When the Queen’s horses left Europe for the first time since 1882, they flew with the airline which flies above the ordinary, Maximus. Because as the UAE’s largest all cargo solutions provider, Maximus went the extra furlong to make sure that our equestrian friends not only made a comfortable and safe journey, but made history too. www.maximus.aero FLYING ABOVE THE ORDINARY
CONTENTS
CONTENTS Issue 67 April 2010 For the latest news and stories go to
23 02 Editor’s Letter
16 ArabianSupplyChain.com
40 Ask The Expert
Where does the logistics industry stand in terms of redundancies in the Middle East?
Highlights of the month from the official website of Logistics Middle East magazine.
06 Readers Letters
18 Logistics Recruitment
What type of communication is required for logistics companies to maintain a long-term client relationship, asks Metreks’ Curtis Greve.
Readers of Logistics Middle East provide their views on the industry’s hottest topics.
With the Middle East logistics industry experiencing its first signs of a recovery, will recruitment opportunities now arise?
09 News Update • Agility could make thousands of employees redundant with a programme of cutbacks • DIP launches AED300m logistics complex • Abu Dhabi opens logistics excellence centre • Kanoo reveals new BDP logistics venture • Student delegation visits Dubai DED office • Dulsco Logistics to expand local skills base • DHL delivers freight for Bahran Grand Prix • Aramex to expand Hong Kong operations • Dubai Customs launches Mirsal 2 system
09
42 Facts And Figures Transportation statistics from a variety of regional and international sources.
23 Middle East Case Studies
46 Events Calendar
A look at the supply chain operations of various companies throughout the region, including Landmark Group, Al Bayader, Tamer Group, Toys “R”Us and Caterpillar.
A listing of seminars, conferences and trade shows for the Middle East logistics industry.
32 Warehouse Leasing Cluttons has launched a logistics team to walk clients through the warehouse leasing minefield in Middle Eastern countries.
32
48 Face To Face Interview Following decades of success in Europe, BITO’s regional manager Christian Gebler explains how the company’s product range will help clients to raise standards with their Middle East warehousing facilities.
48
www.arabiansupplychain.com | APRIL 2010
1
EDITOR’S LETTER
Registered at Dubai Media City PO Box 500024, Dubai, UAE Tel: 00 971 4 210 8000, Fax: 00 971 4 210 8080 Web: www.itp.com Offices in Dubai & London ITP BUSINESS PUBLISHING CEO Walid Akawi Managing Director Neil Davies Deputy Managing Director Matthew Southwell Editorial Director David Ingham VP Sales Wayne Lowery Commercial Director Fareed Dubery EDITORIAL Senior Group Editor Robeel Haq Tel: +971 4 210 8597 email: robeel.haq@itp.com Contributors Nadia Khan, Ed Attwood, Sarah Cowell ADVERTISING Commercial Director Fareed Dubery Tel: +971 4 210 8381 email: fareed.dubery@itp.com Sales Manager Jayant Dey Tel: +971 4 210 8246 email: jayant.dey@itp.com STUDIO Group Art Editor Daniel Prescott Art Editor Lucy McMurray
Are we recruiting or making redundancies?
T
he issue of recruitment has returned to the spotlight in this issue of Logistics Middle East, with news that marketleader Agility has introduced a large-scale programme to decrease its workforce by thousands around the world. Approximately 500 to 600 employees have already been made redundant, according to local media reports, and there’s more to follow in the coming months. For many people, this will bring back memories from approximately the same time last year, when the Middle East logistics industry was plagued with job losses at regional powerhouses such as DP World, Gulf Agency Company (GAC) and Danzas. Does that mean the market slowdown is continuing at full pace, despite a series of local reports that the industry has experienced its first signs of a recovery? Perhaps not. Agility has been realistic about current market conditions, with an official stating that demand for billiondollar contracts will not return to previous levels for a while. At the same time, the company has also been impacted by
its high-profile court case in the United States over the alleged overcharging on US$8.5 billion worth of government contracts, which probably had an impact on the decision to make cutbacks. Our interview with Nigel Moore, the managing director of recruitment firm Logistics Executive in the Middle East and Africa, paints a brighter picture of employment issues. According to him the region has overcome a brief recruitment crisis and returned to a situation where the logistics industry is actively looking for qualified and experienced professionals from around the world. However, this has presented a new challenge - how to attract the world’s best talent to these shores when countries in other parts of the world are now offering more attractive packages? It’s a million dollar question that the Middle East logistics industry will need to answer in the coming months. If you have any comments to make on this month’s issue, please email Robeel Haq, senior group editor of Logistics Middle East magazine (robeel.haq@itp.com)
To subscribe please visit www.itp.com/subscriptions 2 APRIL 2010 | www.arabiansupplychain.com
PHOTOGRAPHY Director of Photography Sevag Davidian Chief Photographer Khatuna Khutsishvili Senior Photographers G-nie Arambulo, Efraim Evidor, Thanos Lazopoulos Staff Photographers Isidora Bojovic, George Dipin, Lyubov Galushko, Jovana Obradovic, Ruel Pableo, Rajesh Raghav PRODUCTION & DISTRIBUTION Group Production Manager Kyle Smith Deputy Production Manager Matthew Grant Production Coordinator Louise Schreiber Managing Picture Editor Patrick Littlejohn Image Editor Emmalyn Robles Distribution Manager Karima Ashwell Distribution Executive Nada Al Alami CIRCULATION Head of Circulation & Database Gaurav Gulati MARKETING Head of Marketing Daniel Fewtrell ITP DIGITAL Director Peter Conmy ITP GROUP Chairman Andrew Neil Managing Director Robert Serafin Finance Director Toby Jay Spencer-Davies Board of Directors K.M. Jamieson, Mike Bayman, Walid Akawi, Neil Davies, Rob Corder, Mary Serafin Circulation Customer Service Tel: +971 4 210 8000 Certain images in this issue are available for purchase. Please contact itpimages@itp.com for further details or visit www.itpimages.com. Printed by Horizon Printing Press Controlled distribution by Blue Truck Subscribe online at www.itp.com /subscriptions The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the reader’s particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review.
Audited by: BPA Worldwide Average Qualified Circulation 6,379 (July - Dec 2009)
Published by and © 2010 ITP Business Publishing, a division of the ITP Publishing Group Ltd. Registered in the B.V.I. under Company Number 1402846.
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READERS LETTERS
Time for change in the Middle East
An ITP Business Publication Licensed by Dubai Media City
PREVIEW: SCATA 2010 Information on the Middle East’s ultimate celebration of supply chain excellence
Dear Editor, As a reader of Logistics Middle East, I was interested to hear about the continued progress of TCS in the Middle East, especially with the Dubai Metro being introduced into its delivery network. I would actually like to invite the company to launch its operations in Saudi Arabia. If the management team needs any assistance, please contact me as I have been working in Saudi Arabia’s courier market for the last 17 years and believe the country needs TCS to beat existing players. Syed Masood Abbas
LOGISTICS LAUNCH MARCH 2010 ISSUE 66
NEWS AND ANALYSIS FOR SUPPLY CHAIN MANAGEMENT PROFESSIONALS
EPS starts the countdown to the launch of its hub at Dubai Logistics City (DLC)
LE SSONS IN
L OGIST IC S Professor Rob Whelan, president, University of Wollongong in Dubai (UOWD)
ED EAST HAVE OPEN IN THE MIDDLE STICS WHY UNIVERSITIES RATION OF LOGI THE NEXT GENE THEIR DOORS TO PROFESSIONALS
MOMENTUM LOGISTICS І MISC BERHAD І DULSCO HR SOLUTIONS І XVISE INNOVATIVE LOGISTICS
The continued rise of Abu Dhabi Dear Editor, Having put together the first comprehensive Study for Abu Dhabi logistics infrastructure in 2006, I wholeheartedly welcome the efforts from the recent Global Logistics Forum to discuss and implement some of these important initiatives. McKinseys London, under my direction, led this important study and we found many key initiatives required in transport, sea ports and airport logistics. I am proud to say the new ministry of transport, new airports free zone are numerous other initiatives have directly resulted from this work. Congratulations to Sheikh Hamdan and his excellent vision. Norman Wing Johnston
Support for KSA logistics institute Dear Editor, I’m pleased to read about the launch of Al Majdouie Group’s Middle East Logistics Institute (MELI) in Saudi Arabia. It appears that the Kingdom has started to follow in the footsteps of Dubai and the United Arab Emirates in this regard. My hearty congratulation to everyone involved in this important venture. Professor Philbert Suresh
The promise of materials handling Dear Editor, Having read the recent Materials Handling special in Logistics Middle East, I am convinced this is a growth market for the region. As a member of Digitized Logistics, a professional supply chain management firm with offices in Saudi Arabia and the UAE, I look forward to hearing more about the firms mentioned in your article. Rashad Shareef
Golden opportunity Dear Editor, Thanks for your coverage of the Tamer Group’s recent warehouse opening in Saudi Arabia. I would like to thank Mohammed Tamer, CEO of Tamer Group, for giving my company the opportunity to design, deliver and complete this project on behalf of their market-leading company. Mohammed Sufyan, Alesayi Storage Systems
University challenge Dear Editor, With a limited amount of available information on the logistics education sector in the Middle East, your recent survey was very welcome news. A growing number of logistics courses have been launched in this region recently, although ‘industry hearsay’ would suggest that none of the universities have experienced much success with these programmes to date. This is a real shame, because the industry would almost certainly benefit from having a regular stream of logistics professionals who have been specifically educated and trained in this region and have a true understanding of local operations. Damien Turner
Please address your letters to: Logistics Middle East, PO Box 500024, Dubai, UAE or email: robeel.haq@itp.com (Please provide your full name and address, stating clearly if you do not wish them to appear in print. All letters will be edited for clarity of shortened to fit the allotted space).
