Logistics News ME - September 2021

B2B ECOMMERCE

CASE STUDY

OP-ED

Growth of eCommerce in the F&B industry

Flavouring the world through better logistics integration

The backbone to a century of motoring evolution

CONNECTING TRADE PROFESSIONALS WITH INDUSTRY INTELLIGENCE

SEPTEMBER 2021

ON SAFE GROUND SALAH ADIB

THE GENERAL MANAGER AT AL MASAOOD - TBA DIVISION reveals how the company is at the forefront of delivering innovation-driven solutions to the market and why safety is the division’s top priority

A MEMBERS OF EMIRATES TRANSPORT BUSINESS CENTERS:

IN THIS ISSUE

24

34

18 ON SAFE GROUND Salah Adib The General Manager at Al Masaood - TBA Division reveals how the company is at the forefront of delivering innovationdriven solutions to the market and why safety is the division’s top priority

14 FREIGHT FORWARDING LESSONS LEARNED FROM THE PANDEMIC Amadou Diallo, CEO of DHL Global Forwarding Middle East and Africa, shares how COVID-19 holds opportunities for digitalisation, globalisation, and the future of logistics 24 OP-ED LUBRICANTS - THE BACKBONE TO A CENTURY OF MOTORING EVOLUTION Fausto Lupone, Automotive Sector Expert at Petronas Lubricants International, writes how lubricants is inseparable from motoring 32 CASE STUDY

FLAVOURING THE WORLD THROUGH BETTER LOGISTICS INTEGRATION Lee Michael Sissons, Regional Head, APA Ocean Management,

A.P. Moller-Maersk, reveals how the shipping firm is providing end-to-end logistics solutions to garlic producers in China

34 SUPPLY CHAIN

STRENGTHENING THE AUTOMOTIVE SUPPLY CHAIN Khaled AlShami, Senior Director, Solution Consulting, Middle East & Africa, Infor, writes why building trust and visibility across the automotive supply chain is crucial

38 AUTOMATION

IMPROVING WAREHOUSE AUTOMATION VALUE Developing a strategy for keeping automation systems and software current and in good working order is essential to minimizing risk and maximizing equipment performance

LOGISTICS NEWS ME | SEPTEMBER 2021 | 3

LNME

EDITOR’S NOTE

T

he COVID-19 pandemic and digitalisation has further fuelled the eCommerce sector. We’re beginning to see increased demand for online purchases across multiple sectors.

Recently, JD Property, a subsidiary of China’s eCommerce firm JD.com, revealed that it is purchasing a stake in China Logistics Property Holdings Co. for USD2.1 billion. This move is said to give JD Property an edge over its rivals in China’s already competitive market.

There are also new players entering the eCommerce domain, food and beverage companies for example.

Igor Nikolenko, Co-founder & CEO of SupplyMe, tells us about the surge in online food sales and how the advent of technology and the need for personalized online experiences has created new dynamics in the everevolving F&B industry (read more on pages 30-32).

Furthermore, logistics companies across the globe are heavily investing in warehouses and logistics infrastructure to cater to the burgeoning demand.

The eCommerce sector in the GCC, especially the UAE and Saudi Arabia is witnessing a spike in online sales.

The Abu Dhabi Investment Office (ADIO) recently announced financial and non-financial incentives as part of its Dhs2 billion (USD545 million) Innovation Programme for three companies, one of which is Lyve, a UAE-based logistics solutions and technology company.

In Dubai, a dedicated eCommerce free zone has been set up to offer seamless solutions to businesses to drive the growth of licensed eCommerce companies. Dubai CommerCity has already succeeded in leasing 30% of its facilities within a period of only two months in the first part of the development phase of the free zone, which extends over an area of 2.1 million sqft and backed by an investment of Dhs3.2 billion.

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rabih.naderi@bncpublishing.net +966 50 328 9818 MANAGING EDITOR

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Jochebed Menon EDITORIAL DESIGN

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MARKETING EXECUTIVE

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REGIONAL NEWS

“WITH ADDITIONAL CAPITAL EXPENDITURE, WE HOPE THE SME SECTOR WILL BE EMPOWERED TO PLAY AN EVEN GREATER ROLE IN ADVANCING THE UAE’S NATIONAL INDUSTRIAL TRANSFORMATION AND BUILDING A KNOWLEDGE AND INNOVATION-BASED ECONOMY.”

DIC AND EMIRATES DEV. BANK INK DEAL TO BOOST SME GROWTH AND LOGISTICS SECTOR

D

ubai Industrial City (DIC), a member of Dubai Holding Asset Management, has signed a strategic agreement with Emirates Development Bank (EDB), a financial enabler of the country’s economic diversification and industrial transformation agenda, to provide innovative financing and banking solutions to small and medium-sized enterprises and support the growth of vital national industries such as advanced manufacturing and logistics.

Signed by Saud Abu Al-Shawareb, Managing Director of Dubai Industrial City and Shaker Zainal, Head of Business Finance at EDB, the strategic agreement aims to support Dubai Industrial City’s efforts to develop the industrial sector in Dubai and the UAE, provide new opportunities to attract local and international manufacturing companies, and offer financial

8 | LOGISTICS NEWS ME | SEPTEMBER 2021

solutions to develop state-of-the-art infrastructure.

The agreement also aligns with EDB’s continuous efforts to enable the industrial transformation and economic diversification agenda in the UAE, build a knowledge-based economy, increase global competitiveness and sustainable growth, and support startups and SMEs, which are key drivers of the national economy.

Shaker Zainal, Head of Business Finance at EDB, said: “Through this agreement with Dubai Industrial City, we will offer the right support to finance SMEs. We are always keen on cooperating with related entities especially in terms of financing small and medium-sized enterprises, and we believe that this collaboration with one of the region’s largest industrial hubs will help us reach potential customers and study the possibility of funding them.

“We will also work together on developing entrepreneurship and awareness programmes and sharing industrial knowledge.”

Earlier in the year, EDB announced it had allocated an investment portfolio of AED30 billion until 2025, to support the development of industrial sector. This is part of EDB’s commitment to support the goals of the National Agenda under Operation 300 bn – a 10-year strategy to empower the country’s industrial sector to propel a sustainable national economy by boosting the SME ecosystem in UAE as well as enhancing the contribution of SMEs to the country’s GDP. Saud Abu Al-Shawareb, Managing Director of Dubai Industrial City, said: “Today’s strategic partnership reaffirms our efforts to transform Dubai Industrial City into a world-class business destination for manufacturing and logistics.

“It will galvanize our business community, unlock new investment opportunities, create skilled jobs, and consolidate Dubai’s position as a business-friendly hub for trade and commerce. With additional capital expenditure, we hope the SME sector will be empowered to play an even greater role in advancing the UAE’s national industrial transformation and building a knowledge and innovationbased economy. We look forward to working in partnership with EDB on this imperative initiative.”

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REGIONAL NEWS

AD PORT’S OFCO EXPANDS FLEET WITH PURCHASE OF SEVEN VESSELS

O

ffshore Support and Logistics Services Company (OFCO – Offshore International), the integrated maritime logistics service provider that is jointly owned by Allianz Marine & Logistics Services (AMLS) and SAFEEN, Abu Dhabi Ports’ marine services arm, has announced the acquisition of seven support vessels as part of its offshore marine services fleet.

Comprising of four Anchor Handling Tugs (AHT), a 65-metre landing craft, as well as a supply ship and multipurpose safety standby vessel, the newest additions to OFCO’s fleet will further extend the new company’s capabilities in providing highly efficient and cost-effective onshore and offshore integrated logistics solutions and subsea services.

Combined with a fully operational offshore supply land base and led by a growing team of industry-leading talent, OFCO’s fleet expansion marks Abu Dhabi Ports’ venture into the everevolving field of regional and international offshore logistics.

Captain Maktoum Al Houqani, Chief Corporate Authority Officer of Abu Dhabi Ports, Acting Head of Maritime Cluster, and Chairman of OFCO said: “With the acquisition of diversified and ultra-modern support vessels as part of our ever-expanding offshore marine services fleet, Abu Dhabi Ports is rapidly taking its strategic move into offshore logistics to new heights, while simultaneously cementing its role as the preferred maritime services provider in the Middle East and beyond.”

He added: “Possessing a unique proposition that combines industry-leading capabilities, rich talent, and cost-efficient solutions as part of a holistic offering, OFCO will deliver immense value to our customers, particularly for those active within the GCC’s offshore oil and gas market.

“We will continue to explore other potential vessel acquisitions and other related expansion opportunities in an effort to broaden our overall service capabilities, and to ensure we are well-positioned to satisfy the increasingly complex needs of the offshore market for years to come.”

