GLOBAL SUPPLY CHAIN MARCH 2020 ISSUE

March 2020 Issue 68

ENHANCING THE BUSINESS OF LOGISTICS

STRATEGIZING FOR SUCCESS Policing Policies

Volvo Trucks

Making headway in Abu Dhabi

Red Sea Gateway Terminal

Consolidating Jeddah Islamic Port’s operations

Tranzone

Propelling the Pharma Chain

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

     

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

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The emergence and now the rapid spread and onslaught of the CoronaVirus COVID-19 is adversely impacting businesses and trade all over the globe. The pandemic is now well and truly upon us and in its wake is having a devastating impact on production schedules, marketing and business plans.

As more uncertainty looms large on the horizon, the global logistics and supply chain sector, like many other industry verticals, are bracing for the downbeat fallout. This phenomenon, hopefully temporary, is taking its toll. However, the logistics trade and related segments, as past developments will testify, are known to be resilient and will bounce back!

Strategizing is key to any business and our cover story looks at identifying tactics, guidelines and pointers on how to determine benchmarks and roadmaps to succeeding and even thriving in our highly competitive industry—logistics, transportation and distribution.

Volvo Trucks, in partnership with local UAE distributor FAMCO, recently opened its newest ‘Volvo Uptime Centre’, the first in the region. This was furthermore complemented by two sets of commercial sales transactions of Volvo trucks made to two Abu Dhabi transport companies—Al Nubla Transport and Cardiff Transport. We carry a detailed report.

Elsewhere, Marc Carson, Commercial Manager, Tranzone UAE, examines issues and challenges related to the transportation of pharmaceutical products in the GCC and the region.

Recently, the Red Sea Gate Terminal signs a long-term, 30-year concession to redevelop the Northern sector of the Jeddah Islamic Port that will further boost business at Saudi Arabia’s busiest west coast port. We look at the role of all of the Kingdom’s stakeholders in this ambitious endeavour consistent with the Saudi Grand Vision 2030.

As is the practice every year, the annual (2020) Agility Emerging Markets Logistics Index has been revealed.

For the first time since the launch of the Index, the UAE features in the top 10 list of all three individual sub-indices.

The UAE ranks first in the region and third globally after China on the ratings, the report stated. In the Gulf, United Arab Emirates (No. 3), Saudi Arabia (6), Qatar (7), Oman (14), Bahrain (15) and Kuwait (19) also rank highly.

The jump in the UAE rankings, according to the extensive study, is attributed to the country’s continued open financial sector, transparent regulatory system and corruption protection frameworks and its progress towards a comprehensive national SME development strategy.

So not all doom and gloom—and this is indeed the silver lining to the region’s logistics sector!

Happy reading!

Malcolm Dias

Editor malcolm@signaturemediame.com

MARCH 2020 3

March 2020 Issue 68 September 2019 Issue 62

ENHANCING THE BUSINESS OF LOGISTICS

06 NEWS 20 Volvo Uptime Centre

32 IATA Report

21 Volvo Truck UAE sales

34 Agthia advances

Volvo’s first signature Uptime Centre in the ME has been inaugurated in Dubai.

The new Volvo Trucks in the Tractor series have debuted in the UAE.

22 Al Nubla opts for Volvo Trucks

Abu Dhabi transporter gets first batch of the new Volvo Trucks.

Cargo carriers should brace for turbulence in business during 2020, says an IATA forecast.

36 Thought Leadership Tom Craig

54 Gulfood 2020

Speedy delivery and adaptability are the new indispensable dynamics in e-commerce.

26 ROI in logistics ventures

44 Abu Dhabi Ports

Strategizing and staying the course is key to success.

The Port has developed the world’s first unmanned Autonomous Commercial Tugboats in a partnership deal.

30 Emirates SkyCargo

46 Tranzone Tactics

4 March 2020

52 New Gas Find

ADNOC and Dubai will collaborate to harness new gas finds in the border areas.

42 Red Sea Gate Terminal

To date the carrier is holding up well on the cargo front despite pressures.

GCC countries have fared well in the latest ratings given by Agility.

The Abu Dhabi-based F&B Company fared healthily in 2019.

24 Cardiff Transport

Another Abu Dhabi transporter takes possession of new Volvo Trucks consignment.

50 Agility Emerging Markets Logistics Index

RGST’s takeover of the North Jeddah Port Terminal bodes well for the Kingdom’s port operations.

Marc Carson, Commercial Manager, analyzes streamlined transportation systems for pharma products.

The mega event closed on a successful note.

55 JAFZA shines at Gulfood 2020

The Port and Free Zone made an impact at the recently concluded Gulfood 2020.

56 SOHAR Port and Freezone

The key Omani Port is poised to bring US$ 27bn in investments this year.

58 Thought Leadership Prof. Omera Khan

Disruption is the new normal in business warns Prof. Omera Khan.

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Etihad Cargo expands digital air cargo reach n Etihad Cargo has announced it has strengthened its commitment

to deliver heightened customer experience by inking a new partnership for digital air cargo with WebCargo by Freightos, the world’s largest air cargo rates and e-Booking platform.

The WebCargo partnership extends Etihad Cargo’s digital reach to more than 1,700 logistics providers and forwarder customers globally, with the platform serving as an additional strategic channel to avail Etihad Cargo e-Bookings following the successful launch of Etihad Cargo’s own portal at www.etihadcargo.com in 2018, which today receives almost 50% of the carrier’s overall bookings.

The WebCargo platform will provide instant Etihad Cargo booking schedules, promotional rates and e-Booking, enabling sales and operations teams at forwarders to compare and book air freight in seconds.

“We are pleased to kick-start 2020 with yet another digitalisation milestone. During the past 12 months we have introduced several initiatives to improve our customers’ experiences and provide the company with greater accessibility and visibility,” asserted Rory Fidler, Head of Technology & Innovation, Etihad Cargo.

“Digital Air Cargo is going to become an industry norm and WebCargo is proud to be leading the movement with innovative industry partners like Etihad Cargo,” stated Manel Galindo, CEO, WebCargo.

Following its announcement, Etihad Cargo’s flight schedules and market rates in mainland Europe and the UK will roll out on the WebCargo platform progressively allowing all platform members to review and compare airline offers, whilst instant e-Bookings functionality will follow in April upon the successful completion of API (Application Programming Interface) testing and systems integration.

Markets where e-Bookings will be enabled first are Spain, France and UK, with a gradual rollout to more markets to ultimately cover all of Europe throughout 2020.

Etihad Cargo and dnata extend partnership across four continents n Etihad Cargo has bolstered its global handling partnership

agreements with dnata, one of the world’s largest air service providers.

The new agreements align the two UAE-based companies until 2023, with dnata providing warehouse and cargo handling services to manage 180,000 tonnes of air cargo carried annually across 15 gateways in Etihad Cargo’s global network.

For the first time, the Etihad Cargo-dnata alliance now extends to North America and South Asia Pacific, with dnata having commenced warehouse operations at Canada’s Toronto Pearson Airport from 5 February 2020, to be followed

by Singapore’s Changi Airport on 1 May 2020.

The new North America and South Asia Pacific agreements add to existing Etihad Cargo-dnata warehouse and cargo handling operations at Dubai International (DXB) and Dubai World Central (DWC) airports, as well as Sydney, Melbourne and Brisbane in Australia, together with Karachi, Lahore and Islamabad in Pakistan, and Zurich, Geneva, Manchester, Milan and Amsterdam in Europe.

“Our extended agreements with dnata reinforce a partnership that has grown rapidly during the past decade, and marks a significant milestone between two UAE entities with truly global presence,” remarked Andre Blech, Head of

6 MARCH 2020

Etihad Cargo and dnata extend global handling partnership.

Operations and Service Delivery, Etihad Cargo. “dnata continues to invest in our facilities, equipment and team to deliver best-in-class services for this important customer airline,” stated Stewart Angus, the company’s Divisional Senior Vice President for International Airport Operations.

DP World handles 71mn TEU in 2019 n DP World handled 71.2mn TEU (twenty-foot equivalent units) across its global portfolio of container terminals in 2019, with gross container volumes flat year-on-year on a reported basis and up +1.0% on a like-for-like basis.

Like-for-like gross volumes in Q4-2019 accelerated to +2.1% with growth driven by Asia Pacific and Africa. Jebel Ali handled 14.1mn TEU in 2019 down 5.6% year-on-year due to a decline in low margin cargo.

At a consolidated level, DP World terminals handled 39.9mn TEU in 2019, an 8.6% improvement in performance on a reported basis and down 0.5% year-on-year on a like-for-like basis.

“2019 has been a challenging year with the trade war between China and US and regional geopolitics causing uncertainty in the market. Despite this, our portfolio has delivered growth which once again demonstrates the resilience of our business,” stated Sultan Ahmed Bin Sulayem. Group Chairman and Chief Executive Officer, DP World in a press statement.

DP World file photo.

Jeddah Islamic Port’s RSGT welcomes the first delivery of modern advanced terminal equipment n Red Sea Gateway Terminal (RSGT), the world-class terminal,

a wholly owned subsidiary of the Saudi Industrial Services Group SISCO, has announced the arrival of the first consignment of new advanced terminal equipment, which includes terminal trucks and trailers.

This will enable the Port operator to accelerate and speed up port and quay operations at the North Jeddah Islamic Port (JIP), the biggest and busiest port in Saudi Arabia. The value of the delivered equipment exceeds SAR 1bn (US$ 267mn).

Jeddah Islamic Port is the primary port of call and trade conduit for trade and shipping in and out of the Kingdom via the Suez Canal.

The delivery of the new advanced machinery follows the recent signing in December 2019 of the 30-year concession mega contract valued at SAR 6.6bn (US$ 1.76bn) by RSGT with the Saudi Port Authority (Mawani) to redevelop and modernise the North Jeddah Islamic Port.

The new Terminal Trucks and Trailers, the newest of its kind in the Kingdom, and especially customised for port operations come equipped with the latest and most demanding safety features, which will significantly contribute to increasing productivity and performance at JIP. Red Sea Gateway Terminal is the first container terminal in the Kingdom of Saudi Arabia which is built by the private sector under a ‘build, operate, and transfer’ (BOT) agreement, and the only terminal at the Jeddah Islamic Port capable of accommodating Ultra-Large Container Ships (U,LCS) of 20,000+ TEU capacity.

Terminal tractors at RSGT. The Red Sea Gateway Terminal is committed to regional and global infrastructure and facility investments to better serve the growing requirements of global shipping lines and domestic cargo, and container services, as well as expanding our presence internationally in the global logistics chain through organic growth and by obtaining new concessions or acquisitions.

MARCH 2020 7

Giant gas turbine transported by road to EGA Jebel Ali in logistical feat

RTA and Careem officials at the bike launch ceremony.

RTA and Careem launch bike rental service in Dubai n Dubai’s Roads and Transport Authority (RTA) and Careem have officially launched the first-of-its-kind bike rental service in the region, providing 780 bicycles and 78 stations across Dubai under the project’s phase 1.

The multi-phase project will provide 3,500 bicycles across 350 stations in Dubai upon completion.

Mattar Mohammed Al Tayer, Director General and Chairman of the Board of Executive Directors of the RTA and Mudassir Sheikha, Co-Founder and CEO, Careem, recently inaugurated the service at the Jumeirah Lakes Towers’ rental station.

The solar-powered rental stations will allow users to hire and pay via the Careem Bike app, which allows them to unlock the bicycle by scanning the QR code on the bicycle and enter a 5-digit code from the application into the station.

According to its 15-year contract with the RTA, Careem will operate 1,750 bicycles and install 175 stations during the first two years, before increasing them to a total of 3,500 bicycles and 350 stations over the next five years.

“We appreciate the great efforts made by the RTA to bring success to this project, while we value the contributions of our partners at Wasl Properties, Emaar, Dubai Multi Commodities Centre (DMCC), TECOM and Dubai Holding, who helped translate this project into a reality,” stated Sheikha.

Over the past few years, the RTA has laid 425 km of bicycle tracks across Dubai. The overall bicycle tracks across the Emirate will reach 647 km by 2023.

8 MARCH 2020

Seimen’s H-Class turbine transportation to EGA facility in Jebel Ali

n Emirates Global Aluminium announced that a giant gas

turbine, the biggest in the UAE, has been moved by road from DP World’s Jebel Ali port and installed at EGA’s Jebel Ali site in a carefully-planned overnight operation.

The Siemens H-class gas turbine, weighing 457 tons and with a length of 13.5m, was transported the six kilometres from Jebel Ali port, using an over-sized truck.

On arrival at EGA, the turbine was placed in its permanent location at the heart of a new AED 1bn (US$ 273mn) sophisticated power block which will further improve the efficiency of EGA’s electricity generation.

The entire operation took just over four hours over two days.

The new power block at EGA, developed by JA Power & Water Co, a joint venture formed by Mubadala and Dubal Holding, will be the first in the global aluminium industry to use a Siemens H-class gas turbine, a leading technology in efficient power generation.

“The arrival and installation of the turbine is a milestone in the new power block project, and we are pleased it has been completed safely and efficiently,” remarked Abdulnasser Bin Kalban, CEO, EGA. “The Siemens H-class is among the world’s most efficient and powerful gas turbines. The EGA power plant will be the most efficient gas-fired facility in the UAE and will significantly lower emissions and strengthen the industry,” affirmed Dietmar Siersdorfer, Middle East and UAE CEO, Siemens.

The new power block at EGA will have a generation capacity of over 600 megawatts of electricity and EGA intends to buy the output for 25 years following commissioning.

The H-class turbine was built by Siemens in Berlin and was shipped to the UAE by sea.

Larsen & Toubro advance BIM for rail projects n The second phase of India’s Western Dedicated Freight Corridor is under construction to meet the growing demand for freight services in the states of Haryana, Rajasthan, and Uttar Pradesh.

The project will reduce the unit cost of transportation and quadruple the current average freight speed from 20 kilometers an hour, introducing time tabled freight services and tripling container capacity from 5,000 to 15,000 tons.

Larsen & Toubro Limited (L&T) is constructing Package CTP-14, a 128-kilometer corridor between Rewari to Dadri.

Since the adoption of BIM methodologies in rail in India is still in its infancy, and in light of significant increases in government expenditure in infrastructure, L&T realised its success on the project could be a game changer.

Using a multi-discipline portfolio of Bentley applications, L&T was able to conceptualise, design, and construct the project in a timely manner, leveraging BIM methodologies to share information across the different disciplines involved in the design, delivery, and maintenance of physical assets along the railway.

As detail design progressed, the dynamic interface of OpenRail Designer allowed team members to compare different scenarios to help simplify logistics, reduce cost, and create a safe environment for site personnel during construction.

Bentley to empower rail networks.

“Bentley software helped L&T achieve its vision of digitalisation and implementation of BIM to enable designers, planners, and implementers to use a single repository for the free flow of accurate information and a collaborative way of working through the process of designing, delivering, and maintaining physical assets,” commented Nikhil Jose, Assistant Engineering Manager-Civil, L&T.

Serco ME & GCANS extend Air Traffic Control services contract n Building on the success of its long-term partnership with the

Ministry of Transport, international public services company, Serco Middle East has announced the awarding of an extension of its Air Traffic Control Services following eight-year tenure.

The contract is valued at US$ 25.6mn and will be extended until the end of 2020.

Over 50 Serco employees currently provide support on the ground for the General Company for Air Navigation Services (GCANS) at Baghdad Airport, with the company providing operational Air Traffic Control staff and instructors as well as key advisors in AIS, CNS training and management.

As part of the partnership, Serco will continue to provide operational support, On‐the‐Job Training Instruction (OJTI) including the certification training of OJTIs and Examiner duties in the areas of Area, Approach and Tower Control. Serco’s remit also includes management mentorship programmes in Safety, Quality Assurance and ATC Training along with management support to all areas of Air Navigation Services.

Serco has been providing world-class air navigation services in the Middle East for over 70 years and the extension to the contract is testament to a number of key milestones that have

Serco ME’s Phil Malem, Peter Mohring and the Baghdad Airport team. been reached during the eight-year tenure, including the meeting the commitment of the Government of Iraq to transition and transfer Iraqi sovereign airspace and sectors to the Iraq Civil Aviation Authority Serco ME will work closely with Iraq Civil Aviation Authority and GCANS in this endeavour.

