GLOBAL SUPPLY CHAIN MAY JUNE 2020 by GLOBAL SUPPLY CHAIN

May â&#x20AC;&#x201C; June 2020 Issue 70

ENHANCING THE BUSINESS OF LOGISTICS

Rising to the challenge:

Supply chains prove their resilience amid the odds UAE Logistics Sector Resilient and Holding Up

Hellmann Worldwide Logistics Heathcare and Pharma to the fore

Swisslog

Warming up to the Cold Chain

THE WORLD'S HEALTH IS IN THE SAFE HANDS OF TURKISH CARGO AS THE CARGO AIRLINE THAT FLIES TO MORE COUNTRIES THAN ANY OTHER, WE CARRY ALL YOUR HEALTH AND WELLNESS NEEDS, FROM PHARMACEUTICALS TO MEDICAL SUPPLIES WITHOUT EVER INTERRUPTING THE TEMPERATURE-CONTROLLED COLD CHAIN.

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     

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

Printed by United Printing Press (UPP) – Abu Dhabi Distributed by Tawseel Distribution & Logistics – Dubai

Contributor’s opinions do not necessarily reflect those of the publisher or editor and while every precaution has been taken to ensure that the information contained in this handbook is accurate and timely, no liability is accepted by them for errors or omissions, however caused. Articles and information contained in this publication are the copyright of Signature Media FZ LLE & SIGNATURE MEDIA LLC and cannot be reproduced in any form without written permission.

The raging novel CoronaVirus (Covid-19) pandemic has now descended and well and truly upon us. The repercussions of the onset of virus are enormous and the epidemic appears to have consumed and decimated everything in its wake. There is barely a sector or segment that is untouched by its onslaught. The world and nations’ economies now confront new realties, challenges and a rapidly-changing landscape on every front. As a result, industry, trade and financial systems are waking up to the grim consequences. Thus, priorities are being rearranged and logistics and supply chains adapted to fit new and evolving formulations, planning and strategies. In this combined May-June 2020 Edition, we examine how inventive logistics services providers and rebooted supply chains are grappling with the situation and fighting back vulnerabilities. Brian Cartwright, Client Partner, Supply Chain and Logistics, Pedersen & Partners, surveys the scenario with feedback and commentaries from a cross section of senior professionals from the regional logistics and supply chain community. To trade, modify or not to trade with China is increasingly becoming a hot button issue and many countries have pressed pause as they reflect on possible ramifications with their dealings with China. Eelco Dijkstra, Managing Partner, Europhia Consulting, puts this contentious issue under the scanner in an opinion piece. IATA is taking up the cudgels on behalf of airlines that are facing the brunt of the crisis. We have a special report on the extent of the industry’s predicament in the region. Elsewhere, we also feature a special report from Dubai Chamber reinforcing the resilience and buoyancy of the logistics trade and supply chains in the region. Saudi Arabia is taking rapid strides in developing its logistics capabilities and infrastructure. The Kingdom has invested heavily into new and modern ports whilst upgrading and renovating the current ones. We look at some instances. We also have individual takes from Hellmann Worldwide Logistics on how they are meeting head-on with the pandemic in their healthcares and pharma sectors and separately Swisslog, with their narrative on how they are putting on the heat in their cold chain processes for the benefit of all stakeholders involved. However, all is not doom and gloom and many also see the light at the end of the proverbial tunnel and hope on the horizon. The industry is known to be resilient and together I am confident we will eventually be able to ride out the crises!

Happy reading! Malcolm Dias

Editor malcolm@signaturemediame.com MAY – JUNE 2020 3

May – June 2020 Issue 70 September 2019 Issue 62

ENHANCING THE BUSINESS OF LOGISTICS

36 06 NEWS 20 UAE Logistics Buoyant A recent report by Dubai Chamber reveals buoyancy in the nation’s logistics trade.

22 Blockchain Versatility

A thought leadership article by Epicor’s Stephen Edginton sees use of this technology in multiple industry verticals.

24 GPCA

Making the case for uninterrupted supply of feedstocks to fight the pandemic.

25 Changing SC Landscape

Eelco Dijkstra, Managing Partner, Europhia Consulting, on the postCovid19- supply chain landscape.

28 Almajdouie Logistics

Saudi Arabia’s top LSP has introduced WABCO Telematics for its vast fleet.

4 MAY – JUNE 2020

30 Hellmann Worldwide Logistics

Two senior UAE-based officials give their take on how healthcare and pharma logistics are harnessed to combat the pandemic.

34 Yanbu Port-Saudi Arabia The Kingdom’s fast developing western port has introduced new service offerings.

42 GCEC Trading

UAE-based GCECT is marketing highly dependable, durable and affordable PPEs for travellers and workmen.

46 IATA

The advocacy association for international airlines is lobbying for stimulus from governments.

48 Tom Craig

Our long and regular contributor holds forth on the aftermath of Covid19- on the logistics and supply chain sector.

Pandemic Feedback

Brian Cartwright, Client Partner, Pedersen & Partners, talks to a number of professionals for comments on the pandemic.

50 Frost & Sullivan

Sawant Singh, Managing Partner, assesses the business impact of Covid19- in the GCC Region.

52 Maersk Group

The world’s largest container shipping company has fared well in Q2020-1.

54 Swisslog

Alain Kaddoum, General Manager on how the company is warming up to the cold chain.

58 MAWANI Saudi Arabia MAWANI and SGP have inked the largest single BOT Agreement in the Kingdom.

60 Emirates SkyCargo

Despite the challenges, the carrier currently operates cargo flights to multiple destinations.

You wouldn’t accept price uncertainty in a restaurant. So why do it in shipping? Introducing Maersk Spot – our simplified booking tool to improve the efficiency and predictability in your supply chain. With Maersk Spot, you get Loading guarantee

Fixed price

Compensation if in a rare case rolled

Emirates SkyCargo strives to maintain and replenish food supplies in the UAE n Emirates SkyCargo has utilized the cargo capacity on its Boeing 777 freighter and Boeing 777-300ER passenger freighter aircraft to help maintain and replenish food supplies in the UAE during the Covid-19 pandemic, the carrier recently indicated in a press note. The air cargo carrier has helped import more than 34,000 tonnes of food into the country between January and April 2020, out of which 13,000 tonnes were

imported between March and April. In the month of April alone, Emirates SkyCargo helped bring in food supplies into the UAE from over 35 countries around the world. "Despite the severe reduction in the number of flights we operate and the resultant reduction in the amount of cargo capacity we can work with, we have given top importance to maintain food

supplies in the UAE as we consider this our responsibility," remarked Nabil Sultan, Emirates Divisional Senior Vice President, Cargo. Emirates SkyCargo is currently operating flights to around 60 global destinations on a scheduled basis and to many more destinations as charter and ad hoc operations. Just some of the food imports that Emirates SkyCargo has facilitated since the start of the

year include More than 5,200 tonnes of food from Australia including chilled meat and fruits such as grapes and melons. Also ferried on board the freighters were close to 2,500 tonnes of food from Egypt including fresh fruits such as strawberries, guavas and vegetables including sweet potatoes and more than 4,000 tonnes of food from India including fresh vegetables and fruits.

Emirates SkyCargo’s e-commerce offering sees strong lift in the UAE n Emirates Delivers, the

e-commerce delivery platform launched by the freight division of Emirates has witnessed a strong reception by UAE customers in March and April 2020 according to a recent press release. A reliable and cost-effective e-commerce shipping solution targeted at individual shoppers and small businesses in the UAE, Emirates Delivers permits consolidation of purchases from multiple online retailers in the US into a single package and have it delivered to an address in the UAE. As customers have turned increasingly to shopping online during the Covid-19 pandemic, 6 MAY – JUNE 2020

Emirates Delivers has seen an increase in membership and orders since March 2020. The e-commerce platform saw a month on month jump of 20% in shipments delivered over the last month with customers

shopping for a range of items including medicines and supplements, toys and games, fashion and sporting goods. “Our customers can make use of the 30 day free storage offer in the US

and take advantage of the most attractive offers on various e-commerce sites to consolidate their shipments and save on individual shipping costs through the competitive shipping rates that they can access through Emirates Delivers,” remarked Nabil Sultan, Emirates Divisional Senior Vice President, Cargo. Despite challenging conditions, including the suspension of all passenger flights from the UAE, Emirates SkyCargo has been connecting Emirates Delivers shipments through its freighter services from the US, offering UAE customers an average transit time of around seven days.