Officially launched in January 2021, OFCO currently serves as one of the largest and competitively priced providers of onshore and offshore integrated logistics solutions, and subsea services in the GCC. Deploying a winning combination of exceptional fleet assets, logistics solutions and supply-base operations, OFCO is wellplaced to deliver a wide range of specialised services geared towards large offshore infrastructure projects, including active operations within the Middle East’s oil and gas sector.

Offering a unique ‘one-stop-shop’ offering, the company’s solution portfolio, which in addition to subsea services include integrated logistics for O&G and EPC organisations, as well as inspection repair and maintenance (IRM), is further supported

by Abu Dhabi Ports’ land-based logistical assets.

Ahmed Khalil, General Manager, Allianz Middle East Ship Management, said: “The expansion of OFCO’s offshore marine service fleet has greatly enhanced the organisation’s capabilities in meeting the ever-evolving demands of the region’s offshore energy market.

“Building on this momentous occasion, we aim to continue developing our unique offering incorporating not only the latest in support vessel design, the highest industry best practices and innovations, but we also strive to embrace new capabilities that will enable us to serve the end-to-end logistical needs of customers in other expanding industries.”

LOGISTICS NEWS ME | SEPTEMBER 2021 | 9

LNME

REGIONAL NEWS

CARTLOW PARTNERS WITH BLUE OCEAN GLOBAL TO BOOST CIRCULAR ECONOMY

O

ffshore Support and Logistics Services Company (OFCO – Offshore International), the integrated maritime logistics service provider that is jointly owned by Allianz Marine & Logistics Services (AMLS) and SAFEEN, Abu Dhabi Ports’ marine services arm, has announced the acquisition of seven support vessels as part of its offshore marine services fleet.

Comprising of four Anchor Handling Tugs (AHT), a 65-metre landing craft, as well as a supply ship and multipurpose safety standby vessel, the newest additions to OFCO’s fleet will further extend the new company’s capabilities in providing highly efficient and cost-effective onshore and offshore integrated logistics solutions and subsea services.

Combined with a fully operational offshore supply land base and led by a growing team of industry-leading talent, OFCO’s fleet expansion marks Abu Dhabi Ports’ venture into the everevolving field of regional and international offshore logistics.

10 | LOGISTICS NEWS ME | SEPTEMBER 2021

Captain Maktoum Al Houqani, Chief Corporate Authority Officer of Abu Dhabi Ports, Acting Head of Maritime Cluster, and Chairman of OFCO said: “With the acquisition of diversified and ultra-modern support vessels as part of our ever-expanding offshore marine services fleet, Abu Dhabi Ports is rapidly taking its strategic move into offshore logistics to new heights, while simultaneously cementing its role as the preferred maritime services provider in the Middle East and beyond.”

He added: “Possessing a unique proposition that combines industryleading capabilities, rich talent, and cost-efficient solutions as part of a holistic offering, OFCO will deliver immense value to our customers, particularly for those active within the GCC’s offshore oil and gas market.

“We will continue to explore other potential vessel acquisitions and other related expansion opportunities in an effort to broaden our overall service capabilities, and to ensure we are well-

positioned to satisfy the increasingly complex needs of the offshore market for years to come.”

Officially launched in January 2021, OFCO currently serves as one of the largest and competitively priced providers of onshore and offshore integrated logistics solutions, and subsea services in the GCC. Deploying a winning combination of exceptional fleet assets, logistics solutions and supply-base operations, OFCO is well-placed to deliver a wide range of specialised services geared towards large offshore infrastructure projects, including active operations within the Middle East’s oil and gas sector.

Offering a unique ‘one-stop-shop’ offering, the company’s solution portfolio, which in addition to subsea services include integrated logistics for O&G and EPC organisations, as well as inspection repair and maintenance (IRM), is further supported by Abu Dhabi Ports’ land-based logistical assets.

Ahmed Khalil, General Manager, Allianz Middle East Ship Management, said: “The expansion of OFCO’s offshore marine service fleet has greatly enhanced the organisation’s capabilities in meeting the ever-evolving demands of the region’s offshore energy market.

“Building on this momentous occasion, we aim to continue developing our unique offering incorporating not only the latest in support vessel design, the highest industry best practices and innovations, but we also strive to embrace new capabilities that will enable us to serve the end-to-end logistical needs of customers in other expanding industries.”

“THE EXPANSION OF OFCO’S OFFSHORE MARINE SERVICE FLEET HAS GREATLY ENHANCED THE ORGANISATION’S CAPABILITIES IN MEETING THE EVER-EVOLVING DEMANDS OF THE REGION’S OFFSHORE ENERGY MARKET.” WWW.CBNME.COM

REGIONAL NEWS

MAERSK SECURES GREEN METHANOL FOR FIRST CONTAINER VESSEL OPERATING ON CARBON NEUTRAL FUEL

A

.P. Moller – Maersk has identified its partners to produce green fuel for its first vessel to operate on carbon neutral methanol: REintegrate, a subsidiary of the Danish renewable energy company European Energy.

REintegrate and European Energy will establish a new Danish facility to produce the approx. 10.000 tonnes of carbon neutral e-methanol that Maersk’s first vessel with the ability to operate on green emethanol will consume annually. Maersk will work closely with REintegrate and European Energy on the development of the facility.

“This type of partnership could become a blueprint for how to scale green fuel production through collaboration with partners across the industry ecosystem, and it will provide us with valuable experiences as we are progressing on our journey to decarbonise our customers’ supply chains.

“Sourcing the fuels of the future is a significant challenge, and we need to be able to scale production in time. This agreement with European Energy/REintegrate brings us on track to deliver on our ambition

to have the world’s first container vessel operated on carbon neutral methanol on the water by 2023,” says Henriette Hallberg Thygesen, CEO of Fleet & Strategic Brands, A.P. Moller – Maersk.

The methanol facility will use renewable energy and biogenic CO2 to produce the e-methanol. The fuel production is expected to start in 2023.

The energy needed for the power-to-methanol production will be provided by a solar farm in Kassø, Southern Denmark.

REintegrate has a proven track record for producing green e-methanol with a test laboratory in Aalborg.

The new facility will be its third e-methanol facility, as they are also constructing an e-methanol facility in Skive with startup 2022.

While the renewable energy will be produced in Southern Jutland it is yet to be decided where in Denmark the power-to-methanol facility will be located.

Maersk announced the dual fuel vessel, an industry first, in February 2021. In June, Maersk announced that Hyundai Mipo Dockyards will be building the 2100 TEU (Twenty Foot Equivalent) feeder.

LOGISTICS NEWS ME | SEPTEMBER 2021 | 11

LNME

REGIONAL NEWS

HIMALAYA WELLNESS TO BUILD DHS120MN HERBAL PHARMA FACTORY IN DUBAI INDUSTRIAL CITY

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anufacturing and logistics hub Dubai Industrial City has announced that Himalaya Wellness has signed an agreement to set up a Dhs120 million state-of-the-art herbal pharmaceutical plant that will be producing three billion tablets, 15 million syrup bottles and three million units of ointment annually at Dubai Industrial City.

Himalaya, with over 90-plus years of herbal expertise, is a producer of over 300 herbal medicines, nutritional supplements, skin care, hair care, oral care, baby care and animal health products.

The new herbal pharmaceutical facility in Dubai Industrial City will export medicines to over 100 countries.

The commercial production at the new facility will start in the first quarter of 2024. The proposed factory will sit on 760,000 sq. ft of land and will be the first of three facilities Himalaya will build in 12 | LOGISTICS NEWS ME | SEPTEMBER 2021

Dubai Industrial City. The herbal pharmaceutical facility will be followed by dedicated units for Personal care products and Functional foods in future.

Shailendra Malhotra, Global CEO, Himalaya Wellness, added: “After over 20 years of successful operations in the region, we have decided to build the manufacturing facility here for our herbal pharmaceuticals.

“We pride ourselves on being environment friendly and this facility would be Leeds certified – Green Building. Our flagship brands like Liv.52 & Cystone are household names in many countries and the proposed manufacturing facility will be supplying to over 100 countries.”

He further added: “The objective is to increase our global manufacturing capacity for herbal medicines, and we decided on UAE due to its strategic location, state-of-the-art infrastructure, and efficient business environment. UAE has been the cornerstone of Himalaya’s global success and this partnership with

Dubai Industrial City shall further reinforce our global strategy.”