“We are pleased to have been awarded with an extension of our partnership with the General Company for Air Navigation Services (GCANS) to deliver the best possible air traffic services and highest standard of aviation training to support Iraq’s aviation sector,” remarked Phil Malem, CEO, Serco Middle East.

MARCH 2020 9

Etihad Cargo picks key cargo service provider n Consistent with the recent implementation of the new global sales distribution structure across its network, Etihad Cargo, the cargo and logistics arm of the Etihad Aviation Group, has selected ECS Group, one of the world’s largest General Sales & Support services group, to deliver a significant scope of its new regional sales operating model across multiple-territories.

Etihad Cargo has entered into Cargo Service Provider (CSP) agreements with ECS Group’s subsidiary company Globe Air to provide customer service, reservations, post-flight support, operations support, accounting and billing support services in the United States, United Kingdom, Germany, Netherlands, Singapore, Indonesia and Malaysia.

Furthermore, through ECS Group’s subsidiary companies Globe Air, UniversalGSA and ExpAir, the parties entered into CSP agreements that also cover sales services in Canada, Belgium, Switzerland, Austria, the Czech Republic, Slovakia and the Nordics, as well as Los Angeles and the offline Etihad stations in the United States.

“ECS Group’s ability to deliver cost-effective sales operations through bundling multiple jurisdictions and maximising economies of scale was a key factor in their award,” affirmed Abdulla Shadid, Managing Director Cargo & Logistics Services, Etihad Aviation Group.

Etihad’s renewed regional distribution strategy is designed for the carrier to lead its own sales and commercial activities in select global cargo gateways, with key leadership appointments made across North America, Europe, Middle East, Africa and Asia.

“We share Etihad Cargo’s vision of putting digital at the heart of efforts to expand air freight, and this shared vision is an essential aspect of our partnership,” stated Adrien Thominet, Chief Executive Officer, ECS Group.

Etihad Rail to expand locomotive fleet n The Board of Directors of Etihad Rail, the developer and

operator of the UAE’s national railway, has awarded a contract for the supply of locomotives for the UAE’s nationwide rail network to Progress Rail Locomotive, a Caterpillar company, expanding the company’s fleet to 45 locomotives, which is equivalent to 6 times the current fleet consisting of 7 locomotives.

In the presence of HE Sheikh Theyab Bin Mohamed Bin Zayed Al Nahayan, Member of the Executive Council, Chairman of Abu Dhabi Crown Prince's Court and Chairman of Etihad Rail, the contract was signed by Shadi Malak, CEO, Etihad Rail, and Ramzi Imad, Progress Rail’s Regional Director of International Sales for North Africa and Middle East.

“In the year of “The cutting-edge fleet of locomotives will raise the bar in the transportation system and logistics services in the country and increase the network’s annual capacity to more than 60 million tons, compared to the current annual capacity of approximately 7.2 million tons,” asserted HE Sheikh Theyab on the occasion.

Etihad Rail contracted Progress Rail, one of the world’s biggest manufacturers of diesel-electric locomotives, to design, manufacture, test, and ship 38 EMD locomotives especially designed to withstand the high temperatures and humidity of the gulf region.

Additionally, the locomotives fleet will be equipped with highly developed air filtration system that filters sand from the air intake and pulse cleaning systems, ensuring effective and efficient operations while passing through desert areas.

The locomotives feature powerful motors and will be supported by advanced emission reduction technology, reducing carbon emissions

10 MARCH 2020

by 70-80%. The locomotives are designed to haul a 100-wagon train, which can replace 5,600 on-road truck trips per day.

The agreement increases the fleet of Etihad Rail to 45 heavy 4,500 HP locomotives, which are among the most powerful locomotives in the region. Since Etihad Rail became operational in 2016, the company’s current fleet of 7 locomotives has contributed to decreasing the number of truck trips on the roads of Al Dhafrah by more than one million, with up to 28 million tons of granulated sulphur transported from sources at Shah and Habshan to the processing and export point at Ruwais.

The signing of the contract follows the awarding of all civil works contracts for Stage Two of the national railway network, the launch of construction works of Package A of Stage Two, and the award of a contract to build a series of freight facilities for the rail network, underlining the company's consistent and strong performance to complete one of the biggest and most important infrastructural projects in the country.

Tristar Group signs US$ 24mn LNG shipping service contract with BP n Dubai-headquartered Tristar Group has announced that it has signed a four-year contract with BP to provide liquefied natural gas (LNG) shipping services for a value of US$ 24mn.

The deal with BP, one of Tristar’s long-standing partners, follows the recent addition to the Dubai-based company’s shipping fleet of its first LNG tanker, the Tristar Ruby.

The four-year deal will cover a variety of LNG shipping services comprising trading and delivery capacity worldwide.

The Tristar Ruby, formerly the British Ruby joins Tristar’s 30-strong fleet of ocean-going tankers. The vessel was built by Hyundai Heavy Industries in 2008 and has a cargo carriage capacity of 155,000cbm.

She will be technically managed by Wilhelmsen Ship Management and commercially operated by Tristar.

“We are pleased to be able to announce the value of our deal with BP, the first as we expand our presence into the LNG shipping market. This represents a strengthening of our relationship with BP, one of our core partners,” remarked Eugene Mayne, Group CEO, Tristar Group.

Eugene Mayne, CEO, Tristar Group.

Tristar Group CEO shares Tristar’s sustainability initiatives at Dubai Chamber n Dubai Chamber recently hosted the Sustainability Network

Achievements ceremony to acknowledge the commendable work done by its members in implementing sustainable and responsible practices in 2019 and to motivate them to further integrate these practices in the community.

Last year, 17 new companies joined the Network, bringing the membership to 64. Launched in 2010, as a platform for the business community to identify and share expertise on CSR and sustainability challenges, the Network has initiated many initiatives to support businesses adopt sustainable practices.

The ceremony was preceded by Hamad Buamim, President & CEO, Dubai Chamber, and attended by members of the Sustainability Network, business leaders, experts and decisionmakers in the field of sustainability.

Buamim congratulated the members for their commitment and success in putting in place responsible business practices and creating awareness about the impact of business on the environment.

Eugene Mayne, Group CEO, Tristar, joined Hassan Omar, Chief Operating Officer, Ducab, Abdullah Sharafi, Managing Director, Gerab Group to make presentations on responsible practices for businesses, the role of sustainability in shaping the future of business and how the Sustainability Network can be a platform to attain those goals.

In 2019, the Sustainability Network organised 20 events, ranging from high-profile best practices seminar to multi-

Eugene Mayne addressing the Dubai Chamber Assembly. stakeholder dialogues with more than 384 participants from private and public on topics such as employee well-being, sustainable supply chain, and waste management.

This year, the Network, through its eight sustainability Network Task Forces, which are based on the four pillars of CSR and sustainability, namely workplace, marketplace, community and environment, will continue to set actionoriented agendas.

MARCH 2020 11

SOHAR inks license agreement with Albwardy Damen n Consistent with its commitment to provide highquality vessel services, SOHAR has recently entered into an agreement with Albwardy Damen.

The signing took place SOHAR Port and Freezone Head Office, with Mark Geilenkirchen, CEO of SOHAR Port representing SOHAR and Ibrahim Mohamed Al Shidi, representing Albwardy Damen.

The agreement will see the installation of a 40foot workshop container at a service jetty in the Port and will be Albwardy Damen’s fourth operational location in the Middle East.

Albwardy Damen is a joint venture between Albwardy Investment, based in Dubai and Damen Shipyards Group, headquartered in the Netherlands.

The company provides shipbuilding and ship repair services to the marine and oil & gas-related industries in the Middle East.

Turkish Cargo maintains steady growth in December 2019 n According to the international air cargo information provider

World Air Cargo Data’s (WACD) December 2020 data (cumulative) report, Turkish Cargo, which serves 127 countries of the world, grew significantly by achieving a tonnage increase of 7.1 percent in a sector wherein the global air cargo market shrank by -4.4 percent.

According to the released WACD data, Turkish Cargo, which has the largest growth rate among the top 10 airlines, rose to 7th place in the international air cargo industry and increased its global market share to 4.1 percent.

On the basis of the tonnage sold, the air cargo brand has grown by 17.1 percent in North and South America, 14.1 percent in the

12 MARCH 2020

Far East Region, 9.7 percent in South Western Europe, 4.7 percent in the Middle East and South Asia, and 7.1 percent in Africa, thus achieving positive results in all regions wherein it provides air cargo service, and kept growing steadily in these regions.

In addition to the Turkish Airlines' cargo carrying capacity, Turkish Cargo operates direct cargo flights to 88 destinations with its cargo aircraft fleet and has achieved a sustainable growth through its current infrastructure and new investments.

Turkish Cargo continues to increase its capacity through extensive operations in over 300 destinations covered by its current flight network.

Turkish Cargo currently serves 321 destinations in 127 countries.

Agility reports earnings increase of 7% for 2019

Dr Mohammed Zarooni (L) and Hamad Buamim

DSOA and Dubai Chamber ink agreement to attract entrepreneurs n Dubai Silicon Oasis Authority (DSOA) recently Tarek Sultan, Vice Chairman and CEO, Agility

n Agility, the Kuwaitheadquartered global logistics provider, recently reported 2019 net profit of KD 86.8mn (US$ 284mn), an increase of 7% from 2018. Revenue for the year reached KD 1,578.6mn (US$ 5152.6mn) and EBITDA was KD 193.1mn (US$ 630.3mn), increases of 1.8% and 24.7%, respectively.

For the fourth quarter 2019, Agility reported a net profit of KD 23.2mn (US$ 75.73mn), an increase of 4.4% over Q4 2018.

“Global trade tensions, regional economic uncertainty, and financial market pressure in emerging markets all contributed to a challenging year for our logistics business. Internally, the costs associated with our investment in digitization also had an impact; one that we believe will continue in 2020,” remarked Tarek Sultan, Agility Vice Chairman and CEO. Beyond digital, emerging markets also remain a key investment focus. This includes building logistics parks across the Middle East and Africa, the Reem mega-mall project in Abu Dhabi, bringing on new ocean vessels

and fuel farms through our fuel logistics subsidiary, and growing rapidly in Africa through our airport services subsidiary.

“We move into 2020 cognizant that we are likely to see volatility in the global economy that may impact our logistics business, as well as slower market activities in certain markets in the Middle East and Africa that may affect certain portfolio companies. That said, we are confident that despite these challenges, we are well-positioned to navigate through them,” Sultan stated.

Q4 Air Freight volume decreased by 7% (in tonnage) as a result of falling trade volumes and lower demand from customers across industries and geographies.

Ocean Freight TEUs grew 1.9%, but Q4 yields declined 2.2% vs. the same period in 2018. GIL Ocean Freight yields were strongest in the Americas and Europe.

Contract Logistics achieved healthy growth, mainly in the MEA Region (Kuwait, Saudi Arabia) but also in the US, Australasia and Singapore.

Project Logistics also showed solid growth in multiple countries.

signed a strategic agreement with Dubai Chamber of Commerce and Industry (Dubai Chamber) to support start-ups and entrepreneurs in Dubai.

The agreement was signed between Dubai Technology Entrepreneur Campus (Dtec), the largest tech hub and coworking space in the MENA region, wholly owned by Dubai Silicon Oasis Authority (DSOA), and Dubai Startup Hub, an initiative of Dubai Chamber of Commerce and Industry.

Dr Mohammed Al Zarooni, Vice Chairman and CEO of DSOA, and Hamad Buamim, President and CEO of Dubai Chamber, signed the one-year agreement at Dtec in the presence of several officials from the two entities.

Under the terms of the partnership, DSOA and Dubai Chamber will produce an annual report on start-ups in Dubai in a bid to attract business and direct investment, through Dtec and Dubai Startup Hub. The agreement will also offer startups access to the “Soft Landing Program” that facilitates business setup in the emirate. In addition, they will have the opportunity to participate in the quarterly Dtec Forum that seeks to address key issues of the startup ecosystem, and other entrepreneurshipfocused workshops organized by Dtec.

“DSOA works to position Dubai as a leading destination for business setup and investment through offering world-class services to diverse sectors, especially in the technology field,” stated Dr. Al Zarooni.

“Our cooperation with DSOA marks the beginning of a new phase of Dubai’s endeavors to establish itself as the global startup capital,” remarked Buamim.

MARCH 2020 13

NFPC unveils transformative initiative at Gulfood 2020

HH Sheikh Hamdan Bin Rashid Al Maktoum inaugurated Gulfood 2020.

Silver Jubilee edition Gulfood 2020 closely on healthy note n HH Sheikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance, opened Gulfood 2020, the landmark 25th edition of the region’s longest-running annual food and beverage (F&B) trade show at Dubai World Trade Centre (DWTC).

As an industry pioneer and weathervane for global F&B sector trend-tracking, Gulfood attracted F&B producers that serve a global population that is set to race past eight billion by 2030.

The global F&B sector seeks to keep pace with changing consumer habits and spiralling spending, which now stands at more than US$ 7.2tr annually, according to the Gulfood 2020 Industry Outlook Report.

The five-day Gulfood 2020 from 16 to 20 February showcased large-scale innovation in the F&B sector, with a wide array of industry disruptors exhibiting innovative products and solutions, new-to-region flavours and products, and the global networking opportunities with F&B businesses from every corner of the world.

Running alongside the main exhibition, the second edition of the three-day Gulfood Innovation Summit brought together major players from across the international industry to examine the latest challenges and opportunities in the global F&B market.

To mark its silver anniversary, Gulfood 2020 rolled out a host of new features and initiatives to further enhance the visitor experience.

The Gulfood Innovation Summit attracted a power-packed line-up of speakers including high-ranking ministers, thoughtleaders and industry stalwarts. Speakers taking to the Summit stage included HE Mariam Bent Mohammed Saeed Hare Al Mohair, Minister of State for Food Security of the UAE; HH Prince Waleed Al Saud, President – Saudi Arabia Restaurant and Cafés Association, and Darien Al Kati, Goodwill Ambassador, Food and Agriculture Organisation of the United Nations.

14 MARCH 2020

NFPC and Tetra Pak officials display the new Oasis water packaging.

n Oasis, the water brand of UAE based National Food

Products Company (NFPC) has staked its claim as the first beverage brand in the GCC. In a new unprecedented initiative, Oasis Water will provide drinking water for the consumer market in Tetra Pak carton packages, environmentally-sound packaging material that boasts a wealth of biodegradable and recyclable properties.

The pioneering Oasis product was unveiled at Gulfood and reaffirms NFPC’s commitment to an innovative sustainability agenda.

The main material used in Tetra Pak package is paperboard, a renewable material made from wood. It is Forest Stewardship Council™-certified and features six layers that protect the contents from sun, air and light.

Cardboard is the main component used, and it is sourced from trees with new trees planted to replace the ones used for production. A number of Life Cycle Analysis (LCA) studies have assessed that the Tetra Pak carton is generally attributed with the lowest environmental impact of all packaging formats.

“Our decision to provide drinking water within Tetra Pak packages, which provides so many waste reducing benefits, is our keen commitment in addressing the serious issues of global pollution,” affirmed Iqbal Hamzah, Group CEO, NFPC. “We are excited and proud to see our customers adapting sustainable packaging solutions in the UAE which is becoming more and more aware of the environmental cause,” asserted Amar. Zahid, President, Middle East & Africa Tetra Pak. NFPC (National Food Products Company) was founded in 1971 with the establishment of a dairy production facility in a desert location. Brands under the NFPC umbrella include, Lacnor, Oasis, Blu, Royal Bakers, Gulf & Safa, Milco and Melco.

Bridgestone continues to invest in tyre innovation for cars of the future n Bridgestone Middle East & Africa (MEA), one of the region’s leading tyre brands, continues to innovate its tyres to address the requirements of cars of the future, including autonomous vehicles, amid the steady transformation of global mobility.

Bridgestone’s most recent innovation is the Smart Strain Sensor technology, which is equipped with the Internet of Things (IoT) tools. Through this feature, the vehicle owner can track tyre inflation pressure and temperature as well as measure the dynamic change in the strain that occurs when a tyre is in use.