6 APRIL 2010 | www.arabianbusiness.com/transportation
NEWS UPDATE
www.arabiansupplychain.com | APRIL 2010
15
ONLINE HIGHLIGHTS
Still hungry for more news?
The online home of:
for regular updates on the Middle East logistics industry WEBSITE STATISTICS
MOST TALKED ABOUT LOGISTICS COMPANIES ON ARABIANSUPPLYCHAIN.COM Agility Gulf Agency Company (GAC) Aramex FedEx Ehrhardt + Partner Solutions
UAE cargo operator slams closure rumours
MOST POPULAR HEADLINES
UAE-based cargo operator Midex Airlines has denied rumours that its Air Operators Certificate (AOC) has been revoked by the General Civil Aviation Authority (GCAA). The allegations, which have been circulated on a number of online forums, were fuelled by the death of two post-holders at Midex Airlines – its director of quality and director of safety. However, speaking exclusively to ArabianSupplyChain.com, the airline’s director general Jassim Al Bastaki stated that contrary to the reports, a number of cargo flights were scheduled for this month. “Our AOC has not been taken away, it is right here in my office with me,” he claimed. “The GCAA is running a standard operational audit with us at the moment, which all airlines undergo two or three times a year. I must provide the GCAA with details of my two new post-holders, the director of quality and the director of safety. It’s just a case of submitting their names, the rumours that Midex is out of operation are not true.” The claims have been reinforced by a statement from the GCAA’s director of safety, Ismail Al Balooshi. “We are currently reviewing the operations of Midex and working closely with them to resolve operational issues. This is a routine activity conducted by GCAA with all its operators in the region,” he told ArabianSupplyChain.
error for Etihad blunder
1 Emirates blames technical 2 Agility restructuring will
make thousands redundant
3 Aramex plans major boost to Hong Kong operations
4 FedEx founder ranked in
Forbes Rich List for 2010
5 Sharjah fire causes damage
to more than 20 warehouses
EDITOR’S CHOICES VIDEO REPORT
SPECIAL REPORT
Forklift Accident Brings Down Warehouse Racking Although the majority of warehouse operators prefer to keep their forklift accidents under wraps, this video highlights one of the worst-possible outcomes of poor driving standards.
TOP 10: The World’s Top Air Cargo Operators 2010 A look at Air Cargo World’s report on global air cargo operators, with freight forwarders providing their ratings on airline customer service, technology and recent performance.
SPOT POLL
Which Middle Eastern airline offers the best cargo service in the industry?
51.2% 11.6%
Emirates Airline
16 April 2010 | www.arabiansupplychain.com
Etihad Airways
9.3%
Qatar Airways
9.3%
Royal Jordanian
18.7% Other
LOGISTICS RECRUITMENT
RECRUITMENT RESULTS An expert view into the latest recruitment trends and challenges in the Middle East logistics industry. he logistics industry has traditionally struggled to find a recruitment balance in the Middle East. During its economic boom, the region was plagued with complaints about a skills shortage, while the global recession has presented a different set of challenges, with the emergence of redundancies at companies such as Agility, Danzas and DP World. However, as the managing director of Logistics Executive Middle East, a Dubaibased recruitment specialist, Nigel Moore has plenty of experience in these market changes and remains unfazed by the industry’s recent setbacks. “Although recruitment levels have decreased as a result of the global recession, a considerable number of companies are still hiring in the Middle East logistics industry,” A skills shortage is still prevalent, says Nigel Moore he states. “To be honest, a lot of people were employed during the boom without the for around six to nine months, due to the necessary experience or qualifications, global recession, but we’re back to having a because there was a skills shortage and skills shortage again,” states Moore. “To make companies had to lower their expectations things a little harder, the Middle East has not in order to expand their workforce. This is always kept pace with the packages offered in no longer the case. Companies are more other parts of the world. This is more evident focused on strategic recruitment and will in the current climate, because companies only consider those applicants that fulfil their are facing pressure to lower their overheads, which often impacts the salaries offered. exact requirements.” While a larger pool of candidates is now For example, we conducted an international headhunt for a client recently, available in the Middle East, which was offering a very good employees are still fighting a “The Middle East package by Dubai standards. battle to attract the very best However, the response was talent to their companies. has not always still limited because there are This is not necessarily due to kept pace with the selective countries abroad that competition from other players kages in other packages offer better packages.” in the local market, but actually parts of the world” Another factor that has from those in mature markets,
T
such as Europe, North America and even Asia, which is bad news for a region that has traditionally relied on overseas candidates while recruiting. In fact, according to a recent survey conducted by Logistics Executive, with 463 respondents from the Middle East, approximately 87% of executive management in this region were planning to hire from overseas. “There was a glut in the Middle East market 18 APRIL 2010 | www.arabiansupplychain.com
influenced a slowdown in quality responses to recruitment adverts, according to Moore, has been a certain amount of negative coverage that Dubai has received from the international media in recent months. “To some extent, there has been a loss of confidence in the Middle East and this has the potential of clouding someone’s judgement in terms of working here,” he maintains. “However, I’m
still a massive supporter of the UAE and neighbouring countries and you have to remember that the underlining factors that created a logistics boom in this part of the world are still around. They haven’t changed and therefore it’s more important than ever for companies to have a good talent attraction strategy to combat the skills shortage.” To further highlight the importance of this strategy, around 16% of Middle East respondents to the Logistics Executive survey believed there would be a critical or high degree of impact on their business from a skills shortage. Logistics Recruitment has successfully advised a number of clients on their talent attraction strategy in recent months to combat those fears and ensure the company is clear about the candidates they wish to attract, with a particular focus on skills, competencies and experience. “To some extent, companies in the Middle East should also be more flexible in their approach. Since the recession, employers have increased their focus on candidates with Middle East experience. While there are advantages to this approach, I believe the region needs an influx of new talent, otherwise we have the risk of limiting ourselves in terms of developing world-class services.” Of course, another way of combating a problematic skills shortage is attracting a greater interest from GCC nationals in a logistics career. Various attempts have been made to boost numbers in the past, although the results have been somewhat mixed. “It has proved a difficult task to attract GCC nationals, especially when there are more amenable jobs in the government that have good salaries,” says Moore. “Also, it takes longer to build a solid career in the logistics business and that can put people off. But there are great initiatives underway, including those by the Dubai Department of Economic Development (DED), which will help to encourage nationals into this industry and in time ease the pressure from a regional skills shortage.”
LOGISTICS RECRUITMENT
www.arabiansupplychain.com | APRIL 2010
19
LOGISTICS RECRUITMENT
87%
of executive management said they would hire from overseas. Financial expectations and visa issues were the main focus in bringing people in from overseas followed by cultural fit and the difficulty to assess the candidate.
25%
of human resource managers said they would counter offer between 0-10% of the time and 88% of those counter offered would stay for longer than 12 months.
Key challenges of business in the coming year were seen in order as profitability, customer satisfaction, sustainability, productivity, leadership management, financial constraints and retention of talent. 20 APRIL 2010 | www.arabiansupplychain.com
Hard to find skills Responses came from people that worked in or whose organisations worked in over 50 different sectors of the economy. 21 different roles were identified as currently difficult to find.
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21
Customer Services IT & Telecommunications Facilities Management Distribution & Warehousing Legal & Corporate Affairs Finance & Accounting Engineering & Technical Logistics & Transport Human Resources Maintenance & Workshop Procurement & Inventory Research & Development Manufacturing & Production Project/Program Management Risk & Environment Marketing & Communication Quality Assurance Safety Sales & Business Development Supply Chain Training & education
LOGISTICS RECRUITMENT
50%
of C-level people had post graduate degrees with 80% speaking more than one language. 60% of the C-Level respondents had moved jobs in the previous three years and of those that did move 85% had been international relocations.
16%
of C-Level responses showed either a critical or high degree of impact on the business from a shortage of skills, whereas 22% of HR responses showed either a critical or high degree of impact on the business from a shortage of skills. In both cases about 25% of responses showed no impact on the business as a result of skills shortage.
10-13%
was the estimated percentage of staff turnover according to human resource managers, whereas executive management estimated it to be 6-10%.
An average of 55%
of human resource managers and C-level staff advised that logistics was represented at board level in their organisations.
Comparison to 2008 results
In the 2008 report, 17.46% of the respondents stated that salary was a key issue in considering a relocation, compared to 18.35% in 2009
As a rule HR and C-Level staff agreed that the financial crisis and resulting economic slow down would have a significant negative impact in the coming 12 months. What was a bit surprising was that the overwhelming majority (80%) of HR and C-Level responses had climate change as having no impact. The survey was conducted by Logistics Executive last year, with 463 responses from professionals across the Middle East.