The plant will be built to the highest standards recognised by the World Health Organisation, the US Food and Drug Administration and the European Medicine Agency’s good manufacturing practices. It will enhance global trust and confidence in high-quality made in UAE products, boost medical security, and support the nation’s industrial strategy, Operation 300Bn. It has operations all around the world and established its UAE presence in the year 2000, followed by setting up its R&D centre ‘Himalaya Global Research Centre’ in Dubai Science Park in 2013.

Abdulla Belhoul, Chief Commercial Officer of Dubai Holding Asset Management, said: “In line with the vision of our leadership, the UAE continues to consolidate its status as a global leader thanks to a raft of infrastructure investments, new initiatives and regulations.

Combined, these factors have created a competitive and enabling industrial ecosystem.

“Under Operation 300Bn, the manufacturing of pharmaceutical and medical products is a crucial segment, and our partnership with Himalaya is another milestone that will contribute towards achieving the nation’s ambitious plans for the industrial sector”.

Saud Abu Al-Shawareb, Managing Director of Dubai Industrial City, said: “Stimulating growth in the pharmaceutical industry by increasing domestic medicine production is of vital national importance in line with the vision of our leaders for economic diversification. We are delighted to enter into this agreement with the leading wellness company Himalaya and believe our competitive ecosystem, with advanced infrastructure and an easy setup process, is the perfect place for its next phase of growth.

“For more than a decade, we have been a strategic driver and enabler of Dubai’s knowledge and innovationbased economy and today’s announcement is the latest step forward in our ongoing efforts to position this city as a global hub for advanced manufacturing and logistics.”

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REGIONAL NEWS

GULF CRYO RECEIVES ‘SUPPLY ACHIEVEMENT AWARD’ FROM HYUNDAI ENGINEERING CO. LTD.

G

ulf Cryo, a provider of industrial gas solutions, received a Supply Achievement Award from Hyundai Engineering Co., Ltd. due to unrivalled supply performance during the commissioning phase of the world’s largest single construction Liquified Natural Gas (LNG) Terminal at Al Zour, Kuwait designed to import as much as 22 million tonnes of LNG per year.

In an unprecedented move, Gulf Cryo has successfully supplied Al Zour LNG Terminal with more than 2,700 metric tonnes of Liquid Nitrogen to cooldown the LNG terminal’s facilities hitting a temperature of -120°C prior to unloading the LNG from ships to storage tanks.

The whole procedure was complete in no longer than a week time, and the LIN has been fully supplied through Gulf Cryo’s cryogenic gas production plants in Kuwait. Day four of the supply event marked the peak in supply where the LIN consumption reached 540 met-

ric tonnes per day.

Once the terminal facilities have reached cryogenic temperatures, they are assessed whilst maintaining an inert atmosphere, ensuring the mechanical integrity of the jetties and the piping system.

This makes the unloading of LNG from the carrier a simpler and less timeconsuming process that would have otherwise not been the case.

Both the cooldown procedure and the equipment utilised were subject to HAZOP studies, assuring all risks associated with the process were identified and minimized.

This was a phenomenal deviation from standard terminal cooldown procedures, where the entire cooldown of the unloading lines was achieved through utilizing cold vapour sprayed into the lines that were initially at ambient temperature, rather than direct introduction of cryogenic liquid.

The impact has been marked substantial as it is proved to increase energy efficiency by avoiding the flaring of LNG

vapour during the process.

Amer Huneidi, Executive Chairman of Gulf Cryo said: “We are glad to have provided an innovative and world class solution that is highly efficient and wellsuited to meet the significant requirements of our customer. The success of this supply is a hallmark of our performance and supply chain competency and will inspire us to work towards a continued leading position across the region.

“I will also take this opportunity to thank Hyundai Engineering Co. Ltd. for collaborating with us in this commissioning, providing us an opportunity to surpass this momentous milestone in our journey.”

Once fully operational, the LNG Terminal at Al Zour is expected to import as much as 22 million tonnes of the super-chilled gas per year and will have a storage capacity of 1.8 million cubic metres of LNG. The liquefaction capacity of the terminal will be 30 billion cubic metres per day.

LOGISTICS NEWS ME | SEPTEMBER 2021 | 13

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FREIGHT FORWARDING

LESSONS LEARNED FROM THE PANDEMIC Amadou Diallo, CEO of DHL Global Forwarding Middle East and Africa, shares how COVID-19 holds opportunities for digitalisation, globalisation, and the future of logistics

I

t’s been more than a year since the first COVID-19 case came to light, uncertainty still drives our decisions. Despite widespread vaccinations and control mechanisms put in place across the globe, we continue to fight a prolonged battle.

As challenging as the situation may be, it contains within it the seeds of learning and growth. Here are five lessons distilled from the pandemic, critical to the future of our business.

14 | LOGISTICS NEWS ME | SEPTEMBER 2021

1. PEOPLE OVER PROFITS Best-in-business companies have always operated with this ethos. But COVID-19 really drove this lesson home. A people-centric approach during challenging times is not just ethically correct, but it also makes sound business sense. If employees are happy and motivated, their productivity is greater than those who feel undervalued or unappreciated.

Businesses should remember that it’s their people who work to achieve the

Amadou Diallo

profit in the first place, therefore they must always be priority. People-first companies are not only great places to work, but they are also profitable enterprises.

2. CRISIS SITUATIONS HELP TO BENCHMARK RESILIENCE Uncertainty and volatility are the only certainty today. Logistics providers had to showcase real strength in situations when things are not going according to plan. We expect the unexpected, and plan for it. This builds resilient organisations.

From shipping large quantities of personal protective equipment (PPE) to communities that urgently needed it, to shipping vaccines around the world so they can be used to save lives, logistics providers have been crucial in the fight against the global pandemic. We have the monumental responsibility of distributing approximately 10 billion doses of vaccines over the next two years.

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LESSONS LEARNED FROM THE PANDEMIC

Uncertainty also drives flexibility and agility. Businesses and people have demonstrated incredible agility and resilience in adapting to the new situation. New transport solutions and connections have been set up without anyone being able to travel. Digital such as a new Transport Management System enabled supply chains to keep going on.

3. REMOTE WORK, WORKS Technology has enabled us to stay connected with colleagues through the pandemic and manage businesses across geographies. Though frontline workers in the operations are not able to work from home, the pandemic proved the power of teamwork in logistics.

If there is one thing that the pandemic has taught us, it is that together we are stronger. For a successful transition to work remotely, trust is one of the most powerful leadership skills. A global company can be managed remotely – but not without trust. You must trust your people and equally important, tell them that you trust them.

ing a steady supply of these life-saving items especially for frontline healthcare workers.

We are learning to share information, and this is resulting in growing prosperity, not only economically but also socially and socio-culturally. Without a globalised world we wouldn’t be able to fight this pandemic. We hope that the level of globalisation will even increase after COVID-19, which will put us in a stronger position to face existing and future challenges.

“WE ARE LEARNING TO SHARE INFORMATION, AND THIS IS RESULTING IN GROWING PROSPERITY, NOT ONLY ECONOMICALLY BUT ALSO SOCIALLY AND SOCIOCULTURALLY.”

4. DIGITALISE TO THRIVE In the UAE, we have witnessed the exponential rise of eCommerce, supply chain innovation and digital transformation, which are contributing factors to the growth of logistics sector.

As many parties are involved in getting goods moved around the world, digitalisation has the potential to ease not only the life of shippers but make processes even faster and leaner.

The recently launched customer platform myDHLi is one example, while Saloodo!, the digital road freight solution platform, is leading the movement to ‘Uberise’ trucking. It helps carriers manage their fleets better and optimize the capacity of their full truckload (FTL) shipments.

5. WE NEED MORE GLOBALISATION A globalised world stands not only for trade, but also for the free flow of information, vital supplies, and people. Back in April last year when air freight capacity was severely impacted due to border closures, DHL Global Forwarding had operated dedicated flights carrying PPEs as well as essential supplies from China to Middle East and Africa via Dubai, ensurLOGISTICS NEWS ME | SEPTEMBER 2021 | 15

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REPORT

A scene from ‘Middle East Energy Dubai 2020’ - the leading trade expo for power generation, transmission and distribution, lighting, renewables and digitalization sectors.

UAE HAS ‘MOST COMPETITIVE INDUSTRIAL SECTOR IN ARAB WORLD’ UN REPORT THE COUNTRY HAS RAPIDLY SOARED UP THE GLOBAL INDUSTRIAL RANKS BY INCREASING ITS INDUSTRIAL PERFORMANCE IN FOUR OUT OF EIGHT INDICATORS, MARKING A QUANTUM

LEAP FOR THE SECTOR

T

he UAE has the most competitive industrial sector in the Arab world, according to the latest UN global rankings.

