Feature – How 2020 is shaping up for the Logistics Industry
Logistics News ME caught up with industry leaders to see what their vision is for 2020 and how Expo 2020 Dubai is boosting their confidence for the year.
Albert Asool, CEO, Agility GIL Dubai
Overall 2019 Performance
Difficult market conditions throughout 2019 have severely affected the logistics sector as a whole. However, within our Dubai business, we have witnessed an increase in business opportunities across a number of industry verticals, which have helped us offset these challenges. Particularly due to the growth in manufacturing in the region, which has led to an increase in demand for regional logistics hubs. As a result, Agility has benefitted from growth within the retail and FMCG sectors. Furthermore, our 2019 business has been favourably impacted by a shift in customers becoming more discerning and increasingly looking for logistics providers with scale and resources to offer full end-to-end logistics solutions.
Agility GIL also continued to move forward in 2019 with its digitization agenda to improve operational efficiency and drive a better customer experience.
Our performance in 2019 allows us to enter 2020 strong with a dynamic approach towards achieving our goals. From a global perspective, we have invested $18 million in green supply chain technologies so far through our corporate venture arm Agility Ventures and we stay committed to our ambitious environmental strategy. We always strive to offer our customers advanced smart technologies, drive efficiencies, deepen access to services, and open entirely new markets with new ways of doing business.
Expo 2020 Boost
The logistics industry in its entirety is benefiting from the investments in infrastructure projects related to Expo 2020 and the same applies to Agility.
Mobility is one of the key pillars of Expo 2020. We see Expo 2020 as a great opportunity to connect people from across the world, goods and innovations unlocking a great potential for the community we live and operate in. The Logistics sector is a major contributor to the UAE economy and with the economic transformation momentum we are experiencing we expect Dubai to strengthen its position as a global logistics hub. We see Dubai Expo 2020 as a platform that will help us exchange ideas and envisage the future of logistics; on our end we are constantly transforming our business to be more efficient, accelerating value creation through digital connectivity and remaining committed to social and environmental sustainability.
Plans for 2020
Agility is on track to integrating sustainability into the heart of our business. We have identified and prioritized activities that address our direct environmental and social impact and explore opportunities where we can make a difference.
We continue to invest in technology-driven change and seek to be the digital leaders in our industry. Our Agility Ventures team is partnering with innovative start-ups that are re-shaping the supply chain in areas ranging from green technologies to e-commerce. We are also accelerating in-house development, acquisitions, and partnerships to grow our digital logistics platform, Shipa. We believe this is the key to differentiating Agility and positioning us for future growth.
Geoff Walsh, UAE Country Manager, DHL Express
Overall performance in 2019
This year has been tremendous for our operations in the MENA region, especially in the UAE where we opened our new state of the art logistics facility at Dubai World Central (DWC). The new import and export gateway and service center, located at the Logistics District at DWC, will support the rapid growth of e-commerce in the UAE and the region. It will improve Pick-Up & Delivery performance in Dubai South and enable better commercial import and export capabilities at the Al Maktoum International Airport. Furthermore, we entered an expansive 27-year long-term contract with Abu Dhabi Airports Free Zone to develop the new Express logistics facility that will significantly enhance the global connectivity of the UAE through Abu Dhabi International Airport.
In 2019, we collaborated with Vinculum Solutions to simplify cross border solutions for brands and retailers in the UAE. We also introduced recycled eco-uniforms made from plastic bottles that are identical to the current uniforms. This step towards sustainability will help recycle around 510,000 water bottles per year. We were also recognized with the World’s Best Workplaces by Great Place to Work®, and won Kincentric Best Employers Middle East & North Africa Award, which is a testament to our employee-centric policies and motivated workforce.
Expo 2020 Boost
Expo 2020 Dubai will boost the logistics industry, as huge investments are being made to drive infrastructure and logistics services for this massive event. As one of the largest and most iconic global events, it will strengthen the logistics and supply chain segment even further and cement the UAE’s position as a leader in logistics. We are looking forward to the opportunity to connect with businesses and commercial representatives from around the world, to share our value proposition and to support their logistics needs in the future.
We look forward to seeing path-breaking innovation in smart mobility and last-mile delivery at Expo 2020 that will serve evolving customer expectations. In addition, cross border e-commerce is booming in the region and presents strong growth opportunities in 2020. There is demand to deliver more efficient customer benefits through our enhanced shipping solutions. DHL Express already has a strong foothold in the market and a growing network to support new online operators entering the market. In addition to B2C delivery, the B2B market for logistics services for industry sectors such as automotive, life sciences, retail, healthcare and banking is also growing – and represents a growing business segment for us.