Etihad Cargo enlarges freighter coverage in the wake of the pandemic n Following its recent launch of passenger freighter flights to 10 destinations, complementing its Boeing 777 freighter operations, Etihad Cargo has recently announced five additional routes using Etihad Airways passenger aircraft to increase the flow of essential supplies into the United Arab Emirates and provide further east-west connectivity between major markets. Using bellyhold capacity on a mix of Boeing 777 and

787 aircraft, Etihad Cargo is introducing services between Abu Dhabi and Melbourne, Chennai, Kerala, Karachi, and Amsterdam, in addition to passenger freighters already operating scheduled cargoonly flights to Seoul, Beijing, Bangkok, Singapore, Manila, Jakarta, Mumbai, Delhi, Bangalore and Riyadh. The new routes will further ensure continuity of fresh imports to the UAE including meat, fish and seafood, fruits,

and vegetables, in addition to pharmaceuticals and medical supplies, as the nation continues to take responsible measures to ensure food security and national health as part of its response to the Covid-19 pandemic. Etihad Cargo has also operated a series of special charters to carry urgent consignments of medical supplies from mainland China and Hong Kong to destinations in Europe and the Americas. “Etihad cargo is playing our

part in supporting international requirements for essential freight, carrying significant consignments of goods between other nations,” said Abdulla Mohamed Shadid, Managing Director Cargo and Logistics, Etihad Aviation Group. With these additional flights Etihad Cargo will now operate over 90 turnaround flights a week to 29 destinations in 5 continents using the combined fleet of dedicated Boeing 777 freighters and Boeing 787 passenger aircrafts.

Etihad Cargo to deliver critical airfreight services to Australia n Etihad Cargo has partnered with the Australian

Government to provide critical international airfreight assistance to Australia. Under the agreement with the Australian Trade and Investment Commission (Austrade), Etihad Cargo will provide dedicated cargo services between Abu Dhabi and Australia, leveraging bellyhold capacity of its fleet of Etihad Airways passenger aircraft to deliver essential supplies into the Australian market. It will facilitate bi-directional trade to further ensure continuity of fresh imports to the UAE from Australia including meat, fish and seafood, fruits, and vegetables. The initiative has been established by the Australian Government to accelerate

delivery of agricultural and fisheries exports into key overseas markets, with over 560 Australian businesses already registering their interest in utilising the International Freight Assistance Mechanism. “Australia has been a longtime and vital trading partner for the UAE and we are pleased to be able to continue to provide this lifeline connecting our countries and enabling the movement of goods,” commented Abdulla Mohamed Shadid, Managing Director Cargo and Logistics, Etihad Aviation Group. Federal Trade Minister Simon Birmingham said this new network would be crucial to coordinating international freight out of Australia until commercial passenger flights were restored.

MAY – JUNE 2020 7

SAL launches advanced services at new facilities in Riyadh International Airport n Saudi Arabian Logistics (SAL) has moved some of its services to the newly-launched facilities at King Khalid International Airport (KKIA-RUH) in the Kingdom’s capital Riyadh. This comes in line with SAL new operational plan aiming to enhance ground-handling services and streamline the cargo acceptance procedures through the village, which is a global integrated logistics platform for cargo and supply services. Three quality and important services will be provided from the new venue during the first phase, which are export cargo handling, domestic cargo handling and express mail services effective 20 April 2020. Omar Hariri, CEO, SAL, noted that the new facilities are a major leap in the company’s progress because the Cargo

Omar Hariri, CEO, SAL Village now offers additional capabilities. He noted that the village is the first of its kind in the region and was launched last January to contribute

effectively to trade growth and enhance all logistic services. “The movement of ground handling services to the new facilities will undoubtedly

enhance the cargo operations being provided during the Covid-19 crisis and ensure the continuity of the logistic operations and the flow of cargos,” he explained. The SAL customers will get faster services as the operational capacity has doubled and will reach 450,000 tons a year at a total area of 67,000sqm. There are 10 aircraft aprons and 15 docks for loading and unloading goods inside trucks. There are free parking areas for customers as well. The Saudi Arabian Logistics is the main cargo gate in Saudi airports and the only logistic platform linking all airports and facilitating ground handling services, electronic commerce activities, land transportation, warehouse management and storage solutions.

SOHAR Port joins SEA-LNG

n SEA-LNG recently welcomed SOHAR Port and Freezone as

its first Middle Eastern port member. SOHAR joins SEA-LNG to promote its investment in LNG bunkering facilities and the use of liquefied natural gas (LNG) as a marine fuel. SEA-LNG is the leading multi-sector industry coalition, created to accelerate the widespread adoption of LNG. MARSA LNG, a venture comprised of TOTAL and OQ, is developing a state of the art LNG liquefaction plant and bunkering facility in SOHAR Port. “This major LNG Bunkering project will generate incountry value and job opportunities, and will support industry diversification efforts by promoting shipping activities in Oman. The establishment of this facility will make SOHAR one of the key LNG bunkering facilities on the main shipping trade routes, alongside other strategic ports,” commented Mark Geilenkirchen, CEO, SOHAR Port. The project will see the provision of LNG to the shipping lines calling at SOHAR Port. The switch from traditional marine fuel oils to LNG has accelerated following the implementation of new sulphur emission limits by the International Maritime Organization (IMO) in January 2020 and the IMO greenhouse gas emission targets set for 2030 and 2050.

8 MAY – JUNE 2020

SOHAR Port is now a SEA-LNG member. “We welcome SOHAR to our cause of furthering the use of LNG as an important, environmentally superior maritime fuel,” remarked Peter Keller, Chairman, SEA-LNG. Due to its unique location outside the Strait of Hormuz and mid-way between Europe and Asia, SOHAR is ideally positioned to become a major LNG bunkering hub in the Middle East.

SOHAR Port and Freezone strengthens efforts to consolidate local trade n The management team at SOHAR Port and Freezone has affirmed the continuation of its business operations, despite the current health crisis surrounding the outbreak of Covid-19. In a press communication, the SOHAR team declared it has increased efforts to ensure an uninterrupted flow of operations and a continued supply to the local market. SOHAR has activated its business continuity plan, while also adhering to the health and safety directives mandated by the Supreme Committee, throughout all its Port and Freezone facilities. “This strategy supports the efficient and effective handling of shipping goods and operations, allowing for a smooth flow of logistic operations while continuing to supply the markets with its required needs,” stressed Batti Bin Mohamed Al Shibli,

Harbour Master, SOHAR. “I also believe that the high inflow of work is due to the influx of demand, which means we are playing our part in bringing in added value to Oman’s import and export sector. Moreover, it is important to highlight the high-level

collaboration between various entities in both the private and public sectors,”Al Shibli concluded. SOHAR Port and Freezone is recognised as a key logistics hub in the Sultanate, with a majority of good coming via the Port to be distributed within the local market.