The country has reached 30th in the world in the 2021 United Nation’s Industrial Organisation’s (UNIDO) Competitive Industrial Performance Index (CIP) report which tracks 152 countries.

The UAE has climbed five places since 2020 and nine places since 2017 in the UNIDO CIP, demonstrating the competitiveness of the nation’s industrial sector and its business ecosystem, in line with 16 | LOGISTICS NEWS ME | SEPTEMBER 2021

the National Strategy for Industry and Advanced Technology, Operation 300Bn. The report noted the UAE’s progress in infrastructure and the industrial sector’s business ecosystem. It referred to the UAE’s strategy for sustainable growth in the industrial sector through incorporating advanced technology, promoting science-based education, balancing industrial progress with environmental sustainability, and encouraging innovation.

His Excellency Dr. Sultan bin Ahmed Al Jaber, the UAE’s Minister of Industry and Advanced Technology said: “UNIDO’s report reaffirms the UAE’s global reputa-

tion for developing an innovative industrial ecosystem underpinned by advanced technologies and Fourth Industrial Revolution solutions.

“Our rapid advances as a global industrial pioneer are a great testament to the foundations laid by our leadership, who have paved the way for dynamic and sustainable economic growth over the next fifty years, and beyond.”

He added: “The UAE’s continuous progress in UNIDO’s CIP shows we are well on the way to achieving the goals set out by Operation 300Bn. Thanks to the country’s attractive business environment to local and international investors in the industrial sector, the UAE is cementing its position as a global destination for pioneering future industries.”

His Excellency said that UNIDO’s CIP monitored the UAE’s industrial sector’s growth, by identifying the key features of the nation’s industrial development model and linking it to the UAE Vision 2021 and the 2014 National Agenda.

The UAE’s Vision and Agenda aim to create a knowledge-based economy and help the nation climb global indices.

To achieve these goals and manage the strategy, the Ministry of Industry and Advanced Technology (MoIAT) was established in July 2020.

UNIDO’s CIP assesses and measures the industrial competitiveness of global economies through three main dimensions: the capacity to produce and export manufactured goods, technological deepening and upgrading, and world impact.

These three dimensions are divided into eight indicators.

The Emirates has ascended 14 places – from 31st to 17th – for its manufacturing exports per capita, while moving up to 32nd for its total manufacturing exports.

Furthermore, the UAE is now up to 28th globally for manufacturing value added per capita, while also rising eight places for the share of its manufactured goods in its total export mix, moving up to 107th from 115th last year.

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COVER STORY

“AT AL MASAOOD TBA OUR GOAL IS TO ALIGN OUR STRATEGIES WITH THE UAE GOVERNMENT’S VISION, DIRECTIONS AND ASPIRATIONS WHILE DELIVERING INNOVATIVE-DRIVEN SOLUTIONS DESIGNED TO BETTER SERVE OUR COMMUNITIES. WE ARE AT THE FOREFRONT OF DELIVERING INNOVATION-DRIVEN SOLUTIONS TO THE MARKET.”

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ON SAFE GROUND | SALAH ADIB, GENERAL MANAGER AT AL MASAOOD

ON SAFE

GROUND Salah Adib, General Manager at Al Masaood - TBA Division, reveals how the company is at the forefront of delivering innovation-driven solutions to the market and why safety is the division’s top priority Tell us about your role at Al Masood Tyres, Batteries and Accessories Division.

As the General Manager (GM) of Al Masaood Tyres, Batteries and Accessories (TBA) Division, which is part of Al Masaood Group, I take the lead in ensuring its overall operational efficiency and increasing its profitability prospects.

I make sure that our organisation advances according to our goals. At Al Masaood TBA, one of our main aims is consistent customer satisfaction. This drives us to step up our digital initiatives and innovations to keep up with the market trends and evolve alongside the changing needs of our customers.

Another is to sustain our achievements as a business enterprise. The secret to our company’s success is our commitment to keeping things simple, supported by our continuous investment in the skills development of the younger generations. Our young and creative professionals today are helping bring fresh and out-of-the-box business growth ideas to the company.

I also prioritise the wellbeing of our employees, ensuring that they stay motivated by going beyond formalities through ‘personal leadership.’ My leadership style stems from the fact that our employees are among the most important assets of our organisation.

As such, understanding what’s important to them which is to earn for their families and achieve their life’s dreams - is an expression of my genuine care and a demonstration of my commitment to their personal and professional growth. >>> LOGISTICS NEWS ME | SEPTEMBER 2021 | 19

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COVER STORY

“THE COMPANY IS THE EXCLUSIVE DISTRIBUTOR OF THE FULL BRIDGESTONE TYRE RANGE FOR CARS, TRUCKS, INDUSTRIAL, AGRICULTURAL AND EARTHMOVER VEHICLES IN ABU DHABI. WE HAVE THE LARGEST RETAIL CHAIN FOR TYRE DISTRIBUTORS IN THE REGION, INCLUDING 16 OUTLETS ACROSS ABU DHABI, AL AIN, AND THE WESTERN REGION.”

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How is Al Masaood TBA a preferred choice for customers?

At Al Masaood TBA our goal is to align our strategies with the UAE Government’s vision, directions and aspirations while delivering innovative-driven solutions designed to better serve our communities. We are at the forefront of delivering innovation-driven solutions to the market.

The company is the exclusive distributor of the full Bridgestone tyre range for cars, trucks, industrial, agricultural and earthmover vehicles in Abu Dhabi. We have the largest retail chain for tyre distributors in the region, including 16 outlets across Abu Dhabi, Al Ain, and the Western Region.

Our outlets provide the following services: tyre change, wheel balancing and alignment, engine flushing, battery change, nitrogen filling, engine diagnostics, puncture repair, wiper change, centre fit service, A/C service, and many more.

In addition, through our association with Total France, the division has established a chain of rapid oil change centres to offer oil and filter change, among others. With our team of professional technicians, we guarantee convenient automotive solutions that are delivered safely and in line with the highest standards. Our commitment to our customers is this: to have you back on the road in no time. The combination of all these elements makes TBA the brand of choice for many customers.

Tyres are a crucial element to road safety. What have been some of the steps Al Masaood TBA has taken to ensure safety on the roads?

People’s safety is our top priority. We have, in fact, been initiating multiple successful road safety campaigns aside from offering essential products and services to help keep our drivers safe on the road as well as protect the public.

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ON SAFE GROUND | SALAH ADIB, GENERAL MANAGER AT AL MASAOOD

on the danger of using old, too much or too little air-pressured tyres. Reinforcing these sessions are strategic social media posts promoting the campaign’s goals and activities.

For the past three years, we have been proud participants in Abu Dhabi Police’s annual ‘Safe Traffic Summer’ awareness campaign. In partnership with Abu Dhabi Police, the initiative allows us to educate drivers about the dangers of worn-out tyres, including fatal accidents and serious injuries.

The summer safety campaign promotes vehicle and tyre safety and encourages motorists to carry out regular maintenance of their vehicles. As part of the campaign, we also conduct free tyre checks at designated points across Abu Dhabi. Our teams are trained to make sure that tyres are in good condition.

Another activity under the ‘Safe Traffic Summer’ campaign is numerous lectures

Please explain Al Masaood TBA’s tyre assessment and tracking system and how it works.

We use ‘Toolbox’ which is Bridgestone’s proprietary software for tyre assessment and track-ing, to easily and quickly generate the results of the tyre inspections conducted by our team. The report produced by ‘Toolbox’ provides our fleet customers with insightful, direct, and actionable recommendations to maintain and optimise their tyre performance.

Further-more, it enables them to monitor tyre consumption.

As Bridgestone’s authorised distributor in Abu Dhabi, tell us about your relationship and some of the measures you’ve taken jointly in promoting safe driving and ensuring tyre health.

We are proud of our fruitful 35-year partnership with Bridgestone. We have jointly undertaken numerous initiatives over the years to bring to the fore the important role of tyre health in safe driving.

Bridgestone has awarded us the ‘Gulf Cooperation Council Distributor of the Year’ title on several occasions throughout the years. Moreover, our Fleet Solution team was recognised as the Best Commercial Team across all Bridgestone

distributors worldwide at Bridgestone’s Toolbox Global Awards 2020. As one of Bridgestone’s worldwide partners, we were honoured for our consistent efforts to become a solution provider of choice among fleet customers. We continually strive to maintain our market lead and grow hand in hand with Bridgestone MEA as one team committed to achieving our shared goals. I would like to thank the Bridgestone MEA team for their ongoing support to us, and for the fruitful relationship we’ve had together over the years.