WORLDLEADERSIN EXECUTIVE LOGISTICS RECRUITMENT Middle East and Africa Talent Specialists • Executive Search • Interim Management • Executive Recruitment • Career Transition & Outplacement • Mergers and Acquisitions +971 4 361 6275 / nigelm@LRS.ae / www.logisticsrecruitment.ae
AUSTRALIA
•
ASIA
•
EUROPE
•
MIDDLE EAST
•
AFRICA
www.arabiansupplychain.com | APRIL 2010
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Providing the Ultimate Logistics Solutions in the Middle East and North Africa (MENA) Region
MIDDLE EAST CASE STUDIES
SAUDI SUCCESS
Veteran trading company Tamer Group continues its quest to raise standards in Saudi Arabia’s logistics industry with its ground breaking new warehouse in South Jeddah. ince its establishment as Saudi Arabia’s first pharmacy in the 1920s, the Tamer Group has handled the promotion and distribution of numerous marketleading healthcare brands in the Kingdom, including Novartis, Roche, Covidien, Johnson & Johnson, Pfizer and UCB Bristol Meyers. However, its partnership with global powerhouses has not been limited to this sector alone, with successful forays into consumer goods distribution for the likes of Nestlé, Cadbury Chocolate, Proctor & Gamble and luxury brands such as Gucci, Valentino and Mont Blanc, to name a few. “Saudi Arabia is a very large market and we cover the entire Kingdom, in addition to other Middle Eastern markets such as Bahrain and Yemen,” explains Mohammed Tamer, managing partner of the Tamer Group. With such diverse activities, a lot of businesses would struggle to cope with their supply chains. However, over the past 90 years, the Tamer Group has developed a world-class system for its warehousing and transportation, with storage facilities located in Jeddah, Riyadh, Khobar, Abha, Madina, Tabuk and Qasim. Earlier this year, the latest addition to this network - a 58,000m2 distribution centre - was launched in the Al Khomra district of South Jeddah. The warehouse has already received a string of accolades, including ISO 9001:2008 certification, approval from the Ministry of Health, and a Good Warehousing Practices (GWP) award from Nestlé. The new facility was opened after the Tamer Group received instructions from the Ministry of Health to move from its current location in the heart of the city. However, with a much larger amount of space than its predecessor, Tamer argues that the facility was also essential to support the company’s business growth and enhance its supply chain operations to international standards. “Our warehouses are usually split function, with healthcare in one section and consumer in the other,” he says. “This latest facility has been approved to store pharmaceutical products and includes a 24,000 pallet capacity, with individual chambers for the different types of goods. It will truly enhance our Middle East distribution network and provide value-added services to customers.” The Tamer Group sources its products from a number of international locations, with a primary focus on Europe and the Far
S
Tamer Group operates various split-function warehouses in cities across Saudi Arabia
East. “Our products are transported by a combination of seafreight, airfreight, courier and land transport to Saudi Arabia,” says Tamer. “Most of the goods arrive by sea, although our temperature-sensitive medical items are usually received by air.” Distribution operations are mainly conducted in-house and overlooked by Toufiq Chawdhury, Tamer Group’s national distribution manager. “Only the transportation is outsourced, as this process is easier to manager with a third party supplier, but the rest is managed in-house, including customs clearance,” he confirms. “We currently deliver to more than 300 customers per day and our distribution network extends to more than 16,000 pharmacies within the Kingdom, and as well as hospitals and polyclinics.” More recently, the company has contracted Supply Network Solutions (SNS) to conduct a full logistics audit and offer consultancy services to ensure the maximum utilisation of Tamer Group’s resources, whilst lowering its operational costs. The study consists of reviewing infrastructure, IT systems, current processes and overall supply chain structure. “Although logistics in Saudi Arabia is considerably behind markets such as the UK, this industry is booming and the potential to develop is very apparent,” concludes Chawdhury. “Our plan is to eventually create a separate 3PL company to look after the receiving, storing, warehousing and distribution of customer goods, not only for the Tamer Group but other companies too.”
P.O. Box 180, Jeddah , 21411, Saudi Arabia Tel: +966 26435600 / Fax: +966 26435312 Email: info@tamergroup.com www.arabiansupplychain.com | APRIL 2010
23
MIDDLE EAST CASE STUDIES
LANDMARK DEVELOPMENT As one of the most successful retailers in the Middle East, the Landmark Group has developed a supply chain that is the envy of rivals throughout the region.
24 APRIL 2010 | www.arabiansupplychain.com
MIDDLE EAST CASE STUDIES
ounded back in the 1970s with a single store in Bahrain, the Landmark Group has emerged as one of the Middle East’s most successful retailers, with over 900 stores across the region, in addition to countries such as India, Pakistan, Turkey and Egypt. “We provide a value-driven product range for the entire family,” explains Vipin Sethi, CEO of Landmark Group. “Quality is not a question of price for our company. Across our retail concepts, we strive to provide value at every price point.” Diversity has obviously played a fundamental role in developing the Landmark Group’s market-leading position, with a portfolio that covers footwear and accessories (Shoe Mart), fashion (Splash), children’s clothing (Baby Shop), furniture (Home Centre and Q Home Décor) and home décor (Lifestyle). Even outside of retail, the group has interests in everything from indoor entertainment centres for children to speciality good offerings and even budget hotels. “Our various offerings have evolved into the preferred choice for consumers and have become category killers,” continues Sethi. While a number of chief executives have made similar claims about their brands in the Middle East, the fact that Landmark Group has achieved a consistent annual growth rate of 25% is perfect support to Sethi’s assertion about the company, which currently employs around 31,000 personnel in total. Further evidence is provided by the numerous trophies that decorate his office, including Retailer of the Year from the Retail City Awards to the Business Excellence Award in the re-export category at the Mohammed Bin Rashid Al Maktoum Business Awards. “With so much activity within the Landmark Group, our supply chain operations must be efficient. The products are sent to the Middle East from across the world, with a particular focus on India, China, Hong Kong and Indonesia,” states Sethi, who has a refreshing knowledge of supply chain issues. “We use a combination of different transportation modes. The majority arrives by sea freight, although airfreight is used for highmovements, based on criticality of the shipments. The use priority m of roads iis based on the feasibility and nature of cargo being moved. road transport is avoided for fragile cargo movement to For instance, insta ensure no in-transit damages are caused to our merchandise.” Once the t products arrive in the region, they are transported to the Landmark Group’s growing number of logistics facilities, one of th including a regional distribution centre (RDC), central distribution (CDC) in Jebel Ali Free Zone, and origin consolidated freight centre (C stations (CFS). ( are located across the Middle East and each “Our facilities f warehouse is equipped with modern storage equipment and material warehou handling solutions, which have been acquired from market leaders such as Famco,” continues Sethi. “This includes everything from multi-level racking, VNA racking and selective racking to electric multi-lev
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forklifts, reach trucks and hand pallet trolleys. Our operations are also supported by Oracle WMS for real-time visibility of inventory, assisting us to make the required decisions.” Landmark Group has opted for a combined in-house and 3PL model to manage its supply chain operations. “This helps us in serving our customers better. Transportation is outsourced at all our locations as it gives us the flexibility to manage our business volumes. Our inter-GCC movement contracts are door-to-door, which means our service providers handle transportation and border clearances efficiently,” explains Sethi. “Our warehousing operation is done inhouse as the necessary infrastructure and skills have been developed by us to specifically cater to the group’s growing needs.” The executive admits that, like any growing organisation, Landmark Group has grappled with various supply chain challenges at various times. Much of this has centred about developing the right infrastructure at the right time to handle the growth in business and volumes. In addition, his logistics team has worked tirelessly to meet country specific regulations and requirements on product standards and documentation. “This is critical as it impacts the lead times of product delivery from the point-of-origin to the point-of-consumption,” he maintains. “We also have challenges such as port congestion and border congestion impacting transit lead times, in addition to inflationary pressures which drive up the supply chain cost.” Sethi is evidently proud that Landmark Group’s supply chain has proved a success is battling these challenges. And with high ambitions to develop the group even further in the coming years, there are various initiatives in place to continue strengthening its logistics processes. “There are three key stages to our supply chain development plan. Firstly, we will continually evaluate and modify the network design to ensure minimum lead times and cost,” he explains. “Secondly, we will invest in state-of-the-art IT systems for efficiency and effectiveness in operations. And finally, we have a dedicated supply chain process improvement cell, which is responsible for benchmarking the best supply chain practices around the world and implementing it in Landmark. With these three factors, I am confidence our supply chain will continue to support all growth predictions for the coming years.”
Landmark Group: logistics challenges • • • • •
Ensuring the right infrastructure is developed to support business growth Meeting product regulations and documentation for each country The impact of port and border congestion on transit lead times Dealing with multiple suppliers to source various product categories Inflationary pressures which drive up the supply chain costs
FAMCO - Leaders in Logistics Solutions
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MIDDLE EAST CASE STUDIES
TOY STORY
With some of the top toy importing countries in the world, the Middle East is a tempting field for Toys”R”Us to play in. But what tricks does the global retailer have up its sleeve to manage its supply chain? ith the toy market valued at a the containers to our central warehouse in hefty US$1.5 billion per year Jebel Ali Free Zone, Dubai.” in Middle East, supported After getting the containers into the by annual growth of 11.8%, distribution centre, the Toys”R”Us’ team setting up a successful toy plans its stock transfers. “Our inventory shop in the region promises very healthy control team pushes the stock to stores returns indeed. This lucrative scenario and they plan how much to send and has not gone unnoticed by global retailer when to send. They work according to Toys”R”Us, which has operated under the our marketing calendar, seasonality and prestigious eye of the Al-Futtaim Group consumer demand,” Anadol continues. since 1995. When you consider that this involves As one of the leading trading companies 15,000 different SKUs, it becomes clear that in the UAE, with many well-known global this no easy task. “We use IBM AS400 to brands under its belt including Toyota, help us on this complicated replenishment Panasonic, Marks & Spencers, IBM and activity, and our inventory control team Ikea, the Al-Futtaim Group knows a thing replenishes all UAE stores daily and twice or two about efficient logistics operations a week out of the UAE,” he adds. in the region. Coupled with the reputation The next step in the supply chain involves of Toys”R”Us for smooth supply chains partnering with Agility, as the retailer’s in the US and Europe, implementing a warehouse operator in Jebel Ali. “After market-leading model for storage and the inventory control team writes the distribution should be plain sailing. transfers, this information goes to Agility, “We buy merchandise from all over which is mainly responsible for clearing the the world and deal with more than 300 containers at Dubai ports and item picking Dev Anadol manages the Toys”R”Us regional supply chain manufacturers to get the best possible in the distribution centre,” says Anadol. prices for our customers,” explains Devrim Anadol, buying and Agility’s daily responsibilities include loading the trucks, relogistics manager at Toys”R”Us. “We plan our ranges according packing promotional products and Arabic labelling, together with to worldwide trends, movie releases, seasonality and consumer yearly stock count and peak sales period planning. According to behaviour in the GCC. And of course we take into account our sales Anadol, the actual size of the Jebel Ali facility is around 8000 CBM. targets and financial objectives.” “We have a team of 15 colleagues, two dedicated customer support The retailer currently operates in the UAE, Bahrain, Qatar, Oman, representatives and one account manager based there. They move Kuwait and Egypt, with products mainly arriving from China, around 2000 CBM to 3000 CBM per month during the peak period,” Europe and the United States. For this reason, it relies on immaculate he continues. support from its third party logistics partners to ensure an efficient Next, in terms of the transportation, the retailer relies on support supply chain. “Considering the number of countries and the number from DHL and Aramex. “We use DHL for road networks in GCC and of vendors that we deal with, our operation requires a flawless process sea freight. We also have two trucks from Aramex and they replenish and great teamwork,” Anadol emphasises. “To ensure the smooth our stores in the UAE,” Anadol explains. flow of the supply chain, it is imperative that the logistics ‘parts’ work The logistical thinking behind the Toys”R”Us supply chain clearly in perfect unison.” makes good sense. “It looks complicated, but when you put everything In terms of these logistics ‘parts’, Toys”R”Us relies on major 3PL together, it works fine,” Anadol laughs. “However, it’s imperative that players to help them deliver their successful operations, including everyone does their job 100% correctly. It’s all about teamwork.” Agility, UPS, DHL and Aramex. For those critics who may argue that It is also about making the most of the unique strengths that each of ‘ too many partners spoil the supply chain’, Anadol is keen to explain the service providers can provide Toys”R”Us, whether it be extensive how it works in practice. global networks, reliable fleets or warehouse expertise. “The first step in getting the merchandise is, of course, processing “Each of our logistics partners is focusing on something particular. the purchase orders and we get support from UPS worldwide We are happy with the services each one is providing,” concludes consolidation services on this,” he says. “UPS operates in 224 Anadol. “It’s a complicated chain and so appreciation is very countries and supports us by origin coordination, which means important. Everyone did a great job in 2009 and we want this to timely shipments, assisting on consolidation and follow up with the continue in the current year. It’s really important for motivating suppliers on ship windows and documentation. Basically, UPS gets ourselves and our partners.”
