Logistics News ME - July 2016

Sector focus

Country focus

Viewpoint

Airships on the rise

Bahrain: small but strong

The latest trend observations

Connecting trade professionals with industry intelligence

How global security issues are affecting the logistics landscape

July 2016

We deliver on Logistics The Rais Hassan Saadi (RHS) Group have been at the very front of the emergence of Dubai as a Shipping and Logistics hub since they started operations in 1910. Now over 100 years later, the company has evolved into the regional powerhouse it is today with diverse interests across the region.

RHS Logistics, the 3PL and supply chain systems integrator, operates from the Middle East, but with a truly global vision. Utilising the latest of technologies, and with a wealth of experience on diversified

product handling, in high quality, sophisticated environments, it has cemented its status as an innovative market leader within the Logistics industry.

With cutting edge facilities in Dubai World Central, Jebel Ali Free Zone, Dubai Airport free Zone adjacent to the Sea and Air ports, housing a total of 100,000 pallet locations, RHS have and will continue to

invest in first class infrastructure, ensuring they remain leaders in their field.

How can RHS Logistics help your Logistics business?

Call us on (971-4) 8810007, (971-4) 8082300 or visit rhslogistics.com

RHS Logistics represents the 3PL division of the RHS Group of companies operating out of Dubai, U.A.E.

RHS Logistics Established 1910

Start 8 | News

Features

Contents

16 | Sector Focus The rise of the airship (again) 20 | Face to Face In conversation with Airships Arabia MD Gregory Gottleib 24 | Cover Story Understanding the risks faced by the industry

30 | Country Focus Bahrain under the spotlight 33 | Viewpoint

24

42 | Supplier News 46 | Diary

38

16

34 30

Logistics News ME | July 2016 | 3

Editor’s Note Understanding risk Risk exists in many forms and in a growing number of situations taking one is even seen to be courageous. In the digital age, risk makes a great Internet meme, but in the new age of unprecedented and turbulent world events, it also makes for a great headache.

This month Logistics News is all about risk. From the risks that exist in the supply chain, as analysed by the Chartered Institute of Procurement and Supply (CIPS), to the ever present risk of global security, which has caused some shipping lanes to be likened to war zones.

The world has changed significantly over recent decades – from technology to politics and economics – and the impact on how business and trade operate as a result of these changes has been undeniable, with significant repercussions on global security.

Today, piracy threatens multiple shipping routes but is concentrated around key MEA ports and lanes. Road infrastructure across the MEA region requires significant upgrade and the treat of cybercrime is ever present.

NYA International says the threat to countries such as Yemen, Iraq and Syria is severe – which comes as little surprise – but even in countries such as Turkey, the threat of risk is growing. The main concerns are conflict and kidnap, driven by the need for rebel forces to raise funds through ransoms. Internationally, even more countries are being labelled as having high security threats, including Brazil, Philippines and China, where again kidnap and a public distrust of authorities are deterring new investors and capping the economic potential of the countries.

Doing business in these environments is not easy, especially when there are some leaps insurers will not take. The trouble the industry is left to face is that while risk today appears to be everywhere it is actually a very different type of risk.

The risks faced today aren’t about strategy and compliance – damaged goods or an overturned pallet. They are about holding back a tide of malicious attacks whether they be physical or virtual, on land or at sea, not to mention adapting to the challenges of ever more extreme weather events.

Sometimes the minimization of risk is about variety – the old saying that not all the eggs should go in the same basket – other times it can be achieved through knowledge. But what the team here at Logistics News ME has discovered over the last few weeks is that in every form risk is now a multifaceted and threatening aspect of running a business, hinged on the fall-out from political and economic events, and the industry must galvanise in order to learn how to operate in this new environment.

Melanie Mingas Group Editor

Group Sales Director Joaquim D›Costa jo@bncpublishing.net +971 50 440 2706

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news

In the NEWS UAE Thailand trade reaches $5.2bn The Highlights The Thai Government is making improvements to better facilitate trade. It joined the Kyoto amended Convention as of June 2015, and in stages to support the ratification of the trade agreement.

The Thai Government’s efforts to support investment and to encourage small and medium enterprises through tax exemption, as well as boost and reform the agriculture, energy, technology and other sectors, with initiatives currently underway to privatize them.

Thailand “continues to enhance the protection of intellectual property rights” through the preparation of new laws as well as legal amendments.

Thailand uses government procurement as an important tool for economic policy. It revealed a 7% allocation for local suppliers and noted government legislation to manage the risk of corruption in this area. Thailand, however, has not signed the multilateral World Trade Organization agreement on government procurement.

Thailand is preparing eight laws for transforming the state into a digital economy, involving actions such as changes in the air transport sector and major maritime laws. Tourism was also identified as a major source of foreign exchange.

A

report issued by the UAE Ministry of Economy reveals that non-oil trade – inclusive of free zone activities – between the UAE and Thailand amounted to $5.2 billion in 2015, with aluminum, automobiles and precious metals most traded.

The report mentioned premium raw aluminum, ornaments and precious metals as the main exports from Thailand, with cars and vehicles for transport of people and goods as well as jewelry counting among the primary imports.

8 | Logistics News ME | July 2016

Hind Al Youha, director of foreign trade policies in the Ministry’s Foreign Trade Sector said that issuing such a report is in line with the Ministry of Economy’s mission and objective of improving public and private sector awareness on the trade and investment systems of the UAE’s key economic partners.

The report showed that the Thai economy experienced a decline in GDP growth in 2014, down to 0.9% in comparison with the 7.3% growth in 2012 as a result of high purchasing power.

The inflation rate fell gradually during 2014 at 1.9% or half of the 2011 level. Al Youha noted that the Thai Government has implemented structural reforms to enhance the competitiveness of its economy, expedite infrastructural development, and encourage innovation.

The government has worked towards developing the rubber sector to address global prices, increased supply, and lower demand. Thailand maintains a strong presence in banking, telecommunications and transportation services.

news

Dubai South businesses briefed on Expo

Officials from Expo 2020 Dubai have met with representatives from businesses in Dubai South to raise awareness of the commercial opportunities the mega event offers to local businesses.

About 120 guests attended the session, including business leaders from SMEs and corporates, representing key sectors incorporated in the Dubai South Business Park Free Zone including food and beverage, logistics, aviation, consulting, trade, legal and retail.

Manal AlBayat, vice president of engagement for Expo 2020 Dubai, commented: “The journey to, and hosting of the Expo mega event offers a wealth of opportunities for businesses, and our engagement activities are aimed at providing an inclusive platform that enables everyone to make the most of those.

The business community are key stakeholders in the Expo and its legacy, so the chance to meet with them was particularly welcome.”

Earlier in May, Expo unveiled its master plan at the Arab Media Forum. The Expo site lies in Dubai South, and will become an easily accessible international transit hub with direct access to Dubai World Central, as well as being situated conveniently for Abu Dhabi International Airport and Dubai International Airport. The site is also in close proximity to Jebel Ali Port. The team overseeing the delivery of Expo 2020 Dubai has moved to new offices on the site, which has seen over 4 million cubic metres of earth moved as the site has been levelled in preparation for construction.

Oman Global Logistics Group launched The government of Oman is to establish a holding company, Oman Global Logistics Group SAOC, to invest in ports, free zones, railway, maritime and land transport companies, according to reports in The Times of Oman.

The decision was announced by Dr. Ahmed bin Mohammed Al Futaisi, Minister of Transport and Communications last month. The holding firm will be the government’s development arm and will play a key role in creating major growth opportunities to significantly raise the contribution of logistics sector to the gross domestic product.

“The aim is to synchronise investment and development objectives and therefore exploit the asset’s capabilities and potential in order to maximize the return on investment,” said a ministry release.

A key mandate for the holding firm will be the implementation of the National Logistics Strategy, under the direct supervision of the Ministry of Transport and Communication. A key drive in the implementation will be to activate the role of the private sector in accelerating the growth of logistics sector through joint investments, innovation and bydeveloping national capability in order to create employment opportunities.

The firm will also take necessary steps to implement the policies drawn by the government, including the coordination and integration between the state agencies to achieve the company’s investment and development objectives. Further, it will have the responsibility to monitor the performance of the group companies.

Oman has just completed the preliminary design of its entire planned rail network, which aims to link the ports, economic, industrial and commercial areas and also areas with potential urban growth.

Logistics News ME | July 2016 | 9

news

Kizad Phase 2 work begins

A

bu Dhabi Ports has begun work on the second phase of Kizad Logistics Park (KLP).

Construction has begun on 64 modular warehouse units, which will be handed over to tenants by Q3 this year, bringing the total number of units at the park to 105, covering an area of 118,965 sqm.

KLP is located in the logistics cluster of the Khalifa Industrial Zone (Kizad).

Phase one of the facility is already operational and Abu Dhabi Ports said it plans to make the park one of the leading warehousing centres in the region with the completion of the second phase.

“Kizad’s development follows a demand-driven approach, responding to the needs of the market and designing flexible solutions accordingly,” said Mana Mohammed Saeed Al Mulla, COO at Kizad. “Around 83% of the 41 warehouses in Phase 1 were leased prior to construction being completed and 100% leased a few months later. Since then the need for more high-quality warehousing units has encouraged us to start building Phase 2 of KLP.” The warehouses at KLP all have 7m high ceilings on a 1.3m raised floor, dedicated loading areas, ramp access and designated on-site parking, Kizad said. Each unit has an area of 1,133 sqm with a mezzanine office. Larger units of up to 9,064 sqm can be created by removing internal walls.

“In a challenging leasing environment, superior pre-built offerings support businesses with their logistics requirements and the success of KLP’s Phase 1 only proves that Kizad is the ideal solution, offering an exceptional location, world-class infrastructure and dedicated investor support in a competitive operating environment,” Al Mulla added.

10 | Logistics News ME | July 2016

Abu Dhabi Ports eyes Chinese business

Abu Dhabi Ports, master developer, operator and manager of ports and Khalifa Industrial Zone in the Emirate, have presented the integrated offerings of Khalifa Port and Kizad at an exclusive business event in Abu Dhabi.

Organised by Abu Dhabi Ports in association with the Embassy of the People’s Republic of China to UAE and the Chinese Business Council, the invitation-only event for Chinese businessmen attracted over 80 top Chinese businessmen from across the UAE. The value proposition represented by Kizad, the integrated trade and industrial hub of Abu Dhabi, and Khalifa Port, the maritime gateway to Abu Dhabi, were detailed in the half-day event titled “Opportunities in Abu Dhabi―A Global Trade, Manufacturing and Logistics Hub”.

Keynote speeches were delivered by Mr He Song, the Economic and Commercial Counsellor at the Chinese embassy in the UAE, and Captain Wang Song, Chair of the Chinese Business Council. Mana Mohammed Saeed Al Mulla, Chief Operating Officer, Kizad delivered the welcome address.

“With Khalifa Port at Kizad’s door step, the outstanding access to markets, world-class infrastructure and tailored solutions available, will prove attractive to Chinese businesses and I am confident that our offerings have the potential to support their efforts to boost trade ties between China and the UAE,” said Al Mulla.