Dubai Industrial City
Saud Abu Al-Shawareb, Managing Director of Dubai Industrial City
The growth of Dubai Industrial City over the years speaks for itself. It was established in 2004, and now it has attracted over 750 players in the light and medium manufacturing and logistics sectors. We currently host over 280 factories operational and under construction in sector-specific zones, including major local and multinational organisations such as Unilever, Patchi, Almarai Group, NMC Trading, Asmak, Gulf Eternit and Standard Carpet.
Dubai Industrial City is a driver of the development and expansion of an advanced industrial sector in the United Arab Emirates and the wider region. Our hub contributes to the Emirate’s diversified economic growth and job creation through enhancing the ease of doing business, providing state-of-the-art infrastructure, encouraging modern and sustainable practices.
2019 also marked the opening of our first community retail mall to service the 42,000 workers who live and work in our community. Dubai Industrial City attracted till last year AED8.4 billion in indirect investment. Third of the growth we had in 2018 came from existing partners, a testimony to the supportive relationship-based approach we believe in.
Expo 2020 Boost
Expo 2020 will answer global calls for optimism, and future prospects, according to Dubai Chamber of Commerce and Industry, Expo 2020 will aid the local construction sector for a further two years.
Expo plans to reuse, recycle and repurpose waste tied in with the country’s commitment to a green economy, keeping with the UAE’s current development of a long-term waste strategy. At Dubai Industrial City, we are working towards driving the city’s transformation towards a successful model of the new green economy and in accelerating the development of an advanced industrial sector in the UAE, we welcomed Enviroserve’s specialized recycling plant within Dubai Industrial City’s premises, earlier this year.
At Dubai Industrial City, we are continuously investing in our infrastructure and enhancing our connectivity, as we anticipate an increase in the number of operational factories over the coming months.
To date, we invested AED4.3 billion in modernising our infrastructure. In the past two years, Dubai Industrial City has expanded its 140-km road network in order to improve accessibility and connectivity for business partners and in anticipation of the projected growth of the industrial sector in line with the national strategy.
Food security- In support of the national food security strategy, we are focusing on attracting and enabling the success of more food production facilities and manufacturers and anticipate several innovative facilities to become operational in 2020, including a large scale vertical farm by Badia Farms that we recently announced.
Sustainability – We see more and more factories, new and operational in our business community, adopting environmentally friendly practices such as relying on renewable energy. We see the shift to green sustainable manufacturing happening steadily.
Peter Richards, Group CEO, Gulftainer
The two most distinguished achievements for the company were the roll-out of the initial phase of our 50-year concession to develop and operate the Port of Wilmington followed by the launch of the Sharjah Port of Trade (S.P.O.T) service, a new strategic sea cargo clearance offering in the UAE.
The development and operation of the Port of Wilmington, USA has been very exciting and challenging during this first year. An overall investment of US$600 million has been earmarked for upgrades and expansion including approximately US$500 million for a new 1.2 million TEU (twenty-foot equivalent units) container facility to be situated on the Delaware River at the DuPont company’s former Edgemoor site. This is the largest investment ever in the USA by a private UAE company. During its first year of operation GT USA Wilmington participated in a number of firsts, including successfully handling the largest wind turbine blades ever received at its Delaware terminal, unloading and transferring 39 65-metre blades over two days.
The new strategic sea cargo clearance offering at S.P.O.T, raised service levels significantly, leading to substantial cost and time savings for our customers. In just a month since the launch of the service, the facility secured four major customers. S.P.O.T. is an inland extension of the Khorfakkan Container Terminal (KCT), which offers unmatched connectivity within the UAE, as well as faster cargo clearance through on-site inspections.
With regards to other milestones: our gateway flagship Sharjah Container Terminal (SCT) welcomed the M.V. Port Klang from Sunmarine Shipping Services, demonstrating SCT’s strategic position as a prominent gateway port for the region, whilst forging an important partnership based on shared value and operational efficiencies.
At Gulftainer, we believe that our growth is entrenched in the partnerships that we have established over the years and maintained through our commitment to add value to our partners. Our goal is to enhance our current services and capabilities throughout our ports by continuing to work closely with our stakeholders to ensure their requirements are fulfilled.