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The Best in Service, Quality and EfďŹ ciency
Core Services: s Freight Management and Customs Brokerage s Automotive Logistics s Warehouse and Inventory Management s Domestic and International Transportation s Project Cargo and Heavy Lift s International Moving
P.O. Box 61450, Dubai, United Arab Emirates. Tel: +971 4 881 8288, Fax: +971 4 881 9157, e-mail: contact@alfuttaim.ae
www.al-futtaim.ae
MIDDLE EAST CASE STUDIES
INDUSTRIAL STRENGTH Detailing the successful partnership between Caterpillar and Al-Futtaim Logistics in the UAE
aterpillar has emerged as one of the world’s most recognised brands, with products and components being manufactured in 50 facilities across the United States, in addition to more than 60 other locations in 23 countries throughout the world. “Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. The company is also a leading services provider through Caterpillar Financial Services, Caterpillar Remanufacturing Services, Progress Rail Services and Caterpillar Logistics Services,” states Michelle Wahrenburg, General Manager, Transportation and Supply Chain Services. “For more than 80 years, we have been building the world’s infrastructure, and in partnership with various
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dealers, Caterpillar is driving positive and sustainable change on every continent.” In Dubai, Caterpillar Logistics operates a flagship PDC (Product Distribution Centre) for finished machine products. The concept behind the PDC involves a distribution strategy that has been developed to increase the velocity of products through the supply chain and therefore improve delivery time to dealers. “Essentially, the PDC provides high levels of sustained service, short availability, and limited configuration choices,” says Wahrenburg. Caterpillar imports machines such as HEX and Motor Graders from China, Japan and Belgium, in addition to container loads of buckets from Hungary, USA and South Africa. “Machines are then exported from the PDC by road and ocean to Middle East and East Africa destinations. Therefore we selected Dubai as
MIDDLE EAST CASE STUDIES
the PDC’s location due to its strategic hub location as well as its business philosophy of continuous improvement and had wellexcellent port facilities,” explains Wahrenburg. established automotive and transport experience in the UAE In an effort to improve service, capture cost reduction and and region,” says Wahrenburg. to develop a long-term, competitive supply base, Caterpillar “In addition the company was able to highlight successful launched a Request for Proposal in 2008 for its UAE and GCC relationships with its existing blue chip clientele, a solid regional clearance, forwarding and distribution. infrastructural base with strategic location, broader supply chain experience and a competitive The scope included customs brokerage for “We selected Dubai containers and machines into and out of Dubai, pricing model.” as the PDC’s location freight forwarding of outbound machines to all The implementation of Caterpillar’s PDC was due to its strategic destinations, road transportation out of Dubai to successfully completed within a challenging hub location as well the wider Middle East, NVOCC services for ocean timeframe and Wahrenburg is very pleased with as its excellent shipments of machines out of Dubai using Roprogress so far in the development of the company’s Ro vessels, shipment visibility (track and trace), PDC distribution strategy. “We are definitely port facilities” regulatory compliance and account management. looking forward to further optimising our “Al-Futtaim Logistics was chosen by us after a clearance, forwarding and distribution activities very vigorous vetting procedure, based on a set of key criteria. with Al-Futtaim in our mutually-beneficial business Basically, they demonstrated the best capabilities, presented a partnership.”
CASE STUDY: CATERPILLAR MIDDLE EAST
Caterpillar is served at the Al-Futtaim Logistics warehouse in Jebel Ali
Which supply chain functions has Caterpillar outsourced to Al-Futtaim Logistics? • Customs brokerage of containers and machines into and out of Dubai • Freight forwarding of outbound machines to all destinations • Road transportation out of Dubai to the GCC and Middle East • NVOCC services for ocean shipments of machines out of Dubai (Ro-Ro) • Shipment visibility (track and trace) • Regulatory compliance • Account management
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MIDDLE EAST CASE STUDIES
COMPLETE PACKAGE Currently amidst a US$22 million expansion programme, Al Bayader International has heavily invested in a state-of-the-art warehousing facility in Dubai’s Jebel Ali Free Zone to improve the flow of its supply chain operations.
he Middle East’s These facilities service Al business community Bayader’s eclectic mixture of has produced an customers, which hail from a variety overwhelming of different industries and include number of success hotels, retail outlets and caterers. stories over the years, with common In particular, the company has tales of small enterprises growing experienced considerable success into regional and sometimes even with the supermarket sector, international powerhouses. It’s claiming to hold a 90% market perhaps the local entrepreneurial share in the UAE, Qatar and Oman, spirit and determination to succeed together with a 50% market share in that has resulted in countless Saudi Arabia, Kuwait and Bahrain. businessmen turning their It is also a supplier to many leading ambitious dreams into profitable international and regional airlines, realities. This is certainly the case including British Airways, Emirates, with Nidal Haddad, the CEO of Al Etihad and Air Arabia. Bayader International, who started To support its market growth, Al his business operations back in 1990 Bayader has embarked on a major as a humble supplier of foodstuff expansion programme in recent packaging. Today, the company has years, which includes the opening grown into a multi-million dollar of a US$4 million state-of-the-art player in the regional marketplace, warehousing facility, located in with plans to significantly expand Dubai’s Jebel Ali Free Zone. operations in the coming years. The 23,000m2 site integrates “It’s been an exciting journey and an extensive warehouse building we’ve gained unrivalled market with loading and off-loading areas, knowledge and understanding of parking spaces and a logistics Logistics investments are essential, says Al Bayader’s CEO Nidal Haddad the business challenges faced by our management centre. It has been customers,” Haddad explains. “I would say our success has been built specially designed to improve the company’s regional storage and on creating excellent partnerships and providing customers with the distribution capabilities. highest standards in innovative packing solutions.” “With exports being an integral part of Al Bayader’s business from Al Bayader has attempted to differentiate itself from competitors day one, the facility has excellent access to many more potential export by providing customers with an innovative catalogue of disposable destinations across the Middle East, North Africa, East Africa and products, which are heavily focused on vibrant colours, sleek finishes Eastern Europe,” says Haddad. “Meanwhile the additional capacity and groundbreaking functionality. It’s certainly a bold move away had further improved logistics operations, reduced export costs, and from the more traditional designs available in the marketplace, which ensured better service to regional branches within GCC countries.” Haddad describes as “potentially bland and boring”. The company invested a significant period of time in designing the “The fact that Al Bayader’s products stand out strongly on warehouse complex together with a number of suppliers in the material supermarket shelves has given the company another edge over the handling world. The Dubai-based Span Group, for example, provided competition,” he says with confidence. “We don’t settle for run-of-the- a customised warehouse management system (WMS), as well as a mill solutions and want to think outside the box when designing our narrow aisle racking system produced in Malaysia. In addition, the portfolio of products.” Sharjah-based company Mohamed Abdulrahman Al-Bahar supplied Approximately 20% of the products offered by Al Bayader are a number of forklift trucks, which are manufactured by Caterpillar actually manufactured by the company, whilst the remaining amount and Atlet. is imported from across the world, including locations in North “We want to become the largest group for packaging and disposable America, Europe and Asia. “The consignments are transported by sea products in the Middle East, with the capabilities to produce 60% freight into the various Middle Eastern countries where we operate,” of what we sell,” explains ,” says Haddad. “Of course, logistics will also says Haddad. “At present, we have a head office and warehouse in play an important role in providing excellent service to customers Sharjah, together with facilities in Doha, Muscat, Abu Dhabi, Al Ain, and we’ll continue to invest in storage and distribution centres over Ras Al Khaimah and Fujairah.” the coming years”
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WAREHOUSE LEASING
Real estate veteran Cluttons has launched an industrial and logistics team to walk clients through the warehouse leasing minefield in the Middle East. he growing number of warehouse developments in the Middle East has proved a mixed blessing for those planning to lease a regional storage facility. While the variety of options has certainly increased in recent years, so has the complexity involved in researching the market and selecting the ‘best fit’ for your supply chain operations. Since a poor decision could make the difference between triumph and failure, its essential that companies ask themselves a variety of questions to ensure the selection process is successful in the long-term. For example, what are the specifications of the warehouse? Does the location have suitable links for product transportation? How does the leasing costs compare to other nearby developments? Of course, this scenario is prevalent outside of the Middle East too, although developed regions such as Europe and North America are equipped with specialist agencies that scour the market on behalf
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of clients and present them with the most Sharjah, Bahrain and Oman. And with 15 suitable options. While such services have years of experience in the sector, his skills traditionally been scarce in this part of the and experience have been instrumental in world, real estate heavyweight Cluttons developing a solid foundation for the first conducted a feasibility study in 2008 year of operations. to determine whether the concept had “The team carries out activities that much potential in the Middle East. The were previously managed by our clients results were so encouraging in-house, who perhaps lacked that a dedicated team was sector specific knowledge. By setup in January last year to “The team carries employing individuals with provide a direct link between specialist skills in this market, out activities that warehousing landlords and we have won a number of high were previously profi le clients who are keen prospective clients. naged by our managed “Our industrial and logistics to benefit from our service lients in-house” clients team was established to provision,” continues Wright. provide a comprehensive Cluttons is marketing a service to clients operating number of services as part of in this growth sector, building on our 30 the industrial and logistics team, including years of experience in the Middle East consultancy and research, funding, and North Africa, while also supporting acquisition and property searches, disposal the development of this region as a global agency and marketing, estate management logistics hub,” explains Will Wright, who and valuation. was hired to establish the division with a Although some would question the team of specialists working across Cluttons’ decision to launch such a venture in the regional offices in Dubai, Abu Dhabi, midst of a global recession, especially
WAREHOUSE LEASING
with the corresponding downturn in Middle East logistics, Wright believes it was actually the perfect time to establish his team in the region. After all, a number of existing developments, such as Jebel Ali Free Zone and Dubai Investment Park, are still expanding to meet customer demand, while emerging ventures such as Dubai Logistics City, Bahrain Logistics Zone and Prince AbdulAziz Bin Mousaed Economic City have continued to attract multi-million dollar investments. “The reaction from existing clients has been very encouraging and we have been awarded a significant amount of instruction from them, in addition to new clients being added to our portfolio. Despite the wider economic climate, it has been a very positive period and the timing seems to have been ideal,” he argues. “The quality of the business parks and the specification of property is also improving in the region to meet the internationally recognised standards. Rising values over the last 10 years coupled by operators seeking to focus capital on core business has led to the emergence of a leasing and investment market. Th is provided us with an opportunity to further assist clients. We believe Cluttons is the fi rst fi rm to offer this service line to the market.”