Our mission to promote road safety continues by conducting a free tyre check in all our outlets, in addition to our on-the-go assist vans that provide car care services whenever and wherever our customers are. They just need to call our call centre to get the assistance they need.

Moreover, at Al Masaood TBA we provide quality products and services through the latest equipment available in our service centres.

Tell us about your collaboration with Abu Dhabi Ports and the police department on driver safety.

Al Masaood TBA’s collaboration with Abu Dhabi Ports and Abu Dhabi Police has led to multiple successful initiatives, one of which was the ‘Eyes on the Road’ campaign. Under this initiative, we provided truck drivers with complimentary tyre checks and well-deserved rest at truck stops in Abu Dhabi. >>>

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COVER STORY

We launched it to highlight the importance of the health and safety of truck drivers, given the long hours they spend on the road. Poor health conditions could result in diminished concentration with drastic consequences to truck drivers, other road users and pedestrians. In addition to health check-ups, drivers were also treated to some well-deserved refreshments and fun activities to help them relax and unwind.

Cars, buses, and trucks account for the largest chunk of the transport and logistics industry in the region. This puts a focus on tyre usage as well as on repairs and recycling. How can we make tyres more sustainable and what measures have Al Masaood TBA undertaken in this respect?

Experts from a wide variety of fields have been working together to make the tyre of the future even more energy-efficient and eco-friendly during the manufacturing, use, and recycling stages of its life cycle. More than anything, they have emphasised the need to replace every tyre

component with more environmentally compatible materials, if necessary, and ensure sustainability, especially in production processes.

Regular tyre inspection and maintenance are essential to prevent overheating, incorrect inflation pressures, and poor wheel balance and alignment, among others – all of which contribute to a reduction in tyre life and safety. It is also vital to regularly check the tyres’ tread depth.

When it comes to tyre replacement, we make sure that the old tyres are properly disposed of by working with a certified scraping company.

What are some of the key challenges facing the tyre market today? What role does climate play in this?

In the Middle East, tyres are considered the largest segment for spare parts.

Although the market had slowed down in 2020, we are confident of its steady recovery this year and beyond.

The region is known for its hot weather and dry climate, which may negatively

impact tyre health and performance.

Therefore, we have been partnering with relevant government entities on awareness campaigns throughout the year, and we will continually strive to do our best in promoting tyre health and road safety in our community.

What is your vision for Al Masaood TBA? Our vision is to be the ‘first choice’ partner for all tyre and auto care service needs. I am proud that we are getting closer to achieving this. I am committed to doing my level best to sustain our gains and accelerate our expansion.

To accomplish this, we will continuously offer our customers exceptional products and professional auto care services and gain a deeper understanding of our evolving market. To maintain quality and help improve the safety and lives of people everywhere, we are committed to implementing consistent innovation of our products and services backed by our uncompromising pursuit of excellent customer experience.

“EXPERTS FROM A WIDE VARIETY OF FIELDS HAVE BEEN WORKING TOGETHER TO MAKE THE TYRE OF THE FUTURE EVEN MORE ENERGYEFFICIENT AND ECO-FRIENDLY DURING THE MANUFACTURING, USE, AND RECYCLING STAGES OF ITS LIFE CYCLE.”

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RENAULT TRUCKS 360� SOLUTION PROVIDER

NEW RENAULT TRUCKS EVOLUTION RANGE Renault Trucks bringing major improvements in terms of driving comfort, on-board comfort, safety and productivity.

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OP-ED

shaped motoring in the past, craft tailored performances in the present, and become inseparable partners to those innovating the future of motoring.

Lubricants

THE BACKBONE TO A CENTURY OF MOTORING EVOLUTION

FAUSTO LUPONE, AUTOMOTIVE SECTOR EXPERT AT PETRONAS LUBRICANTS INTERNATIONAL, WRITES HOW LUBRICANTS IS INSEPARABLE FROM MOTORING

O

ver the last century, scientific breakthroughs in motoring have seen the capabilities of industrial, commercial and motorsport vehicles rise exponentially to meet drivers’ needs.

However, it’s fair to say that none of these innovations would achieve their potential without the vast strides made by lubricant technology every step of the way.

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Lubricants may seem like a second thought for the industrial buyer or the first-time driver looking to take their test as quickly as possible to get on the road.

However, the contribution of oils to motoring is fundamental and unparalleled. In fact, it is now inseparable from the highclass performances challenging every part of the industry to innovate and advance.

Here, the Petronas’ expert shares how the power and agility of lubricants have

A rich heritage in winning formulas Motor oil was never a retrospective attrition to the motorist’s arsenal of tools.

It has always been essential to performance.

These first lubricants reduced friction in far more ways than one. Born of steam engine innovations following the Industrial Revolution, they emerged side-by-side with cars as they entered the international scene.

The ability of quality lubricants to optimise and lengthen the performance of engines not only allowed early drivers to hit the road smoothly for the first time but, consequently, it paved the way for the acceptance and development of the motor car. Critically, lubricants proved to the world that a frictionless motorcar ride was far better than the ‘faster horses’ which the people supposedly wanted.

As lubricants developed, so did vehicles. Fiat, for instance, began its lubricants division in 1912, designing ‘first fill’ fluids that would soon become the industry standard for achieving optimal performance on the road.

As the Second World War prompted a need for higher performance military vehicles, lubricants enabled this. In the post-war period, this newfound variety and quality in motor oils allowed the car industry to evolve its design diversity to cater for the modern drivers of the 1960s.

Advanced formulation and manufacturing never failed to meet the needs of the latest contemporary technologies.

As a result, the knowledge that new engine types and new materials could be supported by key lubricants players has powered motoring innovation ever since.

Collaborating to achieve best results With a century of development in fluid technology under its belt, the lubricants industry is now capable of truly democratising driving in the modern day. This means ensuring that every industry or individual can secure the highest quality performance from their vehicle possible – regardless of make or model.

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LUBRICANTS | THE BACKBONE TO A CENTURY OF MOTORING EVOLUTION

Optimal compatibility between system and product is only achievable through close collaboration between lubricants developers and original equipment manufacturers (OEMs).

Both teams must share knowledge and workspaces to ensure that lubricants are co-engineered to achieve the highest standards for specific vehicles. A continued commitment to high quality research is what enables lubricants manufacturers to turn their hand to any brief, understanding the needs of equipment, recognising challenges, and ultimately formulating the best results for the OEM’s customers.

For instance, the development of a scheme like Petronas Lubricants International’s (PLI’s) Fluid Technology Solutions (FTS) programme has helped to maximise productivity for customers, with value-added products and services that are global, yet refined to specific needs.

Through detailed user and market research, analysis of legislative requirements and collaboration between engineers and scientists, schemes like this foster a unique approach to deliver the right fluid to the right user.

The development of lubricants for Formula One cars is a case in point. The collaboration between Mercedes and Petronas began with the engineering of fuels and lubricants independently by PLI, which were then handed over to the Mercedes team for testing.

However, in 2014, an integration exercise saw the teams begin to work much more closely together, enabling Petronas specialists to gain a better understanding of technical aspects of the Mercedes engine, thereby increasing trust as well as efficiency and delivering results. The results were immediate, and the Mercedes-AMG Petronas team has won every championship since.

“OLDER CARS CAN STILL REACH MAXIMUM PERFORMANCE THROUGH THE DEVELOPMENT OF MODERN LUBRICANTS WHICH DRAW ON THE ORIGINAL OIL SPECIFICATIONS FROM THE MANUFACTURER.” Research into lubricants to empower hybrid and electric vehicles (EVs) is already fully underway at the world’s top fluid development labs, as demand for these vehicles’ booms.

EV motors require several fluids: oil for the reduction gear that is the EV’s transmission unit, and oils specifically for the electric motor if the oil cooling is used for the motor. Teams are focussing their R&D efforts on battery thermal management fluids: ways to help electric vehicles reach maximum performance when operating at various conditions and to prolong battery life.

The pace of innovation in vehicle performance is just as quick as that at the forefront of vehicle production and design.

Both start with conversation; such discussions at Petronas’ EV Fluids Symposium are a direct result of the automotive care fostered in Fiat’s own garages over one hundred years ago.

The innovations these conversations produce is then a testament to that ongoing excellence: thermal battery fluids for optimised delivery of electrical energy, fluid for friction management of integrated driveline systems, and next generation bearing greases for a quieter ride and longlasting performance. Once again, lubricant technology remains firmly by the side of

those pushing for the brighter future of driving.

Reducing waste is also high on the agenda of lubricants manufacturers.

Older cars can still reach maximum performance through the development of modern lubricants which draw on the original oil specifications from the manufacturer.