Additionally, the data produced via the sensor can be transmitted to other drivers on the road, thereby preventing any untoward incident such as accidents. This technology is seen to result in improved vehicle and road safety and enhanced productivity for fleets.

“At Bridgestone, we continue to utilize tyre sensors to allow an autonomous car predict the type of surface being driven on. Also, through predictive modelling, drivers can better estimate the mileage left to fix their tyres for higher efficiency,”

Stefano Sanchini, Regional MD, Bridgestone MEA (extreme right), with other panellists at the Middle East Smart Mobility event. said Stefano Sanchini, Regional Managing Director, Bridgestone MEA. Sanchini was a panelist at the recent Middle East Smart Mobility held in Dubai.

In the event’s panel discussion titled

‘MENA’s autonomous road map: the current vision, goals, and challenges for autonomous vehicles in the region,’ he shared Bridgestone’s vision to transform the functions and role of tyres.

Circ expands micro-mobility presence to Ras Al Khaimah n Circ, the Middle East’s first regulator approved e-scooter operator,

has partnered with RAK Transport Authority, RAK Tourism Development Authority and leading private real estate developers to provide e-scooters in the Al Hamra, Al Marjan Island and Corniche Al Qawasim districts.

Circ’s e-scooter service will offer residents and visitors safe, affordable, convenient, sustainable and better-connected journeys for riders in the Northern Emirate.

“We are excited to provide the residents and tourists of Ras Al Khaimah with an eco friendly, affordable and convenient transportation solution for short distance trips to better connect the many points of interest in the Emirate,” remarked Bader Al Kalooti, Co-Founder & CCO Middle East, Circ.

“Mobility is a key theme of Expo 2020, and we are pleased to see innovative solutions of this nature arriving in our Emirate,” commented Raki Phillips, CEO, Ras Al Khaimah Tourism Development Authority.

“Circ e-scooters will offer an enjoyable and liberating way for people to explore Ras Al Khaimah in a new way, bringing equity in transportation access for everyone and facilitating local commerce in the Emirate,” stated Jaideep Dhanoa, Co-Founder and CEO, Circ.

Circ has commenced operations in Ras Al Khaimah.

MARCH 2020 15

Intertek in Dubai gets top Quality Control recognition

The Al Gurg family – (from left) Dr Raja Al Gurg, Abdulla Al Gurg, Maryam Al Gurg, Muna Al Gurg and seated Easa Saleh Al Gurg.

Easa Saleh Al Gurg commemorates its diamond anniversary n Easa Saleh Al Gurg Group (ESAG), the leading Dubai-based

multidivisional conglomerate, has marked its 60th anniversary in 2020. ESAG’s present portfolio of 27 different companies across a diverse range of business verticals includes longstanding joint venture partnerships. Established in 1960 by Easa Saleh Al Gurg, the Group’s Chairman, the conglomerate began as a trading partner for Grundig in the early sixties.

ESAG’s growth trajectory led to partnerships with several international companies who wanted to gain a foothold in the UAE. The Group at present has more than 370 international brands within its various business verticals.

In these six decades, three generations of the Al Gurg family have steered the Group’s evolution into one of the region’s well-known family business houses, with diverse product and business interests in the retail and lifestyle, consumer, building & construction, real estate, industrial and joint venture sectors.

With the Group marking six decades of business in the same year that the Emirate hosts Expo 2020 Dubai, Dr Raja Al Gurg, the Group’s Managing Director, has pledged to continue the family’s commitment to focus on leading industry expertise that positively impacts the nation’s growth.

“The Group’s commitment to excellence and innovative thinking has made it one of the leading family businesses in the UAE,” said Dr Al Gurg.

ESAG has also championed gender equality and workforce balance. The Group employs 270 women, led by Dr Raja Al Gurg along with her siblings Maryam Al Gurg and Muna Al Gurg who continue to play an active role in executing the Group’s strategy.

16 MARCH 2020

Manufacturers, importers and exporters operating across multiple GCC countries to experience a faster and more cost-efficient process for obtaining G Mark Certificates.

n Intertek, a leading Total Quality Assurance provider to industries worldwide, has been designated as a ‘Notified Body’ by the Gulf Standards Organization (GSO) to issue Gulf Conformity Mark (G Mark) Certificates to locally-produced, imported and exported products across the Gulf countries.

The scope of notification covers Gulf Technical Regulation for Low Voltage Equipment and Appliances (BD-142004-01).

Established in 2016, the G Mark certification programme applies to a number of low voltage electrical equipment and appliances as well as children’s toys imported or sold in the GSO member countries: Saudi Arabia, the UAE, Kuwait, Bahrain, Oman, Qatar, and Yemen.

It is mandatory for all low-voltage electrical products subject to the regulation of GSO regulated products entering these markets to bear a G mark.

With this new designation and existing global capabilities, Intertek is currently able to offer importers and exporters in the Gulf a vast range of G Mark testing and certification services. Manufacturers, retailers, wholesalers, distributors and suppliers will experience a simplified, more time, and cost efficient process for obtaining G Mark Certificates.

The new appointment for Intertek Dubai as a G Mark ‘Notified Body’ complements Intertek’s conformity offerings and provides a more comprehensive service to clients operating across multiple countries in the Gulf.

“Intertek has provided expert support and guidance on the Gulf Technical Regulations and overall G marking requirements and procedures since the inception of the G Mark programme. The new accreditation as notified G Mark body for Intertek Dubai will help shorten the time required to access the GCC market for clients across the world,” asserted Mutaz Yahia, Intertek Certification Manager, Electrical & Network Assurance.

Washmen launches advanced facility in Dubai n After spending 18 months in R&D, scouring the world’s 20 best laundries, from traditional leaders in quality from France and Germany to tech pioneers in Singapore, South Korea and China, the Washmen team’s quest to provide the best laundry services available in the world is now a reality, according to a company press release.

“Anyone that has seen the 30,000 sqft facility and the technology we use, even throughout development, is excited. It’s a testament to the team’s hard work,” remarked Rami Shaar, the company’s CEO and Co-founder.

Over the last 4 years, Washmen has risen to the top of the laundry space through its focus on customer experience, logistics and digital user experience.

Washmen now boasts Miele’s WetCare technology, a patented process designed to completely mimic the mechanics of handwashing garments in cold water, providing the ultimate level of care possible, extending the lifetime of a garment by up to 50%.

Other offerings include Air Dry

An inside view of the new 30,000 sqft Washmen facility in Dubai. technology. Unlike at any other laundry in the UAE, items are air dried when they’re sent to Washmen.

Additional services offered include steam pressing, Unique QR coding of every single item and RFID technology, wherein each item is tagged with an RFID chip when it enters the facility. This allows its movement

to be pinpointed at all times.

This facility currently employs 150. The Washmen team also offers a free recycling service that collects all your recyclables from customers. Started in late 2015, Washmen is a digital laundry and dry-cleaning service in the UAE. The services are offered in Dubai and Abu Dhabi.

Solutions for a healthy world Tranzone operates a state-of-the-art 3PL warehouse in Jebel Ali Free Zone. We have partnerships with the leading pharmaceutical, medical device and animal health companies around the world.

Healthcare Logistic Services: Air Freight Sea Freight Land Transportation Value Added Services Warehousing & Distribution Return logistics Documentation Tranzone FZCO (Member of Banaja Holdings)

Jebel Ali Free Zone (South) Plot No: S20129 P.O Box : 262955, Dubai, United Arab Emirates, Tel : +971 4 811 0000

Web: www.tranzone.ae MARCH 2020 17

8 June 2020 Dubai South, Dubai, United Arab Emirates

www.logisym.org Government of Dubai

Logistics Gateway Dubai Beyond 2020 Learn: How Dubai will shape up to retain its regional logistics and distribution gateway role beyond 2020.

Topics discussed by industry leading speakers n Logistics infrastructure developments n Multi-modal freight hub Dubai n Regional E-commerce retailing n Robotics and automation n Big Data in logistics Europhia Consulting is the regional partner of Logisym Dubai.

Connecting leading logistics and supply chain solutions to the UAE. www.europhia.com

Jason Verhoven M: +971 50 6543876 E: jason@signaturemediame.com

AG&P breaks ground on its LNG import facility in South India n AG&P, the global downstream gas and LNG logistics company, has broken ground on its LNG Import Facility at Karaikal Port, Puducherry, paving the way to broader access to natural gas as a primary fuel in South India.

The Karaikal LNG Import Facility (Karaikal LNG) is expected to commence commercial operations by Q4-2021.

Owned and operated by AG&P, Karaikal LNG Import Facility is being built on a 12-hectare site within the Karaikal Port, which enjoys the only deep-water access on the East Coast of India south of Chennai, with all-weather capabilities and 24/7 operations.

Karaikal LNG, which will have an initial capacity of one million tonnes per annum (MTPA), will include a Floating Storage Unit (FSU) leased through a long-term charter agreement with ADNOC Logistics and Services (ADNOC L&S) from 2021, providing an efficient solution that will enable the supply of this clean fuel to be affordable.

Strategically located 280km south of Chennai, the capital of India’s Tamil Nadu state, the new terminal will provide natural gas to power plants, industrial and commercial customers within a 300km radius.

In addition, Karaikal LNG will serve the important city gas networks of AG&P and other city gas companies that bring CNG

AG&P breaks ground on its LNG import facility at Karaikal Port, Puducherry, South India. and LNG to vehicles and piped natural gas to households and other establishments. Truck loading bays will enable delivery of LNG to remote customers by AG&P’s own fleet of trucks.

“AG&P takes on the value chain from import of LNG through to delivery of gas to end-customers, vehicles, kitchens, large and small factories, power, restaurants and malls,” stated JM Sigelman, CEO, AG&P. “Our goal is to bring down the unit cost of regasification terminals for smaller volumes to make LNG commercially viable for scattered and smaller customers,” remarked Karthik Sathyamoorthy, President, AG&P Terminals and Logistics.

Bahri renews support to Saudi Maritime Congress 2020 n Company in lead to drive local and global maritime sector

growth. Furthering its commitment to contributing to the advancement of the maritime sector, Bahri has reiterated its support to Saudi Maritime Congress 2020 to be held at the Dhahran Expo in Dammam, Saudi Arabia, on 22 and 23 March.

“The Saudi Maritime Congress offers us a unique opportunity to discuss current and emerging trends in the logistics and transportation sector and create a roadmap for us stakeholders to play a vital role in shaping its future,” affirmed Abdullah Aldubaikhi, Chief Executive Officer, Bahri.

As Founding Strategic Partner of the event alongside the Saudi Ports Authority (MAWANI), Bahri will be participating in both the conference and the exhibition being held as part of Saudi Maritime Congress in order to provide the ideal platform to stimulate private sector investment in the maritime industry.

Abdullah Aldubaikhi, CEO, Bahri.

Keynote Session: Vision 2030 Abdullah Aldubaikhi, Chief Executive Officer, Bahri, will participate in the keynote session at Saudi Maritime Congress.

In this headline session, leaders of the organisations driving maritime business and policy within the Kingdom will discuss the opportunities for domestic and international maritime and logistics companies and the progress of key Vision 2030 objectives.

Session: The fuel revolution to 2050 Abdulaziz Sabri, President of Bahri Ship Management, will chair an important session reflecting on lessons learned since the implementation of the IMO 2020 Sulphur cap. The panellists will explore what alternatives, including battery power, will be available in the near future. A key discussion point will consider whether ship owners and fuel suppliers are fully prepared for a changing energy landscape.

18 MARCH 2020

Volvo Uptine Centre

Officials of Volvo Trucks and FAMCO at the inauguration of the new Volvo Trucks Uptime Centre in Dubai Investment Park.

Volvo opens its first Uptime Centre in the Middle East Partners with FAMCO to raise customer service to higher standards

A

l Futtaim Auto & Machinery Co. (FAMCO) recently announced the launch of the Middle East’s first Uptime Centre supported by Volvo as it looks to raise the level of customer service in the region.

Customers operating Volvo Trucks and Volvo Construction Equipment will benefit from upgraded standards of support courtesy of the region’s first Uptime Centre

by FAMCO UAE supported by Volvo, based at the FAMCO workshop facility in Dubai Investment Park.

It will serve as an IT nerve centre, monitoring data transmitted by connected machines through CareTrack and identifying areas where uptime and efficiency can be increased. The technical bays supporting the Uptime Centre are proficient in all required categories related to the pre-planning needed to ensure efficient servicing and that unplanned repairs are dealt with in an efficient manner.

Service offerings This service includes the consistent use of proven fleet management systems, in addition to designated uptime bays, 20 MARCH 2020

Founded in 1927, the Volvo Group serves customers in more than 190 markets. updated workflows, genuine Volvo parts and specialised technicians.

Case handlers will alert dealers to machine errors codes and alarms so that they can take immediate action on behalf of their customers, reducing unplanned stops, spending on fuel and maintenance and preventing future problems.

For truck owners, the Dynafleet fleet management system provides constant updates on a vehicle’s performance, making it possible to pinpoint critical data and take prompt action to reduced costs, improve vehicle utilization and allow for the quick re-deployment of assets.

At the same time, the CareTrack advanced telematics service, available to equipment operators, allows machine problems to be caught before they occur,

while also improving technical response time and downtime resolution speed.

Volvo Trucks delegation present “This new facility will allow us to better support our partners, providing further reassurance that when they choose a Volvo truck or machine, they are actively prioritising increased uptime and maximising profit, whilst reducing downtime and any negative impact on their investments,” affirmed Vladimir Knezevic, Managing Director, FAMCO UAE. “With the launch of its new Uptime Centre supported by Volvo, FAMCO is setting new standards for the truck industry in the Middle East,” asserted Frank O’Connor, Middle East Market Director, Volvo Trucks. Other officials present on the occasion included Per-Erik Lindstrom, SVP Volvo Trucks International; Roger Alm, President, Volvo Trucks; Nigel Johnson, Senior Managing Director, FAMCO; Youssef AlRaeesi, Government Relations Director, Al Futtaim Automotive.

Founded in 1927, the Volvo Group is headquartered in Gothenburg, Sweden and serves customers in more than 190 markets.n

Volvo Uptine Centre

FAMCO delivers the first batch of trucks in UAE Abu Dhabi based Al Nubla General Contracting Company has received five units of the FH460 6x4 Tractor units while Musaffah based Cardiff General Transport has taken deliveryof eight units of FM420 4x2 Tractor trucks.

A

l-Futtaim Auto & Machinery Company (FAMCO) has delivered the first batch of the Tractor trucks to Al Nubla General Contracting Company and Cardiff General Transport.

Fuel efficiency is everything and at the very core of this truck category. To help get the most out of the fuel, Volvo Trucks has pioneered world-leading technologies, developed innovative services and devised fuel saving strategies that make a big difference to the corporate bottom line of its clients.

Volvo Trucks is introducing new functions that help drivers save fuel even when cruise control is not activated. The launch of upgraded D13 diesel engines for Euro 5 models, together with the new software, enables fuel savings depends on driver experience and the operating conditions.

Volvo Trucks 13L engine range has been meticulously engineered to save fuel – without compromising performance. The engine is optimised and changes has been made on engine cylinder, engine ECU, turbocharger among other innovations.

This is also supported with software improvements like pedal mapping, Volvo Torque Assist, gear shifting calibration.

“This handover of the first batch of Tractor trucks from Volvo to our customers marks its debut in the UAE. These trucks bring a whole new level of efficiency, reliability to

FAMCO has sold more than 4000 units with automated transmission in the UAE. commercial vehicles. FAMCO will continue to invest in such heavy-duty vehicles to ensure the best possible results and the highest standards of overall operational efficiency for all the transportation and construction segments,”affirmed Vladimir Knezevic, Managing Director, FAMCO UAE. Highlights of this family of trucks include: Volvo Torque Assist: Volvo torque assist automatically adapts the truck’s torque and acceleration to the road topography as well as keep the amount of injected fuel constant after the engine’s green range has been passed New Cylinder liners: New cylinders liners, with smoother surfaces, reduce internal

friction and by extension improve fuel efficiency.