Over the past few weeks, SOHAR activated its business continuity plan, together with the support of ASYAD, Oman’s flagship logistics group, the Directorate General of Customs, Royal Oman Police and the Oman Chamber of Commerce and Industry

Abu Dhabi Ports signs ‘Virtual Declaration’ to keep trade open amid pandemic n In an effort to collaborate and keep trade flows open during

the ongoing Covid-19 crisis, Abu Dhabi Ports has joined 19 of the world’s leading port authorities in signing a first-of-its-kind virtual declaration. Hosted via video conference, the Ports Authorities Roundtable (PAR) Declaration calls on member ports to work together by allowing merchant ships to berth and carry out cargo operations to maintain the global supply chain. The Declaration also commits the maritime sector to adhere to best practice in ensuring the safety of seafarers in terms of precautionary measures when dealing with coronavirus cases. Held in the presence of officials from the International Maritime Organization (IMO) and the International Association of Ports and Harbours (IAPH), Abu Dhabi Ports was the sole representative from the MENA region at a virtual roundtable that also included participants from Asia, Europe and North America. “Abu Dhabi stands at the centre of global maritime trade and our participation at the Port Authorities Roundtable affirms our strategic status as a vital hub that links East and West,” asserted Captain Maktoum Al Houqani, Chief Corporate Authority Officer, Abu Dhabi Ports. Organised by Singapore, the PAR is a forum for leading port authorities to discuss industry centric issues MAY – JUNE 2020 9

Blue Yonder expands offerings to minimize Covid-19 impact on Global Supply Chains n Blue Yonder (formerly JDA Software) has expanded its offerings to help customers minimize the impacts of COVID-19 on their global supply chains, while ensuring critical supplies get to the people that need them the most. These offerings help organizations effectively mitigate disruptions and manage a multitude of emerging challenges such as demand spikes, transportation disruptions, and inventory and labour shortages, ultimately making their end-to-end supply chains more resilient. “It is critically important to ensure that global supply chains are able to predict, pivot and respond to potential disruptions and are aligned to major Covid-19 hotspots all over the world – from demand and supply matching, labor optimization and scenario planning,” commented Mark Morgan, Executive Vice President and Chief Revenue Officer, Blue Yonder Blue Yonder’s Covid-19-related offerings span the entire customer journey right now – from optimizing labor in warehouse and manufacturing fulfillment centers, to providing increased real-time demand and supply matching for grocers and retailers including ‘what-if’ scenario response planning, to a real-time control tower

providing complete visibility, orchestration and inventory/labor risk assurance based on pandemic hotspots, a company press communiqué explained. According to a corporate statement released by Blue Yonder, the company’s latest expanded offerings include the ‘Covid-19 Supply Chain Risk Response’ that connects to the Centre for Disease Control and Prevention’s (CDC) live feed on the spread

of Covid-19 and layers in customer demand, supply, and inventory information to provide real-time visibility and potential supply chain impacts for accurate decision-making. Also highlighted is the ‘Covid-19 Scenario Planning’ that permits companies to run multiple, real-time scenarios to determine changes they may need to make to their network operations and quickly adapt to ever-changing demand/supply situations.

Turkish Cargo achieves the highest growth rate among the top 25 n Turkish Cargo, the fastest

growing air cargo brand in the world, achieved the highest growth rate among the best 25 air cargo carriers with 16.6 percent growth rate, according to the International Air Transport Association’s (IATA) Freight Tonne Kilometers (FTK) February’20 results. Previously ranking 8th in 2019, Turkish Cargo rose to 5th place and increased its global FTK market share to 4.4 percent, while the global air cargo industry shrank by 2.6 percent, according to FTK data, 10 MAY – JUNE 2020

which is the measure of a flight’s freight carrying capacity. “Our geopolitical location and available means will help our country to become a more significant player in the air cargo sector following the Covid-19 pandemic. Therefore, we are

working towards our goal of making Turkish Cargo one of the top five air cargo brands in the world by 2023,”commented M. İlker Aycı, Chairman of the Board and the Executive Committee, Turkish Airlines. Turkish Cargo continues to

carry much-needed medicines and medical equipment from different continents first to Turkey and afterwards from Turkey to Chicago, Taipei, Atlanta, Sao Paulo, Seoul, New York and Kiev, and to all over the world. The successful brand carried 4,000 tons of medicines and 500 tons of medical equipment during April. Turkish Cargo, which has the 6th largest air cargo carrying capacity in the world, is providing air cargo services with 25 high-capacity freighters to 90 direct cargo destinations.

UPS commissions 200 Covid-19 relief goods flights n UPS recently announced it added over 200 company-owned and chartered air freighter flights in April to support FEMA’s (Federal Emergency Management Agency) Project Airbridge and other healthcarerelated missions. Project Airbridge is a publicprivate partnership to get vital and life-saving equipment to where it is needed with greater speed. These additional flights serve to meet the soaring demand to ship test kits, personal protective equipment and other supplies necessary for the global response effort. “With our scale and flexible global network, we are in a unique position to handle Coronavirus response shipments for FEMA and healthcare customers,” remarked David Abney, UPS Chairman and CEO. The vast majority of the additional flights are carrying products from Asia to the U.S. and Europe. UPS is shipping personal protective equipment,

ventilators, emergency room monitoring equipment, test kits and other supplies. The company has the capabilities to transport specialized products, such as temperature sensitive compounds, a press communiqué added. A recent flight for Dr. Reddy’s

Laboratories, a major Indian pharmaceutical company, originated in Hyderabad, India and contained 30 tons of temperature-sensitive compounds to be shipped to the U.S. on an urgent basis. To maintain product effectiveness, the entire

shipment had to be maintained at +15°C to +25°C. The product was moved within the UPS network through the Cologne, Germany air hub, then to the UPS Worldport in Kentucky, before reaching its final destination on time and as committed.

Egypt’s DP World Sokhna functions at maximum capacity to meet import demand n DP World Sokhna, a major

gateway for Egypt’s trade, has in a press communication indicated that it is operating its port at maximum capacity to meet import requirements and to continue supporting the country’s people and economy during the Coronavirus pandemic. The Port is continuing its operations to support the economy of Egypt serving the Egyptian people during Covid-19. DP World Sokhna has a capacity of approximately one million TEUs annually with an upcoming capacity of 750,000 TEU with the proposed opening of Basin 2 in June 2020.

The port has been implementing comprehensive safety measures and preventive actions as part of its efforts to prevent the spread of Covid-19 and protect the health and safety of its customers and employees,

by following all processes and procedures that are in line with the recommendations and instructions of the Egyptian Ministry of Health and the World Health Organization (WHO). DP World Sokhna has also

been implementing an array of extra preventive steps to combat the virus. Information is shared with the staff on the importance of social distancing and increase awareness on hygiene standards. DP World Sokhna has also been distributing masks, gloves and sanitizers. “Over the past 10 years, we have successfully positioned DP World Sokhna to be Egypt’s leading port. This puts us in a firm position of responsibility in supporting the economy of Egypt and serving its people,” affirmed Ajay Kumar Singh, Chief Executive Officer, DP World Sokhna. MAY – JUNE 2020 11

FarEye raises US$ 25mn in latest investment sourcing n Logistics SaaS platform FarEye recently announced a Series D investment of USD 25 million led by M12 (Microsoft’s venture fund) with participation from Eight Roads Ventures and Honeywell Ventures. Existing investor SAIF Partners also participated in the round. Founded in 2013 by Kushal Nahata, Gaurav Srivastava and Gautam Kumar, FarEye’s predictive logistics platform enables enterprises to orchestrate, track, and optimize their logistics operations. FarEye empowers enterprises to win in this customer-centric era with exceptional delivery experience and efficient movement of goods for both B2C and B2B segments. FarEye handles more than 10 million transactions everyday across the globe on its platform and provides ‘better-decisioning’ based on billion plus data-points fed into its machine learning

FarEye founding team: Gautam Kumar, Gaurav Srivastava and Kushal Nahata. engine. The platform’s ability to seamlessly digitize 3PL carriers’ operations and quickly integrate with external systems for predictive visibility has gained immense traction globally, positioning it as a marquee toptier provider.

“We will use this investment to create greater value and improve the experience for our customers by enhancing the platform’s predictive capabilities, increasing platform partnerships, expanding into new markets and growing our

teams in Europe, Asia Pacific and US,” commented Kushal Nahata, CEO, FarEye. “From just-in-time logistics optimization to last-mile transportation notifications for end customers, supply chain visibility is a business imperative for organizations,” remarked Abhi Kumar, M12 India Head. “FarEye’s highly configurable last-mile and long-haul logistics platform has been validated by leading global enterprises across the 3PL, retail and manufacturing categories,” noted Shweta Bhatia, Partner Eight Roads Ventures. “With supply chain and logistics networks becoming so critical in today’s environment, FarEye has proven to be a business-critical provider and enabler of delivery logistics,” said Kamal Vasagiri, director of venture capital investments at Honeywell Ventures.