By using the most appropriate additives and the most advanced technologies to ensure protection of older engines against wear and tear, modern lubricants can enable top class, efficient performances from older cars. This ultimately prolongs their lifespan and delays highly pollutive disposal processes.

Keeping up with innovation There has never been a more exciting time for motoring than today. The challenges of sustainability, combined with the democratisation of technology, means that pioneering new technologies are making their way to the market continually.

Each must be able to demonstrate longterm efficiency to meet the expectations of drivers, and limit impact upon the environment. Quality lubricants will be integral in enabling cars to meet this high standard - as they have been throughout the history of the modern motor vehicle.

Powering the future of sustainable motoring The lubricants industry has always been highly adaptable to the development of new vehicle technologies. Now, as motoring undergoes the biggest shift towards sustainability in its history, lubricants science is leading the way by enabling ‘greener’ technologies to reach their potential, ultimately proving the value of eco-friendly vehicles to manufacturers, investors, and consumers.

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CASE STUDY

FLAVOURING THE WORLD THROUGH BETTER LOGISTICS INTEGRATION LEE MICHAEL SISSONS, REGIONAL HEAD, APA OCEAN MANAGEMENT, A.P. MOLLER-MAERSK, REVEALS HOW

THE SHIPPING FIRM IS PROVIDING END-TO-END LOGISTICS SOLUTIONS TO GARLIC PRODUCERS IN CHINA

W

ith a history of cultivation that spans more than 2,000 years, Jining, Shandong in North-eastern China is a well-known hub for garlic.

The region grows about 700,000 mu of garlic each year, which is exported to more than 160 countries and regions around the world. Naturally, there is a need to transport the produce in reefer containers to retain its quality.

Sissons says: “Our customers specialise in the export of agricultural products, and

26 | LOGISTICS NEWS ME | SEPTEMBER 2021

their enterprises are involved in several focus areas, including base planting integration, purchasing, refrigeration, deep processing, and international trade.”

The sales markets cover more than 70 countries in Europe, the Americas, the Middle East, South and Southeast Asia, and more.

CHALLENGES ENCOUNTERED For many years, customers generally used a combination of trucking and ocean transport to ship high-quality garlic from

the region all over the world. “However, the inland leg of this journey is currently fraught with various complications.

There is only one type of trucking service, transportation costs are high, timings are irregular, and the service is frequently affected by natural and social factors,” he adds.

Particularly during the ongoing pandemic, it has become difficult for exports to avoid unforeseen supply chain breaks, and the entire logistics supply chain plan for the export of garlic cannot be accurately guaranteed. This poses a major hurdle for customers.

In response to the problems encountered by customers, the Maersk team has been committed to helping them find costeffective and stable logistics solutions to help boost the garlic product export.

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FLAVOURING THE WORLD THROUGH BETTER LOGISTICS INTEGRATION

“UPGRADING THE WHOLE PROCESS FROM ‘PORTTO-PORT’ TO ‘END-TOEND’ HELPED EMPHASISE THE VALUE OF OUR COLD CHAIN SERVICE COVERAGE, AND ENSURE THE TIMELY, SAFE, AND EFFICIENT DELIVERY OF THE GOODS TO THE FINAL CONSIGNEE.”

While communicating and coordinating with foreign companies to carry out onestop product trials, the Maersk cold chain expert team also actively explored new domestic logistics solutions.

FINDING A SOLUTION Based on the strategic cooperation with China Railway Jinan Bureau Group, Maersk were actively exploring a new one-stop service that connects the garlic product rail transportation to our maritime services and extends the starting point of traditional export services right from the inland warehouse to the port.

After a customer completes the booking, they only need to wait for the packaging to be completed in the factory warehouse.

The rest of the short-distance inland transportation, and the railway connection to port, are arranged by Maersk in coordination with the railway and the port authorities.

“This prevents the fragmented coordination of various touchpoints across the supply chain and helps considerably improve efficiency,” he adds.

Upgrading the whole process from ‘portto-port’ to ‘end-to-end’ helped emphasise the value of our cold chain service coverage, and ensure the timely, safe, and efficient delivery of the goods to the final consignee.

Maersk’s Jining West-Qingdao railway service not only provides us with more choices for domestic transportation, but also brings us a new end-to-end logistics solution.

In the past two years, Maersk has successfully promoted the sea-rail combined transport of Jining garlic exports. On 29 June 2021, it was officially announced that Maersk would start operating a customised train for freezers.

This is a cold chain inland product specially curated by Maersk for customers according to their needs, providing them with a one-stop cold chain solution.

Sissons concludes: “This new service

perfectly highlights the benefits our integrated services can provide. We will be able to provide more proactive assistance and be more innovative in our end-to-end approach by leveraging this new inland offering.

“It also aids our mission to decarbonise logistics, given the low CO2 emissions from trains compared to trucking. The ‘Garlic Train’ will be the first of other similar initiatives, and I look forward to seeing more.”

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LNME

FREIGHT

SOARING FREIGHT RATES

Rizwan Sajan, Founder and Chairman, Danube Group, tells us how high freight charges are affecting businesses and consumers

F

reight rates have quadrupled since the COVID-19 pandemic caused a worldwide lockdown in March 2020, pushing retail prices up, that has been affecting consumers worldwide who are trying to recover from loss in income, business.

World Dry Baltic Index jumped from – 50% in May 2020 to more than 400% in May 2021 – an unprecedented increase in a year. China Container Freight Rate Index jumped 170% in April this year 28 | LOGISTICS NEWS ME | SEPTEMBER 2021

compared to what it was in July 2020, while Harpex World Charter Rate Index jumped 350% in a year from July 2020 to July 2021.

The rate increase was caused by COVID-19 pandemic, which caused a massive decline in trade, resulting a decline in shipments worldwide, says Rizwan Sajan.

Many shipping companies were forced to dock the ships and send the sailors to long holidays. So, when the economic activities resumed after the lockdown,

there was a shortage of sailors and other professionals in Autumn 2020.

A combination of factors including soaring demand, a shortage of containers, saturated ports, too few ships and dock workers, have contributed to the situation on almost all the trade routes. Recent COVID-19 outbreak in Asian countries – especially India and China in particular – are worrying.

Transporting a 40-feet container cargo by sea from Shanghai to Rotterdam costs a record USD10,522, a whopping 547% higher than the seasonal average over the last five years, according to Drewry Shipping.

With more than 85% of the goods trade transported by sea, freight rate increase threatens to push up the price of everything from toys, building materials, furniture, auto spare parts, and components of all types of goods to tea and coffee – compounding concerns on rising inflation.

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SOARING FREIGHT RATES | RIZWAN SAJAN, FOUNDER AND CHAIRMAN, DANUBE GROUP

“WITH MORE THAN 85% OF THE GOODS TRADE TRANSPORTED BY SEA, FREIGHT RATE INCREASE THREATENS TO PUSH UP THE PRICE OF EVERYTHING FROM TOYS, BUILDING MATERIALS, FURNITURE, AUTO SPARE PARTS, AND COMPONENTS OF ALL TYPES OF GOODS TO TEA AND COFFEE – COMPOUNDING CONCERNS ON RISING INFLATION.” the overall cost of the goods, a research by HSBC Holdings estimates that a 205% jump in shipping costs over the past year could increase the Euroarea producer prices by as much as 2%.

At the retail level, traders are faced with three choices – absorb the cost, pass it on to the consumers or halt trading!

Most active traders would pass half of it to their customers and absorb the other half, eventually hitting the bottom line.

What was initially thought as a temporary spike initially, the high freight rate seems to have become the new norm, industry sources say. Although things might change in future, however, the high-rate environment might continue for a year or two, before returning to the pre-COVID-19 situation.

The high shipping expenses are being factored into contracts for the next 12 months, forcing companies to pass the

extra costs on to consumers.

There is hardly any sign of relief in the short term, and rates are therefore likely to continue spiking in the second half of this year, as rising global demand will continue to be met with limited increases in shipping capacity and the disruptive effects of local lockdowns, according to a report by economists at ING. Even when new capacity arrives, container liners may continue to be more active in managing it, keeping freight rates at a higher level than before the pandemic, they say.

Container liners have enjoyed outstanding financial results during the pandemic, and over the first five months of 2021, new orders for container vessels reached a record high of 229 ships with a total cargo capacity of 2.2 million TEU. When the new capacity is ready for use, in 2023, it will represent a 6% increase after years of low deliveries, which

Rizwan Sajan, Founder and Chairman, Danube Group

the scrapping of old vessels is not expected to offset,” the report said.