V- Shaped Oil Scraper Ring: A new scraper ring design helps reduce internal friction against the cylinder wall New Pedal Map: The pedal map has been recalibrated to create a smother torque development, which helps improve fuel efficiency and makes the truck easier to control.

Upgraded engine management system: The engine management system (EMS) unit has been upgraded to a newer version with better capacity. Fuel efficiency has been improved through detailed calibration and optimisation of several parameters.

New Turbocharger: A new turbo charger with an inverse impeller increases the overall turbo efficiency of the engine and reduces the fuel consumption.

Safety, low cost of ownership and operation; increased availability, productivity, spacious cabin and driver comfort are among other advantages of Volvo trucks.

FAMCO has sold more than 4000 units with automated transmission in the UAE. n MARCH 2020 21

Volvo Uptine Centre

Al Nubla votes for Volvo trucks Abu Dhabi’s Al Nubla General Contracting Company is among the first recipient of the new Volvo trucks consignment. With this delivery, Volvo trucks are making much headway in Abu Dhabi.

A

l Nubla General Contracting Company has received five units of the new Volvo FH460 6x4 Tractor units from the Swedish truck manufacturer’s UAE distributor Al Futtain Auto & Machinery Company (FAMCO).

Al Nubla International General Trading Company and Al Nubla International General Transport are sister associate firms of Al Nubla General Contracting Company (NGT).

The Abu Dhabi based and 1995-established NGT conglomerate is engaged in diversified businesses and its corporate activities include but are not limited to excavation and mining, aggregate, cement, road Base, sub-base, sand, gatch, chemical, blocks, plywood, and building materials trading.

In this exclusive interview with Global

22 MARCH 2020

Supply Chain, Mohamad Fares, General Manager, Al Nubla International General Trading, spoke glowingly about his company’s procurement of the new vehicles and the corporate relationship with FAMCO. “We at Al Nubla Group believe in turning the market trends and challenges into opportunities and investing into long term business relationship,” he affirmed in this interview. The following is the transcript of that conversation.

Global Supply Chain (GSC): What are the challenges and priorities you face as an operation?

Mohamad Fares (MF): As in any business, there are some key challenges facing our operations.

Firstly, cost control is the main challenge and priority and at the same time there are factors like fuel cost and toll tax that cannot be controlled. In recent times fuel prices have

gone up which has in turn affected costs.

Furthermore, toll taxes added a significant amount to the total cost as it comprises 30% of the total operational costs.

We are also committed to enhancing our customer service. In recent times, the markets are dynamic, supply chains have become longer and more complex, and customer expectations have changed, both in terms of delivery times and service quality. Now customers also expect their logistics partners to provide innovative costeffective solutions.

GSC: How have your fleet operations changed over the last decade?

MF: Fleet operations have changed considerably over the last decade. New technologies have been introduced and higher customer expectations and demands have resulted in cost-efficient solutions.

Additionally, fleet management tools and

Volvo Uptine Centre

Mohamad Fares (fifth right) receiving the symbolic key from Vladimir Knezevic (fifth left). software have been introduced to make the operations streamlined.

GSC: Specifically how do you maximize uptime in your fleet?

MF: Maximizing uptime in the fleet is becoming more important with rising parts and labour costs.

Partnering with Volvo Trucks–FAMCO has been an advantage to Al Nubla.

FAMCO has provided us with unique fleet innovative solutions as well as total Procurement Management Programme advantages and comprehensive after-sales services. It has also enabled us to effectively manage and implement our assets while maximizing reduction of downtime and to ensure reduced risk of any unforeseen emergency expenses.

GSC: Looking ahead, what changes in the market will affect your operation and how do you plan to remain one of the sector’s leading?

MF: The truck fleet industry is undergoing continually evolving and rapid challenges.

Therefore this requires innovative solutions to counter problems and few logistics solutions providers can cope with the challenges that require cost effective and innovative solutions both to provide long term and customized services.

Utilization of telematics and the

The key features in the new Volvo trucks range are Low fuel consumption and spacious Cabins continued interest in mobility is now in increasingly high demand. This is only the beginning of what the future has in store.

Expected changes will also impact the safety of drivers and reduce accidents occurring on daily basis.

Telematics is considered the current and most effective real-time data leverage to impact reduction of accidents. When managers of fleet or administrators can immediately analyze data thoroughly leading to coach and manage drivers with real-time data as when they see incidents of speeding or aggressively breaking or accelerating, this is when we see the most impact on reducing accidents and cost.

New legislations, taxes (road taxes) and the rise of fuel prices are factors that can affect our operations. These changes directly affect our relationships with our customers as they barely agree to share the cost with us. Thus we are trying to get as much vital

information and as early as possible to cope with the changes and to transmit it to our customers as well.

GSC: What features of the new truck do you feel benefit your operation?

MF: Low fuel consumption in the new Volvo trucks range is one of the many key features and advantages that will reduce our operational costs. Furthermore, safety measures are being taken care of in the new trucks range which is the key characteristic for our drivers’ safety that is important for us as we consider our drivers as crucial partners in business.

The cabins in the new Volvo trucks range are spacious and drivers have the space to take a comfortable rest when it is necessary. This in return will reduce the cost of accidents as well impacting downtime reduction risk.

GSC: How do you feel FAMCO is a good partner for your operation?

MF: FAMCO is one of the leading auto dealers in UAE and in the region. From selling commercial heavy truck units to machinery, providing complete logistics solutions, parts and services, FAMCO is always there to support our operations.

FAMCO is highly respected throughout the UAE for the supply and service of heavy vehicles and machinery. n MARCH 2020 23

Volvo Uptine Centre

Cardiff General Transport roots for new generation Volvo trucks

The Musaffah, Abu Dhabi based company decided on Volvo Trucks after intense vetting and examination. With this procurement, Volvo Trucks has made further inroads into Abu Dhabi.

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ardiff General Transport has taken delivery of eight units of Volvo’s FM420 4x2 Tractor trucks from AlFuttaim Auto & Machinery Company (FAMCO).

Cardiff General Transport has grown to be one of the largest and most successful transportation companies in UAE with its unique corporate culture. The company prides in its excellent services and high professional standards, affirmed atop company official.

“Our organizational culture is based in principles, ethics and values. Our commitment is to work together towards a common goal and to exemplify the highest standards of personal and professional ethics in all aspects of our business. We are backed by a dedicated team of customer oriented Office staff, trained and experienced drivers and various fleets of vehicles,”asserted Basheer Mohammed, Business Development

24 MARCH 2020

Manager, Cardiff General Transport, in an exclusive interview with Global Supply Chain.

With several years of expertise to its credit, Basheer affirmed that the company strives to provide excellence in service to all its loyal clients through its professional team work.“Cardiff Transport is well-known for its timely fleet supply and its prompt service,” he stressed.

Cardiff Transport has established a wide range of operations in oil-field industry, attracting one of the sector biggest players ADNOC. Providing 24/7 on-shore and offshore transportation, project management, vehicle lease and vehicle rental, custom clearing and forwarding services to their major client demands they follow some of the highest safety and quality standards in the region. The Cardiff Transport philosophy revolves around the uncompromising standards of safety and the high quality of customer service provided.

The following is the transcript of the interview: Global Supply Chain: (GSC): What are the challenges and priorities you face as an operation?

Basheer Mohammed (BM): The current market situation is indeed challenging and customers are becoming more and more empowered and demand more and better services and accountability. The continued hike in the fuel price is having a serious impact on the expense side of the business and it is really tough to maintain the customers who insist on more discounted prices rather than increasing the price.

Consequently, we are not able to maintain the same cost for the trips in the present context. Controlling the fuel cost and maintenance cost is second important task in the transportation industry where you need to be pro-active and bring more strategic tools to control these costs. Cardiff Transport has a separate department for fuel controlling and

Volvo Uptine Centre

The Cardiff Transport team receiving the symbolic Volvo Trucks key from Vladimir Knezevic (front row, fourth left). monitoring and appropriate control over its use, price and impact on the business.

GSC: How has your fleet operation changed over the last decade?

BM: The backbone of our service is extensive support from customer-oriented operations team and well-trained drivers and operators who are specialised in the oil & gas industry.

We utilise the capabilities of our full services according to customer requirements. We treat every working project as our own and complete the task as a partner.

Safety is the important part of the oil & gas industry and it is crucial that transporters are able to match the safety and environmental requirements of a sector that becoming cleaner and greener. The company has established its own dedicated HSE (Health–Safety-Environment) department as part of an effort to protect lives and the environment from any unsafe operations.

In the oil & gas industry, everything is reported and safety comes first, there is no compromise on safety rules and regulations.

One of the major factors that we care about is safe transportation. Cardiff Transport’s HSE department monitors and trains employees to work according to oilfield site rules and regulations.

Whoever violates safety rules, they will have to face actions according to the violation matrix and given safety orientation in order to improve the quality and standard of work. Basically that is the requirement of

Cardiff Transport offers 24/7 on-shore and offshore transportation, project management, vehicle lease, custom clearing and forwarding services customer itself, the operations to be done as per the ADNOC rules and regulations and we are taking the necessary measures to follow it accordingly.

GSC: Specifically how do you maximize uptime in your fleet?

BM: The critical role of our maintenance department to maximize the uptime for our fleets. All of our trucks have extensive service contracts with the Dealers and they are support by extended warranty and genuine parts that come with additional warranty period, which helps us to improve on the quality as well as for saving also for a long term relationship.

We follow proven education programmes that increase fuel economy by 10%. We enjoy good partnership with FAMCO and are committed to a long-term business relationship.

GSC: Looking ahead, what changes in the market will affect your operation and how

do you plan to remain one of the sector’s leading operator?

BM: The market is very sensitive, but as long ADNOC is innovating and brining more technologies and increasing the oil and gas production, we are expecting more projects in that sector.

Providing customer-centric solutions in different segments and being flexible to customer requirements enables us to keep costs manageable and build business relationships for the long haul.

GSC: What features of the new truck do you feel benefit your operation?

BM: The Advance Brake System has a good control over the engine. However, a proper training session is required from the manufacturer.

In case of vehicle break-down, there is extra 3-Gear manual transmission which can be used in an emergency situation. Also, the fuel monitor system installed in the trucks is good feature.

GSC: Why, in your opinion, is FAMCO is a good partner for your operation?

BM: FAMCO brings the latest techniques and modern machines that comprehensively comply with all requirements of international standards. That is the start to a good business relationship with the company. Volvo trucks are productive and reliable, constitute a good and cost-efficient buy and we are very comfortable working with FAMCO on this count. n MARCH 2020 25

Cover Story

Deciding and devising strategies for the logistics & supply chain industry Prudent planning and being business savvy is the difference between success and failure

26 MARCH 2020

Cover Story

The indispensability for strategizing in an increasingly complex, volatile and vulnerable world of business including the logistics and supply chain industry cannot be denied. With so much at stake financially, the need to draw and channel resources in the present business landscape and context is as critical as ever. This comprehensive analysis by US-headquartered LTD Management, regular contributors to Global Supply Chain, advocates the necessity to define a road map and outline both a strategic and tactical work plan and effective road map to operate and run a successful business venture.

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ll logistics providers-3PLs, transport, forwarders, warehouses, logistics centers, ports and other--and whether they are asset based or nonasset based should have a strategy.

The strategy identifies challenges, issues and risks with markets and their dynamics; and, going forward, can set the direction where the company is going for new markets and new business and customers to grow sales and profits.

Surprisingly, despite the purpose and benefit, many service providers do not have a viable, current strategy. Instead they view developing one as too much work, react to what customers ask or what competitors are doing, or have one that is outdated. In a way, they letting business vagaries drive their direction and future.

Having no strategy can be a risky approach, especially if competitors, established and the potential new entrants, have a well-done strategy and especially given the reality of global economic change.

The strategy can be operations focused or it can be a significant change, to transform the company. Which strategy is developed can be based on and reflect risks for the business or for the service sector, competition, or changing customer and/or market segments.

Two part strategy

There are two parts to a successful strategyfirst, developing one and second, executing it. Developing a strategy comes from serious, formal strategic planning process.

It involves a blend of financial and non-

financial objectives.

The plan should also focus on the present business, and how it will adapt to the future and new services and opportunities. It identifies where the company is going--and where it is not going-- and what it takes to succeed in that service arena.

Planning: The starting point is where the business is now as to present dynamics with trends, markets, services, and customers; value proposition, and competitive positioning, coupled with sales and profits.

At any stage of the planning process, at the minimum, a SWOT (Strengths, Weaknesses, Opportunities, and Threats) is useful for the present and potential future scenarios.

Planning contains mistakes that can limit the ability to develop a worthwhile strategic MARCH 2020 27

Cover Story

plan. Some of the shortcomings that can lead to a bad strategy include: Spot or short term planning: Firms only go out one to three years with the plan.

While that span is easier to deal with than looking out five years or so, that is based too much on what has happened, missassumes what will happen, over-assumes the company’s position in that future trend and is not strategic. It is more like a budget or extended sales plan.

As a corollary to the short-span view, companies confuse goals with strategies.

Increasing sales or reducing costs by a certain percent is a goal, not a strategy.

Providers try to mimic what a competitor is doing, especially if it is new. That is not a strategy. A good strategy separates the business from the competition. Emulating competitors or chasing the next new logistics service is a short-sighted approach that often lacks understanding of market niches, operational nuances and value proposition.

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Companies stay with what they are familiar with, their comfort zone. This can be a myopic bias against performing the diligent planning analysis that is necessary.

It does not identify and address hard questions and challenges, such as how sustainable the present business approach and operations model are. That negates the concepts of strategy and of planning.

Flexibility in planning:

Planning is not rigorous and does not adequately assess both external and internal factors. Internal analysis does not get the rigorous attention it should get. Diligent self-assessment is required, but it can be difficult. Overestimating abilities and underestimating problems short-circuit any serious planning.

Companies oversimplify trends, especially global ones, and their impact on future business. They let the past dictate too much of what will happen, even against the dynamic and changing global business world.

Firms do not comprehensively deal with uncertainty and look at “what if� scenarios. It is a dismissive approach based on the past. Change, with its speed with competitors and markets, is more than local; it is global.

Businesses create a wish list of strategies.

Aggregating a catalog of possible ideas, no matter how worthwhile, is not strategic planning. The effort dictates potential strategic choices be culled and prioritized and that hard decisions must be made on what to do.

Service provision key to success

Service providers do not scrutinize how well the strategy positions the service offering to the dynamics of global economic and business forces. They also overestimate potential competitive advantage-and underestimate its transiency-- that the firm may create with its strategic placement.

Companies keep the planning within the

Cover Story

Execution and strategy implementation is critical. The best strategy, without good execution, will struggle to succeed.

Organic growth: This can be a slow and assumed steady method using internal capabilities and resources. The approach implies high expectations and requires improved performance.

Aggressive growth: External partnerships or alliances and, especially, merger and acquisition are options with this choice.

In addition to identifying right target firm, timing is an issue with this choice.

Companies, whether using organic and aggressive, can pursue one strong initiative or a few worthy opportunities.

These approaches mean there will be an allocation, even reallocation, of resources-capital, people, assets and technology.

Going forward, firms should adapt and change their present businesses and build new ones. Companies should both change existing services and create fresh service offerings. It is not an either-or as to adapt or create; it is to do both, unless the plan involves divestiture or maximize profits of the present service and let it fade away.

Execution-Implementation interface C level and do not extend down to others who may have a better understanding of the present activity. There is also an underlying assumption that what a company and its executives do are transferable to the future.

This lack of communication and buy-in with the planning often continues with attempts to execute the strategy-attempts that often fail.

Planning is an annual process with little happening with regards to implementation.

That creates frustration and lack of interest with the effort.

There are basically three approaches for logistics service providers to strategically differentiate themselves: Status quo: The conservative, stay-thecourse option may seem like the safest choice; but it carries significant risk in the ever-changing and competitive global economy. Executives with strong risk aversion favor this way. It depends on the past to predict the future and on simplified assumptions to assume away uncertainty.

Execution and strategy implementation is critical. The best strategy, without good execution, will struggle to succeed. And the more dramatic the strategy is with scope and impact, the greater is the challenge for sound execution. An operations strategy has an internal capabilities and requirements, perhaps best-in-class.

The significant change strategy has both internal and external requirements.