Around 25mn tons of goods pass through Dubai Customs in Q1-2020 n Dubai Customs has reported that in Q1-2020, 24.314mn

tons of goods passed through its sea and air shipping centers despite the international economic downturn due to the pandemic crisis. Dubai Customs’ inspectors are working hard to ensure smooth and streamlined flow of goods into the local, regional and international markets, a press release indicated. “Dubai Customs is playing an increasingly important role during this difficult time to secure borders, trade and international supply chain,” remarked Dr Abdullah Busnad, Executive Director of Customs Inspection Division. Following the stimulus package plan announced by the Government, Dubai Customs extended a refund of 20 per cent on the customs fees imposed on imported products sold locally in Dubai markets from 15 March to 30 June 2020. Dhows and all ships registered locally are exempted of any berthing fees. The package also includes the cancellation of the AED 50,000 (US$ 13610) bank guarantee or cash required to undertake customs clearance activity. Bank guarantee or cash paid by existing customs clearance companies will be refunded.

12 MAY – JUNE 2020

Ahmed Mahboob Musabih, Director General, Dubai Customs.

Maersk launches its first weekly China to Turkey rail service n Integrated container logistics company AP Moller–Maersk has launched its first weekly rail service from Xi’an, China to Izmit, Turkey. Forming part of Maersk Intercontinental Rail’s service network, this new route will, in addition to shorter transit time, provide customers with wide network options connecting main locations in China and Turkey with diverse range of pre- and on-carriage services. “After having successfully launched our Intercontinental Rail (ICR) service from China to Europe three years ago, we have seen increase in demand by our customers for this particular service from different locations across both Asia and Europe,” observed Kasper Krog, Head of Intercontinental Rail, AP Moller–Maersk This unique rail service is ideal for customers within the automotive and technology

industrial verticals in Turkey and other segments which are in high need of fast delivery to market. Due to a well-connected rail system across the country, ICR is providing its customers with connections to Black Sea, Eastern Europe and Southern European countries via the port

of Korfez in Izmit, by using feeder network of Sealand, a Maersk Company. Depending on their supply chain needs, the customers are given further flexibility choosing different Maersk transportation solutions by rail and ocean, as part of the integrated offerings

across ocean, logistics and services allowing them to react quickly to changing market demands. Customers will further benefit by taking advantage of using Maersk’s own equipment fleet, visibility and operational expertise throughout the journey.

King Abdullah Port completes handling of major project cargo for Petro Rabigh n Saudi Arabia’s King Abdullah

Port has announced the successful completion of the last phase of handling 3,200 tons of machines for the Petro Rabigh Phase II upgrading, a task that required very accurate handling and transport techniques. Five of the largest international companies cooperated during the process of transporting the cargo from outside the Kingdom until its arrival in King Abdullah Port and then on to the Petro Rabigh Project. The unloading and handling processes were carried out smoothly in the bulk and general cargo terminal thanks to King Abdullah Port’s advanced technologies and large cranes, which enable the port to handle

huge volumes of cargo for the megaprojects currently being implemented in the Kingdom. Bulk and general cargo activities began at the port during 2017, following the granting of the concession to operate the berths of bulk and general cargo terminal to AMSteel. Since then, the company has demonstrated

its efficiency and excellence through the fast and efficient handling of cargo due to its great capabilities and mobile cranes, each of which can handle up to 140 tons. The annual throughput of the port’s bulk and general cargo terminal is expected to increase to 15 million tons upon completion of the facility.

Run by the Ports Development Company, King Abdullah Port is the first port in the region to be fully owned, developed and operated by the private sector. Strategically located on the Red Sea coast in King Abdullah Economic City, King Abdullah Port is the Middle East’s first privately owned, developed and operated port. MAY – JUNE 2020 13

Bahri’s net profit up in Q1-2020 despite Covid-19 challenges Total revenue for the quarter under review rose to SAR 2.08bn transportation company Bahri (US$ 554mn), up 22.06 percent recently reported strong from SAR 1.7bn a year ago, and growth in net profit during the 7.36 percent from SAR 1.94bn in first quarter of 2020 despite the fourth quarter of 2019. challenges posed by the “The results are a testimony global Covid-19 pandemic. to our constant desire and The increase in quarterly our unmatched capabilities earnings was driven by a to seize opportunities in the significant improvement in the market as they emerge. Our performance of the company’s extensive efforts to enhance business units resulting from a operational efficiency and rise in freight rates and strong improve productivity have also demand for oil transportation. paid off,” commented Abdullah Bahri’s net profit after zakat Aldubaikhi, CEO, Bahri. and tax for the three months The company’s gross profit ended March 31, 2020, jumped stood at SAR 561.33mn, rising by a huge 133.77 percent to Abdullah Aldubaikhi, CEO,Bahri 31.71 percent from SAR 426.18mn SAR 419.22mn (US$ 111.48mn) in Q1 2019 while operating profit went up 34.1 percent from SAR from SAR 179.33mn recorded in the same period in 2019. The 377.18mn in last year’s January-March period to SAR 505.79mn in growth also represents a quarter-to-quarter increase of 68.3 the corresponding period this year. percent from SAR 249.08mn.

n Saudi Arabia’s marine

DHL launches dedicated air freight service from China to Africa and Middle East n DHL Global Forwarding has

launched a dedicated 100-tonne weekly air freight service for organizations and governments shipping goods from China to Africa and Middle East. Capitalizing on Dubai’s strategic geographical location as the gateway to countries in the region, the leading international provider of air, sea and road freight services will consolidate cargo from across China into Guangzhou and air freight them via Dubai to their various destinations across Africa and Middle East, all within two or three days. “DHL remains committed to leveraging our capabilities, global network and customized solutions to ensure that goods and critical resources continue to reach people and communities in Africa and the Middle East,” remarked Amadou Diallo, CEO, DHL Global Forwarding Middle East and Africa. Named after the Nguni 14 MAY – JUNE 2020

DHL Forwarding-employees at work. Bantu word, ubuntu (humanity) used across Africa to refer to the universal bond of sharing, UbuntuConnect refers to the China-Africa lane where bulk of the cargo is expected to comprise personal protective

gear such as masks, gloves, hand sanitizers and goggles. Equally, part of the cargo will head to other countries in the Middle East to plug the demand gap there. Whilst the secured uplift

from China will be in operation for four weeks beginning April 21, DHL Global Forwarding is actively seeking to secure routes to all of Africa and boost capacity to the Middle East and Africa in the longer term.

Gulftainer fasttracks medical supply consignments; supports UAE’s Covid-19 response n Gulftainer has launched an interim and complimentary ‘Express Service Lane’ initiative to prioritize the delivery of medical supply consignments at its ports across the UAE. The move is part of the company’s commitment to accelerating logistical procedures and fast-tracking the availability of medical supplies to consumers across the nation. Through this effort, Gulftainer seeks to support the preventive measures and national initiatives launched by the UAE government in confronting the COVID-19 pandemic. As part of the initiative, Sharjah Container Terminal (SCT) is also actively encouraging customers to use its secured digital payment

methods while benefiting from convenient and seamless online processing of transactions. “The prompt and efficient delivery of medical equipment and supplies plays a crucial role in ensuring the health of the nation – particularly during these unprecedented times. The Express Service Lane enables SCT to expedite critical supplies and get them to the brave caregivers in the community in the shortest time possible,” commented Peter Richards, Group CEO, Gulftainer. “Our operational protocols have been enhanced to ensure maximum safety for all members of the logistics community including but not limited to vessel crewmembers, on dock labour, and truckers across the UAE,” he added.

An aerial view of Gulftainer operated UAE’s Port Khalid Sharjah Container Terminal (SCT).

