabilities by adding state-of-theart services and technologies to the port’s offerings. As part of the partnership, both the entities signed a deal to set up Maersk Integrated Logistics Hub, a
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non-bonded warehouse, to provide comprehensive logistics services and benefit local petrochemical exporters. The agreement was signed by Mohammad Shihab, Managing Director, Maersk Saudi Arabia, and Jay New, CEO, King Abdullah Port, in a ceremony held at King Abdullah Port. The signing ceremony was attended virtually by Richard Morgan, Regional Managing Director, Maersk West & Central Asia.
Logistics hub The Maersk Integrated Logistics Hub at King Abdullah Port will cover an important logistical requirement of exporters who already have access to Maersk’s solutions such as landside movement of cargo, customs clearance, and ocean logistics, thus ensuring a truly integrated logistics offering. The hub will serve as the focal supply chain solution, primarily
AP MOLLER-MAERSK GROUP
for Saudi Arabia’s petrochemical exporters, through the large space allocated for handling and storing cargo. It will play an important role in facilitating the storage of export cargo and enable pallet handling, stuffing and shuttling.
Major initiative The establishment of the hub is part of a major initiative aimed at increasing the performance efficiencies and competitiveness of Saudi Arabia’s logistics sector. It is also in line with the objectives of Vision 2030, which include transforming the Kingdom into a top global logistics hub connecting Asia, Europe, and Africa, increasing the non-oil exports, and improving the Kingdom’s global ranking on the Logistics Performance Index from 49 to 25.
Located within a two-kilometre radius from the terminal yard and directly adjacent to the customs inspection zone, this hub’s strategic location will greatly benefit the exporters by saving time. Furthermore, most of the exporters based out of the manufacturing hub of Yanbu have had to truck their cargo almost 350 km to Jeddah for loading onto vessels. With the Maersk Integrated Logistics Hub at King Abdullah Port, this distance has been drastically reduced to 200 km. Exporters currently require 14 to 18 days from receiving the booking to loading the material on the vessel.
New capabilities With the new hub, this process will now take only 6 to 8 days, given material availability,
AP Moller-Maersk accelerates fleet decarbonisation with 8 large ocean-going vessels The agreement with HHI includes an option for four additional vessels in 2025
In the first quarter of 2024, AP Moller-Maersk will introduce the first in a groundbreaking series of 8 large ocean-going container vessels capable of being operated on carbon neutral methanol. The vessels will be built by Hyundai Heavy Industries (HHI) and have a nominal capacity of approx. 16,000 containers (TEUs). The agreement with HHI includes an option for four additional vessels in 2025. The series will replace older vessels, generating annual CO2 emissions savings of around 1 million tonnes. Additional capital expenditure (CAPEX) for the dual fuel capability, which enables operation on methanol as well as conventional low Sulphur fuel, will be in the range of 10-15% of the total price, enabling Maersk to take a significant leap forward in its commitment to scale carbon neutral solutions and lead the decarbonisation of container logistics. “This order proves that carbon neutral solutions are available today across container vessel segments and that Maersk stands committed to the growing number of our customers who look to decarbonise their supply chains,” stated Soren Skou, CEO, AP MollerMaersk. “This the ideal large vessel type to enable sustainable, global trade on the high seas in the coming decades and from our dialogue with potential suppliers, we are confident we will manage to source the carbon neutral methanol needed,” commented Henriette Hallberg Thygesen, CEO, Fleet & Strategic Brands, AP Moller-Maersk.
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AP MOLLER-MAERSK GROUP
thus reducing the turnaround time, increasing efficiency, and improving competitive advantage through reduced logistics costs. The reduction in trucking wills also positively contribute towards environmental sustainability through reduced emissions. Maersk is initially investing in 100,000sqm. of warehousing space during the first two years of operations at the hub, to cater to the annual throughput that will reach 1 million metric tons by third year as demand from exporters grows over the years. “The Maersk Integrated Logistics Hub at the King
Abdullah Port is an important milestone on our journey of providing logistics solutions for our customers in Saudi Arabia,” affirmed Shihab. “The strategic partnership between Maersk and King Abdullah Port is an important step in raising the efficiency of the Kingdom’s logistics sector and boosting our capabilities in logistics and trade in line with the Vision 2030 objectives. We are confident that this will significantly enhance the port’s outstanding operational capabilities by enabling us to provide sophisticated services seamlessly,” asserted New.