Each strategy carries different proficiencies to implement and creates challenges for present executives, managers and employees to have the skills to implement the strategy.

Achieving the strategy separates planning for the sake of planning and planning needed to advance into the future. It also demonstrates the conviction that the company has in the strategy. Executing the strategy means communicating the plan within the company and with stakeholders to build support-both operating and financial-and aligning the business with its strategy.

Adequate resources and defined

responsibilities for execution are needed, along with corresponding, relevant metrics to track progress.

The transformation and its rate of implementation to carry out the strategy may require recognizing and dealing with the need for change management. In reality, there are strong similarities between change management and successfully implementing a strategy.

Grand strategy:

Tied to the grand strategy are underlying strategies and implementation plans for sales, pricing, marketing, positioning, operations and technology. Logistics providers should recognize the life cycle to their services, especially with regard to profit maximization and the commodity service view of their offerings.

This service life cycle creates the need for the subset of strategies and fulfillment of them. How people within the company grasp and execute these opportunities can have significant effect on long-term margins.

While direction can come from the top level, carrying out the execution needs clear lines of responsibilities couple with a coordinated, cross functional effort by different groups within the company.

There can be no standalone activities for success. It should be integrated. The potential for assuming away the need for the collaboration can create unnecessary surprises and failure to gain all the market, operations and financial benefits of the strategy.

Strategy planning and execution are not easy for logistics providers. They are a challenge. But as difficult as they are, doing nothing in the face of dynamic competitive and market changes can be dangerous for all stakeholders. Logistics providers that do not plan well and implement well let events drive where they are going.

They do not control it. These providers are market followers, not market leaders. As a result, these firms do not transition to take full advantage of opportunities. They miss out on market share, customers and profits that companies, who have a coordinated planning and strategy execution, earn and enjoy. n MARCH 2020 29

Emirates SkyCargo Roundup

Emirates SkyCargo’s freighter service to China sees strong demand Carrier also commemorates three decades of its operations to Riyadh

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n Emirates SkyCargo Boeing 777 freighter Emirates SkyCargo has resumed scheduled freighter services to the country, the carrier has reported in a recent press statement.

Emirates SkyCargo is reporting good demand for the import and export of cargo into the Chinese market, after China reopened for business after the recently concluded Lunar New Year holidays.

The air cargo carrier operates freighter services to Guangzhou (CAN) and Shanghai (PVG), having resumed these scheduled services after a planned hiatus over the traditionally low-traffic period over the holidays.

“Emirates SkyCargo continues to support trade and movement of goods into the

30 MARCH 2020

Chinese market and is committed to supporting China’s diverse distribution needs and supply chains through our freighter operations to Shanghai and Guangzhou,” stated Hiran Perera, Emirates Senior Vice President, Cargo Planning & Freighters.

The carrier continues to carry belly-hold cargo on its double daily flights between Beijing and Dubai.

The flights to China are operated on Emirates’ Boeing 777 freighter aircraft offering a cargo capacity of around 100 tonnes for exports and imports on each flight. Commodities being currently transported on the freighter flights include perishable food items, pharma, medical supplies and other general cargo.

Saudi Arabian operations Meanwhile, the carrier is also commemorating three decades of its operations to Riyadh. Additionally, the airline also operates extensive trucking operations within the Kingdom Emirates SkyCargo is marking the 30th anniversary of its operations to the capital of the Kingdom of Saudi Arabia.

Since February 1990, the air cargo carrier has played an important role in facilitating exports and imports of cargo between Riyadh and the rest of the world through Dubai.

Emirates SkyCargo currently offers just over 1000 tonnes of combined export and import cargo capacity into Riyadh through

Emirates SkyCargo Roundup

Over the last five years, Emirates SkyCargo has helped transport more than 138,000 tonnes of cargo to and from Riyadh.

its 27 weekly flights. Over the last five years, the carrier has helped transport more than 138,000 tonnes of cargo to and from Riyadh.

Some of the major commodities that Emirates SkyCargo has helped transport include chilled meat, electronic equipment, pharma and other types of general cargo.

The air cargo carrier also operates flights to three other destinations in Saudi Arabia – Dammam, Jeddah and Medina in addition to Riyadh. Overall, Emirates SkyCargo has facilitated movement of more than 365,000 tonnes of cargo into and out of the Kingdom since January 2015.

Bonded Trucking Corridors to Riyadh

Emirates SkyCargo makes India selection Abdulla Alkhallafi appointed Cargo Manager for India Emirates SkyCargo has appointed Abdulla Alkhallafi as its new Cargo Manager for India. Alkhallafi will be based out of Delhi and will be overseeing all commercial and operational aspects of Emirates SkyCargo in one of the air cargo carrier’s most important markets globally.

He will be taking over from Keki Patel, who will be retiring after his tenure of more than 15 years as Cargo Manager for India with Emirates.

Alkhallafi worked as Cargo Manager for North India for Emirates since June 2017. He is a UAE national who joined Emirates in 2014 as part of Emirates

SkyCargo’s Commercial Management Programme.

“Abdulla has shown immense potential in his previous roles and we have no doubt that his dynamism and his understanding of the air cargo industry will help drive further growth for Emirates SkyCargo in India,” remarked Nabil Sultan, Emirates Divisional Senior Vice President, Cargo.

With over 170 weekly flights to nine destinations, Emirates SkyCargo facilitates an important volume of trade between India and the rest of the world. In addition to transporting cargo on passenger flights, the carrier also operates scheduled freighter flights to Mumbai and Ahmedabad.

In order to respond to customer demands and provide additional capacity options for businesses overseas wanting to send cargo to Riyadh, Emirates SkyCargo has also introduced two bonded trucking corridors in Saudi Arabia connecting Dammam and Medina with Riyadh.

The trucking service is operated by Eastern Allied Transport, an affiliate of Allied Transport Company, who operate Emirates SkyCargo’s fleet of 49 trucks 24X7 between Dubai International Airport (DXB) and Dubai World Central (DWC).

Emirates SkyCargo is currently operating the trucking service up to five times a week based on customer demand. The trucks are tracked using GPS and cargo loaded inside the trucks are secured with tamper proof seals to ensure that cargo arrives safely at Riyadh.

The main commodities being moved currently on the trucking service include garments, courier and other general cargo.

Although Emirates SkyCargo currently only offers import capacity into Riyadh through the trucking service, the carrier will also evaluate export opportunities based on market demand.

Emirates SkyCargo offers cargo capacity on its fleet of over 270 aircraft including 11 Boeing 777 freighters.

The air cargo carrier operates two state of the art cargo terminals at its hub in Dubai and has developed specialised air transportation products for specific industry verticals. During the Financial Year 2018/19, the carrier transported more than 2.7 million tonnes of cargo through its network. n MARCH 2020 31

IATA Report

Air Cargo demand down 3.3% in January 2020 IATA report reveals the adverse impact the emergence and spread of COVID-19 is having on the international air cargo industry

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he International Air Transport Association (IATA) newly released data for global air freight markets showing that demand, measured in cargo tonne kilometers (CTKs), decreased by 3.3% in January 2020, compared to the same period in 2019. ”January marked the tenth consecutive month of year-on-year declines in cargo volumes. The air cargo industry started the year on a weak footing. There was optimism that an easing of US-China trade tensions would give the sector a boost in 2020.

However, that has been overtaken by the COVID-19 outbreak, which has severely disrupted global supply chains, although it did not have a major impact on January’s cargo performance. Tough times are ahead.

The course of future events is unclear, but this is a sector that has proven its resilience time and again,” said Alexandre de Juniac, IATA’s Director General and CEO. Cargo capacity, measured in available cargo tonne kilometers (ACTKs), rose by 0.9% year-on-year in January 2020.

Capacity growth has now outstripped demand growth for 21 consecutive months.

It is unlikely that the COVID-19 outbreak had very much to do with January’s weak performance. Lunar New Year in 2020 was earlier than in 2019. This skewed 2020 numbers towards weakness as many Chinese manufacturers would be closed for the holiday period. February performance

32 MARCH 2020

will give a better picture of how COVID-19 is impacting global air cargo.

Regional Performance Airlines in Asia-Pacific and Europe suffered sharp declines in year-on-year growth in total air cargo volumes in January 2020, while North American and Middle East carriers experienced a more moderate decline. Latin America and Africa were the only regions to record growth in air freight demand compared to January 2019.

Asia-Pacific airlines saw demand for air cargo contract by 5.9% in January 2020, compared to the year-earlier period. This was the sharpest drop in freight demand of any region for the month. Capacity growth was flat. Seasonally-adjusted cargo demand rose slightly however, following the thawing of US-China trade relations. The impact from COVID-19 is expected to affect February’s performance. North American airlines saw demand decrease by 1.3% in January 2020, compared to the same period a year earlier.

Capacity increased by 3.4%. Seasonallyadjusted cargo demand rose slightly however, amid a more supportive operating environment and following the thawing of US-China trade relations.

European airlines posted a 3.7% decrease in cargo demand in January 2020 compared to the same period a year earlier – more than double the 1.3%% drop in year-on-year

demand in December. Seasonally-adjusted demand also dropped sharply, disrupting the positive trend that started mid-2019.

Capacity decreased by 3.0% year-on-year.

Middle Eastern airlines’ cargo volumes decreased 1.4% in January 2020 compared to the year-ago period. Capacity increased by 2.9%. Against a backdrop of operational and geopolitical challenges facing some of the region’s key airlines, seasonally-adjusted freight volumes ticked down in January, but a modest upwards trend has been sustained.

However, given the Middle East’s position connecting trade between China and the rest of the world, the region’s carriers have significant exposure to the impact of COVID-19 in the period ahead.

Latin American airlines experienced an increase in freight demand in January 2020 of 1.4% compared to January 2019 – reversing the 2.5% decrease in December.

Seasonally-adjusted freight volumes in the region also ticked upwards, underpinned by new route connections, which is a positive development for the region’s carriers.

Capacity increased by 2.4% year-on-year.

African carriers posted the fastest growth of any region for the 11th consecutive month in January 2020, with an increase in demand of 6.8% compared to the same period a year earlier. Growth on the smaller Africa-Asia trade lanes (up 12.4% in 2019) contributed to the positive performance. Capacity grew 5.9% year-on-year. n

Agthia Group

Agthia Group net revenues surpass US$ 545mn mark The Abu Dhabi headquartered F&B company continues to gain positive top-line momentum in food segment, 5-gallon HOD business and international operations

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gthia Group, one of the region’s leading food and beverages companies, recently announced preliminary and unaudited results for the fiscal year ending 31 December 2019.

The Group posted US$ 37.3mn in net profit, as well as net revenues of US$ 545mn (AED 2.04bn). Agthia grew its revenues by 2% year-on-year on geographic expansion and product category diversification.

The consumer-business contribution to Agthia’s top-line increased to 56 percent versus 54 percent from the previous year. Agthia’s 5-gallon Home and Office Delivery (HOD) business in the UAE, Food segment along with international operations in the Kingdom of Saudi Arabia (KSA) and Kuwait drove the consumer business’s top-line growth.

On the local front, the company’s water portfolio consisting of UAE’s popular Al Ain Water, as well as Al Bayan, and Alpin retained market leadership with volume and value shares at 29 and 27 percent, respectively.

With regard to Agthia’s Agri-business, composed of Grand Mills Flour and Agrivita Animal Feed, the Flour business outperformed despite pulled out subsidy environment, as volumes recorded strong growth in export sales, retail penetration specifically in the Northern Emirates, as well as wheat trading.

“Agthia’s 2019 financial results are a testament to the company’s agility in the ability to maintain leading market share and grow revenues against headwinds. This is underscored by Agthia’s resilience and commitment to uphold and protect shareholder value, as well as our unwavering alignment to the UAE’s economic diversification agenda,” Eng. Dhafer Ayed Al Ahbabi, Chairman, Agthia Group.

34 MARCH 2020

commented Eng. Dhafer Ayed Al Ahbabi, Chairman, Agthia.

“Our positive revenue growth momentum has been led by diversification of our product portfolio, as well as increasing our geographical footprint in the face of unfavorable external factors. Agthia continues to demonstrate dominance in the UAE when it comes to the water segment despite aggressive competitive activity, price promotions, and changing consumer habits. Our success is also supported by the flour business beating the zero-subsidy competitive environment along with the vigorous performance in the food segment and international markets,” remarked Eng. Tariq Ahmed Al Wahedi, CEO, Agthia Group.

Agthia Group’s total assets stood at US$ 840mn (AED 3.1bn) as of 31 December 2019, increasing marginally compared to the same time last year. n

Agthia launches region’s first plantbased water bottle Meanwhile, the Agthia Group announced the launch of Al Ain Plant Bottle, the region’s first plant-based water bottle, at a press conference on the sidelines of Gulfood 2020 during UAE Innovation Month, in the presence of HE Dr Thani Al Zeyoudi, UAE Minister of Climate Change and Environment.

An MoU was also signed between Agthia and Veolia, a global leader in optimized resource management, to launch a PET water bottles collection initiative in the UAE, which includes the use of digital solutions, and various awareness programmes, along with incentive schemes and rewards...

The packaging of the new Al Ain Plant Bottle is environmentally friendly and made of 100% plant-based sources, including the cap. Furthermore, the water bottle serves growing consumer move toward sustainability as it is biodegradable and compostable, within 80 days.

The revolutionary innovation is set to improve the environmental footprint from a CO2 perspective.

It uses plant sources and converts them into a durable 100% plantbased resin, which is then used to create the Al Ain Plant Bottle.

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Thought Leadership

The emergence of disruptive innovation in Supply Chain Management When speed is the new competition In this Opinion-Editorial (OpEd) contribution, 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 examines the new supply chain innovation as it applies to e-commerce. He affirms and makes the case that neither e-commerce nor Amazon but the new digital dynamic that drives online customer buying and makes products more accessible to customers is essentially the star disruption. Disruptive innovation, a term of art coined by Clayton Christensen, describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors —Editor.

36 MARCH 2020

Thought Leadership

MARCH 2020 37

Thought Leadership

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he concept of disruptive innovation / disruptive technologies originated from an article by Joseph Bower and Clayton Christensen. Disruptive Innovation (DI) was viewed as a way of growth.

It was discussed it in terms of and in context of companies. The take was with corporations whose customers were corporate businesses, not individual shoppers.

That is a narrow view. This is a different take on DI, a new supply chain management that created a new way of selling that is now global.

Context

Disruption is the new selling reality; it is how a company used a new service to make a new market niche and a dominate position. That service—the New Supply Chain Management—is the innovation, the disruptive innovation that drove Amazon’s success.

E-commerce is a new selling market and approach that is disrupting retail.

This was not an overnight event. Early online selling was often by individuals using free delivery as a reason to buy. The delivery performance for these sellers was inconsistent. It was not a consistency and standard for online customers.

Against this, incumbent store retailers basically ignored e-commerce. They were unable to understand what was being done and how it worked. They failed to see the threat. These companies did not see the growth from doing it—and the loss from not doing it.

That is until Amazon caused the retail apocalypse, retail paid the price for ignoring e-commerce and for its lack of robust movement into it and transforming to the New Supply Chain Management.

Borrowing from Christensen, this may be comparable to what happened to many main frame computer manufacturers. They missed personal computers that changed the computer industry.

The Amazon phenomenon

Amazon’s success was a twenty year in the making overnight sensation. The game changer was when a small company, Amazon, offered and provided two-day order delivery at no cost. Two-day delivery!

They performed as promised. They did what no other firm selling online had done.

38 MARCH 2020

They did it because of the New Supply Chain Management.

E-commerce is not the disruptive innovation. Nor is Amazon, another who sold online. It is the new supply chain that drives customer buying and made products more accessible to customers. And this new supply chain is about more than technology. It is also about the structure of technology, process, and organisation.

Alibaba in China is basically a platform for third-party sellers. Amazon sells both products it owns and for third parties.

And their success, especially with their products, validates the New Supply Chain Management.

Customers were used to going to stores to buy products. They often made small purchases. Retailers always monitored overall store sales and foot traffic metrics.

Customers were provided with stores and were expected to come in to buy.

At this time, retailers looked at statistics as to the number of stores and foot traffic to show how they were doing. These measures are about where the company is now, and customers were viewed as a mass of present buyers. They assumed what customers wanted.