Almajdouie Logistics accomplishes major heavy lift movement n Almajdouie Logistics is always ready and able to meet new

challenges, especially ones that provide the opportunity to showcase and demonstrate the Company’s expertise. Almajdouie recently completed a massive heavy lift operation, transporting weighty cargo admeasuring 20.85m x 5.43m x 10.00m (L x W x H) and weighing 81 tonnes from Dammam’s 2nd Industrial City to the oil exporting port of Ras Tanura in the Kingdom’s Eastern Province. There were many logistical challenges to overcome due to the height of the cargo. With assistance from the Saudi Electricity Company, certain lines were temporarily shut down and lifted in order to accommodate the movement. Almajdouie Logistics used a specially designed side-by-side trailer to maintain stability while covering uneven roads en-route. As always, safety was a top priority, and the operating team maintained the highest professional standards at all times. Due to the Covid-19 situation, extra attention was given to ensure that operations staff complied with the Ministry of Health’s protocols. As is usual, an HSE officer was also assigned during the movement for the monitoring and implementation guidelines. MAY – JUNE 2020 15

IATA and UPU warn of air capacity shortage n The International Air Transport Association (IATA) and the Universal Postal Union (UPU) warned recently in a press statement that air capacity for postal services is insufficient and urged governments to do more to support the movement of mail by air during the Covid-19 crisis. Owing to the drastic 95% reduction in passenger flights, which are typically used to transport mail, and a 2530% increase in demand for e-commerce as customers and businesses resort to online purchasing in response to social distancing restrictions, postal administrations are facing a challenge in sending and delivering international mail, in particular, cross-continental mail. Montreal, Quebec– headquartered IATA and

Bishar A. Hussein, Director General, UPU. Berne, Switzerland based UPU are calling on governments to facilitate the flexibility that airlines need to meet this critical demand by removing border blockages to ensure trade flows

continue, avoiding unnecessary regulations and fast tracking the issuance of permits for chartered operations. IATA and UPU are also working to support posts’ use

of cargo flights in addition to commercial passenger flights by providing information on the airlines and cargo carrier status, available new alternative routes and best practices. “It is vital that everything is done to support the smooth movement of mail which is an important component of society,”remarked Alexandre de Juniac, IATA’s Director General and CEO. “The cancellation of more than 4.5 million passenger flights – the primary means of transporting post - has meant that capacity is scarce, costs more and takes longer. Action needs to be swiftly taken to address the shortfall in air cargo capacity and to keep the mail moving,” commented Bishar A. Hussein, Director General, UPU.

Jubail Commercial Port welcomes maiden call from AG3 Service n Gulf Stevedoring Contracting Company (GSCCO), part of the Gulftainer group of companies, announced that it has received the HYUNDAI TACOMA container vessel from the recently updated AG3 service of THE Alliance at the Jubail Commercial Port (JCP) on the eastern Arabian Gulf coast of Saudi Arabia. Through establishing a strategic new connection between JCP and Port Kelang in Malaysia, the AG3 Service further strengthens trade between Saudi Arabia and Malaysia, one of Saudi’s biggest export markets, as well as key trade hubs across Asia, including Hong Kong, Singapore, Kaohsiung, and crucial markets in China. The service enables end users to benefit from direct 16 MAY – JUNE 2020

The Hyundai Tacoma container vessel at Jubail Commercial Port (JCP). weekly calls at JCP by dedicated vessels that boast a 6,350-TEU capacity on a weekly basis as part of THE Alliance network, comprising Hapag-Lloyd,

Hyundai Merchant Marine, Ocean Network Express and Yang Ming. The port rotation schedule of the new service is: Qingdao,

Busan, Shanghai, Ningbo, Kaohsiung, Shekou, Singapore, Jebel Ali, Dammam, Hamad, Jubail, Abu Dhabi (Mina Khalifa), Sohar, Port Kelang, Singapore, Hong Kong, Qingdao. Through offering faster and higher frequency services, this schedule is set to boost trade ties between Asia and Saudi Arabia. “The new service aligns with our commitment to contributing to Saudi Arabia’s status as one of the primary shipping hubs in the region. This service will also help identify new business opportunities in Jubail and reinforce its position as a leading industrial and commercial centre,” commented Jason French, Group Managing Director, GSCCO. This year, GSCCO celebrates its 35th year of operating ports in Saudi Arabia.

SAFEEN acquires its largest service vessel to date n SAFEEN, the Abu Dhabi Ports’ maritime service arm, has announced the acquisition of a Post Panamax bulk carrier, making it largest vessel ever to join its inventory. Built in Romania and in service since 2006, the vessel will operate under the name ‘HAFEET’ and will initially undergo an extensive conversion, prior to commencing operations. The refitting will include advanced cranes and conveyor system. When combined with other design parameters, will render the vessel a potent and efficient transhipment platform, enabling SAFEEN to provide solid bulk cargo transhipment services. Once its conversion is fully complete in the latter part of 2020, M/V HAFEET will be based at Musaffah and will be tasked with supporting Emirates Steel’s

The MV HAFEET, the largest vessel ever to join SAFEEN transhipment requirements. Commencing its operations in January 2021, the vessel will assist in discharging bulk iron ore bound for Emirates Steel from incoming bulk carriers more efficiently, thereby economizing the turnaround time for the large ocean-going vessels. “The acquisition of the vessel is part of a larger expansion strategy by Abu Dhabi Ports

aimed at broadening our portfolio of services, and taking our experience and service excellence to the wider bulk transshipment market,” affirmed Captain Adil Banihammad, Head of Maritime Cluster & Chief Executive Officer, SAFEEN, Abu Dhabi Ports. Boasting a deadweight of up to 101,648 metric tonnes and diesel engines capable of generating

up to 15,200 horsepower, M/V HAFEET includes a total of seven holds for cargo storage, making it a natural fit for the delivery of efficient transhipment services. Aside from being fitted with four advanced cranes and a conveyor system needed for cargo handling, the vessel will receive new hoppers, grabs, and additional generators to support its increased power requirements.

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

Web: www.tranzone.ae MAY – JUNE 2020 17

Volvo Group and Daimler Truck partner to develop sustainable transportation n Sharing the Green Deal vision of sustainable transport and a carbon neutral Europe by 2050, two leading companies in the commercial vehicle industry, Daimler Truck AG and the Volvo Group, have signed a preliminary non-binding agreement to establish a new joint venture. The intention is to develop, produce and commercialize fuel cell systems for heavy-duty vehicle applications and other use cases. Daimler will consolidate all its current fuel cell activities in the joint venture. The Volvo Group will acquire 50% in the joint venture for the sum of approximately EUR 0.6bn on a cash and debt free basis. “Transport and logistics keep the world moving, and the need for transport will continue to grow. Truly CO2-neutral transport can be accomplished through electric drive trains with energy

coming either from batteries or by converting hydrogen on board into electricity,” remarked Martin Daum, Chairman of the Board, Management Daimler Truck AG. “By forming this joint venture, we are clearly showing that we believe in hydrogen fuel cells for commercial vehicles. However, for this vision to become reality, other companies and institutions also need to support and contribute to this development, not least in order to establish the fuel infrastructure needed,” commented Martin Lundstedt, Volvo Group President and CEO. The common goal is for both companies to offer heavy-duty vehicles with fuel cells for demanding long-haul applications in series production in the second half of the decade. In addition, other automotive and nonautomotive use cases are also part of the new joint venture’s scope.

Jebel Ali Port and JAFZA awarded ISO 45001:2018 Certification n DP World, UAE Region has

received a timely, boost to its efforts to combat the COVID-19 challenge by becoming the first Port and Free Zone operator in the Middle East to attain the updated transition of Occupational Health and Safety Management System certification (ISO 45001: 2018) for international best practices and standards from Lloyd’s Register. jThe achievement follows an independent audit of Jebel Ali Port, Jebel Ali Free Zone (JAFZA) and World Security operations conducted by assessors from Lloyd’s Register (LR), a leading independent provider of accredited certification and a maritime 18 MAY – JUNE 2020

Lloyd’s Register recognition for excellence in health and safety systems boosts DP World, UAE Region drive against COVID-19. classification society to verify compliance practices. This makes DP World, UAE

Region the first port operator and trade enabler in the Middle East to implement the highest

levels of management related to occupational health and safety systems. “As the premier maritime gateway and hub to a region of more than 3.5 billion consumers, the wellbeing of every stakeholder interacting with our business is important to us,” commented Mohammed Al Muallem, CEO and Managing Director, DP World, UAE Region and CEO, JAFZA. DP World, UAE Region became the first port operator in the Middle East to successfully implement the Regional Security Management System standards and achieve its regional ISO 28000:2007 certification from Lloyd’s Register (LR) in 2013.

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UAE’s Logistics sEctor

UAE’s Logistics Sector plays a key role in global efforts to overcome pandemic New analyses from Dubai Chamber highlight the country’s connectivity as being integral to helping the world navigate the current crisis

he UAE’s status as a vital global logistics hub is helping the global community effectively navigate the coronavirus (Covid-19) pandemic – according to new analyses by Dubai Chamber of Commerce and Industry (Dubai Chamber). Titled ‘UAE Logistics Sector – Connectivity and Resilience,’ the analyses highlight the country’s busy air cargo routes, high maritime freight connectivity, wellestablished warehousing network and strong logistical system as key elements that are enabling communities to weather the restrictions being created by the current situation.