Maersk is initially investing in 100,000sqm of warehousing space. In future catering to the annual throughput that will reach 1 million metric tons by third year as demand from exporters grows.
Maersk signs shipbuilding contract for world´s first container vessel fueled by carbon neutral methanol Hyundai Mipo Dockyards to build the 2100 TEU feeder vessel
AP Moller-Maersk and Hyundai Mipo Dockyards have recently agreed on a contract for Hyundai Mipo to build a feeder vessel with a dual engine technology enabling it to sail on either methanol or traditional very low sulphur fuel. Maersk announced the intention to order the vessel, an industry first, on 17 February 2021. It will fly the Danish flag. “From 2023 we will offer a truly carbon neutral product for our many customers who look to us for help to decarbonize their supply chains,” commented Henriette Hallberg Thygesen, CEO, Fleet & Strategic Brands, AP Moller-Maersk. The feeder will be 172 meters long and will sail in the network of Sealand Europe, a Maersk subsidiary, on the Baltic shipping route between Northern Europe and the Bay of Bothnia. The methanol propulsion configuration for the vessel will be developed by MAN Energy Solutions and Hyundai Engine and Machinery (main engine) and Himsen (aux engine) in collaboration with Hyundai Mipo and Maersk. “While we are pioneering these solutions for our industry, we are working with well-proven technologies and the cost potential from further scaling is becoming very clear to us,” remarked Ole Graa Jakobsen, Head of Fleet Technology, AP Moller-Maersk.
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GatewayRail becomes India’s first rail operator to join Tradelens
LSP modernizing customers’ supply chains by offering secure digital documentation GatewayRail, India’s leading intermodal logistics service provider and rail-linked Inland Container Depots (ICD) operator, has become the first rail operator in India to join TradeLens, a blockchain-underpinned digital logistics platform, jointly developed by AP Moller–Maersk and IBM. The association between GatewayRail and TradeLens is a major milestone in digitizing India’s vast inland container logistics ecosystem with a significant impact on efficiency gained by exporters and importers. TradeLens brings together data from the entire global supply chain ecosystem. This data allows TradeLens and its network partners to modernize manual and paperbased documents by replacing them with blockchain-enabled digital solutions. It also allows the network partners to provide their customers with deeper visibility into the entire journey for their cargo from origin to destination. Customers moving import and export containers on these services will be able to make full use of the solutions provided on the TradeLens platform such as the TradeLens eBL, an electronic Bill of Lading using blockchain technology and integrated with trade finance companies and the Core product that offers true end-to-end visibility in addition to digital documentation. “At GatewayRail, we have a commitment towards ease of doing business through digitisation of logistics. Joining the TradeLens platform allows us to lead the change in Indian intermodal logistics ecosystem,” remarked Sachin Bhanushali, CEO and Director, Gateway Rail Freight Ltd. “There is no doubt that digitizing supply chains will ultimately help in bringing down the total cost of logistics, which is an important cornerstone of the National Logistics Policy,” commented Bimal Kanal, Head of TradeLens, South Asia.
BLUE YONDER
F
ollowing a year of intense changes in the logistics industry, new research from Reuters Events Supply Chain in partnership with Blue Yonder reveals the priority strategies and investments for supply chain execution and risk management. The State of Supply Chain Execution Report 2021 analyzed responses of supply chain professionals and found that the pandemic, customer centricity, rising e-commerce complexity and costs, need for Direct-to-Consumer (D2C), and the risk of financial peril are propelling retailers, manufacturers, and logistics service providers (LSPs) to digitally transform. Companies looking to capitalize on the omni-channel opportunities created by increased online-order volume over the last 18 months are now prioritizing more agile delivery and fulfillment models, like D2C. Retailers’ and manufacturers’ online sales increased more than 120% over the past year. LSPs have also seen e-commerce volumes explode, reporting a 200% increase compared to 2019-2020. “In the long term, investment in execution systems like Transportation Management Systems (TMS) and Warehouse Management Systems (WMS), as well as end-to-end visibility, automation, and cloud strategies will help build more sustainable, resilient and agile organizations for the future,” stated Raj Patel, Senior Director, 3PL Industry Strategy, Blue Yonder. “As the economy transitions to a post-pandemic environment, retailers, manufacturers and LSPs are transforming their transportation and broader supply chain operations to address their most pressing supply chain challenges,” he added.