Think of it this way. Why was it not a leading retailer, seeking to better serve customers, that was the leader in making online buying such a powerful way of selling direct to end customers. These customers have names and are not just people who go to a store.

Enter e-commerce

E-commerce was a new-market approach. And there was no such thing as order delivery velocity—two-day or any firm day. So what was done exceeded customer expectations. As it progressed, customer expectations grew with the buying convenience and order delivery performance. These small order customers were now empowered.

What happened was that the New Supply Chain Management is about customers. It created customer expectations and defined customer service beyond a label. Additionally, it provided a path for the rise of customer power.

With e-commerce, the size of this market segment has been recognized and defined.

Go to the store or use e-commerce with fast, free delivery. As they say, the results are history. This is the true retail apocalypse.

E-commerce, not store sales, is dominating retail growth.

Accelerated deliveries

The online order delivery speed is driven by the strategic and weaponised supply chain management (SCM). It is a very different approach and process. And from it, a company and a market arose. The New Supply Chain Management is disr This can also be seen as to how few firms have transformed to it. Instead, with everything, they are staying with

Thought Leadership

the fundamentals of the old supply chain with a few adaptations to try to gain the performance of the New Supply Chain.

As a result of order delivery speed, retail is omni-channel with e-commerce and stores (or clicks and bricks). The convenience of buying online is shifting retail to online sales at the expense of store sales. Leaders here have strong supply chain performance, thanks to the New Supply Chain Management.

Amazon’s e-commerce dominance can be seen in the February 24, 2020, Forbes online

article titled,‘Target Emergences as 8th Largest E-commerce Retailer – Here’s How Their Marketplace Strategy Is Entirely Different To Amazon and Walmart’, by Kiri Masters.

It shows Amazon has 38.7% of e-commerce sales. Walmart at #2 has 5.3%.

Target, the subject of the story, has 1.2%.

There were leaders and laggards—and those who do not even register on the sales charts.

Supply chain management is the real disruptor. Speed is the new competition and that is achieved with the New Supply Chain Management.

Amazon has 38.7% of e-commerce sales followed

by Walmart with 5.3%.

MARCH 2020 39

Thought Leadership

Top 10 US Companies, Ranked by Retail Ecommerce Sales Share, 2020 38.7%

1. Amazon

5.3%

2. Walmart 3. eBay

4.7%

4. Apple

3.7%

5. The Home Depot

1.7%

6. Wayfair

1.5%

7. Best Buy

1.3%

8. Target

1.2%

9. Costco

1.2%

10. Macy’s

1.1%

Note: Represents the gross value of products or services sold (Browser or app), regardless of the method of payment or fulfillment, excludes travel and event tickets.

Source: eMarketer, Feb 2020

While Amazon gets the attention, it was the New Supply Chain Management that is the real topic. A service, supply chain management based, turned retail on its head. The order delivery paradigm that Amazon started is driven by a New Supply Chain Management. Now retail incumbents are struggling to copy it.

Old Supply Chain Management

To give some perspective on how it is innovative, here is an overview of the supply chain management that had been, and for many, is still used. It can be described as a monolith and one size fits all.

The traditional supply chain is defined by its logistics, especially warehousing and transportation. This can also be seen in the SCM organization. That arrangement hinders the ability to improve performance, especially the kind needed with the new selling reality.

Most of the focus is on the downstream, or outbound, part of the supply chain. This is the part, often domestic, that goes from factory to the buyer or from warehouse to the store.

40 MARCH 2020

A key performance supply chain metric for the C-suite is logistics costs. As such, SCM was almost viewed as a necessary evil to make and sell products. Note, there are other KPIs, but they are internal to supply chain management, such as for order picking.

Also, the supply chain is operated and designed as node/link or stop/go.

Inventory is an asset, and inventory rich, while being out of stock of other products, is often accepted. Warehouses are located on transportation costs.

Outsourcing is common, usually for cost reduction. Putting another party, especially an outside party, into the supply chain adds complexity and can work against achieving the required velocity of the new selling.

Another example is the Last Mile. This is about the shipping cost from the e-tailer / retailer / manufacturer. So it creates misdirection from focusing on order delivery performance. What is notable too is that leaders who use the new supply chain are not ones complaining about the ‘Last Mile’.

Adding to this cost emphasis is the revenue/cost/profit of online selling versus store. Margins are smaller with e-commerce.

Many retailers and consumer goods manufacturers do not see the significance of what the new supply chain is doing. They seem to be focused on maintaining some degree of status quo with stores, despite this new selling reality which is about customers. Many also see online orders as fulfillment and not as part of a bigger picture of total supply chain management.

New Supply Chain Management

What has happened is not an evolution, and revolution is not an adequate term of how SCM performance drove and continues to drive Amazon’s success with order delivery velocity. Supply chain management is strategic and weaponized—an upgrade from its backroom status. Amazon changed retail with the New Supply Chain Management’s performance of the 2-day order delivery.

Now it is even dropping to one day and same day. E-commerce has become customer convenience and customer expectations. All because of the New Supply Chain Management. This performance elevation and enhancement are giving customers more than they already have— greater value.

Tom Craig

Thought Leadership

The more descriptive term of what the new supply chain has done is perfect order performance.

Customers receiver complete orders of what they ordered and delivered as they expected/specified. Complete orders. No mistakes. Delivered on time.

Contrast this to e-tailers who deliver orders in multiple shipments and delayed.

Think too of store retailers with out of stock shelves. The out of stock delay also occurs with manufacturers. In these cases, customers are left to deal with the failings of sellers.

For starters, no business activity is more complex than end-to-end, nonlinear supply chain management. None. The New Supply Chain both recognizes it and addresses it.

That is a big differentiator for what it does and why. Importantly, it is central to what it can do.

• Essential elements of the new supply chain include: • Recognize the end-to-end supply chain • Understand supply chain complexity and its nonlinearity • Extend focus upstream to where the supply of supply chains begin • Build end-to-end inventory velocity • Compress time • Align the warehouse network with customers • Use metrics that the C-suite appreciates • Integrate process and technology

The new competition—speed

Achieving order delivery speed is not about fulfillment. It is about end-to-end supply chain velocity creating inventory velocity.

Speed is the new competition.

End to end is important. It means the supply chain, inventory, velocity, visibility, technology, and process.

This SCM has a different structure with integrated process and technology.

Organization is based on velocity upstream and downstream. Technology is part of this SCM group.

Metrics are elevated and have the company view. The Perfect Order— delivered (not shipped) on time, complete, and accurate—is the best customer service measure.

Inventory velocity—call it turns or days off—and how to move it faster through the supply chain. This inventory velocity creates investment opportunities with its working capital benefit. Inventory safety stock is

to buffer uncertainty. Compressing time reduces uncertainty and the capital tied up in safety stock.

Important too are using strong metrics.

Perfect Order performance may be the best company and customer service metric.

Period. Next is inventory velocity. This can be turns or days of inventory, especially if it is end-to-end inventory.

Warehouses are aligned for order delivery service. This means having more warehouses for proximity purposes.

Defined by supply chain—end-to-end metrics such as inventory velocity—turns and perfect order. Structure reflects upstream and downstream. There is velocity and performance. It includes technology personnel to drive greater velocity with visibility. There is also integration in addition to process and technology.

Reverse outsourcing by bringing logistics activities in-house. This in turn improves speed with removing an outside, intermediate. It also brings greater control.

Conclusion

What is happening with retail, now omnichannel is impacting retailer suppliers who must improve their supply chain performance to meet the requirements of their customers. Another step in how the disruptive innovative supply chain is spreading.

Recognizing that some define disruptive innovation as to a company, this could be called dual disruptive innovation—Amazon and the New Supply Chain Management.

But what differentiated Amazon’s e-commerce offering was the New Supply Chain Management that drove their success with incredible order delivery service. It is a business model whose success is built on the New Supply Chain Management.

New Supply Chain Management is sustainable. Within retail, the gap is widening significantly between those who are transforming to the New Supply Chain and those they are entrenched / stuck with their approaches.

The old, call it outdated, supply chains are institutionalized by companies that continue to fixate on logistics costs and do not want to invest in responding to disruptive innovation. A result of this is that firms that were once leaders are isolating themselves and being passed by those who are transforming.

All this adds to the growth and

competitive advantage that Amazon has with the supply chain weapon. A question is, as e-commerce grows global across markets and industries, who will take on the New Supply Chain to take the respective leads in their niches. They all have noticed what is happening. Failure to act has no validity.

The gap issue is compounded by the escalating speed of order delivery.

Delivery accelerated from two-day to one-day to same day. Customer power and expectations are moving in response to the speed and firms that provide it and the enhanced convenience it represents.

Laggards are risking being at a tipping point of not being able to change in time.

Compressing the order delivery time is putting additional pressure on stores. And, the convenience of the fast delivery as compared to going out to a store coupled the new supply chains of leaders versus laggards is extending the retail apocalypse.

Also, the new reality with the New Supply Chain Management is sweeping across markets, industries, and the world.

It is spreading past B2C/DTC (direct to customer) into B2B. Customers, whether people or firms, want their products faster. Manufacturers, retailers, and others who think they are immune to what is happening may be placing their business futures at risk.

The New Supply Chain Management drove the order delivery success and has become disruptive innovation. It has now moved from B2C/DTC e-commerce to retail to grocery. And it is not stopping as in crosses markets, industries, and the world.

Next gen supply chain management is here with the New Supply Chain Management. Think bigger than technology as next generation. Think beyond standard industry segments, beyond retail, beyond manufacturing.

Technologies, such as the Internet of Things (think beyond connectivity) will require the new supply chain for connectivity with is greater velocity. Forget velocity. Think velocity squared.

It is called disruptive innovation for a reason and resistance is futile. n (References: Bower, J. L., and C. M. Christensen. “Disruptive Technologies: Catching the Wave.” Harvard Business Review 73, No. 1 (January–February 1995): 43–53.)

MARCH 2020 41

Red Sea Gate Terminal

Jeddah Islamic Port set to become the largest container terminal in Saudi Arabia The Red Sea Gate Terminal signs a long-term, 30-year concession to redevelop the Northern sector of the Port

T

he Red Sea Gate Terminal (RSGT) has signed a 30-year concession to consolidate and redevelop the Jeddah Islamic Port’s North Container Terminal (NCT), including the proposed take-over of the adjoining Container Terminal, to become the largest container terminal in Saudi Arabia and on the Red Sea. Incorporation of the adjacent Container Terminal, part of this new long-term agreement, will increase RSGT’s 2020 throughput to 3 million TEU and short-term capacity to 5 million TEU. Red Sea Gateway Terminal (RSGT) signed a new concession agreement with the Saudi Arabian Ports Authority (‘Mawani’), the Kingdom’s Port Regulator, covering the period from 2020 to 2049, which includes merging operations with the adjacent Container Terminal at Jeddah Islamic Port.

42 MARCH 2020

Whilst the pact will become formally effective from 1 April 2020, maritime operations at NCT have already commenced and ongoing.

Massive infrastructure investment The contract calls for RSGT to invest up to US$ 1.7 billion throughout the new thirty-year concession period in infrastructure and equipment. The expanded facility will be the largest logistics gateway, and the busiest container terminal in Saudi Arabia, and on the Red Sea, with a total annual container capacity to reach 8 million TEU. The new infrastructure investment is part of a comprehensive plan for upgrading and adding berth capacity while modernizing the terminal yard and support facilities.

The concession is a further step in the development of Jeddah Islamic Port as the strategic gateway to Saudi Arabia and the preferred hub for the Red Sea and East Africa.

This expenditure will continue the ongoing expansion of the existing RSGT world-class container facility, the largest gateway terminal on the Red Sea.

A new first in the Kingdom

RSGT is the first container terminal in the Kingdom of Saudi Arabia to have been built by the private sector under a build, operate, and transfer (BOT) agreement, representing an investment of US$ 675 million.

RSGT is the only terminal at the Port of Jeddah capable of accommodating Ultra-Large Container Ships (ULCS) of 20,000+ TEU-capacity. RSGT commenced operations in 2009, covers 700,000 square meters, 1355 meters of berth (four berths), equipped with 14 STS cranes.

“We are very pleased to announce this exciting new phase of RSGT’s strategic growth plan; this is a great success story for Mawani (Port Authority--Arabic for ports)

Red Sea Gate Terminal

Phase I of the new consolidated facility will provide a combined 2600 meters of berth, with a total area of 1.5 million square meters. and RGST,” stated RSGT CEO Jens O. Floe.

“This large investment reflects the trust of Mawani and the ongoing commitment of RSGT to the region, and the international shipping industry, to provide world-class facilities and operations, and expand RSGT’s and Jeddah’s role in the global logistics chain,” he added.

Phase I expansion

Phase I of the new consolidated facility will provide a combined 2600 meters of berth, with a total area of 1.5 million square meters. The merging of terminal operations and the planned future expansion will allow RSGT to accommodate the largest vessels entering into global and regional trade, increasing container volumes, which in turn will drive revenue growth.

The consolidation of RSGT and the adjacent terminal, and the planned investment and expansion will be funded by revenue generated by RSGT’s ongoing operations, and through secured local financing.

In 2019, RSGT’s container volume increased by more than 31% over the preceding year, making it the largest logistics gateway in Saudi Arabia’s western region.

The adjacent Terminal, for which the concession is expiring, opened in 2000 and currently encompasses seven berths, with 11 STS cranes.

RSGT—committed to growth RSGT is committed to regional and global infrastructure and facility investments to better serve the growing requirements of global shipping lines and domestic cargo, and container services, as well as expanding our presence internationally in the global logistics chain through organic growth and by obtaining new concessions or acquisitions.

RSGT is located at Jeddah Islamic Port, astride a critical global trade lane through which 13% of the world’s container trade traffic passes. This strategic location along with our advanced facilities and operational excellence, allows RSGT Jeddah to offer global shipping lines a unique HUB access to neighboring countries, combined with a tailored and robust gateway product, making RSGT Jeddah the largest gateway on the western coast of Saudi Arabia.

MARCH 2020 43

Abu Dhabi Ports

Abu Dhabi Ports develops the world’s first unmanned Autonomous Commercial Tugboats Abu Dhabi Ports is leading the charge towards digitalising the region’s maritime operations

A

bu Dhabi Ports announced recently its collaboration with a global commercial vessel designer and tugboat leader, Robert Allan, to develop the world’sfirst fully unmanned autonomous marine tugs.

Once developed, the tugs will join SAFEEN, Abu Dhabi Ports’ maritime service arm, which maintains an expanding fleet of world-class service vessels.

One of the primary advantages of the innovative design includes greater capability, as shifting the human element from on-board to on-shore, will allow such vessels to operate in far more adverse weather conditions. Furthermore, the new technology will help increase efficiency and enhance operational safety.

Abu Dhabi Ports will work closely with one of Canada’s oldest privately-owned Naval Architectural and Marine Engineering firms on the research and development of remotely-controlled marine tugs that will be fully unmanned, and be able to operate within a wide spectrum of autonomy.

The two entities have recently signed a Memorandum of Understanding to this effect at the International Maritime Organization gathering in London.

“In line with our leadership’s guidance, this agreement marks a milestone in our digital transformation, and confirms our commitment to ensure the Emirate of Abu Dhabi strengthens its reputation as a leading centre for digital innovation regionally and globally. It’s a top priority for Abu Dhabi Ports to lead the charge towards digitalising the region’s maritime operations, and we are committed to providing a pioneering model for the sector.

Adopting digital solutions and keeping up with the changing demands of global trade have proven to be key drivers for economic

44 MARCH 2020

Capt. Maktoum Al Houqani and Mike Fitzpatrick sign the landmark agreement, in the presence of HE Dr. Abdullah Belhaif Al Nuaimi. growth and are integral towards achieving our goal of being a smart port,” explained Falah Mohammad Al Ahbabi, Chairman, Abu Dhabi Ports Captain Mohamed Juma Al Shamisi, Abu Dhabi Ports Group CEO, said: “Our cooperation with Robert Allan to develop a new generation of tugboats equipped with superior capabilities and modern technologies, reflects our commitment to ensuring that the infrastructure at Abu Dhabi Ports is at the cutting edge. We are engaged to provide smart and innovative digital solutions to the marine trade and port community, and to our valued customers. This agreement marks another qualitative addition to our digital armoury that will enhance performance efficiency, productivity, transparency, and safety, as well as reduce costs. Continuing our investment in technology and advanced infrastructure ensures the growth and sustainability of our business, and

increases our contribution towards the diversification of Abu Dhabi’s knowledgebased economy.”