Demonstrating resilience Focusing on air cargo, the Dubai Chamber analyses found that Middle Eastern cargo carriers, led by Emirates Airline, are showing resilience to early disruptions caused by the Covid-19 crisis, with Middle East-North America, Africa-Middle East, EuropeMiddle East, and Middle East-Asia routes all experiencing annual year on year (y-o-y) growth between 2.5% to 9% during February 2020 compared to 2019. This bucked the trend that saw global carriers’ international activity drop by -0.9% y-o-y, with around half of their global cargo routes experiencing weakness. The analyses also highlighted the latest data from the International Air Transport Association (IATA) that showed that international cargo tonne kilometres (CTKs) parameter, a measure of air cargo traffic, analyzed by carriers in the Middle East grew 4.3% y-o-y in February 2020 as they expanded their cargo capacity by 6% y-o-y. 20 MAY – JUNE 2020

This was despite having to reduce - as did all international carriers - their passenger capacity due to the COVID-19 pandemic. From a maritime perspective, the Dubai Chamber analyses found that the UAE’s connectivity has been a key factor in ensuring that vital supplies reach global markets.

Excellent connectivity Highlighting the Liner Shipping Connectivity Index (LSCI), a widely used barometer of countries’ accessibility to global trade, it revealed that the UAE has the highest connectivity to global maritime trade networks among all countries in the Middle East and neighbouring Africa, West Asia and

South Asia regions, a strong indication of its global trade hub status. The analyses pointed out that the UAE’s regional markets of Kuwait, Oman, Pakistan, Sudan and Tanzania have their highest bilateral connectivity with the UAE higher or equal to China, the world’s largest economy by purchasing power parity. While for markets such as Kenya and KSA, the UAE enjoys the second highest bilateral connectivity after China. It is worth noting that the network of marine trade routes owned by the Emirates reflects the existence of immense opportunity for easy and flexible movement of goods, thus saving cost and time, which makes the UAE’s logistics sector a key player in the global efforts to fight Covid-19.

UAE’s Logistics sEctor

Abu Dhabi Government provides more financing options for SMEs

New partnership between the Department of Finance and top banks to prioritize funding for SMEs In line with the directives of HH Sheikh Mohamed Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, Deputy Supreme Commander of the UAE Armed Forces and Chairman of the Abu Dhabi Executive Council, the Abu Dhabi Government has expanded the SME Credit Guarantee Scheme, increasing SMEs access to financing in the Emirate. A new joint partnership between the Department of Finance and top lending institutions ADCB, ADIB and FAB will provide small and medium-sized companies (SMEs) with more financing options. Under the partnership, the government will guarantee up to 80% of the value of the scheme extended to SMEs, bolstering businesses’ resilience to withstand market fluctuations. The decision provides SMEs with wider access to renewable financing options for working capital loans for a three-month duration and term loans for a up to four-year duration to support further investment in Abu Dhabi. The scheme is

available to all SMEs that are registered, operating and headquartered in the Emirate.

Stimulus Package The new partnership is part of Abu Dhabi’s Economic Stimulus Package announced in March 2020. The package includes 16 initiatives to facilitate economic activity, reduce the costs of living and support businesses in the emirate. SMEs represent a vital component of Abu Dhabi’s business landscape, accounting for 98% of all companies in the Emirate, 29% of its GDP, and 44% of the non-oil economy. Providing this significant sector with more financing options during this period creates invaluable long-term economic returns and ensures a sustainable and robust path towards Abu Dhabi’s knowledge-based, diversified economy, a press statement from the Abu Dhabi Government Media Office indicated.

Dubai Chamber organizes an online training course for commercial vehicle drivers Topics such as infection control strategy and vehicle sanitization methods were discussed The Centre for Responsible Business (CRB), under the auspices of Dubai Chamber of Commerce & Industry, recently organised an online training workshop on the safety and health of commercial vehicles drivers, during this period of Covid-19 The e-workshop was organized by the ‘Road Safety’ Task Force, which is part of Dubai Chamber’s Sustainability Network, and was attended by over 50 participants from the private sector in Dubai. The workshop focused on the important role these drivers play in delivering food supplies, equipment and medical tools during this challenging time. Participants in the workshop reviewed the various methods and procedures that companies can adopt to provide maximum protection to drivers during their duties. The presenters discussed topics such as infection control strategies through the use of a mix of administrative and engineering preventive measures, safe work practices, personal

protection equipment (PPE) to prevent driver exposure to infection, communication mechanisms and expected driver behaviour and methods of vehicle sterilization.

Training Workshop During the training workshop, officials representing some of most prominent companies in the country led the discussion, including Roshan Menon from Emirates Airlines, Fenu Rehana from Dulsco, Sundarmoorthy Hariharaiyer from Transworld, Arundhan Alphonse from Tristar, and Suneeth Mathew from Nestle. Dr. Belaid Ratab, Chief Economist, Senior Director–Economic Research & Sustainable Business Development Sector, Dubai Chamber, pointed out the importance of driver safety and health during this period, given the primary role that this category of workers play in meeting the daily requirements of life. n

MAY – JUNE 2020 21

Harnessing BlockcHain

How Blockchain can help optimize Supply Chain Management The prowess and potency of blockchain is making much headway from FinTech to applications in empowering supply chains in a slew of new industry verticals such as manufacturing, aerospace, defence, automotive, food, pharmaceuticals and medical devices among many others, affirms Stephen Edginton, VP Engineering at Epicor Software Corp—Editor

n finance, ‘blockchain’ emerged as a recordkeeping technology used by Bitcoin. With authentication and security challenges for the finance industry in a digital world, this technology shows promise by delivering a fast and secure way to authenticate transactions. Now, the focus is shifting to other industries. The expansion of trials is proving that blockchain in manufacturing industries has the potential to be endless with the ability to create new business models. The major use cases so far come from tracking movement of assets, trade finance, and transaction settlements. One example is TradeLens, a blockchainenabled digital shipping platform. It has major shipping players signed up for it, and they’re sharing data for easy flow of information between various trading hubs. The platform covers more than half the world’s shipping container cargo, and even customs agencies started using this system to verify and clear goods in a faster and digitalized manner. 22 MAY – JUNE 2020

Opportunities in Manufacturing Blockchain technology has yet to enter the digital transformation plans of many manufacturers. Research firm Gartner predicts that 80% of the supply chain blockchain initiatives will remain at proof of concept (POC), or pilot stage, through 2022 (Gartner Insights). The firm also says that blockchain will support the global movement and tracking of $2 trillion in goods and services globally (Gartner Insights). Blockchain has all the potential to change the way supply chain functions in a manufacturing ecosystem. Though it’s often reported that large enterprises are leading blockchain powered initiatives, it’s small and mid-size firms that are most likely to take the lead in the long run. While the potential of blockchain isn’t fully realized, firms across industries are keen to invest in the technology realizing the benefits it can bring to process efficiency. Current use cases and

POCs show how it will most likely make a difference in various manufacturing industry segments. The expansion of trials is proving that blockchain in manufacturing industries has the potential to be endless with the ability to create new business models.

Aerospace and Defence This is a highly regulated industry with superior compliance standards where a complex ecosystem and deep supply chain poses everyday challenges to industry players. A blockchain can make tracking transactions across global suppliers easy, thus paving the way for easier regulatory compliance and a better managed supply chain. It can also be used to gain insights on real-time inventory at supplier sites to avoid out of stock situations.

Automotive Auto is one of the best well-matched industries and is expected to get a major

Harnessing BlockcHain

boost from blockchain technologies. Major automakers like General Motors, BMW, Ford, Honda, Jaguar, Land Rover, and others are in the process of piloting this technology for various purposes including vehicle identification, vehicle ownership, and service history. Blockchain will have a material impact on every aspect of this industry. This extends from procurement to manufacturing, distribution, and service functions. At this time, it is being widely tested to track auto parts and suppliers in case of product recalls, which cause billions in losses every year.