The industrial zone has recently launched Phase 2 of its Kizad Logistics Park warehouses.

Currently Kizad has around 90 national and international investors, and a total of 13 million square metres of land leased that represents a total investment of more than AED 55 billion.

Khalifa Port recorded a 32% annual growth in 2015 making it the fastest growing port in the Middle East with an existing capacity to handle 2.5 million TEUs (twenty foot equivalent units/ containers) and 12 million tonnes of general cargo. Khalifa Port currently serves over 20 shipping lines – three of which are Chinese – and is directly linked with more than 52 destination ports – 10 of them being based in China.

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news

IT server revenue down, shipments up

Confidence at “four year low”

In Q1 2016, worldwide server revenue declined 2.35 year over year, while shipments grew 1.7% from the first quarter of 2015, according to Gartner, Inc. “Although revenue declined, the first quarter of 2016 continued with a trend of low-level shipments growth on a global level with a variation in results by region,” said Jeffrey Hewitt, research vice president at Gartner.

“The drop in revenues in light of shipment increases demonstrates that the servers that shipped during the period had lower average selling prices than those that shipped in the same time frame last year.”

All regions showed a decline in either shipments and/or vendor revenue except for APAC, which posted 9.7% growth in revenue and 8.4% growth in shipments for the period. Western Europe grew 1.4% in shipments and 1.5% in revenue. North America posted a 1% increase in shipments but declined 5.9% year over year in revenue.

Worldwide: Server Vendor Revenue Estimates, Q2016 ,1 (U.S. Dollars) Company

1Q16 Revenue

1Q16 Market Share (%)

HPE

3,296,591,967

25.2

3,191,694,948

Dell

2,265,272,258

17.3

2,296,473,026 17.1

1.4-

IBM

1,270,901,371

9.7

1,887,939,141

14.1

32.7-

Lenovo

871,335,542

6.7

970,254,659

7.2

10.2-

Cisco

850,230,000

6.5

890,179,930

6.6

4.5-

Others

4,537,261,457

34.7

4,157,871,705

31.0

9.1

Total

13,091,592,596

100.0

13,394,413,410

100.0

2.3-

1Q15 Revenue

1Q15 Market Share (%)

1Q-16 1Q15 Growth (%)

23.8

3.3

Worldwide: Server Vendor Shipments Estimates, 1Q16 (Units) Company

1Q16 Revenue

1Q16 Market Share (%)

HPE

526,115

19.4

534,559

20.0

1.6-

Dell

464,292

17.1

507,433

19.0

8.5-

Lenovo

199,189

7.3

220,379

8.3

9.6-

Huawei

130,755

4.8

105,803

4.0

23.6

Inspur

109,390

4.0

91,847

3.4

19.1

Others

1,286,097

47.4

1,209,319

45.3

6.3

Total

2,715,838

100.0

2,669,340

100.0

1.7

12 | Logistics News ME | July 2016

1Q15 Revenue

1Q15 Market Share (%)

1Q-16 1Q15 Growth (%)

Confidence in the UK’s logistics sector hit a four year low according to the findings of the biannual UK Logistics Confidence index, produced by Barclays and Moore Stephens. It is the lowest level since the report began publishing back in 2012.

Operators are struggling with downward price pressure, fierce competition and cost increases, with concerns over the impact of the UK’s EU referendum still unknown at time of publication. Those are among key findings, but the study also reveals the sector is still investing in technology and new value-added services in a bid to respond and secure growth.

Almost 70% of respondents expect their turnover to increase in the next 12 months and the same number feel sufficiently confident to be planning investment in capital expenditure over the next six months.

That said, the report also suggests that more than a third of businesses in the study are looking to acquire rivals to unlock new services and achieve economies of scale.

Optimism in H1 2016 has fallen to 51.8, compared to 61.9 in H2 2015, marking the fourth successive drop – and the largest that this business confidence barometer has recorded for the sector.

“Confidence in the UK logistics industry has taken a knock from price pressure and increasing competition,” said Rob Riddleston, head of transport and logistics at Barclays.

“Under such pressure, the high level of planned capital expenditure is welcome news and reflects the sector’s pressing need for investment in technology. It is also encouraging that the role of technology is recognised as a route to both control costs and improve service levels and investment in this area is a key trend for the sector.”

news

Additional judges named for Seatrade Maritime Awards

T

he IMO Secretary-General Emeritus, Efthimios E. Mitropoulos, has confirmed he is to join the prestigious line-up of international judges for the 14th edition of the Seatrade Maritime Awards Middle East, Indian Subcontinent and Africa 2016, which takes place on 31 October at Atlantis The Palm.

The judging panel for 2016 will be chaired

by Joe Brincat (pictured), VP Middle East Region, ABS, who is also a veteran to the industry and well respected amongst his peers and colleagues.

Brincat said: “This year’s judging panel is a testament to the importance of these awards. Amongst them are some of the key leaders in the industry who are dedicating considerable time and effort to ensure the rigorous judging process is adhered to with an end result of rewarding winners with the highest acknowledgement possible in the region.”

Entries for the awards are also now open and companies are requested to submit their entries by the end of July. Full details are available on www.seatrade-middleeastawards.com.

The Judging panel • H.E. Dr Nabeel bin Mohammed Al-Amudi, President, Saudi Ports Authority • Capt. Abdulla Al Khanji, CEO, Qatar Ports Management • Eng. Abdullah Al-Sulaiti, Managing Director, Nakilat; Shaikh Daij Bin Salman Al Khalifa, Chairman, ASRY • Rene Kofod-Olsen, CEO, Topaz Energy and Marine • Gary Lemke, Executive Vice President, Abu Dhabi Ports • Vivek Seth, CEO, Halul Offshore Services Company.

• Efthimios E. Mitropoulos, Secretary-General Emeritus, International Maritime Organization (IMO) • Ashik Subahani, Chair, RINA UAE Branch and Managing Director, Great Waters Maritime LLC • Katharina Stanzel, Managing Director, INTERTANKO.

DAFZA holds UK seminars

DMCA honours employees

Looking to boost the 24% of European investment in Dubai Airport Freezone Authority (DAFZA), the entity has conducted a series of seminars for potential UK investors in key UK citiies including Manchester and Glasgow.

The delegation addressed those who are interested in doing business with Dubai and the MENA region and raised awareness on DAFZA’s leading business solutions, incentives and its role in Dubai’s economy during their stay.

Among the key markets targeted by the seminars were Software and IT Services, Industrial Machinery, Consumer Products, Textiles, Communications, Transportation, Metals, Food, and Electronic Components.

The UAE and the UK maintain strong trade, economic and cultural relations. Last year, their bilateral flow stood at AED63bn. There are currently around 5,000 British businesses operating in the UAE, which represents the UK’s 12 largest trading partner. More than 100,000 British nationals live and work in the UAE, while over a million British tourists travel to the country each year. Thousands of Emiratis, on the other hand, regularly visit the UK for tourism or study under the country’s prestigious academic institutions.

The Dubai Maritime City Authority (DMCA) has honored a group of talented employees for their innovative ideas which are intended to provide a positive impact in advancing the development of the maritime sector and turn Dubai into one of the world’s most important maritime and logistics.

The recognition was given during a special ceremony celebrating innovation and creativity in the DMCA held in the presence of, and in line with the Maritime Authority’s commitment to fostering a culture of innovation and excellence within the local maritime sector. Innovation is considered a key pillar for making the emirate one of the most comprehensive, prestigious and competitive maritime clusters in the world.

Amer Ali, Executive Director, said: “We honour outstanding employees who provide innovative ideas in support of our ongoing commitment to act in accordance with the wise guidance of the government to create a stimulating work environment that welcomes constructive innovative ideas to further enhance global competitiveness and help fulfill goals in a proactive and innovative government initiative.”

news

Materials Handling Saudi Arabia to launch 2016

Messe Frankfurt Middle East is expanding its regional reach with the announcement of the inaugural Materials Handling Saudi Arabia 2016.

The two-day conference and exhibition will take place from 28-29 November 2016 at the Park Hyatt Hotel in Jeddah, offering global suppliers and regional manufacturers direct access to the Kingdom’s thriving logistics, warehouse, freight and cargo industries.

Organised in partnership with Saudi-based Al-Harithy Company for Exhibitions (ACE), Materials Handling Saudi Arabia is a biennial event alternating between the flagship Materials Handling Middle East exhibition in Dubai.

“Saudi’s logistics and materials handling industry is undergoing immense expansion and change and with it challenges that are unique to the Kingdom.

We felt the need to provide a dedicated trade and networking event so key stakeholders can share their experiences, understand the market realities, and prepare for future developments,” said Ahmed Pauwels, CEO of Messe Frankfurt Middle East.

The inaugural edition of Materials Handling Saudi Arabia will be headlined by the two-day Supply Chain and Logistics Forum. The show marks Messe Frankfurt Middle East’s second direct foray into the vast Saudi market, after the breakout success of the 1st edition of Automechanika Jeddah in January 2016.

Exhibitors already signed on include Launch Partners Swisslog, SSI Schaeffer, and Daifuku, while Industry Partners include Abdul Latif Jameel Industrial Equipment Company – the Saudi distributor for Toyota forklifts – Log Square, and Al Samaani.

14 | Logistics News ME | July 2016

RSA-TALKE opens integrated chemicals hub in Dubai RSA-TALKE celebrated completion of the first phase of its integrated chemicals hub in Dubai’s Jebel Ali Free Zone.

The centrepiece of the inaugurated first phase of the chemicals hub is storage and transhipment capacity for up to 1,800 TEU – designed for empty or laden ISO tank containers with class 3, 6, 8 and 9 hazardous substances or non-hazardous chemicals.

“As the chemical and petrochemical companies here in the Gulf region increase their degree of vertical integration, their demand for comprehensive, professional specialist logistics services is increasing too”, says Richard Heath, director at RSA-TALKE. Sultan Ahmed Bin Sulayem, DP World Group Chairman and CEO, Chairman of the Ports, Customs ‎and Free Zone Corporation said: “We are delighted to be a part of RSA-TALKE’s ‎ remarkable growth in the region. The new facility will enable them to serve customers more efficiently and achieve even greater successes in the future. Jafza continually supports its valued business community of over 7,000 companies that have transformed it into a global centre for commerce and trade and an ideal business location for international and regional markets. I extend my best wishes to all the employees of RSA-TALKE and we remain fully supportive of the company’s development.”

The complex is part of a comprehensive, modern chemical logistics centre in Dubai, an important transit hub for the region. In its second and final phase of development, plants for drumming hazardous and non-hazardous liquid chemicals will be constructed at the site, as well as a warehouse for packed products. Hence, RSATALKE supplements and expands the existing equally ultra-modern warehouses for hazardous and non-hazardous chemical and petrochemical products in Dubai South.

news

US shipping slow down “pause not pattern”

Ports on the East coast USA saw a decline in imports of 4.7% – 268,861 twenty-foot equivalent units – in May 2016, specifically at the pots of New York and New Jersey, where the figure marked the third consecutive YoY drop. The total volume of containers passing through the port fell by 6.1% in May. Other ports are also suffering on the Atlantic gateway. Ports in Norfolk, Virginia, and Savannah, Georgia, have also reported lower volumes, just as shipping lines have been cutting service calls in a sign of diminished expectations for a boost in trade, stated a report in the Wall Street Journal.