Commenting on the MoU, Mike Fitzpatrick, President and CEO of Robert Allan Ltd., said: “We are excited to cooperate with Abu Dhabi Ports in this initiative, which provides us with an optimal opportunity to develop the world’s first fleet of remotely-operated tugboats for the commercial sector. The unique aspect of this project is the active participation of all the various stakeholders in Abu Dhabi and the UAE, which should ensure that we can progress smoothly from construction of the vessels to commercial operations.”

“Robert Allen Ltd. has been working on solutions to the technical challenges of an unmanned tugboat for several years now, but we were somewhat stalled in progressing to a commercial construction without an opportunity like this with Abu Dhabi Ports.” n

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Road Transportation

Roadblocks in Pharma Transportation The need to streamline and simplify the movement of much-needed pharmaceutical products has never been so vital.

G

ood distribution practices (GDP) certification requires pharmaceutical product handlers to meet stringent World Health Organization (WHO) standards for safety and security.

While GDP certification is mandatory in most countries including several in the Middle East, EU pharmaceutical companies and their logistics partners must comply with GDP regulations.

In this special contribution, Marc Carson, Commercial Manager, Tranzone UAE, critically examines the issues, challenges, regulations, requirements and criteria confronting pharma transportation and suggests best-practices solutions to overcome problems. He stresses the need for compliance with set practices and

46 MARCH 2020

observance of procedures to ensure best results in the business—Editor.

Transportation and Responsibility

Virtually all countries in the GCC and the Middle East import their requirements of life saving and much needed medicines and pharmaceuticals from production and manufacturing centres outside of the region.

When it comes to transportation or warehousing anywhere on the globe, the Pharmaceutical industry is 100% reliant on its product being transported and stored safely and securely in the required environment.

This is where a reliable and competent transport or supply chain professional plays

a key role. This official has the responsibility to ensure that the supply chain movement from point of collection to point of delivery for Pharmaceutical products is within the prescribed environment, namely maintaining correct temperatures; requires great understanding of the customer’s needs.

Not adhering to the specific industry standards with such a delicate product can have unintended and disastrous results. The consequences of getting the transportation wrong can be the difference between collecting something that will cure or heal, versus something that may potentially be lethal.

There are very good reasons why GDP (Goods Distribution Practices) certification and WHO stipulate that each GDP-certified

Road Transportation

company transporting a Pharma product must follow strict protocol and adhere to preset criteria.

These include but not limited to the following: • The vehicle or trailer has been validated and certified to carry pharmaceutical products.

• The driver has been trained in carrying pharmaceutical products.

• The company is a GDP-certified company • The company can produce the T-Mapping* records for each pharma vehicle or trailer • The vehicle is temperature monitored both by the driver and control room of the transport company.

• The driver should know what to do in the event of engine failure or temperature deviation.

It is the transport company’s responsibility to ensure individuals delivering the pharma product have the appropriate training to be entrusted with the integrity of the product being carried.

5

point Check list for Vehicles carrying pharmaceutical products

1. Driver trained in carrying pharmaceutical products.

2. A GDP-certified company 3. T-Mapping* records for each pharma vehicle 4. Vehicle is temperature monitored 5. Expert advice in the event of engine failure or temperature deviation

Temperature and Humidity Monitoring System: Tranzone has implemented the most advanced network base humidity and temperature monitoring and recording system.

This system has Graphic Recorder which monitors and records the temperature and relative humidity, according to preset reading intervals, through a set of sensors which are placed in selected locations according to T-Mapping findings.

Lack of Understanding: However, this is not always the case. In the many years that I have been involved in Pharmaceutical transportation, I have heard and seen the total lack of respect and complacency shown towards compliance and lack of understanding regarding how a product can so easily be compromised.

MARCH 2020 47

Road Transportation

Pharmaceutical products require special conditions, trained drivers, dedicated vehicles, controls in place to ensure that the product being carried reaches its final destination in a safe condition to be safely used.

I have seen a product, ideally to be stored between +2C to +8C during transit, delivered in an open top truck with the outside temp of 30C. The driver had no idea what he was delivering.

Lackadaisical, careless observations and comments as exemplified in examples below abound in the workplace.

Conversations could typically go like this• Managing Director: “It is like moving chocolate and confectionery! Nothing special required.”

• Transport Company 1: “There’s nothing special required, we have moved pharma in all our reefers.”

• Transport Company 2: “Dedicated trucks!

Why?” • Transport Company 3: “Are our vehicles T-mapped? What’s that? Do you mean GPS? What is the point of having GDP or GMP (Goods Manufacturing Practice), or the manufacturer stipulating that the product 48 MARCH 2020

remains under a temperature controlled environment if this is not what happens?

What is the point in the 3PL Warehouse ensuring that the product is stored in a temperature controlled environment, if the transport company thinks it is nothing more than a shipment of chocolates and treats the product the same as a shipment of chocolates?

Pharmaceutical products require special conditions, trained drivers, dedicated vehicles, controls in place to ensure that the product being carried reaches its final destination in a safe condition to be safely used.

Considering lives depend on these products arriving safely, the transportation process requires responsible, trained individuals. In most cases the driver has no idea of the potential harm the pharma product being carried could have on the end user. The driver in most cases will have no idea of the incredible value of each pack or box or the financial loss if the product has to be destroyed.

Tranzone

A subsidiary of Jeddah, Saudi Arabia headquartered Banaja Holdings, Tranzone operates a state-of-the-art 3PL warehouse in Jebel Ali Free Zone.

Tranzone has partnerships with leading and big pharma companies around the world.

Utilising a unique one-stop approach, Tranzone centralises logistics, provide storage, provide inventory management, as well as purchasing and re-invoicing to the distributors, all at one convenient location.

Tranzone’s capabilities and knowledge are based on six decades of experience in healthcare logistics and distribution in Saudi Arabia.

Road Transportation

Finding a Reliable Transport Company: Ask the right questions before using a transport company. Check the vehicle records, check the cleaning records, check whether the driver of the vehicle has had adequate training. Ask to see the T-mapping results and more importantly the actions taken to minimize HOT SPOTS! Ask the transport company to run temperature tracking reports in PDF format not Excel. How many hours do the drivers work? When do the drivers get time off?

Can the product move only during the day? This can minimize driver fatigue and reduce accidents. What experience does the company have with pharma products? Are they GDP certified?

Don’t be shy about asking for evidence of company competency! Check out for compliance and Key areas for selection • Reliable service levels • Safety & Security

• • • •

Quality Pharma Experience Capabilities of the managers/team Continuous quality and service improvements • Quality of SOPs

Standard Operating Procedures (SOPs):

Ensure that SOPs are implemented and strictly adhered to in the following arenas• SOP - Temperature deviation • SOP - Vehicle breakdown • SOP - Vehicle cleaning • SOP - Driver training records • SOP - GPS failure • SOP - Vehicle accident In the current economic environment, suppliers are being forced to be more competitive, some are cutting corners, cutting costs and cutting service levels, be sure to not just get value for money, strive for excellence in understanding quality control and diligence. It is money well spent in the long run.

Biography Marc Carson’s 30 years of experience in the logistics, B2B & B2C deliveries and transport industry has spanned managing UK and Middle East Service Centre operations, to Regional and Director level management.

Now specialising in the pharma industry, Carson heads up the commercial operation with Tranzone Healthcare Logistics based in Dubai.

MARCH 2020 49

Agility Logistics Index

UAE, China, India, retain top rankings in the latest Agility’s EML Index Saudi Arabia moves to number six spot, leapfrogging seven points in international ranking

T

he United Arab Emirates (UAE) ranks first in the region and third globally after China and India, according to the newly released 2020 Agility Emerging Markets Logistics Index.

For the first time since the launch of the Index, the UAE features in the top 10 list of all three individual sub-indices. The jump in the rankings is the result of the country’s continued open financial sector, transparent regulatory system and corruption protection frameworks and its progress towards a comprehensive national SME development strategy.

Gulf countries outperform most other emerging market regions in the 11th annual Agility Emerging Markets Logistics Index, a broad gauge of competitiveness based on logistics strength and business fundamentals.

Business-friendly conditions and core strengths position several Gulf countries near the top of the Index, behind giants China (1) and India (2), and alongside Southeast Asian nations.

In the Gulf, United Arab Emirates (No. 3), Saudi Arabia (6), Qatar (7), Oman (14),

50 MARCH 2020

Bahrain (15) and Kuwait (19) rank highly.

Among ASEAN countries, Indonesia (4), Malaysia (5), Thailand (9) and Vietnam (11) are strong.

Gulf nations in the lead “The Gulf nations continue to diversify, making steady progress in streamlining regulation and realizing increased digital capabilities,” commented Elias Monem, CEO, Middle East & Africa, Agility GIL. “The entire region is growing and the outlook continues to be healthy as we enter the new decade,” he added.

The findings were unveiled by Bassel El Dabbagh, Regional Director, Chemical Logistics, Agility at a recent press conference in Dubai.

Agility’s annual survey of 780 supply

chain professionals reveals overall pessimism about the world economy with 64% saying a global recession is likely, and only 12% of executives saying a recession is unlikely. Downward pressure on global trade volumes, uncertain growth prospects and the ongoing trade war between the US and China are driving this belief.

The Index ranks 50 countries by factors that make them attractive to logistics providers, freight forwarders, shipping lines, air cargo carriers and distributors. The top 10 are: China, India, UAE, Indonesia, Malaysia, Saudi Arabia, Qatar, Mexico, Thailand and Turkey, China, India and Indonesia rank highest for domestic logistics; China, India and Mexico are top for international logistics; and UAE, Malaysia and Saudi Arabia have the best business fundamentals.

Agility Logistics Index

Bassel El Dabbagh unveiling the latest Agility EML Index Report.

‘2020 Index and Survey’ highlights: • China and India, atop the 2020 rankings based on their size and strength as international and domestic logistics markets lag behind smaller rivals in business fundamentals, a category that ranks countries based on regulatory environment, credit and debt dynamics, contract enforcement, anti-corruption safeguards, price stability and market access. In that area, China ranks no. 8 and India is no. 18.

• Survey respondents see India as the market with greatest potential over China, their second choice. In rankings of best business conditions, several countries are making big moves: Egypt jumps 10 spots to #17; Ukraine jumps 10 spots to #27; Ghana drops 13 spots to #32; and Iran tumbles 12 spots to #38.

• Forty-two percent of those surveyed say a prolonged trade standoff between the U.S. and China could benefit Southeast Asian countries, which offer manufacturing and sourcing alternatives to China. This is less, however, than 56% who said last year that Southeast Asia would benefit.

• Egypt, despite a brief period of social unrest in 2019, showed significant gains across all indices. On the overall index, Egypt rose six spots to No. 20, while leaping 10 spots on the business fundamentals chart (17), six spots on the domestic opportunities index (13) and jumping five spots on the international opportunities index (23).

• The top three factors that keep small businesses out of global trade are trade bureaucracy (17%), government/border instability (14%) and inability to compete with larger rivals (14%), supply chain professionals say in the survey.

• Despite the belief a recession is likely, emerging markets still grew an estimated 3.7% in 2019 and are projected by the IMF to grow 4.4% in 2020. As for what is driving emerging markets growth, 23% say modernization of customs systems and processes; 18% cite increased internet penetration; 16% say modernisation of logistics provider systems (WMS, TMS); and 15% mention increased adoption and modernization of online payment systems.

The top three factors that keep small businesses out of global trade are trade bureaucracy (17%), government/border instability (14%) and inability to compete with larger rivals (14%) The top five ‘megacity’ emerging markets logistics hubs are Shanghai, New Delhi, Sao Paulo, Jakarta and Mexico City. Megacities – urban centers with populations of 10 million or more – require vast logistics support to meet domestic needs and engage in trade.

E-commerce fulfillment, in the survey, is the top choice for logistics services that are expected to maintain or improve growth, well ahead of other services such as domestic last-mile delivery and international express parcel delivery.

The countries with the least potential as logistics markets in 2020 are Syria, Iran, Venezuela, Iraq and Libya, according to the survey.

(Transport Intelligence (Ti), a leading analysis and research firm for the logistics industry, compiled the Index.)

MARCH 2020 51

Energy Find

Ten apraisal wells were tested by ADNOC in the area straddling Abu Dhabi and Dubai.

Mega shallow gas find in area straddling Dubai and Abu Dhabi ADNOC and Dubai join forces to develop new gas discovery

N

ew mega natural gas reservoirs discovered by Abu Dhabi National Oil Co. (ADNOC) on the Dubai-Abu Dhabi border is high-quality organic gas at relatively shallow depths from the earth’s surface.

HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, and HH Sheikh Mohammed Bin Zayed Al Nahayan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, announced the new shallow gas discovery and also witnessed the agreement signing ceremony between ADNOC and Dubai Supply Authority (Dusup).

Royal tweets “Today, my brother Mohammed Bin Zayed and I attended an agreement signing between ADNOC and Dusup to develop one of the largest gas fields discovered between Abu Dhabi and Dubai with 80 trillion cubic feet of reserves. Our land resources will continue to bring and usher in a brighter future,” Sheikh Mohammed Bin Rashid said in a tweet on the occasion.

“Together with my brother Sheikh 52 MARCH 2020

Mohammed, we witnessed the announcement of“Jebel Ali Project”gas reservoir that ADNOC will develop in collaboration with Dusup, a new source of energy supplies to support national economy and sustainable growth plans in UAE,” Sheikh Mohammed Bin Zayed tweeted.

The new discovery is a major step towards achieving gas self-sufficiency by the UAE. Sheikh Ahmed Bin Saeed Al Maktoum, Director-General, Dusup, and Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, signed the agreement.

The discovery of the 80 trillion standard cubic feet (TSCF) of shallow gas resources was made within an area of 5,000 square kilometers between the two emirates with ADNOC drilling more than 10 exploration and appraisal wells. It was first time that ADNOC explored for hydrocarbon resources in Dubai.

Massive recoverable reserves This latest announcement comes less than three months after Abu Dhabi’s Supreme Petroleum Council announced increases in hydrocarbon recoverable reserves of 7 billion stock tank barrels (STB) of oil and 58 trillion standard cubic feet (TSCF) of

ADNOC and Dusup to develop one of the largest gas fields with 80 trillion cubic feet of reserves conventional gas, moving the UAE from seventh to the sixth position in both global oil and gas reserves rankings with a total of 105 billion STB of recoverable oil, 273 TSCF of conventional gas and 160 TSCF of unconventional gas resources.

The UAE currently imports gas through Dolphin pipeline to meet its energy needs to produce electricity. The new discovery will be a big leap in the UAE’s efforts towards self-reliance in gas resources.

“We look forward to working closely with ADNOC to further explore gas resources in the area between Abu Dhabi and Dubai as part of diversifying our energy resources,” affirmed Sheikh Ahmed.

“The strategic cooperation agreement between ADNOC and Dusup is a natural evolution of our shared commitment to harness energy resources in the service of the UAE,” stated Dr. Al Jaber. n

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Gulfood 2020

Gulfood 2020 reinforces trend-tracker 25-year legacy Afghanistan re-enters food supply sector with dedicated national pavilion Al Rabie Saudi Foods Co., one of Saudi Arabia’s largest beverage producers, is aiming to grow its regional market share by promoting its constant consumer-led initiative: healthy and tasty beverages in consumer-friendly, handy and environmentalfriendly Tetra Pak packs that come in different sizes and formats for everyone.

“The focus on no-sugar-added beverages in our unique flavors is part of our continuous pursuit of innovation and product development with the aim of meeting consumer needs and the latest market developments,” said Ghassan Majdali, Deputy Chief Commercial Officer, Marketing, Al Rabie Saudi Foods Co.