Food Manufacturing Blockchain in food manufacturing is seen as a solution that could eliminate or avoid contaminated food entering the supply chain. Most of the initiatives in this domain are aimed at generating trust among consumers by providing guarantees on origin, quality, and raw materials. One such project is IBM Food Trust Initiative, which along with its more than 200 members harvests data from food growers, manufacturers, and sellers to help consumers trace the origin of it (Ref: IBM, The Food on Your Holiday Table May Have Been Verified by Blockchain).

Pharma and Medical Devices Blockchain makes it possible for medical devices or machines to securely share data with concerned parties without violating privacy and compliance. Today, connected health devices generate loads of sensitive data and blockchain takes care of all the major concerns surrounding it. It can securely store, record, access, and share data. The technology can also play a key role in simplifying compliance processes for pharma and medical devices, where supply chain traceability takes an enormous amount of time and resources.

Small and Midsize Manufacturers These companies are the backbone of the global economy, and they contribute to the major share of economic growth. However, the majority are financially constrained. They generally struggle to access credit based on their movable assets as collateral, and a sizable chunk of new businesses cease to exist

Stephen Edginton

Vice President, Engineering and Product Development at Epicor Software Corporation. In his role he is responsible for the Platform Engineering team, of around 100 people globally, with teams in Russia, India, Mexico, US and the UK. He is instrumental in shaping the future vision and strategic roadmap with the executive leadership team, directing Epicor’s architecture covering angular based UX Framework, core frameworks, cloud native architecture, and research. Before joining Epicor, Stephen cofounded the software development and consultancy company, Dot-Net-IT, helping global customers with digital transformations and challenges. Stephen provided core oversight and execution on the technical competency, growing the business, before being acquired in 2016 by Epicor. Stephen has a Bachelors Degree in Computer Science and Software Engineering from the University of Birmingham.

Blockchain-enabled digital shipping platform covers more than half the world’s shipping container cargos in the first three years due to lack of financing. This is where blockchain can help by transforming the way trade finance works. The system records and verifies every step in the supply chain, making it verifiable for all involved parties. This level of verifiability and accuracy can significantly improve invoice financing options for this welldeserved segment.

Smart contracts Another function that blockchain can help is smart contracts. It can do away with expensive business documentation practices with automatic execution and enforcement of agreements. In a way, it can reduce the benefit gap between large enterprises and pave the way to more competitive trade. These are just a few examples. There are

many start-ups that are venturing into the market to expand the scope of blockchain to every possible industry. It’s not only these companies, but also governments that are beginning to recognize how they can benefit the economy. The expectations from the stakeholders are clear—simplify the existing complex production/trade processes and make them more efficient.

Its Fit and Future Blockchain is suitable for every industry that’s high value, high risk, and highly regulated. Its list of benefits is long—from preventing tampering and counterfeiting, to preventive maintenance by identifying when, where, and how failures occur. Blockchain is a good fit for manufacturers who deal with complex supply chains and need systems to monitor the components from the original source to final product for authenticity and safety. It’s maturing slowly, and it may be five years from now before we see the POCs evolving into real-world use cases. Manufacturers need to keep an eye on developments and POCs that may be applicable to their segments. Watch for blockchain opportunities in your business. n MAY – JUNE 2020 23

GPCA

Ensuring uninterrupted supply of raw materials essential to fighting Covid-19 pandemic The Association calls for the reduction of trade barriers including high tariffs currently in place

he Gulf Petrochemicals and Chemicals Association (GPCA), the voice of the chemical industry in the Arabian Gulf, has urged global governments and international legislators to work closely together to ensure the uninterrupted supply of raw materials used for the manufacture of medical and hygiene equipment that are absolutely crucial to fighting the Covid-19 pandemic. Despite facing significant supply chain disruptions, the GCC chemical industry has stepped up efforts to safeguard the supply of raw materials for the manufacture of products used to enable the hygiene, testing and treatment of patients affected by the virus alongside personal protective equipment for medical staff, as well as ensuring the continued manufacturing of essential food packaging material. However, trade tariffs imposed prior to the start of the crisis and in the wake of growing global protectionism since mid2018, combined with border closures in some countries are proving it difficult for chemical raw materials to reach production plants across the world where finished products are made. GPCA and its members are calling for the reduction of tariffs and the removal of trade barriers and all bureaucratic hurdles

currently in place that pose as a significant challenge to the steady supply of chemical and petrochemical products used for the manufacture of specialized equipment and everyday products amid heightened global demand.

protect the health and safety of people and medical personnel,”affirmed Dr. Abdulwahab Al-Sadoun, Secretary General, GPCA.

G-20 Call

Dependence on FMCG companies

The call comes days after world leaders pledged in a statement issued during a G-20 Extraordinary Virtual Leaders’ Summit to ensure the flow of vital medical supplies, critical agricultural products” and ‘resolve disruptions to the global supply chains. The statement went on reiterate the G20’s commitment to a free, fair and stable trade and investment environment, and to keep markets open. All GCC countries have consented to the World Trade Organization (WTO)’s Trade Facilitation Agreement (TFA) that aims to simplify, modernize and harmonize import and export procedures and processes. “As medical facilities in the region are starting to feel the strain from the pandemic, businesses are continuing to manufacture, in difficult circumstances, the various tools, safety equipment and personal protective equipment such as sterile gloves, masks, hand sanitizers and protective clothing urgently needed to

“At the same time, we depend on FMCG companies to continue to ensure the supply of items such as cleaning products as well as packaged food and beverages. The GCC chemicals industry is safeguarding the supply of raw materials to these sectors and reducing or even removing related bureaucratic hurdles will help secure their timely supply. Eliminating tariffs on these essential products will also reduce the costs on medical facilities and GCC consumers who are already under financial strain,” continued Dr. Al-Sadoun. “It is imperative that no efforts are spared to secure the robustness of the medical infrastructure within the Arabian Gulf region, while also maintaining a stable socioeconomic environment,” asserted Mutlaq H. Al-Morished, Chairman, International Trade Committee, GPCA and CEO, Tasnee, Riyadh, Saudi Arabia.

Dr. Abdulwahab Al-Sadoun

GPCA warns GCC chemical exports to India may be hit by investigation Investigative practices by Indian authorities on anti-dumping regulations raise serious concerns under the WTO rules

GCC ethylene glycol (EG) imports into India may be severely hurt as a result of an ongoing anti-dumping investigation targeting imports from Saudi Arabia, Kuwait, Oman, UAE and Singapore, the Gulf Petrochemicals and Chemicals Association, the regional trade body representing the common interests of the chemical and allied industries in the Arabian Gulf stated in a press release. The inconsistent investigative practices by Indian authorities on anti-dumping regulations raise serious concerns under World Trade Organization (WTO) rules and threaten to severely hurt GCC economies, jeopardizing US$ 543mn worth of mono ethylene glycol (MEG) imports, which is equivalent to 20% of total chemical imports from the region into India, according to GPCA analysis.

24 MAY – JUNE 2020

India is the second largest importer of GCC chemicals and accounts for over a third of total GCC export volume together with China. On 6 April 2020, Indian authorities terminated the investigation for the sole imports from Saudi Arabia, and continued the investigation into imports from Kuwait, Oman and the United Arab Emirates. This partial termination of the investigation is inconsistent with Indian anti-dumping rules. “This detrimental and ill-advised measure is having a harmful impact not just on GCC economies but also on bilateral trade, threatening to disrupt India’s domestic market and damage longstanding friendly relations between the nations,” commented Dr. Abdulwahab Al-Sadoun, Secretary General, GPCA. n

Supply ChainS’ RepoSitioning

Realigning Supply Chains, post-Covid-19 With economies severely battered, a rethinking and rearrangement of supply chains appears inevitable There are clear and imminent indications that supply chains will be irretrievably altered in the aftermath of the pandemic. With global trade in turmoil and the blame-game becoming a veritable free-for-all, the present economic upheavels will lend themeselves to a reorientation of trade patterns and review of trade deals. In this special contribution author Eelco Dijkstra, Managing Partner, Europhia Consulting, assesses the current logistics landscape and the certain reshaping of the contours of the supply chains globally—Editor

here is barely any facet of normal life and business that has not been impacted by the ongoing pandemic. There have been fierce debates on the origins and spread of the novel CoronaVirus (Covid-19) that have consumed the world since the start of this year. The economic fallout from the ongoing political war of words related to the pandemic between the nations of the world could be huge. It’s becoming clear that there will be a shake-up of global sourcing strategies pulling away from some of the current mass production Asian centres of manufacturing.