E-Commerce growth driving tech investments in Supply Chain execution systems New Blue Yonder and Reuters Events report surveys retailers, manufacturers, and logistics service providers Pandemic prompts reevaluation of Supply Chain Risk Management
From constraints on raw materials to labor shortages to growing cybersecurity threats on distributed networks, pandemic-related challenges have shifted supply chain risk management priorities: Respondents are hesitant to pursue near/onshoring plans, with only 29% of retailers/manufacturers making an investment. Environmental concerns are also being considered when planning for supply chain risks. Over half (53%) of retailers/manufacturers and half (50%) of LSPs plan to invest in sustainability as a strategy for risk management, it was revealed in a press statement.
Companies prioritize DigitalFirst practices and technology investments
With the growth of e-commerce, investment in modern supply chain technologies and new approaches have become essential for businesses to keep pace with shifting trends and customer expectations. The report found that there are various factors driving investment in supply chain technologies and digitalfirst practices. In the current supply chain environment, companies are moving away from legacy systems and prioritizing technologies that enable visibility for customers and their operations, automate processes and support enterprise agility, the report concluded.
Blue Yonder: a new era of supply chain technology As technology advances at an exponential rate, the world is transforming alongside it to become more connected and empowered. This new technological era is providing customers with hundreds of options, creating new expectations from businesses to balance supply and demand, drive
optimisation and provide a seamless end-to-end experience. With this growth comes new complexities and challenges within the supply chain industry and Blue Yonder, formerly JDA Software, has reimagined its branding to reflect its devotion to endless innovation, and its drive to fulfill the true potential of
its customers. The company’s new name, Blue Yonder, is a reflection of its cloud transformation, product road map and the growing impact of the limitless potential artificial intelligence and machine learning technologies can provide within the supply chain, logistics and retail industries.
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COLD SUPPLY CHAIN
Supply Chain reliance. It is required.
The global pandemic has challenged the modern global cold supply chain like never before.
Tom Craig President LTD Management, Pennsylvania, USA, a leading authority and professional consultant on logistics and supply chain management and regular contributor to Global Supply Chain explores the multiple challenges confronting the cold chain and riding out the peaks and troughs of supply and demand as economies reopen —Editor 58 SEPTEMBER 2021
T
here are markets whose products fall into a special niche--temperature sensitive. These include pharmaceuticals, edibles, foodstuffs, meat, fish and seafood an even chemicals. The challenge is to protect against thawing, freezing, melting, degradation, spoilage particularly in relation to perishables. Add to that the growth of pathogens, the loss of efficacy, crosspolymerization and product
degradation all of which are Irreversible physical changes, part of the putrefaction process. With problems and failures, the product loses some or all of its purpose, quality, and value. It may also create dangers and risks for end-users. As a note, there is more as to industries and products, but this is illustrative of temperature control. The cold chain segment got global attention with early stories about one of the Covid vaccines
COLD SUPPLY CHAIN
and its extreme cold temperature requirements. The temperature cited would have been a serious challenge for its worldwide movement, logistics, and distribution to vaccination depots and administration locations.
Going beyond storage and shipping Supply chain management (SCM) for the cold chain is more than storage and shipping. There is product risk that makes it unique. That risk puts requirements of the supply chain. Overall, for cold chain, the SCM has to be elevated beyond nonunique products. This upraising should be done around the supply chain structure—process, technology, organization and that structure should mirror the company. The design of your supply chain and its operation should draw on lessons learned from the pandemic. That means resilience—
both inside your four walls and outside. Increased resilience means reduced risk. A centrepiece of becoming resilient is your supply chain structure. First, though, there is no universal agreement or standard for the temperature range for the cold chain. This reflects that the protection need depends on and varies by product. Different products putrefy at different temperature ranges—from chill to cryogenic.