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he silver anniversary edition of Gulfood heralded a new era of sector transformation and build on the Dubai event’s 25-year legacy as an on-point trend tracker and robust business facilitator. The mega-event ran from 16 to 20 February at the Dubai World Trade Centre (DWTC).

Leading Brazilian Food Company JBS, the largest animal protein producer in the world, said Gulfood continued to be an important access platform in developing flourishing relations with partners and distributors, as well as serving as a springboard to introduce new products and food solutions into the MENA region.

“It was a very relevant fair for JBS due to its ability to serve a strategic region for our business. Visitors to our stand witnessed very interesting product launches in line with the latest industry trends and the changing needs of regional consumers,” remarked Marcos Delorenzo, director of Marketing & New Business, Seara MENA.

Saudi Arabia potential top of mind Gulf-based food industry heavyweight Truebell, a leading importer, wholesaler, distributor and exporter with more than 60 brands in its portfolio, leveraged Gulfood 2020 as part of a strategy to tap into an expanding food industry in Saudi Arabia.

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With the GCC’s largest country expected to benefit from approximately US$ 59bn of investment by 2021, according to the Saudi Arabian General Investment Authority (SAGIA), Truebell plans to expand its exclusive distribution of key brands within the Kingdom.

“Trends have evolved in line with Saudi Arabia’s changing demographics, increased disposable incomes and maturing food preferences with demand for varied food stuff, organic ingredients and healthy food products expanding well beyond the most popular and recognisable local brands,” said Bhushant J. Gandhi, Divisional Manager, Retail & Food Service, Truebell.

With growing consumer preferences for healthy food products, the total consumption of organic, gourmet and health products within Saudi Arabia topped US$ 27bn in 2019, according to SAGIA. With 29 million residents, 50 per cent of which are under the age of 25, Saudi Arabia has the largest population in the GCC and arguably the population most susceptible to Western consumer food trends,” observed Gandhi.

As more operators look to expand their footprint within the Kingdom, local Saudi producers are also looking to build their export potential. Saudi Arabia’s burgeoning food industry will be out in force at Gulfood 2020 with a national pavilion mounted by the Saudi Export Development Authority (SEDA).

Afghan food producers return to the fore More than 25 Afghani agribusiness producers exhibited in a dedicated national pavilion promoting products including saffron, dried fruits, nuts, grains and wild harvested herbs, spices and medicinal crops including liquorice, cumin, basil, caraway and fennel seeds.

“Our Gulfood 2020 pavilion will reintroduced Afghanistan to all markets and reminded the industry that prior to decades of conflict, Afghani almonds, pomegranates, pistachios, raisins, and apricots were high-demand products across Central and South Asia,” stated Andrew Philip, Technical Advisor for the Afghanistan Pavilion.

‘Rethinking Food’ at the Gulfood Innovation Summit For its silver edition, Gulfood’s knowledge forum tackled pressing issues and imminent industry opportunities under the show theme ‘Rethinking Food.’

“We engaged the industry’s leading experts to assess what needs to be done differently in the F&B industry across five core pillars: technological advancements, government and policy-making, marketing practices, lifestyle and markets including developing economies,” explained Trixie LohMirmand, Executive Vice President, Exhibitions & Events, DWTC. n

JAFZA at Gulfood 2020

JAFZA showcases its F&B trade enabling capabilities at Gulfood 2020 DP World forges an integrated logistics and business friendly ecosystem

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ebel Ali Free Zone (JAFZA) and DP World were key participants at the recently concluded milestone 25th Anniversary Gulfood 2020 megaevent which was held in Dubai from 16 to 20 February.

The five-day event included the Gulfood Innovation Summit under the theme of ‘Rethinking Food’ to discuss topics such as Governments’ role in shaping the future of food, F&B marketing, tourism and retail and future food technologies.

JAFZA currently contributes 16.4 per cent of Dubai’s total traded volume and over 17 per cent of Dubai’s traded value. JAFZA and Jebel Ali Port currently support over 4,500 port customers. In excess of 480 F&B companies from 66 countries operate in JAFZA. “DP World UAE Region looks forward to supporting the businesses in the F&B Sector.

With Expo 2020 just around the corner, rethinking the F&B industry from a fresh perspective, as Gulfood 2020 promises to

do, will add value to our collective efforts,” commented Mohammed Al Muallem, CEO and Managing Director, DP World, UAE Region, and CEO, JAFZA. “At Jebel Ali Free Zone, we benefit from a fast and systematic clearance process which is supporting our working capital and speed to fulfill market demand. We take advantage of the extended logistics solutions DP world is offering as well as the wide ports coverage within DP World network which is supporting our export operation across the world,”said Yasir Jamal, Supply Chain Vice President MENA Unilever.

“Hunter Foods exports to over 30 countries and many of the milestones that have been achieved are thanks to the connectivity of Dubai to the world and the efficiency and infrastructure that DP World, UAE Region offers. We are proud to have been the first food factory in JAFZA, which started operations 35 years ago,”said Ananya Narayan, Managing Director, Hunter Foods.

The world-class business ecosystem hosts partners capable of food, grain meat, and oil processing, customised grain silos and end-to-end solutions for exports, re-exports and imports.

JAFZA’s dedicated F&B cluster, spread over 1.17 mn sqm, offers value-added logistics services including storage, processing, packaging, bagging and other facilities within both bonded and nonbonded zones. A one-stop-shop, ‘Zadi’ on DP World’s online trade facilitation entity Dubai Trade, enables traders to access all food import related services.

The port infrastructure includes container terminals, general cargo yards, temperature-controlled storage, reefer yards and other ancillary services. The Dubai Logistics Corridor facilitates faster trade flows that benefit the world’s fastestgrowing economies with its multimodal sea-land-air transshipment facility, with on-site customs clearance. n MARCH 2020 55

SOHAR Port and Freezone

SOHAR Port and Freezone brings in US$ 27bn investment

Over one million tonnes of cargo throughput in 2019 reported per week New expansions at the leading Omani Port and Freezone with renewable energy projects will get operational soon

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OHAR recently conducted its annual business reception at The Chedi Muscat. During the event, SOHAR also looked back over its achievements in the past year while also shedding light on future plans that will take place in the upcoming year.

The event was conducted in the presence of a large number of strategic partners and representatives of the companies working at SOHAR Port and Freezone.

SOHAR Port and Freezone witnessed considerable growth, seeing an average throughput of over one million tonnes of cargo per week over the course of 2019 and bringing in investments of OMR 10.4bn (US$ 27bn) to date.

During 2019, dry bulk was valued at over 36 million tonnes, liquid bulk at over 15 million tonnes and break bulk over one million tonnes. Additionally, the number of vessels that called into the port reached nearly 3,200 vessels, 900 of which were in the last quarter year alone.

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Capacity growth

Aside from capacity growth, it was announced that the Phase 1 expansion of SOHAR Port South was complete and saw 50 hectares of land added to Port’s present capacity. Work is currently underway for Phase 2, which will see the addition of another 200 hectares to the Port area of 2,000 hectares.

Freezone expansion There are also plans in the pipeline for the expansion of SOHAR Freezone, which in turn, will increase its capacity to bring in prospective investors.

“We have seen incredible growth in 2019, with SOHAR successfully attracting a majority of international industries to set up shop at the Port and Freezone. This, in turn, creates a positive impact by enhancing our contribution towards the Sultanate’s GDP, supporting the Government of Oman’s diversification objectives

and simultaneously creating more job opportunities for the local community,” commented Mark Geilenkirchen, CEO, SOHAR Port.

“We look forward to 2020, which will also see the completion of the SOHAR Port South expansion. The land area has already been earmarked for global giants, such as Trescorp and Total, the latter of which aims to establish an LNG bunkering supply station for vessels at the Port, therefore attracting even more investments to SOHAR,” he added.

Oman’s logistics centre “Since its establishment, SOHAR has emerged as a global logistics and industrial hub and employs a young, capable and efficient workforce, while simultaneously investing in innovative solutions and developing strategies to meet the Sultanate’s national objectives. We seek to continue our commitment to align

SOHAR Port and Freezone

SOHAR Port and Freezone officials in a photo lineup.

ourselves with Oman’s diversification and logistics strategies and attract foreign direct investment to drive further growth,” stated Omar Mahmood Al Mahrizi, Deputy CEO, SOHAR Port and CEO, Freezone.

“This is also enriched by our unique offering of being the only port and free zone in the region that managed under a single entity. Therefore, we are able to provide potential customers with an array of integrated services under one roof,” he continued.

New global investments “With several new global investments, we are continuing to look for ways to develop a myriad of downstream opportunities, wherein one industry’s waste can be used as fuel for another industry. Other innovations include tapping into sustainable and eco-friendly energy resources to attract even more investments and industries into the region. Additionally, with our lower operating costs, energy-saving systems, easy land lease options, as well as our strategic location to key global markets, we host a distinctive competitive advantage,” Omar added.

Phase 1 expansion of SOHAR Port South had 50 hectares of land added to Port’s present capacity. Work is currently underway for Phase 2, which will add another 200 hectares to the Port area of 2,000 hectares.

“SOHAR Port and Freezone has a wellestablished mission and vision to establish itself as an important sustainable logistics hub in the region. We continue to keep ourselves abreast with the latest technology and developments to ensure maximum benefit not only to the organisation and the surrounding community but to also align ourselves with the Oman Vision 2040,” Geilenkirchen concluded.

Agreements and signings over the course of 2019: 2019 saw the groundbreaking of RFX Parks, Shell and Sanvira, alongside further expansions for Al Tamman Indsil, Matrix Prime and SV Pittie. New partnerships were also forged in the Freezone with Gulf Alloys and Metals and Madhav Surfaces.

In an effort to tap into the Sultanate’s renewable energy potential, the partnership with Shell Oman foresees 600 hectares of land being utilised for Solar Photovoltaic (PV) projects. A pioneering project is expected to begin operations in the current year, with the aim of delivering a power supply capacity of 25 MW. Gulf Alloys and Metals signed an agreement for the creation of a low carbon ferrochrome alloy production facility, capable of manufacturing of 10,000 MT per annum and is a part of the efforts of SOHAR to bring in new global investments.

The agreement with Madhav Surfaces aims to develop a quartz manufacturing plant to produce quartz slabs and other quartz products using chrome ore and calcined lime from the local market, to be exported to the USA and Europe. n MARCH 2020 57

Future Watch

Disrupt, or be disrupted At its core, disruptive technology is the phenomenon whereby an emerging innovation, by design or abruptly, interferes with an already established process—compelling users and stakeholders to change or alter course and tact to overcome the interruption.

Old ways of thinking are imprisoning us writes Europe-based Prof. Omera Khan, Strategic Supply Chain Risk expert, author and speaker and regular contributor to Global Supply Chain. In this latest opinion piece, she highlights her wariness with predictions, advocating we best remain guarded and circumspect about the future—Editor.

“I never make predictions — especially about the future,”American writer HL Mencken once tartly observed.

He had a point: predictions are hostages to fortune, and it is not difficult to think of a number of well-known predictions that turned out to be embarrassingly wide off the mark.

Thomas Watson, then President of IBM, wrote in 1943 that he saw a world market for may be five computers. Steve Ballmer, then the Chief Executive Officer, Microsoft, mistakenly saw in 2007 ‘no chance’ of the newly-launched iPhone gaining any significant market share.

Telephones were just a toy that would never catch on, wrote the President of Western Union, William Orton, in 1876, when inventor Alexander Graham Bell offered to sell him the patent.

And so on, and so on. Examples abound.

Nevertheless, not everyone has the luxury of being able to avoid being held to account.

Future ready?

Those of us who run businesses or supply chains—or those of us who advise those people who run businesses or supply chains—have to make predictions: it’s our job. Then also a business or supply chain that is ill-prepared for the future is a 58 MARCH 2020

Future Watch

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Future Watch

business or supply chain that may not have much of a future.

Even so, making predictions about disruptive trends is excruciatingly difficult.

While it’s easy to laugh at how wrong predictions can be, at the time those predictions may well have appeared to be sober, hard-nosed assessments.

All of which is worth bearing in mind as businesses and supply chains around the world begin figuring out what to do about several disruptive trends and events that are at present competing for our attention.

First up, the sustainability agenda. From the fuel that powers our trucks, ships, trains, and aircraft, to the paper and plastics that make up our packaging, logistics is very much in the crosshairs of sustainability activists’ sights.

Ignoring the issue is not an option—but right now it’s difficult to see what options we do have. A few years ago, the focus was on ‘peak oil’ and running out of the stuff; now investors are alarmed at the prospect of so-called ‘stranded energy assets’— reserves of fossil fuels that may never be extracted because of their impact on climate change.

Supply webs open us up to new possibilities, new paradigms, and potentially new and different processes.

Supply Chain reinvented

Geopolitical uncertainties

Next up: ongoing geopolitical uncertainties.

Trump’s trade wars; Brexit; China and its ‘Belt and Road’ strategy; seemingly perennial Middle East tensions: these are not comfortable times in which to be determining supply chain strategies.

Nor is it solely geopolitical uncertainty that impacts supply chains. From the Japanese earthquake and tsunami of 2011 to the more recent CoronaVirus (Covid 19) outbreak, again and again we see what an interconnected world we live in. Within days, an event on the other side of the world can disrupt supply chains thousands of miles away. Supposedly resilient, they turn out to be more fragile than anyone imagined.

Roll it all together, and it is increasingly difficult to avoid the suspicion that present approaches to supply chain management aren’t as effective as we supply chain practitioners fondly imagine.

In short, we need something else— not least a mindset change. Because transformation is only possible when we are willing and able to let go of our old patterns, old models, and indeed old concepts of what constitutes supply chain management.

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Bottom Line. Simply put, he argued, the Triple Bottom Line was no longer enough.

Something else was needed; something bolder.

To those in the know, Elkington’s admission was startling. The Triple Bottom Line has had an enormous impact on businesses’ and supply chains’ approach to corporate and social responsibility, replacing a single-minded focus on profitability a broader focus on social, environmental, and economic impact—the Triple Bottom Line.

A quarter of a century on, it has made a big difference. However, it is not enough, acknowledged Elkington: too many businesses see it as a trade-off mechanism, rather than as an absolute test. Something else is required if businesses are to really ‘shift the needle’.

Prof. Omera Khan Put another way, the biggest risk that businesses may face today is the risk of doing nothing at all. It is not an exaggeration to say that businesses can choose to disrupt, or to be disrupted.

Changing business landscape

As I point out to my students, Uber is the world’s biggest taxi company, but doesn’t own a single taxi cab. Airbnb and Booking.com are the world’s largest hoteliers, but don’t possess any hotels. And after being in business for a quarter of a century, Amazon—the world’s biggest bookseller—is finally experimenting with physical book stores.

Radical stuff, maybe. But those of us prepared to think the unthinkable are in good company. In late 2018, for instance, influential management thinker John Elkington took to the pages of the Harvard Business Review to officially ‘recall’— namely, take back—a concept that he had first launched 25 years ago: the Triple

Another concept that may be ripe for reevaluation is the very notion of the supply chain itself. Look at many actual real-world supply chains, and it is difficult to escape the conclusion that ‘chain’ is arguably too mechanistic a description of fulfilment processes-- too linear, too uni-directional, too evocative of inflexible conveyor belts. In industry after industry, real life doesn’t work like that anymore, if indeed it ever did.

What to replace the term ‘supply chain’ with? I rather like the suggestion that ‘supply web’ would be a better term, a term that is closer to what many of us deal with in practice, and which brings with it values of flexibility and resilience, as well as facilitating two-way flows and multiple sourcing connections.

Does such re-labelling help?

Shakespeare, after all, aptly observed that a rose by any other name would smell as sweet. But with all due to respect to the bard, I disagree. We need that mindset change.

We need to let go of our old patterns and old models, and embrace new thinking.

As practitioners, supply chains imprison our thinking, locking us into paradigms that constrain us. Supply webs open us up to new possibilities, new paradigms, and potentially new and different processes.

And with the challenges the world faces, those new possibilities, paradigms and processes have never been more needed.

Disrupt—or be disrupted. Be an Uber, Airbnb, or Amazon…..and not a moribund traditionalist. n

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Your one-stop shop for warehouse storage and automated systems needs in the MEA region and worldwide.

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