We will continue to build and grow our global footprint: our regions of interest being the Middle East, the USA, Africa, Southeast Asia, and South America. We continue to focus on enhancing the capacity of our existing ports and on the acquisition of new, niche ports. In addition, we will continue to invest in technology and digitisation, which we believe holds immense potential for the industry and can help us to benchmark our operations against best global practices.
Oceanwide Logistics Dubai
Paula Bellamy, Managing Director, Oceanwide Logistics Dubai
Overall performance in 2019
For OL Dubai, 2019 has been a very mixed year, Q1 & Q2 were pretty strong, Q2 especially so which was ahead of budget However Q3 was very poor in comparison, Ramadan falling into the Summer holidays did not help the situation and it seemed more companies took a longer time this year than normal to travel or have extended vacation, as we head towards the end of the year business is still very steady and we hope to close the Q4 on a positive note. Overall we won’t hit budget targets for 2019.
Expo 2020 currently is disappointing from our point of view, we have quoted for many tenders and are awaiting confirmation of movement. Notoriously we have found that exhibition style cargoes do tend to be left too late within the Middle East, therefore we do expect an influx for Q2 & Q3 2020. We are not however looking towards the Expo for business support as it’s an unknown quantity, these types of moves will generally be won by the larger logistics companies and SME’s such as ourselves pick up ad-hoc work. We will therefore continue to work on our regular client base and pick up new clients as they introduce themselves to the UAE.
New business in 2020
Beyond the Expo 2020 and certainly enhanced by the event will be new visitors to Dubai and the UAE. We intend to capture as much of the new business potential that we can by networking, sales tactics, meetings and generally keeping ourselves visible on social networks to help new businesses understand the market, assist to get logistics processes done and as always offer support and advice for free. Something that OL Dubai is very good at is helping our clients and potential clients with the knowledge that we have acquired during our years of running a Middle East based Logistics office. Friendly, honest and trustworthy companies such as OL Dubai are in short supply in the Middle East and therefore we take our place to ensure clients who need to move products from one country to another are given the right advice and good customer service. OL Dubai is entering an exciting phase in growth, which we are very happy to be well placed in Dubai as our hub for International logistics expansion, as we enter our 4th year we sincerely believe the exciting trends of Dubai have only assisted our path to success and will continue to do so. Expo 2020 is an opportunity for us to find new clients and new business but beyond that Dubai has a vision that will ensure our logistics business is required for years to come.
Deepak Khushalani, Founder and Managing Director, Premier Logistics
This year was about establishing and growing internally, specifically bringing on board a set of experienced team of professionals that can drive the next 2-3 years of growth and lead the expansion. Focused mainly on employees, giving them the responsibility to drive their departments and in tandem establishing and connecting with current and new clients.
The last 12 months was to establish various verticals within the organization which we achieved. Premier Logistics has successfully established a successful Finished Vehicles Logistics (FVL) division in collaboration with a leading Vehicle Distributor in the Middle East. Moreover, we have also developed an in-house VAS department currently catering to over 70 brands within the Middle East, providing services such as Co-packing, Shrink wrapping, Labelling, Barcoding, Repackaging and much more. Due to the rapid expansion of our business, we have also managed to secure additional storage facilities (Open Yard and Bulk Storage) for Project Logistics with services such as Lashing and Crating for bulk items.
Expo 2020 Boost
Certainly the belief is that Expo 2020 will bring in more international exposure to Dubai, its industry and trade connectivity apart from other focus areas that the Government is working towards.
We do see additional business inquiries towards this event from our current clientele and also in discussions with potential new customers who see this as a stepping-stone to establishing operations in the region to cover the Middle East, Africa & Asia. We are currently providing our expertise and experience how to enter the region, establish operations for business and how we can partner with them to make their operations more efficient and productive.
Focus on Expansion in 2020
The Government is certainly expanding their enabling role in making it easier to do business and the focus that has continued over the last few years and going forward in creating the infrastructure for trade & commerce to flourish is a positive trend.
A little bit of the uncertainty that was around for most of 2018 and 2019 has slowly started to vanish and the positive effects of regional stability (thought it continues to be a factor), easing of trade barriers especially between the US and China and other easing of business restrictions is a hopeful sign that 2020 will be better.