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With 15 years of experience, Will Wright was hired to establish the industrial and logistics division for Cluttons
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WAREHOUSE LEASING
CLUTTONS RECOMMENDATIONS FIVE MIDDLE EAST LOGISTICS HUBS TO WATCH IN THE MIDDLE EAST 1) Dubai World Central has constructed a bonded road bridge over the Emirates Road to JAFZA South, creating an integrated multi-modal logistics hub with the potential to link air and sea transport in an excellent location for the UAE labour market. By establishing new and reduced beaurocracy at Dubai World Central, including the new logistics city, the potential is tremendous. 2) Port of Sohar Special Economic Zone offers the only opportunity in Oman to operate without a sponsor, with tax and customs incentives. It is adjacent to the sea port (located outside the Gulf) that is being extended to increase container capacity and stands to improve from the New Al Batina Highway Coastal Route and links to Abu Dhabi and to Dubai.
Cluttons has experienced a solid first year with its industrial and logistics team throughout the Middle East region
To support an expected growth in At present, Cluttons manages around 100 premises in this sector and claims contract wins, Cluttons has doubled the size to dominate the valuation market in of its Dubai office and opened a new branch locations such as Jebel Ali Free Zone and in Abu Dhabi earlier this year, supporting Dubai Investments Park. It has also been its existing facilities in Sharjah, Oman and appointed as the sole sales and leasing Bahrain. “We took the strategic decision agent for two forthcoming business parks to enter the Abu Dhabi market as a sign of in the United Arab Emirates - Al Markaz our business strength and commitment to expanding our coverage in the for Waha Land and Emarat UAE,” says Wright. Central Logistics Park for The expansion doesn’t stop specialist warehouse developer “We are trying there either. Further branches Helios Sino Gulf - as well as to educate the are already being planned in Bahrain Investment Gateway market on the the region, with an office due for Manara Developments. efits of hiring benefi to open in Saudi Arabia later Most recently, a contract was a third party” this year. “It’s been a great also signed to advise Oman start for the team and such Airport Management Company appointments have marked on developments at Muscat tangible progress,” concludes Wright. International Airport. “Of course, we are essentially trying to With a limited amount of competition at present, the company has seemingly build management change in the Middle benefited from ‘fi rst mover advantage’ in East and educate the market on the genuine the market. However, instead of resting on benefits of hiring a third party with decades its laurels, a marketing campaign has been of experience, so there are challenges launched to increase its brand presence involved. But looking at the fi rst year of throughout the region and highlight the operations, I believe the future looks bright long-term benefits of using its services for and our growth will continue at full pace in warehouse leasing. 2010,” he ends. 34 APRIL 2010 | www.arabiansupplychain.com
3) Bahrain Logistics Zone, Bahrain Investment Wharf, Bahrain Industrial Investment Park and Investment Gateway Bahrain represent an area of land closely linked to the new sea port, the international airport and will have direct uninterrupted access to the Saudi Causeway. With an integrated customs policy between the entry points to Bahrain and the Causeway, this is bound to attract plenty of attention. 4) Al Markaz is currently the only large private business park launched in Abu Dhabi. When the infrastructure work and first phase is completed, the project will represent the only location in this Emirate where land can be leased, as can completed warehouses and staff accommodation. It will also link road to rail on the regional road network near the city and its airport. 5) Dubai Investments Park has announced its final phase of development, which will be devoted to the logistics sector. It has successfully provided an international residential community associated with a warehouse and office location. This final phase is perfectly located for access to the city and the emirate’s new truck route known as the outer ring road (E611). This is the highest quality environment without freezone status – something currently of interest to many occupiers.
PREVIEW: SUPPLY CHAIN AND TRANSPORT AWARDS (SCATA) 2010
PREVIEW:
SUPPLY CHAIN AND TRANSPORT AWARDS 2010 Its celebration time for the Middle East logistics industry as the fourth annual Supply Chain and Transport Awards (SCATA) return to Dubai this summer to celebrate the region’s biggest achievers.
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eading players from the Middle East logistics industry are set to compete for trade honours at the fourth annual Supply Chain and Transport Awards (SCATA) in Dubai. The prestigious ceremony, which is organised by ITP Business, publisher of Logistics Middle East and ArabianSupplyChain.com, will be hosted on Wednesday 2nd June 2010. “Supported by continued investment in the Middle East’s transportation infrastructure, the region is producing some of the most impressive warehousing and transportation companies in the world,” commented Walid Akawi, CEO of ITP Business Publishing. “Against this exciting backdrop, the Supply Chain and Transport Awards make a welcome return in 2010 to recognise the individuals and companies that stand out from this exalted crowd. The nominees will once again include a combination of regional and international 36 APRIL 2010 | www.arabiansupplychain.com
players that have gone above and beyond in terms of their industry contribution.” SCATA 2010 will include 16 categories in total, covering the logistics, sea freight and air cargo sectors in the Middle East. These include the Express Logistics Provider of the Year and 3PL Service Provider of the Year awards, which honour companies that have consistently delivered world-class services and facilities across the region over the past year. In addition, the FMCG Supply Chain of the Year category will be awarded to a company that has raised standards in the logistics industry with their regional supply chain operations. “Since its inception in 2007, the Supply Chain and Transport Awards have emerged as a leading event for the Middle East logistics industry. Given the market challenges that our industry is facing on a global level at the moment, this is a perfect opportunity to remember those companies and individuals that continue to achieve excellence on a daily
basis,” commented Issa Baluch, founder of Swift Freight International , who returns to the judging panel for a fourth consecutive year. Also coming back to the awards in 2010 are Captain Mansoor Ghafoor (CEO of STALCO Group and president of National Association of Freight and Logistics), Salma Hareb (CEO of Economic Zones World), Ali Al Jallaf (vice president of Dubai Airports cargo unit), Dr Kanak Madrecha (senior manager of Dubai World and founding member of the Supply Chain and Logistics Group), Cedwyn Fernandes (MBA programme coordinator at Middlesex University Dubai) and Sebastian Thomas (head of supply chain at ZAFCO). The panel also welcomes the addition of Alex Borg, regional director of the Chartered Institute of Logistics and Transport (CILT). To receive further information, submit your nomination, book your tickets or view photo specials from previous years, please log onto: www.arabiansupplychain.com/scata
PREVIEW: SUPPLY CHAIN AND TRANSPORT AWARDS (SCATA) 2010
SCATA CATEGORIES SUMMARY LOGISTICS AWARDS EXPRESS LOGISTICS PROVIDER OF THE YEAR Awarded to the service provider that has delivered a portfolio of market-leading solutions within the Middle East’s express logistics sector over the past 12 months. Companies are asked to provide evidence of exceptional performance in network coverage, volumes and world-class facilities. 3PL SERVICE PROVIDER OF THE YEAR Awarded to the service provider that has delivered a pioneering range of supply chain solutions in the Middle East over the past 12 months. 3PL companies are asked to provide evidence of exceptional performance in storage facilities, distribution services and value-added solutions. FMCG SUPPLY CHAIN OF THE YEAR Sponsored by
Awarded to the FMCG company that has raised standards in the logistics industry with their regional supply chain operations. Examples of market innovations, regional investments and responsible practices will be taken into account. LOGISTICS HUB OF THE YEAR Awarded to the industrial area or free zone that provides world-class services to the Middle East freight forwarding industry, with exceptional business incentives, transport and logistics infrastructure, customer service and marketing.