Ben Hackett, chief executive of Hackett Associates LLC, was quoted in WSJ as saying: “The peak season has disappeared. Carriers have already taken out capacity, and if there was a strong peak season coming, they wouldn’t do that. It’s partly overall trade declining. But it’s also that importers simply bought too much.”

Ports on the West coast aren’t seeing the same patterns, due to shifting trade patterns.

Saudi set for growth Saudi’s logistics sector is due to experience a huge growth over coming years as a result of an anticipated 20% growth in industrial activity and the expansions of industrial cities and ports and infrastructure development.

Muwaffaq al-Harith, Chairman of Saudi Al Harithy Company for Exhibitions (ACE), said in the upcoming period the region will also witness a revolutionary leap in the supply chain in light of implementation of the Kingdom’s vision 2030.

This will include the establishment of Energy City to attract major companies in energy-related industries to the city and also raise local inputs in energy and petrochemical industries to 75%.

He also said Saudi Aramco will invest in renewable energy and stimulate other industries to supplement oil production.

Earlier this month Saudi Arabia’s 2030 Economic Vision was sent for approval, which focuses strongly on the private sector and fostering an entrepreneurial ecosystem. The 2030 vision has gained the support of a number of nations, including China, with many firms looking to form strategic partnerships.

Logistics News ME | July 2016 | 15

Sector Focus

Up And Away

Around the world a new generation of airships is being rolled out with a view to transforming how cargo is transported, but with only 40 blimps currently in operation, how long will it be before the airship takes off – again?

B

limp, zeppelin, dirigible, airship; in 150 years of aviation history the humble airship has changed very little. What has changed is attitudes towards the ships and their potential as the sixth mode of transport in a world that is constantly looking for solutions that can incorporate sustainability, lower costs and still meet demanding schedules.

Today, around the world, dozens of companies are experimenting with how to reinvent the airship and in January 2016 Airships Arabia DWC LLC was registered in Dubai South.

Licensed to provide consulting services in aviation, management and logistics, on its website, Airships Arabia claims it will initially support companies and government entities in dealing with airship matters while preparing to upgrade its license, once ready, to allow airship operations, maintenance and support.

As a re-emerging tech, interest in the airship is seeing a steep rise and there are more than 10 companies working on competing designs today. But they don’t stop at the airship.

AA is licensed to fly both hybrid and conventional airships, as well as the provision of maintenance support to other types of Lighter-Than-Air (LTA) vehicle, such as aerostats.

The traditional airship relied on highly flammable hydrogen to create lift under the LTA principle, whereas the new generation of hybrid ships rely more on being heavier than air machines.

In total, the hybrids combine three sources of lift, making use of the aerodynamic shape to generate lift from motion through the air and using inert helium to

16 | Logistics News ME | July 2016

generate 80% of the total lift. Their size however, means that they can generate a significant amount of such lift at relatively low airspeeds. The third source of lift, comprising around 20% of total output, is derived from either vectoring of the engines or directing engine thrust up, to provide lift – or in other directions for directional thrust – as required.

Airships are far slower than planes: they max out at just 110kph, but consume much less fuel and cost about half as much to make. They are also easier to fly in dense, cold air than in hotter, more turbulent southern climes.

The new generation Of the estimated 40 airships operating currently the majority are used for observation, tourism or advertising and AA isn’t the only manufacturer looking to capitalize on the opportunities these afford.

In March of this year, a company called Aeros was granted a patent number by the United States Patent and Trademark Office (USPTO). In the UK, Hybrid Air Vehicles has created the Airlander 10; at 92m, the longest aircraft in the world, stretching nearly 20m further than an A380 jumbo, and holds over 28,000 cubic metres of helium and can stay in the air for up to five days.

These development join the Aeroscraft in Los Angeles that is already in development using a flying prototype that is smaller than the planned full-size vehicle and defense giant Martin Lockheed has built a scaled prototype and signed a letter of intent with Straightline Aviation of

Sector focus

The old airships relied on hydrogen for lift, whereas the new generation uses helium

Britain to supply 12 airships for $480m.

The application of airships is wide and varied. In tandem with their use as passenger ships at the start of the last century, they were used to bomb London during the First World War and to deliver relief supplies to African colonies. Italy built a hangar at Augusta in 1917, which is still standing, to support airship patrols against German U-boat attacks. Many countries, including Britain and Russia, employed airships and tethered balloons as reconnaissance platforms.

But the Hindenburg disaster in May 1937 changed all that and the airship was confined to the history books for decades after 13 passengers and 22 crew died in the accident.

The new generation of airships is firmly fixed on the objectives of the world’s low-carbon future with entrepreneurs and global companies scrambling to develop prototypes – many with impressive safety and sustainability credentials – with the ability to protect and transport huge volumes of cargo.

Like ships of the ocean, airships enjoy increasing economies of size; a doubling of an airship’s dimensions could quadruple its cargo capacity. Once airships are once again large enough to cross oceans economically, international trade will become their primary market.

No road no problem Hitting the sweet spot between fuel consumption, speed and cost, the primary benefit of the airship is that it can carry heavy cargo to remote places.

In the 1990s a project called CargoLifter launched in Germany, sponsored by companies who move goods of up to 160tons. The challenge was to transport goods from

factory to client site without the use of ships, road convoys, rail or pipeline.

Interest hit runaway proportions. If the response said anything it was that the logistics industry was all ears when it came to alternative methods of transportation.

Around 70,000 investors put up €250m in capital; they were reported to be 65% private individuals, 29% financial institutions and 6% industrial partners. A giant hangar was construction near Berlin for the purpose of the exercise and the private enterprise started to build huge research and production facilities with the money raised.

Due to what CargoLifter cited as “technical issues” the project ended and the competition was called a failure.

Development halted in 1996 after the company went bankrupt.

Another aircraft, the “CL 75 Aircrane” transportation balloon prototype, was built next but destroyed in a storm in July 2002. According to sources, in June 2003, the company’s facilities were sold off for less than 20% of the construction costs. The Skyship airship, which had been purchased by Cargolifter for training and research purposes, was sold to Swiss Skycruise and used in Athens for flights connected with the 2004 Olympic Games.

It’s a very different type of disaster to Hindenburg, but it’s still one from which reputational damage was done and lessons can be learnt. Too often manufacturers aim for designs and ships that are too grand and attempting to carry too much weight.

Some corners are calling for ship developers to focus on smaller ships until the demand, and buy in to the industry, can justify increasing the economies of scale of an airship operation.

Logistics News ME | July 2016 | 17

Airship applications include surveillance, military & transport

Why are airships believed to be the next big thing?

In countries which have a high percentage of inaccessible landmass the airship can deliver goods at the speed of a truck without the need to create new road infrastructure and without creating pollution. Such a technological introduction could significantly open up these countries to economic development.

How do airships work?

The most common gas in use today is helium, which has a lifting capacity of 0.064 lb/ft3 (1.02 kg/m3). Hydrogen was commonly used in the early days of airships because it was even lighter, with a lifting capacity of 0.070 lb/ft3 (1.1 kg/m3) and was easier and cheaper to acquire than helium, however, the Hindenburg disaster ended the use of hydrogen in airships because it burns so easily.

18 | Logistics News ME | July 2016

The devil in the detail In its current incarnation, the airship must be grounded in order to load and unload cargo. It must also be connected to a logistics hub, which requires three important components: labour, connective transport links, airport infrastructure according to AeroSpace Review.

It is thought that airships could form a vital part of multimodel networks, specifically when reaching remote and inaccessible places. This would also keep costs down because each mode in the solution has its own unique attributes but transport airships will dominate where no existing infrastructure exists for truck and rail transport, as is the case in Northern Canada for example, or Western China.

What’s important to remember is that in this day and age the airship isn’t trying to compete with the airline industry – reaching speeds of up to 80mph and with the ability to reach remote locations the

airship actually competes far more with road transport methods.

Additionally, in terms of cargo airships will be especially well-suited to goods that do not require expedited transport, but are too delicate or perishable to travel by ocean.

In the Middle East, where Airships Arabia is developing three types of vehicle, the mission is clear: in addition to the certification, regulation and government and private sector liaison role of the organisation, AA will operate its own fleet of airships to provide freight services at competitive prices.

With initial payload capacity of 10 tonnes per load growing to more than 50 tonnes per load in due course, and with an unrefueled range of more than 3,500 km, AA will provide stiff competition for established transport modes when services commence in 2018, not to mention a blast from the past.

Turn the page for an exclusive interview with Airships Arabia MD, Gregory Gottlieb.

The new generation of airships is firmly fixed on the objectives of the world’s low-carbon future with entrepreneurs and global companies scrambling to develop prototypes

428 hp. 116 t GCW. Any questions?

The new Zetros 3643 AS 6x6 Tractor Head.

In recent years, the Mercedes-Benz Zetros has already set standards when it came to extreme off-road applications. The new Zetros 3643 AS 6x6 continues the long-lasting history of the Mercedes-Benz ‘Abu Booz’ in the Middle East and pushes the limits even further with a Gross Combination Weight of up to 116 tonnes.

Trucks.MercedesBenzMe.com

Fitted with a 315 kW (428 hp) engine and 2,100 Nm torque, the three-axle semitrailer tractor-head is ready for a broad variety of on- and off-road construction, transportation, oil & gas and government applications.

And thanks to proven Mercedes-Benz components and the excellent spare parts availability across the region, it assures maximum up-time.

Reinventing the past T

Brian Cartwright speaks to Gregory Gottlieb, managing director, Airships Arabia

his month I had the pleasure of interviewing Gregory Gottlieb the managing director of Airships Arabia and a leading authority in the airship sector. I have been reading a lot about this reemerging technology especially in terms of the logistics sector, but since talking to Gregory I have realised just how much of a potential game changer this can be for a number of sectors, and its already on its way.

As of this year there are more than 10 companies working on competing designs for the airships market and Airships Arabia has already made the move to become the first airship services provider in the Middle East

20 | Logistics News ME | July 2016

with the UAE registration of the company being completed at Dubai World Central in early 2016.

Realistically how far away are you from providing physical logistics using airships in the MEA region?

Well we will be initiating our application for an AOC in the coming months, but the vehicles themselves are still currently in development by companies in the USA, Russia and the UK, including Lockheed Martin and Hybrid Air Vehicles Ltd. We need to see at least one hybrid operating and at least part way through its type certification before we can assume that the

Face to face

technical risk is sufficiently low to give our investors confidence in our business case.

When do you imagine the testing and certification phase to be completed?

The Hybrid Air Vehicles Ltd Airlander 10 in flight is scheduled to be undergoing its initial test flying during this summer, so depending how that goes we will have a better idea of the timeframes for additional phases.