Managing challenges Managing the cold chain, end-toend, is a challenge. It is preferable to finding out at delivery that a shipment went bad. The longer the transit both as to time and distance, the more parties and movement stops involved, the greater the risk. The end-to-end
challenge can then be defined as risk mitigation. This special supply chain, especially for export/import, presents criticality and has requirements that must be recognized. These demands meld and include: Action #1: Maintain end-to-end temperature. It is not an option. Reality is where a company sits in the end-to-end cold chain affects how it handles it--from manufacturing through to local distribution. There is a range of activities from production/preparation to ‘consumption’ by the enduser. With it goes important temperature integrity. Failures create product problems and even peril for end-users. Be aware too of regulations that may apply.
Supply chain management (SCM) for the cold chain is more than storage and shipping. There is product risk that makes it unique. That risk puts requirements of the supply chain.
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COLD SUPPLY CHAIN
Dual approach There are two parts here. The logistics/transport segment will be highlighted below. The other is about your company and its product. You sell the refrigerated product. So you may view your role here as done which it is. However, they have to remember that it is your product, your company, and your brand image if something negative happens to the product. So the challenge escalates with changes in product ownership that may occur. Be aware of the big picture here. Action # 2: Understand the end-to-end logistics providers and infrastructure. This is the transportation and logistics. We need to be mindful of different modes and different roles and warehouse/storage. The issue, as always, is that the temperature is controlled. As with above, there are two parts. One is the logistics infrastructure and the other is the refrigerated container or trailer and the warehouse. Also to be considered are the transport / logistics service providers who move these products. These two parts are what have permitted this market segment to significantly increase worldwide. Selecting the right transport and logistics providers is underpins your success here.
Outsourced logistics This also is important when sections of the logistics are outsourced. Be aware that the benefits an outside provider brings may also be offset because of possible risk with an outsider and how it fits into the supply chain operation. Be aware of the providers that you may not see, that you do not select, or do not directly pay the charges. For example, think of all the movements and places your
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export shipment goes through from your door to be safely placed on a ship. Think of potential delivery delays. It is all to protect your shipment. Action # 3: Integrate the logistics activities and their continuous movement. This means coordination, collaboration, planning, and more. Not every step is providing some type of temperature control, but where there is activity, nothing must go wrong. This can include temperature fluctuations. Think of the times where, for example, a trucker moves a refrigerated container or trailer. Or it is an export move, and all the players must make sure the container moves, is plugged in, and other attention that is needed. The interim steps and players cannot be excluded. Think the same with delivery and stops on the route.
Visibility is more than track and trace; Blockchain, add blocks and build the chain for visibility also aid with the chain of custody that is important. Action # 4: Assess and validate the process (not procedure). Follow the product and the activities. Understand what participants say happens. Then examine it with tracing and tracking customer orders or purchase orders. Do you find gaps that slow down the process or redundancies along the process which are made because of gaps? Think of holes in the process as potential temperature protection failures-risks to your product’s integrity. Reducing process time can improve process control and product integrity. Think time and temperature.
Action # 5: Utilize technology. It is not optional. You need to know if doors on the trailer were left open or how long a container sat unprotected. That is an application for technology to monitor and maintain. This is both for storage and for transport. Visibility, which is more than track and trace; Blockchain, add blocks and build the chain for visibility also aid with the chain of custody that is important for many. You also want technology at a granular level—the case and pallet. This tech application is increasing as also are bots, sensors, chips, temperature trackers and timetemperature indicators (TTI) that change colour. Other inclusions are data logging monitors, RFID (radio frequency identification) tags, GS1-128 bar codes and labels for international shipments. Action # 6: Organization. While cold logistics is a vital part of the supply chain, its role should be defined. This differs from the more traditional of fitting the supply chain into the logistics. This difference is not subtle than delineating by logistics and transportation, the organization should upstream and downstream.
Upstream / Downstream That also aligns with how the company does things. Upstream would be sourcing and manufacturing (or for sea and agriculture, it would be close to those activities). Downstream would reflect more to sales. The particulars of your product will affect your efforts above. It also comes into play as to trailer specifications and how you load the shipment. The devil is in the details. When your high-stakes cold chain supply chain operation is designed and operates well, then chill.
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