AIR CARGO AWARDS
SHIPPING AWARDS
CARGO OPERATOR OF THE YEAR (COMMERCIAL AIRLINE) Awarded to the cargo division of a commercial airline that has delivered a consistent industryleading service in the Middle East and across the world over the past 12 months. Companies are asked to provide evidence of exceptional performance in cost or time savings for end customers, as well as leading innovations.
SHIPPING AGENT OF THE YEAR Awarded to the shipping agent that has delivered groundbreaking service across the Middle East and to the international market over the past 12 months. Agents are asked to provide evidence of exceptional performance. Examples of cost or time savings for end customers will be taken into account, as will technical innovations and responsible working practices.
CARGO OPERATOR OF THE YEAR (CARGO AIRLINE / CHARTER) Awarded to the independent cargo operator or charter that has delivered a consistent industryleading service in the Middle East and across the world over the past 12 months. Companies are asked to provide evidence of exceptional performance. Examples of cost or time savings for end customers will be taken into account, as will responsible practices and innovations.
SHIPPING COMPANY OF THE YEAR Awarded to the ship owner that has delivered a standout performance in the sea freight sector. Applications will be accepted from, but not limited to, container, Ro-Ro, dry, liquid, bulk, and LNG carriers. Shipping lines are asked to provide evidence of exceptional performance across the year. Examples of environmental responsibility, cargo security and staff training will be taken into consideration by the judges.
AIR CARGO HUB OF THE YEAR Awarded to the airfreight facility that has delivered world-class service in the Middle East over the past 12 months. Facilities are asked to provide evidence of exceptional performance in one or more contracts. Examples of business incentives, technical innovations and contribution to the region’s reputation as a centre of excellence.
SHIPPING PORT OF THE YEAR Awarded to the shipping port or terminal that has delivered world-class services and facilities across the Middle East in the past 12 months. Authorities and operators are asked to provide evidence of exceptional performance in the field of terminal management. Examples of innovative solutions and improved efficiencies will be taken into account, as will forward looking investment.
JUDGES AND INDUSTRY CHOICE AWARDS MATERIAL HANDLING PROVIDER OF THE YEAR This category is aimed at regional suppliers that are helping companies to boost their supply chain efficiency with world-class material handling products. TECHNOLOGY SOLUTIONS PROVIDER OF THE YEAR This award recognises the company that has supplied the market with cutting edge technology solutions, such as WMS, RFID and fleet management solutions. TRAINING AND EDUCATION PROVIDER OF THE YEAR This award recognises the achievements of a training provider or education institute that offers a flagship course (or courses) on supply chain management. CORPORATE SOCIAL RESPONSIBILITY AWARD Awarded to the organisation that has taken responsibility for the impact of their overall activities on customers, employees, shareholders, communities and the environment in all aspects of their operations. OUTSTANDING ACHIEVEMENT AWARD Awarded to the company that has experienced a breakthrough year within the Middle East’s supply chain and transportation industry. Companies are asked to provide evidence of exceptional performance in all areas of business.
Hall
of Fame For the Award first tim e ever, and Tra the Sup nspor t ply Cha Awards categor in (SCATA y for pu ) will op blic voti Fame a en a ng. The ward ho prestig nours a made a ious Ha respecte valued ll of contrib d figureh ution to ead tha raising the ind the ben t has ustr y’s chmark growth for regio , while nal exc ellence Hall of . Fame A ward 2 010 No • Fadi G minees hand o u : r (CEO o • Fathi B f Arame uhazza x) (CEO of h Daij b Maxim in Salm us Air C an A l K argo) halifa (C Genera hairma l Organ n o is f Bahra a tion of • Ram M in’s S ea Po enen (E r ts) m • Moha irates S mmed A k yCarg o) l Muall em (UA E Mana Directo ging r of D P World)
• Shaik
www.arabiansupplychain.com | APRIL L 2010
37
PREVIEW: SUPPLY CHAIN AND TRANSPORT AWARDS (SCATA) 2010
SCATA 2010 ONLINE NOMINATION PROCESS We have simplified the nomination process for this year’s Supply Chain and Transport Awards (SCATA). All entries must be submitted online and can be made by the nominee itself, or a customer/supplier/partner. The final deadline is Tuesday 20th April 2010, after which all nominations will be collated and sent to the judging panel for their final votes.
STEP 4: Click on ‘Select Categories’ and pick the award you would like to nominate under
STEP 1: Log onto the SCATA website: http://www.arabiansupplychain.com/scata STEP 2: Click on ‘Submit Nomination’
STEP 5: Enter nomination details, such as the name of the company or person that you are nominating STEP 6: Describe in 200 words or less why this nomination deserves to win. A sample entry is provided on the website for your reference STEP 7: Attach any supporting files or email larger files to scata@itp.com STEP 8: Click ‘Add Details’ to complete the process STEP 3: Enter your log-in and password details or register as a new user
DEADLI EXTENS NE ION Due to p opu
lar the nom ination demand, deadlin for SCA e T been exA 2010 has tended t Tuesda y 20th o April 20 10 38 APRIL 2010 | www.arabiansupplychain.com
Take your storage to the right direction SPAN-Group is the leading provider of total supply chain solutions for companies operating in the Middle East since 1989. Headquartered in Dubai, with regional offices in Beirut and Doha, the group strives to provide the best-of-breed solutions through its Facility Engineering & Design, Warehouse Storage Solutions, Supply Chain IT & Integration Systems and Industrial & Office Furnishing Solutions. Dubai, United Arab Emirates - Showroom #4, Al-Naboodah Complex, Nad Al Hamar Rd, Ramool, P.O. Box 55397, Dubai, U.A.E Tel: (+971) 4 289 5111 - Fax: (+971) 4 289 5110 - Email: inquiry@span-group.com - website: www.span-group.com
ASK THE EXPERT
BUILDING A RELATIONSHIP QUESTION: How do certain logistics companies manage to keep their contracts for several years? KEEPING YOUR CLIENTS HAPPY
MAKING A START WITH THE PROCESS
A concerning number of logistics companies are losing their customers on a regular basis, repeating the same cycle of mistakes year-after-year, customer-after-customer. Of course, there will always be some clients that are willing to change their logistics service providers every two or three years, depending on when the contract expires, but we must remember that this scenario can damage both of the parties involved.
The first stage is “setting expectations”. In a new operation, this is when the client that has outsourced its supply chain has clearly expressed its goals and expectations to the logistics company. Likewise, the 3PL makes a commitment on the service that will be provided, typically supported with level of service metrics and other measurable performance data. Although its natural for changes to occur, the expectations and deliverables must be mutually understood and agreed prior to any action taking place.
LOOKING AT WAYS OF BUILDING LONG-TERM RELATIONSHIPS While there are logistics companies that cannot seem to keep their customers for more than a two or three year contract term, others in the market have secured the business of their clients for decades. So what is the secret to their success? It’s obvious that some logistics companies are offering a poor service, whether you look at the Middle East or any other part of the world. The fact that these players are losing contracts is understandable. At the same time, many 3PLs are going a great job, but still receive a termination letter in the mail from their clients. Why does that happen?
THE ROLE OF COMMUNICATION IN MAINTAINING RELATIONSHIPS Communication is the answer to the above question and there is a three-stage cycle that is traditionally found in the relationship between logistics companies and their clients. This determines the success of their partnership and if the cycle is recognised and acted upon, there is a real potential to extend the relationship for years to come. However, if any part of that cycle is ignored, we can expect that logistics company to effectively handover its clients to a rival business in the market. Given the current challenges that are being faced in the industry, this could be a fatal mistake. 40 APRIL 2010 | www.arabiansupplychain.com
THE IMPORTANCE OF UPDATES The second stage of communication is “ongoing updates”. Again, this is a dialogue of sorts between the solutions provider and the company that has outsourced to them. It is not simply reporting metrics, but having regular communication on a day-to-day basis. At a tactical level, there is generally a manager talking to a single point of contact about operational issues. Just as important, there is a strategic conversation that must take place, at least monthly, between a senior executive from the 3PL and the executive decision maker. These strategic discussions will create alignment between the two entities, making sure that expectations are understood and performance is explained.
issues before they get out of control and to do a really good job of managing the exceptions and minimising the impact of operational issues.
DEALING WITH THE IRREGULARITIES In any complex operations, “stuff ” is going to happen. It is how a 3PL deals with these irregularities that separate best-in-class from the rest of the crowd. A top service provider will be the one that identifies the issue or problem and informs the customer. Not only are they the first to tell the client, they do so with a plan in their pocket and recommendations for action at the ready. Solution providers should be expected to act as a red flag mechanism, supported by a proactive team that will take steps to minimise risk and maximise profits. After all, in the competitive logistics sector, a solutions provider is only as good as their ability to successfully communicate in each of these three stages.
THE MOST IMPORTANT ASPECT OF THE COMMUNICATION PROCESS The third stage and possibly the most important is “exception management”. Remember, companies outsource either because they don’t have the internal core competency or because they want to focus their energies and resources on other critical parts of their business, or both. Put simply, clients pay 3PLs to lose sleep over their operations so the company’s executives don’t have to. The logistics specialist gets paid to provide a level of expertise, identify
This month’s column was written by Curtis Greve, managing director of Metreks
INDUSTRY STATISTICS
FACTS & FIGURES Air Cargo Regional & International Statistics
Knowledge of cargo statistics is essential to supporting your supply chain operations. Every month, Logistics Middle East provides its readers with three pages of the latest information from a variety of trusted sources, including Emirates SkyCargo, Airports Council International (ACI) and Saudi Ports Authority. EMIRATES SKYCARGO FUEL PRICE INDEX
DUBAI INTERNATIONAL AIRPORT: CARGO STATISTICS
420
200000
08 January
408 150000
12 March
400
397
100000
380 05 February
368
50000
12 February
FUEL PRICE INDEX 361 The fuel index is based on the average price of aviation fuel in five key spot markets (Rotterdam, Singapore, New York, US Gulf and US West Coast).