Can you briefly explain why you refer to these airships as hybrids; how do they differ from conventional airships?

We refer to them as hybrids because they combine three sources of lift. Unlike conventional airships, which just use lift from the displacement of air with lower density gas – normally Helium these days – Hybrids also make use of their aerodynamic shape to generate lift from motion through the air. Their size however, means that they can generate a significant amount of such lift at relatively low airspeeds. The third source of lift is derived from either vectoring of their engines or directing engine thrust up, to provide lift, or in other directions for directional thrust, as required.

Also in addition to these hybrids, Airships Arabia will operate and support conventional airships, as well as providing maintenance support to other types of lighter-than-air vehicle, such as aerostats.

What is the current focus of the business while you wait for these Hybrid Airships to be certified?

As an interim activity, the company has been engaged in providing logistics, management and aviation consulting services to clients with an interest in the future use of airships and/or hybrids. Our main focus however has been to get ourselves ready for when type certified hybrid airships become available on the market.

What will be your initial focus for the business once the Airships arrive?

Well our core business will be the operation, maintenance, training and support of hybrid airships across the Middle East so we have been analysing and researching markets across the region, as well as developing relationships with manufacturers and key stakeholders.

Based on our research to date the markets we are planning to address fall broadly into three categories; logistics, surveillance and passenger transport Gregory Gottlieb We are also starting to identify regional operating partners with whom we will develop a symbiotic relationship in their home countries, while providing the technical, operational and training expertise from our home base in the UAE. The market analysis that we are currently working on has identified a number of potential ‘lead users’ in other words companies that might use the hybrid service were it available today, and would be prepared to undertake joint studies of the potential savings in both cost and time that the use of hybrids could represent for them.

Where are the main opportunities identified by your research so far?

Based on our research to date the markets we are planning to address fall broadly into three categories; logistics, surveillance, and passenger transport.

From a logistics perspective hybrids will have low operating costs as the majority of the lift is provided by Helium without the need to burn fuel to maintain that lift. In addition, although they are extremely large, for example the Airlander 10 is 93 metres long and larger than an A380, they tend to have a lower part count, a more benign operating environment and, although slower than most commercial aircraft, a very long endurance which is measured in days, rather than hours.

They also have lower maintenance overheads. We believe them to be ideally suited for bulky but lighter weight payloads, such as perishables. Flowers from Africa to the Middle East is one case study we are looking at. They are also ideally suited for the movement of specialist equipment to and from remote areas, which would certainly benefit the oil or gas sector as a prime example.

They are ideal for these types of tasks as hybrids are able to carry very large and unconventionally shaped payloads, both internally and externally. In addition, they can operate from almost any surface, including sand, grass, concrete or water and have no requirement for conventional runways.

Passenger transport is also an area of interest especially if you take industrial passengers for example where you have oil or gas workers changing shift to and from remote production sites.

Fare paying passengers would also benefit from the yacht-style environment offered in the unpressurised cabins.

Tourism, charter and shorter commuter routes are all being studied at present. The Airlander 10 is planned to carry 48 passengers but future hybrids may well carry more. And we believe that the growth of tourism in the Gulf region will greatly benefit from the introduction of these vehicles.

The final category we are looking at is Surveillance. Originally conceived as military surveillance vehicles, hybrids, with their significant payload and long endurance, are ideal for both persistent surveillance tasks for military and Logistics News ME | July 2016 | 21

Face to face

Brian Cartwright

government customers, as well as for commercial survey, broadcast TV and even aerial advertising and PR tasks.

The Airships Arabia business sounds like a very exciting proposition, but what would you say about the main challenges and obstacles you will face when introducing the concept into this region?

The challenge of introducing a fundamentally new vehicle concept into the marketplace is the main one but that was already addressed successfully more than a decade ago by the German airship developer, CargoLifter AG, which ultimately failed for financial reasons in 2002. They operated a ‘Lead User’ concept that developed close and mutually beneficial relationships with potential customers from early on in the development process; Airships Arabia is planning to adopt a similar approach.

Another leaf that we are lifting from CargoLifter’s playbook is their understanding of the three phases of market entry.

First, we will undertake tasks that could be done by other means today, but for which hybrids can either save time or cost, or both.

Secondly we will enable tasks to be undertaken that cannot easily be done by 22 | Logistics News ME | July 2016

existing means, such as the carriage of items that are too large in one or more dimension to be carried by train, truck or aircraft, thereby influencing product design to become more efficient.

The third and final stage is when we begin to influence the way in which our customers’ businesses are operated, by allowing them to, for example, centralize the maintenance of heavy equipment that traditionally had to be maintained on distributed sites due to the challenge of moving those items by conventional means.

Finally, what are the advantages and disadvantages in terms of cost, payload and speed of Airships as a cargo carrier in comparison to traditional Ocean Freight and Air Cargo?

Studies undertaken in the past by CargoLifter, as well as by the US military, showed that much can be gained by using airships, and by hybrids in particular, for the carriage of certain types of goods. No airship or hybrid can match the speed of a conventional aircraft, but their airspeed is better than most cargo ships, they are not constrained by roads or railway lines and, unlike alternative forms of air transport, they can operate from most locations without the need for runway infrastructure.

Furthermore, with

Brian Cartwright is the Managing Director, Middle East and Africa for Logistics Executive Group, he has partnered exclusively with Logistics News to run a series of interviews with senior executives to uncover the facts and provide real time insight on what’s happening in the SC & Logistics sector across the region.

As a respected thought leader with extensive networks and knowledge of the Supply Chain & Logistics sector, he’s the ideal person to get the inside word on behalf of Logistics News.

endurance measured in days, they can travel long distances without refueling, even if it may take them one, two or even five days to do so. As a fundamentally new form of logistical transport, we will need some time before it is possible to provide chapter and verse on cost, time or other specific advantages, but it is our hope at Airships Arabia that our lead users, who will have the advantage of taking up this opportunity before anyone else, will become strong advocates for their use. As for payload, the basic principle that one cubic metre of Helium can lift approximately one kilogram means that size is everything.

Both Lockheed Martin and Hybrid Air Vehicles Ltd are developing prototypes with payloads of between 10 and 25 tonnes, but both have plans to grow their designs to be capable of carrying up to 100 tonnes over the next decade.

We are always happy to provide more detailed briefings to those with a specific interest in this exciting, game-changing technology.

Cover Story

The new age of risk Armed maritime robbery may be down year to date, but Nigerian waters are still called a “war risk zone� with 68 kidnaps recorded in Q1.

Elsewhere across the MENA region dangerous road infrastructure and corruption are increasing the level and severity of threats to the logistics industry. Kurt Parry investigates.

24 | Logistics News ME | July 2016

Cover Story

Security guards on a ship in the Indian Ocean

M

odern piracy has devastating effects through both the loss of lives and the loss of businesses. As the main focal point of much of the world’s cargo and shipping, the wider Middle East has been a major target for the pirates and its natural geography, trade history and developing economy have made some areas a magnet for such ruthless and desperate bandits.

The East African coast has established itself as both a prime target and a prime culprit and the instability of the nations that make up that coastline pose an everpresent threat. While the Indian Ocean has had its level of potential danger officially reduced, the Gulf of Aden continues to be defined by the IMB Piracy Reporting Centre as a ‘High Risk Area’ (HRA) – there have already been multiple threats and two attempted boardings this year.

Despite this and against highly professional advice and insights, some companies still try to cut corners and put costs above safety.

Jamie Smibert, Marine Broker at Aon Risks Solutions says limited success can

“We have seen companies in Libya and Egypt lose their entire operations and now Iraq and Iran both pose high risk and high gain options. You must do your research and ultimately decide if you know enough to make an informed decision” sometimes lead to premature confidence.

He says: “With the recent reduction in the HRA around the Gulf of Aden, there were industry concerns that shipping companies would become complacent and see this as a sign to reduce security presence on board vessels. Armed guards and the support of international navies have played a major part in turning the Indian Ocean into one of the safer oceans for commercial shipping and with the

political instability still rife in Somalia, there is the need to stay as vigilant as ever from a security standpoint.

“There are reports of shipping companies employing fewer and less professional armed guards for the protection of crew and cargo. This certainly puts them at a greater risk of opportunistic piracy activity,” Smibert continues.

And even though the ships themselves may be less secure and more vulnerable to attacks, insurance is far from paramount.

“It is worth noting that ship owners receive considerable discounts from insurers for having armed guards on board – unfortunately, insurance is often a second thought. But the result of overlooking the need for the correct insurance can be catastrophic. Insurance is fundamental for all logistics businesses and can help to keep companies afloat following an unfortunate major incident,” he adds.

Globally, International Chamber of Commerce (ICC) results show that maritime armed robbery rates have declined year-on-year by nearly a third in the first three months of 2016, but across Logistics News ME | July 2016 | 25

Cover Story the continent into West Africa, pirate attacks, including kidnapping from ships, make Nigerian waters a ‘War-Risk Zone’.

Sixty-eight crew members were kidnapped in Q1 2016 in 10 separate incidents – a 300% increase on Q4 2015 figures. Not only is the passage unsafe, its cost is becoming extortionate, with insurance premiums rising by up to 60%.

Some of the greatest threats, however, come in the vast expanse that lies between the two coastlines. It would be unfair to label the entire African continent as lacking basic infrastructure but for many countries within it, this is an unfortunate truth. The lack of world class rail, road, air and port facilities can seriously hamper supply chains and make logistics operations dangerous as well as inefficient. The ingrained and often-present factors of corruption and crime also add to the mix in some areas, which may well be the most difficult obstacles to navigate overall.

While African economies have seen massive growth in recent years, the speed of investment into its emerging market opportunities has not been matched by its infrastructure, creating an even greater strain on the supply chain and making even greater chinks in the logistics armour.

From problems as basic as a lack of regulations for the hours a driver can work to the real and terrifying threat of hijacking and armed robbery, there are many reasons why Africa poses so many threats. The volatile politics in several countries also makes insurance not only difficult, but sometimes impossible. Outbreaks and sudden resurgences of civil wars play a large part, making premiums almost prohibitive, and while some insurers may provide high price cover for northern parts

“The response of governments has been to increase security in public spaces – and rightfully so. But what if these same terrorists would attack supply chains instead? Hitting just a few strategic targets in the energy trade, for example, could bring the entire global economy to a halt.”

US NAVY security patrolling in port of Djibouti

of the Democratic Republic of Congo for instance, almost none will contemplate many towns in the south.

With round trips on the road taking up to 30 days with 20 border crossings, fraud and corruption have become a part of daily business for many operators. The prospect of indefinite waits at border controls compared to a bribe and a place at the front is often no contest and a larger bribe will persuade those manning the border not to investigate the cargo. The same practice at many of the continent’s ports is increasingly making people trafficking, drugs, illegal immigrants and contraband, much easier.

The root of the problem Without doubt, the MENA region’s political landscape has been a constant source of concern for decades, if not centuries. Trade routes have been forged and then forgotten, forced into oblivion by changes in regime or government.