As a company, Premier Logistics continues to focus on expansion – both locally with tie ups inside and outside the Free Zone, moving forward with cooperation in Saudi which is going to be a key growth factor. Opening our China & India Regional Offices, hiring of key staff for our Sales & Marketing Division will be driven by the business opportunities we see in these 2 countries. Our investment in IT Infrastructure, mobile applications and Inventory Management Systems to keep in touch with today’s fast moving pace of technological advancement will keep us busy.
Alain Kaddoum, General Manager, Swisslog Middle East
Expo 2020 Boost
The Middle East is gearing up to take advantage of digitization in a big way, and we are seeing companies in the region making real investments for real results today. A report by PwC Middle East says that 41% of participants surveyed from the region say they have already reached an advanced level of digitisation and integration and over 62% expect to be at such a level in five years’ time. Compared to other countries around the world, that is an unusually high level of digitization.
As the mega event of Expo 2020 is nearing, Dubai’s aim to become a pioneering smart city has already started to take shape. Expo will be a strong platform for the exposition of the latest technologies, including those in logistics automation. We expect that events like Expo will help take technology adoption to a new level, so more businesses can benefit from data and robotic driven developments, smart logistics and technology-streamlined operations.
The UAE is already adopting innovation, research, science and technology to stimulate a diversified and knowledge-driven economy. According to a report by PwC, the technology is projected to contribute up to 14% to the UAE’s GDP growth by 2030.
Outlook for 2020
The business focus globally and here in the region is no longer on the production of mass goods, but on the development of customised products and thus on the customer’s requirements. Rapid growth in eCommerce is expected to increase the demand for modern warehouses with advanced tech solutions. Moreover, an increasing number of FMCGs, which are typically a significant contributor to the economic growth in the region, are expected to increase the demand for modern warehouses. This is likely to transform warehousing operations in the region, specifically in areas of inventory management, order picking, and real-time monitoring of stocks.
We see plenty of opportunity will be in the retail, F&B and e-commerce sectors. These sectors are booming, and for businesses to keep up with the increased demand, they will need to turn to automation. Our solutions will help automate these warehouses and distribution centres, so orders can be fulfilled efficiently. We also expect to see a rise in the usage of data for the efficient functioning of warehouses, so we’ll support businesses in the Middle East with our innovative software solutions for the same.
Jean-Francois Condamine, President, High Growth and Emerging markets at UPS.
Overall 2019 Performance
In the Indian Subcontinent, Middle East and Africa (ISMEA), for the last 12 months, UPS has expanded our footprint through private-public partnerships, as well as network flexibility and efficiency to respond to fast changing demand, capturing market opportunities and offering competitiveness to our customers of all sizes.
Our goal is to solidify our position as the fastest, most technologically-enabled and responsive company in the industry – and so we are constantly innovating the way we operate and deliver services to our customers. This year we announced that drones are officially joining our fleet with the addition of a new subsidiary, UPS Flight Forward. We received Part 135 certification from the U.S. Federal Aviation Administration to allow flight operations beyond line of sight, making us the first U.S. drone operation to deploy revenue-generating flights. UPS Flight Forward is rapidly building a robust customer base and a network of technology partners to galvanize our leadership in drone delivery.
As part of UPS’s continuous investment in offering additional services to customers, we also expanded UPS Worldwide Express to 14 new countries in ISMEA. The sweeping expansion of global services includes later pick-up times, improved time-in-transit and Saturday delivery, all part of the company’s desire to better connect businesses to its smart global logistics network, while demonstrating its strategic focus on international high-growth markets.
The series of new UPS services and solutions is designed to help customers be more successful, while expanding our competitive advantages, and will create even more growth opportunities. Overall, 2019 has been another great year for us and we look forward to continuing to build on our successes in 2020 too.
We are positive about the signs the market is displaying. The emirate is already a very appealing destination for global companies and investors, and its appeal is only expected to increase and strengthen further through the inauguration of Dubai’s Silk Road. Given the UAE is within an 8-hour flight from two thirds of the world’s population and 65% of the world’s GDP, it is poised to take advantage of economic activity among the world’s fastest growing and developing economies. Operating in the region since 1989, and as Official Logistics Partner of Expo 2020, UPS is committed to helping establish Dubai as a transportation hub for global commerce, connecting businesses throughout the interconnected countries, and we look forward to continuing to do so in the year ahead. We will also continue to actively support our customers, especially small and mid-sized businesses, as they seek to enter or grow their presence in international markets.