Dec 09
Nov 09
Oct 09
Sept 09
Aug 09
July 09
June 09
May 09
April 09
0
INDEX 100 = 53.5 US cents per US gallon
Mar 09
365
Jan 09
360
Feb 09
29 January
12 Mar 10
05 Mar 10
26 Feb 10
19 Feb 10
12 Feb 10
5 Feb 10
29 Jan 10
22 Jan 10
15 Jan 10
08 Jan 10
340
MONTHLY AIR CARGO REPORT: EUROPE REGION* AIRPORT/COUNTRY
DECEMBER 2009/2008 Cargo (tonnes)
CARGO STATISTICS This graph represents the cargo volumes handled at Dubai International Airport over twelve months. Cargo is measured as loaded and unloaded freight and mail in tonnes (Source: Airports Council International)
MONTHLY AIR CARGO REPORT: AFRICA REGION*
YEAR-TO-DATE 2009/2008
% CHG
Cargo (tonnes)
% CHG
AIRPORT/COUNTRY
DECEMBER 2009/2008
YEAR-TO-DATE 2009/2008
Cargo (tonnes)
% CHG
Cargo (tonnes)
% CHG
Amsterdam (Netherlands)
122,157
8.4
1,314,938
-17.9
Accra (Ghana)
4030
-21.7
45,694
-15.3
Brussels (Belgium)
34,405
-12.7
441,972
-28.3
Addis Ababa (Ethiopia)
3082
n/a
39,168
n/a
Cologne (Germany)
49,635
12.9
552,362
-4.5
Algiers (Algeria)
1978
-0.8
21,931
-3.8
Antananarivo (Madagascar)
1205
-9.6
12,187
-28.3
27,613
1.3
285,839
1.5
Casablanca (Morocco)
4272
-2.9
53,795
-6.0
Dar Es Salaam (Tanzania)
1623
-7.2
18,844
-18.2
Durban (South Africa)
1156
n/a
4,707
148.9
Entebbe (Uganda)
4428
-4.6
53,287
-10.8
Johannesburg (South Africa)
24,869
18.1
252,063
-19.5
Frankfurt (Germany)
180,409
26.6
1,887,718
-10.6
Istanbul (Turkey)
39,240
57.3
381,177
6.0
Leipzig (Germany)
49,925
29.9
507,194
18.0
Cairo (Egypt)
London Heathrow (UK)
129,528
17.5
1,349,574
-9.2
Luxembourg (Luxembourg)
58,304
4.5
628,641
-20.2
Paris (France)
162,523
5.5
1,818,503
-10.8
Vienna (Austria)
18,795
32.4
198,408
-1.5
Lagos (Nigeria)
15,935
46.4
175,827
9.4
Warsaw (Poland)
5112
11.0
50,143
-8.3
Nairobi (Kenya)
20,050
-11.0
263,070
-12.5
26,902
17.9
283,034
-7.9
Tunis (Tunisia)
1839
47.9
19,390
-3.9
Zurich (Switzerland)
*Monthly cargo statistics for international airports, with data provided by Airports Council International (ACI). Cargo is defined as loaded and unloaded freight and mail (in tonnes).
42 APRIL 2010 | www.arabiansupplychain.com
INDUSTRY STATISTICS
MONTHLY AIR CARGO REPORT: ASIA PACIFIC REGION*
MONTHLY AIR CARGO REPORT: MIDDLE EAST REGION* AIRPORT/COUNTRY
DECEMBER 2009/2008
YEAR-TO-DATE 2009/2008
AIRPORT/COUNTRY
Cargo (tonnes)
% CHG
Cargo (tonnes)
% CHG
Abu Dhabi (UAE)
33,211
23.6
382,523
7.4
Ahmedabad (India)
Amman (Jordan)
7618
23.7
82,183
-5.8
Bahrain (Bahrain)
30,238
1.8
342,734
Beirut (Lebanon)
6601
1.4
72,589
182,874
26.0
Fujairah (UAE)
3014
Kuwait (Kuwait)
14,764
Muscat (Oman)
Dubai (UAE)
Ras Al Khaimah (UAE) Sharjah (UAE)
YEAR-TO-DATE 2009/2008
% CHG
Cargo (tonnes)
% CHG
2006
11.1
21,856
-13.5
Bangalore (India)
15,878
33.0
162,875
-2.0
-6.9
Bangkok (Thailand)
104,013
60.3
1,045,194
-10.9
5.8
Calcutta (India)
8809
18.9
101,134
7.2
1,927,520
5.6
Colombo (Sri Lanka)
17,015
57.8
140,107
-8.8
3.9
36,874
-1.4
Fukuoka (Japan)
25,658
0.7
247,458
-9.7
7.0
197,984
9.9
Hong Kong (China)
333,836
35.3
3,384,765
-7.5
6233
38.7
64,419
10.1
Jakarta (Indonesia)
44,821
23.9
433,304
-7.0
1080
12.9
5935
-29.7
Kuala Lumpur (Malaysia)
55,732
21.6
601,409
-9.7
38,578
41.3
421,398
16.1
Manila (Philippines)
37,477
66.0
361,184
2.9
Mumbai (India)
52,676
25.2
568,007
1.6
*
Osaka (Japan)
63,076
28.8
608,871
-28.0
YEAR-TO-DATE 2009/2008
Seoul (Korea)
14,471
3.5
149,043
12.0
% CHG
Cargo (tonnes)
Shanghai (China)
250,670
47.9
2,539,284
-2.3 -11.8
MONTHLY AIR CARGO REPORT: NORTH & SOUTH AMERICA AIRPORT/COUNTRY
DECEMBER 2009/2008 Cargo (tonnes)
DECEMBER 2009/2008 Cargo (tonnes)
% CHG
Anchorage (USA)
191,253
23.1
1,990,061
-14.9
Singapore (Singapore)
152,425
15.1
1,660,851
Buenos Aires (Argentina)
17,264
27.4
162,806
-20.8
Taipei (Taiwan)
142,747
67.4
1,358,304
-9.0
Tokyo (Japan)
175,520
30.3
1,851,972
-11.8
Chicago (USA)
111,136
31.1
1,150,027
-14.1
Los Angeles (USA)
145,657
25.3
1,506,295
-7.6
Memphis (USA)
356,686
12.4
3,697,185
0.4
Mexico City (Mexico)
30,948
13.6
324,837
-15.1
*Monthly cargo statistics for international airports, with data provided by global trade association Airports Council International (ACI). Cargo is defined as loaded and unloaded freight and mail (in tonnes).
For up-to-date figures, visit:
www.arabiansupplychain.com | APRIL 2010
43
INDUSTRY STATISTICS
FACTS & FIGURES Sea Freight Regional & International Statistics Our sea freight data includes information on bunker fuel prices at major port facilities in the Middle East, North and South Europe, North and South America, and Asia. More specific cargo statistics are also provided from the Saudi Ports Authority, covering the major ports in the Kingdom.
FUJAIRAH BUNKER FUEL PRICE INDEX 500
12 Jan
480
12 Nov
464.5
12 Aug
447.5
12 Mar
BUNKER FUEL PRICE INDEX*
488
685
675
n/a
527
711
n/a
Fujairah (UAE)
459.5
476
667.5
n/a
Houston (USA)
441
453
n/a
651.5
Istanbul (Turkey)
466
480.5
685
n/a
New Orleans (USA)
446
456
n/a
643
Piraeus (Greece)
445
466
668
n/a
Port Klang (Malaysia)
453
460
661
n/a
Rio de Janeiro (Brazil)
486
504.5
780
n/a
436.5
456.5
663
n/a
457
467
659
649
Rotterdam (Netherlands) Singapore (Singapore)
*Information on the bunker fuel price at port facilities in the Middle East, North and South Europe, North and South America, and Asia, featuring data from 12th March 2010. The prices are quoted in US$ per metric tonne and split into four categories: 380 centistoke (IFO380), 180 centistoke (IFO180), Marine Gas Oil (MGO) and Marine Diesel Oil (MDO).
TOTAL THROUGHOUT FOR SAUDI PORTS IN TONNES 15 million
350 0
12 Apr
288
275 5
200
Summary of cargo throughput for major Saudi Arabian ports - Saudi Ports Authority CARGO TYPE
Loaded
Discharged
Loaded
499,789
1,440,326
499,789
Bulk cargo (liquid)*
358,115
4,359,675
358,115
4,359,675
General cargo
611,632
23,934
611,632
23,934
2,220,253
1,732,175
2,220,253
1,732,175
Ro-Ro and vehicles
153,591
15,360
153,591
15,360
Livestock
10,648
n/a
10,648
n/a
4,794,565
6,630,933
4,794,565
6,630,933
TOTAL
6 million
TOTAL PORT THROUGHPUT
CONTAINERS (TEU)
3 million
Jan 10
Dec 09
Nov 09
Oct 09
Sep 09
Aug 09
Jul 09
Jun 09
May 09
Apr 09
Mar 09
Feb 09
0
YEAR-TO-DATE
1,440,326
Containers (in tonnes)
9 million
JANUARY 2010 Discharged
Bulk cargo (solid)
12 million
12 Mar 10
478
Cape Town (South Africa)
12 Feb 10
Busan (South Korea)
435
12 Jan 10
n/a
12 Dec 09
n/a
12 Nov 09
n/a
12 Sept
12 Oct 09
n/a
12 Jun
407.5
12 Sept 09
Buenos Aires (Argentina)
425 5
12 Aug 09
MDO
12 July 09
MGO
12 Jun 09
IFO180
12 May 09
IFO380
12 Apr 09
PORT / COUNTRY
459.5
11,425,498
11,425,498
2010
2009
January
Year-to-Date
January
Year-to-Date
Discharged
201,541
201,541
157,724
157,724
Loaded
214,920
214,920
198,004
198,004
TOTAL
416,461
416,461
355,728
355,728
Source: Saudi Ports Authority (SPA). The statistics cover all major Saudi Arabian ports (dead weight in tonnes). *Bulk cargo (liquid) excluding crude oil.