Speaking from his Dubai headquarters, Stefano Pollotti, Middle East Managing Director of GEFCO, one of Europe’s largest auto-logistics companies, says operational success can be turned on its head in an instance.

He says: “You can often see there are

The 2016 Regional Maritime Threats Yemen

Iraq

The kidnap threat in Yemen will remain unchanged in 2016, driven by conflict and likely proliferating in areas most affected by violence. Various actors, including the Houthi rebels, the militant group Al-Qaeda in the Arabian Peninsula (AQAP) and tribal militias will operate largely unrestrained due to the continued weakness of the Aden-based government led by President Hadi. Foreign nationals will remain attractive targets, as their perceived high value can be leveraged to meet both political and financial demands in a complex conflict-affected environment.

The threat from kidnap in Iraq will remain severe in 2016, including in places previously considered to be safer such as Baghdad and Basra.

Shia militias – some of which operate with little or no government oversight – will remain a potent force intent on abducting domestic and foreign nationals to further their political and sectarian agenda. Though IS militants will face significant ressure from the Iraqi forces and the international coalition, kidnappings in areas under their control will likely continue apace.

Threat: Severe

26 | Logistics News ME | July 2016

Threat: Severe

Cover Story George adds: “We know that there are parts of this region which can potentially pose a risk in terms of politics and we constantly monitor the situation. We ensure that we always communicate with our clients and are totally transparent in the information we receive and the risks that we assess on their behalf. More than anything, the safety of our drivers is a priority and we would never compromise their wellbeing. Of course, it’s not just the political map we look at, we have some natural hazards and a significant element of human error to contend with.”

highly lucrative opportunities in some markets and if the status quo remained, the potential would transform into a reality. You can make all the preparations, secure all the financing, join with all the partners and then it can all fall apart through political unrest.

For those that are already in those markets, the effects can be equally devastating. Most recently, we have seen companies in Libya

and Egypt lose their entire operations and now Iraq and Iran both pose high risk and high gain options. You must do your research and ultimately decide if you know enough to make an informed decision.”

Stigo George is QHSE manager for road transport safety at Transafe, a specialist dangerous goods transporter with branches in the UAE, Qatar, Kuwait, Egypt and Iraq.

Preparing for the worst Probably the greatest cause for the logistics industry to rethink the way it prepares and assesses risk and disruption is recent terrorism activity – seemingly more random and more widespread from a relatively new source. The chaos of an act of terrorism has enormous implications for transport infrastructure, airports, railroads and ports even if they are not the direct target of the act.

Following the 9/11 attacks for example, an initial clampdown on much of the private and commercial traffic in and out of the USA left Ford Motor Co. assembly lines idle, as vital components were delayed coming in from Canada and Mexico – Ford’s fourth-quarter output was down 13% compared with its production plan.

Many supply chain risk assessors and insurers liken a terrorist act to a natural disaster and advise that preparations should be along the same lines; this could include establishing secondary suppliers, alternative transportation methods and routes and an emergency communications strategy. Real-time data can also be key, in order to react and analyse a terrorist attack and mitigate its effects in the shortest possible time.

Syria

Turkey:

IS and Nusra Front militants will remain active in carrying out kidnappings as the conflict continues with varying intensity. Increased military involvement by the West in the last quarter of 2015 has impacted negatively on the revenue streams of militant groups. Therefore it is conceivable that incidents of kidnap for ransom in particular will increase as militant groups pursue alternative sources of revenue. The number of sectarian kidnappings targeting minority groups will likely remain high, particularly in the northeast.

The exacerbated tensions between the Turkish government and the PKK rebels will likely increase the threat of kidnapping across Turkey in 2016. The southeastern regions near the Iraqi and Syrian borders will continue to be a high threat environment to all foreign nationals due to the presence of criminal syndicates and Islamist militants in the area.

Threat: Severe

Threat: Medium

Logistics News ME | July 2016 | 27

Cover Story However, while this has been tried, tested and trusted advice in the past, many acts of terrorism have adopted a more random approach and contingency plans are therefore more difficult to put in place.

While there were more than 2,700 attacks carried out in the MENA region, South Asia and Sub-Saharan Africa by the socalled Islamic State (IS) in the past year, the acts of terrorism in the West have brought about a new mindset and a need for new resources.

Wolfgang Lehmacher, head of supply chain and transport industries, World Economic Forum has made it clear that the first concern should be public safety, and all appropriate measures should be in place to reinforce that. He also understands that while terrorism impacts enormously on society, logistics objectives are potentially more devastating to a wider population.

“The response of governments has been to increase security in public spaces – and rightfully so. But what if these same terrorists would attack supply chains instead? Hitting just a few strategic targets in the energy trade, for example, could bring the entire global economy to a halt.

To avoid such disaster, companies and governments should be more aware of this perceived ‘low probability threat’ and develop the tools to protect their economic interests and those of the world. What matters then, is to recognise supply chains as a target, and take adequate measures to protect them,” he said. “The private sector should follow suit, and the first necessary step is to accept the likelihood of such attacks. That is not often enough the case.”

The sentiment is echoed by Inge Vandijck, managing partner at Radar, The Risk Management Company, based in Belgium.

She says: “Our society is increasingly faced with terror threats and attacks, including 9/11, Madrid, Paris, London and the Brussels attacks 22/3. Public transport, public places, public transport and recently Brussels Airport were terrorist targets and potential target organisations should review whether their security controls are adequate to counter potential terrorist

attacks of the nature experienced globally in recent years. There should be some insight, for instance into how adversaries will attack, for example with explosives, when they will attack, perhaps on symbolic days or events and why do they attack – the need to understand their motives.

Organisations should focus on lowering the likelihood of occurrence as well as the

2016 international Maritime Threats Africa

The Americas

The expansion of territory controlled by IS militants in Libya and Egypt has worsened the kidnap threat across North Africa. The fragile security situation in the Sahel was also evident, with foreign aid workers targeted in Sudan and South Sudan, and co-ordinated abductions by Islamist militants targeting foreign nationals in Mali and Burkina Faso. In Nigeria, the kidnap threat expanded at varying levels nationwide, with domestic nationals now increasingly targeted.

In 2015 the Americas saw a reduced proportion of global kidnapping incidents compared to previous years. Colombia’s progress toward a peace agreement with the region’s largest left-wing guerrilla group and security initiatives in Brazil have contributed to these improved results. However Venezuela’s rapidly deteriorating economy and Mexico’s public distrust in authorities means kidnapping remains a significant regional concern.

Severe risk: Libya, Nigeria High Risk: Kenya, Sudan

28 | Logistics News ME | July 2016

High risk: Mexico, Columbia, Venezuela Medium risk: Brazil

Cover Story

A Chinese war ship at the port of Djibouti

consequences of the identified threat scenarios. And when it comes to insurance, we would strongly recommend a review of existing policy wordings. Most standard wordings exclude acts of terrorism and acts of war.”

Virtual threats While not as immediately catastrophic to the public, cyber terrorism can be equally as disruptive in the supply chain. Cert-UK,

“When it comes to insurance, we would strongly recommend a review of existing policy wordings. Most standard wordings exclude acts of terrorism and acts of war.” the UK’s National Computer Emergency Response Team paints a grim picture in its report Cyber-Security Risks in The Supply Chain showing that many companies rarely follow their own advice.

The report reads: “When managing risks to their supply chain, modern organisations follow established procedures for mitigating dependencies and vulnerabilities that could impact upon their physical supply chains. These risks are identified, tracked, and assigned owners in a way which increases their visibility and allows organisations to anticipate their impact.

“However, this approach is seldom followed when dealing with cyber-security related risks to the supply chain,” adds Lehmacher. “Yet it is these risks that are most obscured, being several steps removed from the analysis and decisionmaking centre of a given organisation. As a result, they are displaced outside an organisation’s control and an organisation may therefore find that, despite the strong cyber-security measures it has implemented through its ICT system, it has fallen victim to deliberate targeting or collateral damage.”

Breaches in Cyber-security are not only difficult to detect, they can affect any link in the supply chain of any sector or

Severe risk: Pakistan High Risk: India, Philippines Medium Risk: China Kidnapping threats in Asia have varied and evolved between countries, with Afghanistan and Pakistan retaining the most significant threat from criminal and terrorist elements. In the Philippines, the Abu Sayyaf Group has heightened the kidnap threat to foreign nationals in the south, and a potential rise in express and virtual kidnappings in China may stem from the growing use of social media.

Source: NYA International

Asia

industry and are very much on the rise.

Kaspersky Security Network statistics for January-March 2016 show that in the Middle East, Turkey and Africa, an average of 45% of users had security incidents related to local networks and removable media, and 15% of users faced web-related threats and the total number of cyber-incidents detected in the Middle East during the first quarter of 2016 was 15% more than in the same period of 2015.

The dangers of data breaches have attracted major attention from marine logistics organisations.

Risk management has always been fundamental to safe and secure shipping operations and has traditionally focussed on physical operations, but greater reliance on digitisation, integration, automation and networkbased systems has created an increasing need for cyber risk management.

In a bid to protect the marine supply chain integrity, the International Maritime Organization has issued guidelines to provide high-level cyber risk management.

“A technology asset is threatened by a potential circumstance or event, which may result in shipping-related operational, safety or security failures as a consequence of information or systems being corrupted, lost or compromised.’ Perhaps not the most eloquent description of the fight against cyber-crime, but an illustration that the rise of the digital enemy is as great a threat as any other.

There are many risks and dangers facing individuals, businesses and even entire international supply chains, but preparation plays a pivotal role. Whether it is terrorism, piracy, data theft or corruption, damage limitation to some extent is possible and the industry can assess where the greatest risks exist. As author Tom Clancy wrote in The Sum of All Fears: “Panic is something that good operations officers plan for.”

However, there are the unforeseen and unpredictable events, the ‘Black Swans’ which will always have the potential to be catastrophic. Events such as Icelandic volcano ash, Hurricane Katrina, the Tsunamis of Sri Lanka and Japan, Ebola, new scientific advances, legal issues and much more can bring a company’s logistics operations to its knees. These disasters are few and far between and each is unique, but there are still some contingency plans that can be shared on a global stage. Echoing Clancy’s sentiments, Mark Twain tells us: “History doesn’t repeat itself, but it often rhymes.”

Logistics News ME | July 2016 | 29

Country focus

Small but

Strong W

Helen Gaskell investigates the opportunities and weaknesses in Bahrain’s logistics sector

ith its strategic location in the GCC, Bahrain is often considered as the gateway to the GCC region with easy access to the UAE, Saudi Arabia, Kuwait and Qatar. According to statistics from the Central Informatics Organization (CIO), the logistics sector contributed 7% to the Bahrain’s real Gross Domestic Product (GDP) in 2014 and in May this year the Kingdom’s Economic Development Board (EDB) identified logistics as one of the five core sectors where it expects both growth and investments.

Speaking as the guest of honour at the second quarterly Falak Power Lunch 2016, EDB chief executive Khalid Al Rumaihi said that for any development to achieve success, infrastructure is not always an issue but logistics holds the key.