Along with global growth moving past the catch-up phase of its recovery, the coming increase in ocean freight capacity will put downward pressure on shipping costs but

won’t necessarily return freight rates to their pre-pandemic levels, as container liners seem to have learned to manage capacity better in their alliances.

In the near term, freight rates may yet reach new highs thanks to the combination of further increases in demand and the constraints of a congested system. And even when capacity constraints are eased, freight rates may remain at higher levels than before the pandemic.

What is the way out? A decline in port handling charges, customs duty and VAT reliefs by governments could help ease the situation. Ship owners, shipping agencies, freight forwarders could chip in.

However, it needs a quick and coordinated response – as soon as possible.

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B2B ECOMMERCE

GROWTH OF ECOMMERCE IN THE F&B INDUSTRY IGOR NIKOLENKO, CO-FOUNDER & CEO OF SUPPLYME, OUTLINES HOW ECOMMERCE IS PICKING UP IN THE FOOD AND BEVERAGE SECTOR

T

he food and beverage industry has always faced considerable consumer, food safety and regulatory challenges. Consumers expect companies to source ingredients sustainably and ethically, to do more for less and ‘business as normal’ or ‘the status quo’ isn’t going to produce returns on investment.

When 2020 started, only 56% of companies in the food and beverage industry had an eCommerce presence. With the outbreak of the pandemic, these companies were able to compete and capitalise on the surge in online sales triggered by the pandemic.

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The accelerated digital transformation has changed many parts of our lives beyond recognition. The smart phone has enabled the business consumer to communicate and do business ‘on-thego’. One of the biggest spikes we have witnessed during 2020 is the surge in online food sales which made it clear that the digitalisation of B2B eCommerce is now inevitable.

ACCELERATED DIGITAL TRANSFORMATION In 2020, B2B has overtaken B2C sales through online transactions, with B2B reaching a worldwide market value

of USD7.7 trillion, as opposed to the USD2.3 trillion of B2C. The World Economic Forum has estimated the UAE’s 2020 eCommerce market to be valued at USD27.2 billion. The eGrocery market grew by 300% during the third quarter of 2020 in the UAE, while Saudi Arabia’s market has grown by 500%.

The buying behaviour initiated by the pandemic continued even after the lockdown was lifted. An unhappy customer isn’t a repeat customer, so businesses had to align their internal processes to meet buyer demands as quickly as possible.

And this is the current reality being faced by many food & beverage industry suppliers.

The advent of technology and the need for personalized online experiences has created new dynamics in the ever-evolving F&B industry. According to a report

by The Business Research Company, the global food & beverage eCommerce market is expected to grow from USD25.36 billion in 2020 to USD31.25 billion in 2021 at a compound annual growth rate (CAGR) of 23.2% and is projected

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GROWTH OF ECOMMERCE IN THE F&B INDUSTRY

“SMALL AND MEDIUM F&B COMPANIES CAN TAKE ADVANTAGE OF THE SHIFT AND CLAIM THEIR SHARE OF THE PIE BY CREATING A COMPELLING ONLINE PRESENCE LISTING THEMSELVES ON MARKETPLACES AND ECOMMERCE PLATFORMS.”

Igor Nikolenko, Co-founder & CEO, SupplyMe

to reach USD66.95 billion in 2025 at a CAGR of 21%. The change in growth trend is mainly due to the companies stabilising their output after catering to the demand that grew exponentially during the COVID-19 pandemic in 2020.

HEIGHTENED INTERNET PENETRATION Experts have predicted that by 2022 online grocery shopping is expected to be a USD100 billion business.

One of the major drivers of the growth in the F&B eCommerce is the increase in smartphone users and internet penetration.

Ultimately, supplier and producer’s cost will be the key restraint for the food and beverage eCommerce market. These include the cost incurred for order fulfilment, delivery cost, adjusting business resources to dynamic market demand and last-mile connectivity.

A report from Capgemini in 2019 shows that retailers’ net profit could fall by up to 26% in the next three years, if they don’t radically improve last-mile solutions, despite increased online grocery sales.

Since the industry deals with products that have a limited shelf life, organisations need to have a robust supply chain and meet consumer demands to grow and achieve profitable margins. >>> LOGISTICS NEWS ME | SEPTEMBER 2021 | 31

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B2B ECOMMERCE

CONNECTING BUYERS WITH CUSTOMERS B2B eCommerce platforms such as SupplyMe that connects local food suppliers with restaurants, hotels, cafes, supermarkets, and other foodservice businesses of all sizes is the best bet for manufacturers and suppliers to reach out to the millennial generation taking over executive-level realms at companies and give them everything they need to do business in the most streamlined manner possible.

Small and medium F&B companies can take advantage of the shift and claim their share of the pie by creating a compelling online presence listing themselves on marketplaces and eCommerce platforms.

B2B eCommerce platforms with their user-friendly interface, low costs, and trackable delivery options have made eCommerce trend over traditional sellers and present a huge opportunity for the food and beverage sector, considering the growing digital maturity of the industry.

Successful B2B businesses understand the importance of digital readiness and use digital tools to help them streamline their operations and meet fast-changing consumption and purchasing patterns.

The platform can help food & beverage companies to optimise the entire experience from research to delivery. The app can help businesses to tap into new and difficult-to-reach markets, prioritize customer service, lower operating costs, and increase the bottom line.

B2B ECOMMERCE PLATFORMS Another significant benefit of a B2B eCommerce platform for the F&B industry includes the ease of access to all sales related activities, which in turn makes it easier to plan the stock based on demand, facilitate returns, obtain copy invoices, and live statements of accounts through the platform.

Also, setting up a price in B2B eCommerce can get quite complex. Prices may depend on the purchasing volume, pre-negotiated discounts, frequency of purchasing, and many other factors such as the type of business. These complex scenarios call for the ability to create and customise multiple price list for each customer,

company, or business unit willing to deal with your business. B2B marketplace platform enables businesses to use flexible pricing models, giving them an element of control over the transactions made through the platform.

Additionally, B2B eCommerce platforms allows businesses to leverage data and analytics to segment audiences and deliver the right messages at the right time. Data is accumulated to gather insights into customers buying pattens, help them penetrate new markets, improve conversions. Delivering the right message directly to their screen helps organizations to increase their average order value and drive brand loyalty.

ENHANCING CUSTOMER EXPERIENCE To gain a competitive edge over business rivals, meet customer expectations, and keep costs to a minimum, major supermarkets, and food companies large or small are now much more conscious of the need to map out and understand their supply chains. In this day and age of the experience economy, B2B online marketplaces can enhance the customer experience by making the journey easier and seamless and provide more than just functional and rational benefits.

The digital transformation in the F&B industry has turned processes that were disorganised, time-consuming, and burdensome into something simple and convenient helping organisations recover the lost revenue and to save more.

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SUPPLY CHAIN

STRENGTHENING THE AUTOMOTIVE SUPPLY CHAIN KHALED ALSHAMI, SENIOR DIRECTOR, SOLUTION CONSULTING, MIDDLE EAST & AFRICA, INFOR, WRITES WHY BUILDING TRUST AND VISIBILITY ACROSS THE AUTOMOTIVE SUPPLY CHAIN IS CRUCIAL

I

f any event reveals the need for resilient supply chains, it’s COVID-19. The disruptions shook every industry, including automobile. Early 2020 forecasts projected a significant drop in new vehicle sales, but ultimately turned out much better with only a 15% reduction from the total 2019 sales.

It’s no surprise the pandemic has prompted several automotive companies to embrace new supply chain strategies that allowed them to recover quickly while also setting them up for future growth.

Many automotive companies set up crisis teams and control towers to improve visibility and maintain profit-

34 | LOGISTICS NEWS ME | SEPTEMBER 2021

ability, which in turn developed into an advanced strategy around predictive risk management and multitier supplier collaboration.

Managing shortage Even with the automotive industry embracing new supply chain practices, another disruption has risen in the semiconductor chip shortage.

With modern vehicles often containing thousands of semiconductors, this crisis underscores another dimension of supply chain risk exposure and highlights the critical need to collaborate with multitier partners for globally limited supplies.

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STRENGTHENING THE AUTOMOTIVE SUPPLY CHAIN

“SUSTAINED COLLABORATION ONLY COMES WHEN TRANSPARENCY CREATES TRUST ACROSS THE NETWORK. SUPPLY CHAIN VISIBILITY CAN CARRY DIFFERENT MEANINGS DEPENDING ON WHO YOU ASK, BUT AT ITS CORE IT’S ABOUT PROVIDING TRANSPARENCY AND ACCESS TO SUPPLY CHAIN EVENTS.”