44 APRIL 2010 | www.arabiansupplychain.com
01 1 02 2 03 04 05 EVENTS CALENDAR 06 07 0809 10 111 112 13 14 15 16 6 17 17 18 8 19 1 20 211 2 22232425 2627282930 TRADE EVENTS
A listing of trade shows, conferences and seminars relating to the Middle East logistics industry
15th April 2010 CILT NETWORKING EVENT
18th – 19th April 2010 SHIPTEK 2010
25th – 28th April 2010 FREIGHT LOGISTICS ARABIA
The latest seminar from the Chartered Institute of Logistics and Transport (CILT) will explore the financial aspects of supply chain management in the Middle East, with guest speakers from leading companies such as Aramex, Dubai First and Arthur D. Little. The event, which is taking place at Emirates Aviation College on Thursday 15th April, will have a target audience of logistics executives and students that have enrolled onto supply chain and transportation programmes in the Middle East. VENUE: Emirates Aviation College, Dubai EMAIL: info@ciltuae.org WEBSITE: www.ciltuae.org
Following the success of ShipTek 2009 in Singapore, the maritime sector will set its sails for the five-star Crowne Plaza Hotel in Dubai for the trade show’s latest edition. Taking place on 18th and 19th April 2010, ShipTek has been organised as a regional platform for delegates from the shipping, marine and offshore industries to exchange information, explore trade opportunities, showcase technical innovations and take stock of the most prominent issues that will impact future growth in the industry. VENUE: Crowne Plaza Hotel, Dubai EMAIL: contact@shiptek2010.com WEBSITE: www.shiptek2010.com
With a significant amount of growth being forecast for Saudi Arabia’s warehouse and transportation sector, the Kingdom has announced plans to host its second annual Freight Logistics Arabia conference and exhibition. The four-day event is taking place at the Jeddah Centre for Forums and Events on 25th – 28th April 2010, with organisers already reporting a positive response from various exhibitors in the global airfreight, maritime, warehousing, freight forwarding and technology sectors. VENUE: Jeddah Centre for Forums and Events EMAIL: international@acexpos.com WEBSITE: www.acexpos.com/exhibitions
12th May 2010 GLOBAL LOGISTICS AND SCM SUMMIT
200+
deleg a forec tes are a The Supply Chain and SCLG’s st for an summ nual Logistics Group (SCLG)) it has announced plans to host ost its third Global Logistics and Supply Chain Management Summit in May 2010. The Dubai-based trade association in hoping to break its record from last year’s summit, which attracted more than 200 delegates from various Middle Eastern countries, in addition to Singapore, India and the United Kingdom. VENUE: Dubai, United Arab Emirates EMAIL: admin@sclgme.org WEBSITE: www.sclgme.org
2nd d June Jun 2010 SUPPLY SUPP U CHAIN AND TRANSPORT AWAR AW AWARDS WAR (SCATA) 2010
20th – 23rd June 2010 SUPPLY CHAIN MANAGEMENT AND LOGISTICS SAUDI ARABIA
Designed Design e to honour the achievements of companies and individuals in the Middle compan m industry, the Supply Chain and Eastt logistics lo Transport Awards (SCATA) will return to Transp n Dubai b for the fourth consecutive year in 2010. event has traditionally attracted The annual an the biggest names from the sector, with 16 awards being handed out in total, including trophies for 3PL provider of the year, express logistics company of the year and FMCG supply chain of the year. VENUE: Dubai, United Arab Emirates EMAIL: robeel.haq@itp.com WEBSITE: www.arabiansupplychain.com/scata
IQPC has expanded its event portfolio for the Middle East logistics industry with a new seminar in Saudi Arabia, which has been launched to bring the public and private sector together for discussions on new opportunities within the Kingdom. Taking place in Jeddah later this year, the event will highlight cutting-edge logistics strategies that have been adopted around the world and explore how these can be tailored to the highly-specialised market in Saudi Arabia. VENUE: Jeddah, Saudi Arabia EMAIL: enquiry@iqpc.ae WEBSITE: www.supplychainsaudiarabia.com
10th – 12th October 2010 TRANSOMAN
24th October 2010 CILT NETWORKING EVENT
23rd – 24th November 2010 TRANS MIDDLE EAST
TransOman has emerged as the Sultanate’s leading event for transportation, shipping and logistics companies, providing a threeday forum for local industry professionals to discuss the latest issues that are effecting the domestic market’s development. In addition, delegates will be provided with the opportunity to network with their colleagues, exchange valuable information and predict the newest opportunities that are expected to arise in the local sector. VENUE: Oman International Exhibition Centre EMAIL: ebrahim@oite.com WEBSITE: www.oite.com/transoman
The latest seminar from the Chartered Institute of Logistics and Transportation (CILT) will take place at Emirates Aviation College on Sunday 24th October 2010. The event is aimed at trade professionals from across the regional industry, in addition to students that have enrolled on supply chain and transportation programmes. A variety of topical issues will be tackled by speakers from the Middle East, in addition to countries such as the UK and Holland. VENUE: Emirates Aviation College, Dubai EMAIL: info@ciltuae.org WEBSITE: www.ciltuae.org
The historical maritime city of Alexandria in Egypt has been selected as the host city for this year’s Trans Middle East exhibition and conference. The event is expected to attract around 70 exhibitors from around the world, while a supporting conference has a target audience of 500 senior executives from Europe, the Middle East and Africa (EMEA), who will discuss the latest trends in logistics, shipping and container ports, including challenges from the market downturn. VENUE: Hilton Alexandria, Egypt EMAIL: wani@transportevents.com WEBSITE: www.transportevents.com
46 APRIL 2010 | www.arabiansupplychain.com
FACE TO FACE INTERVIEW
QUALITY APPROACH Following decades of success in Europe, BITO’s regional manager Christian Gebler explains how the company is helping the Middle East to raise standards with its warehouse facilities. What material handling solutions does your company provide in the Middle East? BITO has a focus on two core businesses. The first is shelving and racking, which includes complex storage solutions such as carton and pallet live storage, drive-in/push-back pallet racking, multi-tier installations and automated bin/tray storage installation. The second focus is bins and containers, like storage bins with pick opening, stacking containers, and small parts containers.
Has the importance of quality material handling products increased over here? In Germany, in addition to our subsidiaries in almost every European country, quality has priority. We are aware that the Middle East has enormous potential for boosting quality, productivity, safety and efficiency. Many companies in this market are realising that investing in quality will pay off in the long-term, although there is still a way to go.
Is there a lot of competition in the market? BITO only started its Middle East subsidiary a few months ago with a small team, so we have competitors that have already established their brands in this region. Nevertheless, we have decided to partner with these competitors too. For example, with special solutions, such as pallet and carton live storage, boltless shelving and especially in bins, we can assist each other to give clients a truly outstanding solution.
What has pushed this change in attitude? The region has become a logistic hub and entrepreneurs have realised the advantage of having efficient solutions. The benefits are obvious. With efficient solutions, operators will avoid mistakes, impress customers with fast deliveries, reduce customer complaints and motivate employees. On the other side, safety is a big issue. Warehouses are burning and often it seems that ‘safety first’ has become a mere slogan, and in many cases, this demand is not realised.
What makes your products different to others in the regional market? Firstly, BITO manufactures its products in Germany, where we have been based for the past 160 years, with 50 years of experience specifically in storage solutions. The second difference is that we are not only a manufacturer but also a professional partner for all project-related tasks, ranging from layout planning and project management to assembly and after-sales service. We want to set new standards too with a leading service.
Should companies be prepared for the introduction of regulations in terms of higher warehouse standards? Some companies in the Middle East are already prepared for future regulations and have placed themselves ahead of the market. However, recent warehouse accidents have shown there is work to do. As consultants and suppliers, we also have a responsibility to educate the market and raise local standards. BITO takes this seriously, because together with our clients, we have the responsibility to save lives and goods during operations.
48 APRIL 2010 | www.arabiansupplychain.com
But are companies spending less in the region, especially during the recession? Decision makers in the Middle East should never compromise on quality, regardless of the economic situation. If you consider the life cycle of investments, paying for quality will always result in savings on spare parts, re-orders, time and nerves. What marketing strategy has BITO adopted to get this message across? Customers deciding to partner with BITO have already made the decision to be ahead of the market, rules and regulations. Our standards are high and so is quality, not only in terms of manufacturing, but throughout the project-related tasks, ranging from layout planning, realisation and project management to assembly and after-sales service. With products ‘Made in Germany’ our goal is to create enthusiastic customers. As a newcomer in the local market, what challenges are you expecting to face? Our size is a primary challenge in the Middle East, and the fact that some of our competitors are very well-established. However, we are investing a lot in the region and recently appointed a new representative for Dubai, while another will cover Abu Dhabi soon. Marketing is a driving force for sales, because the right strategy will increase our reach. But we are really confident that our products have a strong market here. With thousands of fully equipped warehouses in this region, our latest innovations will be of particular interest, such as the BITO Adapta-Flow modules, which can retro-fit a static pallet racking level into a live storage level, while using the beams available in the existing racking. Our plastic bin and container portfolio has also proved a success in adding value for each and every industry.
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