“The Bahrain Logistics Board, for example, has been set up to reduce waiting time at the causeway through quicker processes.

The causeway sees an ongoing traffic of both goods and people, and if these processes can be tackled smoothly and effectively it will have positive impact on business.”

Having already attracted a number of leading international companies to establish headquarters in Bahrain including DHL, Aramex, KWE and Agility, Bahrain has access to the neighbouring

30 | Logistics News ME | July 2016

GCC economies as well as ranking 18th freest economy in the world, and first in the MENA region, therefore often being described as somewhere “easy” to do business.

The website Heritage.org states: “Despite the challenging external and internal environments, Bahrain has maintained economic resilience and continues to be a regional leader in economic freedom. It remains a financial hub for dynamic economic activity, with high levels of trade and investment bolstered by a competitive and efficient regulatory environment.”

In terms of infrastructure projects and roads, EDB reports that in recent years, Bahrain has witnessed the development and implementation of a number of large-scale projects, and has pledged $694 million in ongoing investment to such projects, which included the reconstruction of the Sitra crossing which was completed in 2011, and the Shaikh Khalifa Bin Salman Highway, adjacent to Mina Salman intersection project. In August 2014, the Minister of Works, H.E. Engineer Essam bin Abdullah Khalaf, announced the Ministry’s plans to study the construction of a fourth causeway to link Muharraq and Manama.

Vivek Nambiar, SVP Agility Saudi Arabia, Bahrain and Oman comments: “Bahrain is extremely business friendly and its

Country focus

strategic location to the biggest consumer market of the GCC (Saudi Arabia) and proximity to the rest of the gulf, augurs well to be as ideal of a logistics hub in the Gulf as any. Agility is committed to this market and our growing presence with our established clientele here is proof to the viability of Bahrain as a logistics gateway to the GCC and region.

“The infrastructure in Bahrain is as good if not better than any other GCC state.

The government has an open ear to the business community and is extremely committed to ensuring a high standard of infrastructure.”

There are a number of significant infrastructure facilities in the Kingdom, including the $360m Khalifa Bin Salman Port, offering services to shipping lines, freight-forwarders and beneficial cargo owners which facilitates growth for the local economy and enhances supply chains for the Northern Gulf. It is only 13km from Bahrain International Airport and is linked to Saudi Arabia by the King Fahd Causeway and Feeder vessels.

Bahrain also has its International Airport (BIA) which hosts 27 commercial airlines and 11 cargo airlines, and provides sophisticated facilities for logistics operators and according to the EDB, 322,734 tonnes of cargo can be carried a year and considerable expansion is in progress.

Salman Industrial City includes several key infrastructure projects in the Hidd area such as the Bahrain International Investment Park (BIIP), Bahrain Investment Wharf, and the Hidd industrial Zone. BIIP is host to a number of international companies, including Mondelez International, MTQ Corporation, Abahsain Fiberglass, RMA Middle East, BASF, JBF and Siemens.

And finally, Bahrain Logistics Zone (BLZ), the Middle East’s first multi-model logistics hub to focus on re-export and value-adding logistics and the only dedicated Customs Bonded Area focused on value-added logistics in Bahrain. The Bahrain Logistics Zone has gained the attention of international logistics players and signed various leasing contracts. It was chosen by Almoayed Wilhelmsen, Aramex, Cargo Partners, Bandar Al-Khaleej-BituMena, and also Schmidt Middle East Logistics, who in December 2014 announced that building had begun on a $30 million dry bulk logistics hub in Bahrain. The facility will ultimately store around 30,000 metric tonnes of materials.

Speaking about the Bahrain Logistics Zone H.E. Kamal Bin Ahmed Mohammed, Minister of Transportation and Telecommunications, Kingdom of Bahrain says: “Significant improvements in customs procedures are on the way. The fact that the average number of trucks waiting to cross the border to Saudi Arabia at any given time has already decreased considerably is a visible result of these measures. Furthermore, restrictions on foreign ownership have been substantially reduced or completely abolished for various sectors. We have

Logistics News ME | July 2016 | 31

Country focus

decided on a review of the airport master critical to stamping out lingering on road networks to meet its logistics plan to ensure it corresponds to freight corruption and safeguarding stability. demand, and in the utilities sector, with companies’ needs. Agreements have also Youth unemployment remains a major Bahrain’s power sector dominated by one been reached with regard to the long-term economic challenge.” fuel: gas. The heavy dependence on one development of Khalifa bin Salman Port, Dr. John Webb, Head of School, School of mode of transport or one fuel type including dredging measures required to Logistics and Maritime Studies, Bahrain heightens risk, as should this area be attract vessels and to fully capture the Polytechnic is trying to tackle this issue, he disrupted operations would be negatively port’s potential. says: “A Curriculum Advisory Committee impacted as there are no diversification “The primary objective is to establish (CAC) has been set up to consult with the options.”

Bahrain as the distribution hub in the Gulf local transport and logistics industry to The report continues to say that while region. This requires attractive connections ensure that the qualifications being the utilities sector is well developed, and for all modes of transport. Improving feeder delivered are relevant to employers in the country’s oil and gas wealth decreasing services and connecting Bahrain to the Bahrain. The use of case-studies the cost of both power and fuel, Bahrain has planned GCC railway will be milestones contextualized to the region provides a one of the most well-developed towards that objective. Taken together, we strong research underpinning to the telecommunications sectors and highest create the right environment for high value program. School staff regularly invites water consumptions in the region. logistics beyond mere transport, However, risks exist in this such as warehousing and value regard too: “Bahrain’s electricity “Despite the challenging external and added services.” sector is over-reliant on one internal environments, Bahrain has With much focus on source, creating vulnerability to expansion and positive energy shortages in the future. A maintained economic resilience and developments, what could go move to decrease fuel subsidies continues to be a regional leader in wrong? According to Nambiar is another risk to the country’s from Agility, talent is a challenge economic freedom. It remains a financial supply chain; thus, a move in the region. would increase the cost of hub for dynamic economic activity, with “The lack of a sufficient local transport and specifically hit the high levels of trade and investment talent pool and interest from the country’s road haulage younger generation to pursue a operators, which its logistics bolstered by a competitive and efficient career in logistics and sector is so reliant on.” regulatory environment.” transportation remains a key Plans to develop a railway concern.

While we are network in the kingdom are in compliant with the Nationalisation goals, professionals to the Polytechnic as guest- the pipeline, but it was recently announced this remains a challenge to sustain given lecturers to expose students to professional that the detailed studies of Bahrain railway the above scenario. The other key challenge life. Before graduation, all students are network won’t be finalised until in the first for the industry in Bahrain in general is the required to complete a 10 week industry quarter of 2017 meaning that investors in turnaround times on the causeway which is placement.

Bahrain must remain reliant on the the arterial link for goods in or out of the “In the past four years two of our country’s road network to meet their island. In recent months through students have won international awards logistics needs for now. collaborative efforts with the EDB and through the Chartered Institute of Nambiar adds: “We remain optimistic on Customs authorities, we have assisted in Logistics and Transport for the quality of our outlook and continue to invest in influencing change and improvement of their student placements and projects.” developing our capacity and capabilities. process for the better of the community.”

BMI Research, a Fitch Group company Though the market overall has been Heritage.org shares a similar view, that analyses and forecast different sluggish, we have clarity on where and how stating on the site: “The kingdom’s countries, industries and financial markets we compete and we are supported by the challenging transition to greater openness, believes however, that the major risk to the range of services that has allowed us to diversification, and modernisation country’s supply chains is its reliance on continue growing. Bahrain is very business continues. Firmly institutionalising the one area. The Bahrain Logistics Risks friendly and continues to attract business rule of law by ensuring judicial Report it says: “This is an issue in the and industry houses, and remains as independence and transparency will be transport sector, with the country reliant attractive as possible in the Arabian Gulf.”

32 | Logistics News ME | July 2016

Viewpoint

Sold for scrap

Is the sale of a 14-year old Post-Panamax Containership for Scrap a New Trend?

Craig Jallal, Senior Data Editor of mapping, ship search and valuation service VesselsValue, examines the question

T

o set the sale in context, the average age of all sizes of Containerships sold for scrap in 2014 and 2015, was around 22-years old. There have been relatively few Post-Panamax Containership sold for scrap, but the average age at the time of sale was around 19.5-years old. Therefore, the 2002-built, 5,447-teu Post-Panamax Containership Conti Taipei was sold relatively young, but this does not appear to be a one-off event.

There have been three other 2002-built Post-Panamax Containerships sold in the last six months. All three were built at “quality” shipyards in South Korea, and at the time of sale their next Special Surveys were not due for at least twelve months or more.

Other distinguishing features were that all three vessels were owned by German companies, and had been inactive at least six to three months before the sale, according to the VesselsValue’s vessel tracking module VV+.

Using the ship search VV+ module, it is

possible to filter the Post-Panamax Containership fleet for similar ships i.e., built between 1999 and 2003, owned by a German company, and with Special Survey due before 1 May 2017. The VV+ search returns 17 candidate ships from a potential fleet of over 1,000 Post-Panamax Containerships.

Two of the 17 vessels on the candidate list have been in-active for at least eight months.

These two ships are currently stationed among a group of islands close to the city of Zhoushan (near Shanghai) in China. These are sisters-ships, and are currently valued at $17m each, with a demolition value of around $8m. One of the above islands, Daixizhen Island, has also recently become the host to two more Post-Panamax Containerships. These are also sister-ships, with a current value of $16m, and a demolition value of $7m. Now that the scrap price is firmer, it will be interesting to see if these relatively young Post-Panamax Containers ships are sold for scrap, too.

How many more could be sold?

Using the ship search VV+ module, it is possible to filter the Post-Panamax Containership fleet for similar ships i.e., built between 1999 and 2003, owned by a German company, and with Special Survey due before 1 May 2017. The VV+ search returns 17 candidate ships from a potential fleet of over 1,000 Post-Panamax Containerships.

Logistics News ME | July 2016 | 33

Viewpoint

“Another factor contributing to the customer evolution is the world becoming smaller - people can literally fly around and commute further than ever before.�

34 | Logistics News ME | July 2016

Viewpoint

The Customer Evolution Prakash P.K. Menon reveals the new business habits retailers must adopt

T

he human race is characterised by one distinctive factor and that is the ability to adapt. We’ve been doing that for as long as we’ve been around - we’ve adapted to the changing environment in which we found ourselves.

We adapt our behavior and we adapt the way we do things in order to be able to fit into the environment.

The changing retail landscape has led inevitably to an evolution in customer and consumer behaviour.

Consumers now go: “I don’t have to do things the same way as I’ve done them before, I can do them differently.” So they’ve evolved, they’ve moved on.

Sadly, many retailers haven’t picked up on that fact and they’re still trying to reach customers the same way as they used to, which is no longer effective.

Moreover, retailers also do a very good job at training their customers to behave in ways that are counterproductive for the retailers themselves. A classic example of that in Australia is that retailers have trained their customers to wait for discounts.