Khaled AlShami, Senior Director, Solution Consulting, Middle East & Africa, Infor

When the automotive demand initially dipped, chip manufacturers saw a rise in demand from other sectors like home electronics and high tech, creating a diversion from chip manufacturers to fulfilling demand from these other sectors. When automotive demand bounced back earlier than anticipated, the limited supply was painfully exposed.

The microchip crisis mostly emerged due to the semiconductor industry’s diamondshaped supply chain. In this type of supply chain network, only a few manufacturers are completely vertically integrated and self-reliant as most manufacturing is outsourced to sub-tier suppliers who are often capacity constrained and

stretch lead times. Any disruption at the sub-tier level directly affects the tiers above, and indirectly affect the OEMs. OEMs with visibility into sub-tier supply levels are better positioned to identify bottlenecks early and better manage the crisis. Now manufacturers are starting to realize that supply chain visibility and supplier collaboration are no longer ‘nice-to-have’ capabilities but have become table stakes for staying competitive or in business at all.

carry different meanings depending on who you ask, but at its core it’s about providing transparency and access to supply chain events.

This gives your organisation the ability to see where orders and goods are in the network, enabling collaboration and synchronisation between partners, customers, dealers, etc.

On the demand side, many automotive companies increase visibility through customer preference research, creating better forecast models and mix levels. Achieving visibility into the demand and supply outlooks allows for early detection of risk so better decisions can be made sooner.

Creating a culture of providing visibility to the network sounds great, but it’s difficult to achieve. The ability to share information both within and outside the four walls of your

company is constrained by behaviours built over decades.

Some of these behaviours need to be dismantled so higher levels of trust are established and generate this degree of visibility.

To build this level of trust, digital ecosystems should incorporate stringent identity and access controls related to network participant activities and data access. Multi-enterprise collaboration platforms or digital supply networks provide the appropriate security that can foster more trusting behaviours and user adoption of new technologies within the network.

This encourages OEMs and suppliers to share information at scale in a sustainable manner that wasn’t possible before, which is the key to creating an agile and responsive supply chain.

Harnessing visibility to build resilience Sustained collaboration only comes when transparency creates trust across the network.

Supply chain visibility can LOGISTICS NEWS ME | SEPTEMBER 2021 | 35

LNME

SUPPLY CHAIN

ECOMMERCE GROWTH DRIVES INVESTMENTS IN SUPPLY CHAIN

NEW BLUE YONDER AND REUTERS EVENTS REPORT SURVEYS RETAILERS, MANUFACTURERS, AND LOGISTICS SERVICE PROVIDERS TO IDENTIFY TOP SUPPLY CHAIN PRIORITIES AND STRATEGIES IN 2021

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ollowing a year of intense changes in the logistics industry, new research from Reuters Events Supply Chain in partnership with Blue Yonder reveals the priority strategies and investments for supply chain execution and risk management.

The State of Supply Chain Execution Report 2021 analysed responses of supply chain professionals and found that the COVID-19 pandemic, customer centricity, rising eCommerce complexity and costs, need for Direct-to-Consumer (D2C), and the risk of financial peril are propelling retailers, manufacturers, and logistics service providers (LSPs) to digitally transform.

Companies looking to capitalise on the omni-channel opportunities created by increased online-order volume over the last 18 months are now prioritising more agile delivery and fulfilment 36 | LOGISTICS NEWS ME | SEPTEMBER 2021

models, like D2C. Retailers’ and manufacturers’ online sales increased more than 120% over the past year. LSPs have also seen eCommerce volumes explode, reporting a 200% increase compared to 2019-2020.

“As the economy transitions to a postpandemic environment, retailers, manufacturers and LSPs are transforming their transportation and broader supply chain operations to address their most pressing supply chain challenges,” said Raj Patel, senior director, 3PL Industry Strategy, Blue Yonder.

“In the long term, investment in execution systems like Transportation Management Systems (TMS) and Warehouse Management Systems (WMS), as well as end-to-end visibility, automation, and cloud strategies will help them – and their customers – build more sustainable, resilient and agile organisations for the future.”

Re-evaluation of supply chain risk management From constraints on raw materials to labour shortages to growing cybersecurity threats on distributed networks, pandemic-related challenges have shifted supply chain risk management priorities: > Respondents are hesitant to pursue near/onshoring plans, with only 29% of retailers/manufacturers making an investment. > 63% of retailers/manufacturers stated that dual sourcing was a favoured strategy for risk management moving forward.

Constraints on the availability of raw materials caused supply side disruptions, even for those with distributed manufacturing facilities. > Environmental concerns are also being considered when planning for supply chain risks. Over half (53%) of retailers/ manufacturers and half (50%) of LSPs plan to invest in sustainability as a strategy for risk management.

Digital-first practices and technology investments With the growth of eCommerce, investment in modern supply chain technologies and new approaches have become essential for businesses to keep pace with shifting trends and customer expectations.

The report found that there are various factors driving investment in supply chain technologies and digital-first practices.

LSPs cited the pressure to reduce supply chain costs (58%) while also improving service levels for their retailer customers (48%) and dealing with labour shortages (30%).

In the current supply chain environment, companies are moving away from legacy systems and prioritising technologies that enable visibility for customers and their operations, automate processes and support enterprise agility. 63% of retailers/manufacturers and 60% of LSPs agreed that end-to-end visibility is currently yielding the highest ROI in their supply chain execution process.

Roughly half (48%) of retailers/manufacturers and more than half (57%) of LSPs have a robust cloud strategy in place, helping to create high levels of infrastructure agility that on-premises, legacy technology systems can’t achieve.

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AUTOMATION

IMPROVING WAREHOUSE AUTOMATION VALUE DEVELOPING A STRATEGY FOR KEEPING AUTOMATION SYSTEMS AND SOFTWARE CURRENT AND IN GOOD WORKING ORDER IS ESSENTIAL TO

MINIMIZING RISK AND MAXIMIZING EQUIPMENT PERFORMANCE

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utomation expert Swisslog has revealed that many warehouse operators that do not know the controls and component on which their automated systems depend on can experience a vulnerable situation due to unplanned downtime.

Control system suppliers, for example, routinely introduce new components and end-of-life older ones. If you do not know you have components that are already, or are approaching, obsolescence you may find yourself struggling to find replacements for failed parts. Instead of replacing a component, you are faced with the challenge of modernising the panel without the benefit of being able to schedule work around planned downtime.

Minimising risk Developing a strategy for keeping automation systems and software current and in good working order is essential to minimising risk and maximising equip38 | LOGISTICS NEWS ME | SEPTEMBER 2021

ment performance. At Swisslog, we have developed several programmes to help our customers extend the life of their warehouse and get more from their investment in automation. These include: Hardware modernisation: Our hardware modernisation programmes begin with a comprehensive audit to identify all relevant components, their manufacturer, and their risk of obsolescence. We then develop a plan to address any vulnerabilities.

In some cases, the automation systems themselves may be so old they can no longer deliver reliable service and may be recommended for replacement. Once the initial work is complete, we use the list of system components and our knowledge of product lifecycles to continually and proactively identify components that are at risk of obsolescence.

This transforms modernisation from an event into a continuous process that can be managed with minimal investment and disruption.

Safety standards Safety assessments: Safety standards, like technology, are continually evolving. Our safety assessments review existing equipment considering newer safety regulations and recommend changes that bring systems in compliance, such as adding doors to cranes or using light curtains in place of mechanical gates.

Software updates and upgrades: Keeping software current is as important as maintaining hardware. Whether it is performing technology updates necessitated by changes to the underlying software systems, upgrading from previous generations of Swisslog software to SynQ or installing SynQ to prepare for automation, Swisslog can manage all aspects of a software update or upgrade. We even offer IT Managed Services in which our experts assume responsibility for managing all the IT systems and software required to keep your equipment operating at peak performance.

Meeting current needs System expansions: One of the benefits of the current generation of automation systems delivered by Swisslog is the ability to size systems to meet current needs while maintaining the flexibility to expand the system when needs change. We have the experience and expertise to plan system expansions to maximize your investment in automation and minimise the impact on operations.

Whether you are operating cranes, AutoStore, CarryPick or one of our shuttle systems, Swisslog can help you design and implement the upgrades and expansions that give you the storage and throughput you need to enable continued growth.

From modernising hardware to upgrading software and expanding modular automation systems, Swisslog has the experience and expertise to develop a strategy and plan that minimises the impact on existing operations and delivers the reliability and performance your business needs.

“In some cases, the automation systems themselves may be so old they can no longer deliver reliable service and may be recommended for replacement.”

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