Customers have evolved, but retailers seem to be saying: “Now, we just wait for them to evolve back again.” That just is not going to happen. Hence, the consumer evolution is the reality and retailers need to adjust the delivery of how they do things, because their customers have changed.

Another factor contributing to the customer evolution is the world becoming smaller - people can literally fly around and commute further than ever before. In a lot of ways there is no longer this tyranny of distance – nowadays, you can have breakfast, lunch and dinner in three different cities, in three different countries, and that makes the customer savvier as to what’s going on around in the world. Therefore, there is obviously a desire to try and bring in different knowledge from their different travel experiences.

This becomes a challenge, not only from a retailer perspective, but also from the desire of the consumers wanting to take the best of not just one

region, but globally. Another thing is that it puts a lot of the power back in the hands of the consumer.

Once upon a time, if you wanted to find out about a product, you would go to your local shop and you would talk to a knowledgeable sales assistant who would tell you all about it. Now, there’s a fair chance that the consumers going into a shop will know more about the product than the person who is selling that to them.

In addition, media, television, movies – all have an effect on the consumer behaviour in terms of what things they want to buy. The major area with a media impact on customer evolution is simply the area of expectation. Customers see it on television, they see it in movies and they go: “I should have one of those.”

So, there is an expectation created that the product is available and that the customer is used to have it.

Particularly with the younger generation now being exposed so openly when it comes to media in the form of mobile devices and the various media channels broadcast, there can be noted a major leap in young consumer evolution. They’re born with devices in their hands, so their expectation is that they will always have devices and that those devices will always be getting better. They have a total inability to cope with not being connected, so if they can’t get online, if they can’t check something out, then it is very disorienting for them.

In some cases, children are more savvy even than the parents, themselves. Kids are more traveled around the globe since a very young age and this also has an impact on the buying behavior. Even though some of them may not have physically travelled to other places in the world, they feel like they have, because they’ve seen the TV programs, they’ve watched the clips, they’ve seen the photographs of other people who’ve been there, and so there is this spread of information about the wider world much more easily gained by their generation.

Logistics News ME | July 2016 | 35

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Viewpoint

Middle East suppliers feeling the squeeze as governments cut spending Sam Achampong comments on the CIPS Risk Index, powered by Dun & Bradstreet, the global indicator of the pressures acting upon supply chains

S

upply chain risk in the Middle East and North Africa remained relatively stable during the first quarter of the year, at 4.371, according to the CIPS Risk Index, produced by Dun & Bradstreet for the Chartered Institute of Procurement & Supply (CIPS). The score is high however by historical standard and compared to other regions, and underlying risk trend continued to deteriorate due to sustained low oil price and increased security risks in the region.

Globally, supply chain risk crept higher for the second consecutive quarter from 79.3 in Q4 2015 to 79.8 in Q1 2016, with Asia Pacific providing the largest risk contribution of any region.

The importance of major exporters in Japan, China and Australia to global trade, make international supply chains particularly sensitive to any instability in the region. This is followed by Western Europe, contributing 30% of global supply chain risk, and the Middle East and North Africa, providing just 9% (see table).

The effects of the weak commodity price have been apparent on the short-term economic outlook for the oil-exporting countries of the Middle East and North Africa, undermining growth as government expenditure, which is a major driver of the economy, is curtailed. As a result, two of the region’s oil exporting economies, Bahrain and Saudi Arabia, were downgraded in Q1. Bahrain’s fiscal deficit is forecast to reach 14% of GDP in 2016; compared to only 3.3% in 2014. In Saudi Arabia, the government has been selling SAR20bn of bonds every month in order to help support the fiscal deficit.

Against this negative economic backdrop, governments and companies in the region are under pressure to cut costs and many are reacting by reviewing short and medium term commitments, projects and contracts.

This is affecting both local and international companies operating in the region. In Saudi Arabia during Q1, the government ordered all ministries to cut the costs of all projects they have contracted by a further 5%.

A combination of low oil prices, regional security issues and wider economic uncertainty is putting pressure on the supply chains in the Middle East and North Africa.

As governments are cutting down on costs and companies are trying to hold on to their cash; extended and protracted payment

38 | Logistics News ME | July 2016

Viewpoint

Global supply chain risk Q1 2016

1

2

3

4

5

Low risk

6

7

High risk

Region

Proportional Contribution

North America

6.48

Western and Central Europe

23.98

Eastern Europe and Central Asia

6.80

Asia Pacific

26.79

Middle East and North Africa

7.25

Latin America

6.03

Sub-Saharan Africa

2.47

Total risk score

79.3

terms are becoming an issue across the region. Several business owners have told us that payment terms have been stretched from the usual six months to more than a year, making it very challenging for them to manage their business and cash flow.

Looking ahead, as governments in the region are taking steps to diversify their economies from oil and open up for cross-border investment and trade, the pressure on the budget deficits may ease. This in turn could help improve the situation around supplier payment terms.

Meanwhile, elevated security risks across the region will ensure supply chain risk remains high throughout 2016 and into 2017. Wars in Iraq, Libya, Syria and Yemen have seen radical groups such as Islamic State and al-Qaeda flourish.

On Iran’s reintegration into global supply chains, there are growing signs that optimism following the end of nuclear sanctions might be misplaced. European businesses are particularly nervous about doing business in Iran while Iranian business culture requires personal relationships to develop gradually before deals can be agreed. Other challenges include the domination of the economy by quasi-state organisations, under-developed financial service system, endemic corruption, and weak levels of transparency and rule of law.

About the CIPS Risk Index, powered by Dun & Bradstreet: First launched in April 2014, the CIPS Risk Index, powered by Dun & Bradstreet, is a composite indicator of pressures acting upon supply chains globally. The Index analyses the socio-economic, physical trade and business continuity factors contributing to supply chain risk across the world, weighting each score according to that country’s contribution to global exports.

The Index helps sourcing professionals understand the risks to which to their supply chains are exposed, articulate questions and scenarios for key suppliers, inform assurance activities, check the readiness of contingency plans, support the negotiation of risk transfer in contracts, and establish factors which may impact the financial stability of tier one and sub-tier suppliers upstream. Regular production of this Index will help procurement and supply professionals communicate and justify riskinformed sourcing decisions and support effective Supplier Relationship Management.

Logistics News ME | July 2016 | 39

Viewpoint

Electrifying the Road Network The recent United Nations COP21 climate change summit in Paris highlighted the need to cut greenhouse gasses, such as CO2, by as much as 80% in many countries by 2020. But the problem is not just constrained to developed countries writes Akin Adamson, Middle East Director, Transport Research Laboratory

T

he UAE›s Vision 2021 National Agenda throws the spotlight on the significant role that sustainable development and transport plays in the country›s efforts towards social and economic growth. Focusing on programs and initiatives directed to improve air quality, water resource preservation, reducing solid waste and the development and implementation of a green growth strategy, the UAE›s 2021 blueprint clearly shows the need to deliver a long-term sustainable energy resource plan to serve as a pillar for the country›s future. This is evidenced

by Dubai›s recent move to launch the world›s largest solar project. Under this project, concentrated solar power (CSP) is expected to be attainable in the next five years. Once completed, the solar project can help reduce carbon emissions by more than 6.5 million tonnes of harmful CO2, helping Dubai and the UAE to meet its commitment to the Paris Agreement to keep global warming temperature increases below 2 degrees Celsius by the end of this century.

Aside from the solar initiative, electric vehicles (EVs) have also started to make inroads in to the UAE - with Dubai taking the lead in introducing various initiatives to make EVs more attractive, from subsidised pricing to the installation of 100 new charging stations by the end of 2015. Electric vehicles offer an ideal solution to tackling the current air quality problem. They provide zero tailpipe emissions, as well as very low grid-to-wheel CO2 emissions if using electricity from renewable sources. The problem is currently that range and utilisation are constrained by battery limitations and charging times, particularly

40 | Logistics News ME | July 2016

While improvements are being made in battery capacity, these incremental increases will place additional strain on plug-in charging infrastructure and won’t deliver the groundbreaking range required to make EVs comparable with ICE vehicles. So in order to accelerate adoption, we need to find an alternative way of powering vehicles.

While improvements are being made in battery capacity, these incremental increases will place additional strain on plug-in charging infrastructure given the need to power ancillary systems in cars in the region, such as air conditioning. So for longer journeys on strategic roads or outside of cities, EVs are not practical. This then severely reduces the range of available vehicles and transport applications for which they could be used.

Is Wireless Power Transfer (WPT) the “breakthrough” enabling technology?

Wireless power transfer (sometimes called contactless charging) is a relatively well established technology for the static charging of vehicles when they are stationary over an in-road installed inductive loop (a “charging pad”).

A coil placed in the ground generates a magnetic field when a high frequency current is passed through it. A second coil, placed on the vehicle, when within range of the magnetic field, generates its own current. Therefore, electrical energy is transferred to the vehicle completely wirelessly. A similar concept is the one being used for wireless charging of smart phones and other consumer electronic devices.

This provides a simple mechanism for recharging a vehicle and removes the requirement for the driver or user to interact with any charging infrastructure, thereby increasing the practicality and user friendliness of the charging process. Charging pads can be conveniently installed at any location where a vehicle is likely to be stationary for any period of time, for example, in parking bays – without the need for complex or unsightly above ground charging infrastructure.

Viewpoint

vehicles each day to drive in full EV mode along the equipped sections of the road, the benefits quickly become apparent.

Another use case for WPT is to extend the range of public transport busses. Charging pads can be installed at bus stops so, when a bus is stationary (even for a few minutes), it can receive a charge that will allow it to travel much further than if it had to rely on stored battery power alone. Such systems are already in operation and the UK’s Transport Research Laboratory (TRL) is running trials across a number of cities in the UK (including London and Milton Keynes) to assess performance and suitability for wider use.

Is on-road charging the answer?

One possible solution is the development of a cost-effective and energy efficient way of providing power to vehicles on the move. This not only reduces the need for large, expensive batteries on board vehicles, but reduces the dependence on plug-in infrastructure, optimising utilisation. However, many people have questioned whether on-road charging is really viable.

To assess the viability of on-road charging, the UK’s Transport Research Laboratory (TRL) recently completed a feasibility study for Highways England into dynamic wireless power transfer (DWPT). The study sought to understand whether DWPT technology can be used on England’s strategic roads to prepare for, and potentially encourage, greater take-up of electric vehicles.

For those not familiar with DWPT, it uses multiple inductive-loops along a stretch of roadway to provide power to vehicles when moving at motorway speeds. Unlike other alternatives, it does not require installation of excessive, over-ground infrastructure and removes the requirement for driver or user interaction, increasing the practicality and user

An electric car charging

friendliness of charging.

Results from tests around the world so far indicate that efficiencies of such DWPT systems should be comparable to plug-in charging. Findings from the feasibility study showed that existing DWPT systems have already proven to be able to deliver power of up to 140kW to moving vehicles, with higher levels possible.

In addition, one of the big advantages of DWPT over plug-in charging is efficiency.

DWPT systems are designed to supply power to the electric motors in the vehicle directly, thus avoiding the inefficiencies of battery charging and discharging. It also enables vehicles with very small batteries to cover large distances of equipped highway in a mostly fully electric mode, for example hybrid HGVs. Combined with the cost of the DWPT equipment and road installation, costs per km are substantial. However, when you consider that the technology would enable thousands of

Creating a flexible charging ecosystem Wireless power transfer is already a reality across a number of sites in Europe for the static charging of vehicles; dynamic wireless power transfer simply takes this technology to the next level. It’s not intended to replace the need for plug-in charging, but to provide an option for opportunistic charging or powering of the vehicle over long journeys.

Despite the focus of the TRL study being DWPT, this technology is not the only solution for road electrification. Other examples include the use of cable catenary systems over highways to provide power to electric trucks via pantographs In fact, Siemens has already developed something similar for its eHighways system which is now being tested in Sweden and the US. Regardless of the method chosen for the UAE the prospect of providing power to vehicles on the move offers exciting possibilities and could play an important role in helping many regions to achieve their vision of becoming smart, connected and sustainable.

However, in order to be certain of the anticipated performance and benefits the technology first needs to be extensively trailed in a representative environment before piloting on a public road. If successful, DWPT, together with conventional plug-in charging in selected locations and urban areas, could provide a flexible, user friendly and fit-forpurpose charging ecosystem that will help the region achieve its vision of becoming smart, connected and sustainable.

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Logistics News ME | July 2016 | 41

Supplier news

SUPPLIER NEWS

FAMCO UAE reaches global final of Volvo Construction Equipment Masters competition

F

AMCO UAE Construction Equipment team has been named as one of two regional winners of the Volvo Construction Equipment (CE) Masters competition, which took place in Konz, Germany from 31 May to 2 June.

Of the 43 qualifying countries from the EMEA region, ten teams qualified to compete in the Volvo CE Masters regional final, from which team UAE and team Sweden will now advance to the Masters global final in Sweden this September, where the eight best teams in the world will compete for the Championship title.

Volvo CE Masters first launched in 1990, a global competition for Service 42 | Logistics News ME | July 2016

and Parts personnel to recognise the highest levels of performance in the aftermarket business. In the first rounds, individuals competed at dealership level, answering theoretical questions online. In teams, the winners then face theoretical and practical tests, as the event progresses through national, hub and regional rounds.

Hani Hafiz, team leader, FAMCO congratulated all the team members, Joseph George, Ranjith Balan and Paul Mathew for their engagement, dedication and team work which led to FAMCO’s regional success.

Mark Johnson, regional GM of after sales, FAMCO said: “We encourage all of our after sales associates

working with Volvo CE to participate in the Masters competition. Volvo CE Masters is an excellent opportunity for our team to enhance their technical and customer support skills through individual and team-based assignments in a competitive and fun environment. Active participation benefits everyone, the individual, FAMCO, Volvo Construction Equipment and most importantly, the customer by providing more efficient and accurate diagnostic and repair procedures. We are very proud of FAMCO’s history of success in the competition, which continues thanks to our current team. We support them and wish them every success in the final.”

Supplier news

Gartner Announces Rankings of the 2016 Supply Chain Top 25 Rank

Unilever topped the Gartner rankings

Gartner, Inc. has released the findings from its annual Supply Chain Top 25, identifying supply chain leaders and highlighting their best practices. Analysts announced the findings at the Gartner Supply Chain Executive Conference, which was being held at the JW Marriott Desert Ridge Resort and Spa in Phoenix, AZ. “2016 marks the 12th year of our annual Supply Chain Top 25 ranking,” said Stan Aronow, research vice president at Gartner. “In this year’s edition, there are several longtime leaders with new lessons to share and a number of more recent entrants from the high-tech, industrial, chemical, auto and life sciences sectors.”

For the first time, Unilever topped the ranking, followed by McDonald’s, Amazon, Intel and a newcomer to the top five, H&M (see Table 1). Five new companies made the Supply Chain Top 25 this year with Schneider Electric, BASF and BMW joining the list for the first time, and HP and GlaxoSmithKline rejoining after several years.

Apple and P&G continued to qualify for the Masters category, which Gartner introduced in 2015 to recognize sustained supply chain leadership over the last 10 years. While this category is separate from the overall Supply Chain Top 25 list, these companies continue to be evaluated as part of Gartner’s annual research study.

Apple continues to succeed by offering platforms that ecosystems of partners

build on to meet customers’ needs. The big forward-facing question for Apple and its supply chain is whether it can deliver on the next big innovations to continue the revenue and earnings pace of the last decade.

For the majority of its products, P&G is running an end-to-end synchronization program. Every part of the supply chain operates based on the daily cadence of consumption, in some cases triggered by demand at the shelf. The supply chain team brings data and analysis skills to the process with the ultimate goal of increasing the value that each active SKU contributes to the company.

Along with the Masters category, the Supply Chain Top 25 continues to offer a platform for insights, learning, debate and contribution to the rising influence of supply chain practices on the global economy.

Gartner analysts derive a master list of companies from a combination of the Fortune Global 500 and the Forbes Global 2000. The Supply Chain Top 25 rankings comprise two main components: business performance and opinion. Business performance in the form of public financial and CSR data provides a view into how companies have performed in the past, while the opinion component offers an eye to future potential and reflects leadership in the supply chain community. These two components are combined into a total composite score.

Company

1

Unilever

2

McDonald’s

3

Amazon

4

Intel

5

H&M

6

Inditex

7

Cisco Systems

8

Samsung Electronics

9

The Coca-Cola Co.

10

Nestlé

11

Nike

12

Starbucks

13

Colgate-Palmolive

14

3M

15

PepsiCo

16

Walmart

17

HP

18

Schneider Electric

19

L’Oréal

20

BASF

21

Johnson & Johnson

22

BMW

23

GlaxoSmithKline

24

Kimberly-Clark

25

Lenovo Group

Logistics News ME | July 2016 | 43

Supplier news

New members named

by Air Cargo Community Frankfurt

Three new members from the field of freight forwarders have joined the Air Cargo Community Frankfurt. As of now the Freight Forwarding and Logistics Association Hessen/Rhineland-Palatinate (SLV), Kühne + Nagel, as well as Hellmann Worldwide Logistics are now members of the dynamic representation of interests for the air cargo hub Frankfurt. The fledgling community as such is growing rapidly and now has 41 members from all sectors of the air logistics chain.

Joachim von Winning, Executive Director of Air Cargo Community Frankfurt: „More and more forwarding agents are using the diverse design opportunities available to them through the Community and opt for a membership. We are very pleased about this, especially since we have two real global players joining us with Kühne + Nagel and Hellmann Worldwide. They will make valuable contributions to our Competence Team and the SLV as well. With its hundreds of member companies it now represents an enormous range with us across small, medium-sized and large companies in the region.“ Kühne + Nagel is one of the major global leading logistics companies. Today the corporate network includes 67,000+ employees at more than 1,200 locations in over 100 countries. In addition to Air Cargo, Ocean/Sea Freight, Contract Logistics and Overland Business embody essential priorities.

Hellmann Worldwide Logistics is also a global logistics service provider. The network has 19,300 employees in 443 offices operating in 157 countries. Besides Air, Ocean/Sea, Road & Rail Hellmann also provides Contract Logistics and many special industry solutions.

The Forwarding and Logistics Association Hessen/Rhineland-Palatinate represents the interests of around 400 regional freight forwarding and logistics companies, which together employ more than 30,000 people. The association offers its members comprehensive consulting services and support.

44 | Logistics News ME | July 2016

EFS Facilities Services acquires UAE based security services firm SecurePlus

EFS Facilities Services has announced the acquisition of SecurePlus, a UAE-based security services provider established in 2005.

The acquisition follows the recent launch of EFS’ managed security services division, which caters to addressing the security services needs for a wide range of clients across public and private sectors, institutions, large scale facilities, hospitals, banks, multinational corporations, five star hotels, shopping complexes, residential communities and commercial properties.

Tariq Chauhan, Group CEO for EFS Facilities Services Group, stated: “The SecurePlus acquisition integrates the provision of security services as part of the self-delivered service offerings of EFS Group in line with our strategic vision to provide a truly integrated facilities management services to our clients. The strategy of EFS Group is to expand the operations of Secureplus across UAE as part of the first phase and to later introduce security services operations in other lucrative key markets as a new business sector complementing EFS’ existing IFM operations. EFS will enhance Secureplus’ service offering to establish itself as a premium service provider of man guarding and industrial security services, in addition to other ancillary services such as cash in transit and technology surveillance amongst others.”

As part of the acquisition, EFS Facilities Services has appointed a new management team to manage SecurePlus, supported by EFS’ shared services team to deliver professional world class security services to clients.

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Diary

The month ahead

Logistics News ME picks the latest and most sought-after exhibitions, conferences and seminars coming up in the industry

SIL International Logistics Exhibition

9 – 11 June Fira De Barcelona Montjuic

After 11 editions SIL has become the Great Logistics and Transport event in Spain and is at second place in Europe’s exhibitions reference. SIL 2016 saw an important growth and spectacular development in the exhibition, consolidating itself in the international exhibition calendar as the logistics exhibitions of Southern Europe. Organised by Consorci de la Zona Franca, whose main activity has been centred in promoting and driving leading projects within the real estate and logistics sectors, developing an exhibition know-how.

India Warehousing Show

08 – 10 June, 2016 Pragati Maidan, New Delhi, India

India Warehousing Show is India’s biggest trade show for warehousing, materials handling, logistic and supply chain industries.

The trade fair allows professionals to explore a variety of innovative products and technologies, discover global trends by meeting industry experts and improve their processes by acquiring the latest technologies

Supply Chain and Logistics Summit

20 – 22 June 2016 Hotel Rey Juan Carlos I, Barcelona

The European Supply Chain and Logistics Summit offers the unmissable opportunity to meet, network and exchange ideas at Europe’s largest event of this kind. The essential summit for all involved in supply chain, logistics and related disciplines, securing

46 | Logistics News ME | July 2016

your place will guarantee that you gain a true understanding of up-to-date industry developments and best practice

LogMat

24 – 26 June, 2016 Chennai Trade Centre, India

The only exhibition of its kind in the South-India that has been organised consistently over the past three years and the only platform where the entire industry meets once in a year to share and discuss the latest upcoming projects within the region. LogMat reaches beyond Chennai as the show attracts buyers from other regions of India.

Cargo Week Americas

28 – 30 June, 2016 Centre Banamex, Mexico City, New Mexico

Cargo Week Americas - Expo Carga is the platform where experts from foreign trade and the freight transport sector meet the world to do business.

Intralogistics Latin America

28 – 30 June, 2016 Centre Banamex, Mexico City, New Mexico

Intralogistics Latin America is a leader event in Latin America which adds the main specialists into the logistic industry in Mexico approaching products, services, innovations and trends of the supply chain and material handling. Over three days the most important material handling providers of the sector are meeting up with potential clients on a platform that includes diverse interactive activities.