The Great Depression In less than three months’ time, the US unemployment rate has sky-rocketed to over 20% of the US workforce being sent home and now without a job. The total number of unemployed is now a whopping 30 million workers—a number unheard of since the Great Depression of the 1930’s. MAY – JUNE 2020 25

Supply ChainS’ RepoSitioning

Every third company in Europe and the US has major Chinese customers and 81% of companies it surveyed rely on Chinese suppliers.

In Europe and elsewhere around the world, the lockdown has also severely impacted economies and businesses. It is feared that the GDP of most countries will severely contract in 2020. The US first-quarter GDP contracted 4.8% and is expected to contract more than 10% for the second quarter ending end of June. Here in the UAE, the impact is also considerable. Key sectors which have been hit thus far are the airline and hospitality industries. Emirates and Etihad have grounded most of their passenger operations. During the lockdown hotels, restaurants, cafes and malls across the emirates were closed. Many staff were sent home on unpaid leave or with significant reductions to their salaries.

Travel constraints

Eelco Dijkstra Eelco Dijkstra is Managing Partner, Europhia Consulting, is an international management consulting company based in Dubai. The company is specialized in the logistics, supply chain and distribution sector. The consultancy operates global supply chain strategy and design assignments for its clients out of its office in the United Arab Emirates. The opinions are based on the author’s own views and understanding of the dynamics within the global supply chain sector.

26 MAY – JUNE 2020

Only now, businesses are starting to re-open slowly. Expo 2020 has also been postponed for a year and will now start in October 2021. As it becomes clear that people globally won’t be travelling much internationally the coming 12 months this will for sure have a significant impact on the UAE’s economy in the months to come – heavily dependent on global travel and tourists through the UAE. Alain Marckus, Managing Director, First Abu Dhabi Bank was quoted in an article in Gulf News of 7 April 2020. “We expect to see a sharp contraction for the second and third quarter GDP combined,”but“remain constructive for Q3-2020 and beyond with an AED 100billion (US$ 27.24bn) stimulus and other measures, such as relief via grants and on indirect taxes to support the economy. Elsewhere, countries have also designed stimulus packages to try and support faltering economies. The US has passed several bills in relief funding and tax breaks to large and small businesses totalling US$ 2.5trillion. In Europe, governments both at national and at European Union level passed legislation for relief funding to businesses. The UK government announced to pay 80% of wages for those who lost their jobs during this period in an effort to keep them employed with employers.

Plummeting oil prices To make matters worse for oil producing nations, global oil prices went down in tandem in the rise of the pandemic. This

was partially caused by an oil price war between Saudi Arabia and Russia and in recent months fuelled further by lack of demand for oil due to the lockdown of much of the global economy. Saudi Arabia announced on 11 May that it would triple its VAT rate from 5% to 15% from 1 July 2020. It also announced plans to suspend giving out cost of living allowances effective June 1, according to its state news agency SPA. The Saudi Finance Minister Mohammed Al Jadaan says these measures have been taken as part of the government’s efforts to manage the economic and fiscal impact of the pandemic and the crash in oil prices. On 12 May 12, the UAE Finance Ministry affirmed that VAT will remain at the current 5%. However, the impact of lower oil prices on top of the pandemic problems will likely further impact many of the GCC economies across the region.

China—the Production Hub The pandemic has made it clear that many medical products including Personal Protection Equipment (PPE) are actually produced in China. With the Covid-19 outbreak, countries were scrambling to find PPE medical equipment to protect their medical workers in the front line fighting the disease in hospitals and retirement homes. Most of the searches for PPE supplies ended up with manufacturing suppliers back in China. As a result of the increased demand, a huge shortage of products emerged as buyers from all over the world scrambled for the same product supplies. Traders saw opportunities to get in on the procurement game which sent prices soaring even further. What made matters worse was the shortage of air-cargo capacity around the world as many airlines were grounded. This has also significantly increased the price for airfreight to transport the PPE goods from China to destinations around the world.

Manufacture evolution Currently, China is a dominant producer of many high value goods such as machinery, electronics equipment, mobile phones including Apple’s iPhone. It also produces most of the apparel items for most US and European luxury retail fashion brands. The country

Supply ChainS’ RepoSitioning

produces 72% of shoes sold in the US and it produces 49% of all toys sold in the US. Chinese companies such as Huawei export advanced mobile network systems around the world on which entire or partial mobile phone networks in many countries operate. We now also know that many medical products such as PPEs are produced in China. What many people don’t know is that also many pharmaceuticals, as final product or as active API (active Pharmaceutical) ingredients, are also manufactured in China and these are vital to the production of many of the medicines sold around the world today.

Massive Supply Chain reshuffles after Covid-19 Citing a February 2020 survey by German supply chain consultants Kloepfel Consulting, every third company in Europe and the US has major Chinese customers and 81% of companies it surveyed rely on Chinese suppliers. Due to retaliatory tariffs imposed on each other in the US-China trade war, companies had already started diversifying their supply chains out of China. It is expected that the speed at which they do this will now accelerate even more.

The US Administration has been increasingly vocal in recent weeks reiterating that US companies should reduce their reliance on China as manufacturing base. Other governments are also reassessing their reliance on the China as manufacturing base. As an example, the Japanese government has offered to pay Japanese firms to leave China and relocate some of their production elsewhere as part of its coronavirus stimulus plan worth US$ 2billion.

Pharmaceutical manufacturing dependence on China In the US, increasing government demand for American-made drugs and medical products will provide an incentive for companies to make their products in the United States, rather than China. While the United States remains a global leader in drug discovery, much of the manufacturing over the past twenty years has moved offshore. The last American plant to make key ingredients for penicillin announced it would close its doors in 2004. Chinese pharmaceutical companies supply more than 90% of U.S. antibiotics, vitamin C, ibuprofen and hydrocortisone, as well as 70% of acetaminophen and 4045% of heparin in recent years, according

to Yanzhong Huang, a senior fellow for global health at the Council on Foreign Relations. China is also increasingly a large manufacturer of many API active ingredients for many US pharmaceutical companies.

Supply and production concerns Supporters of reducing reliance on China have used the epidemic to highlight what they say is a longstanding vulnerability that could leave Americans dangerously short of medicines in the event of a war, trade conflict or pandemic as we see today through the Covid-19 virus outbreak. The post Covid-19 world will be a different world than before. Countries, and also companies, in many vital sectors will be reviewing their manufacturing base from a risk management perspective. They will be looking to reduce dependence in product supply from China. Where in the past fifteen years, we saw a global trend of ‘single’ sourcing of certain products we will for sure move towards a global market with dual and multiple production sources for any single product in which domestic political motives will play a large role. This will see major changes in global manufacturing and supply chains. n MAY – JUNE 2020 27

AlmAjdouie logistics

WABCO Telematics boost efficiency and safety for Almajdouie’s fleet Leading logistics group equipping 1,200 trucks and 1,400 trailers with WABCO Telematics

elgium-based WABCO Holdings, a leading global supplier of braking control systems and other advanced technologies that improve the safety, efficiency and connectivity of commercial vehicles, recently announced that it has signed a landmark deal with Almajdouie Logistics Company in Saudi Arabia. Accordingly, WABCO is equipping 1,200 trucks and 1,400 trailers of one of the leading and largest Saudi-based transport company’s extensive fleet with its advanced telematics solutions and support services, replacing the company’s current basic trackand-trace solution. The implementation of the new solution will support Almajdouie’s ambitious digital transformation program, enabling it to increasingly build its business through real-time fleet management capabilities and data-driven insights. WABCO’s advanced Fleet Management Systems (FMS) will enable Almajdouie to strongly differentiate their customer service and quality. The technology will significantly increase the efficiency of both its fleet and back office operations, cut operating costs, helping meet increasingly stringent regional legal requirements and boosting driver and cargo safety. “For years, Almajdouie has been using a basic track-and-trace solution to pinpoint the whereabouts of its fleet. In today’s increasingly competitive and connected logistics market, that is no longer enough,” explained Almajdouie Logistics Heavy Lift General Manager, Eyad Hamzah Arafah. “As operating costs, particularly for fuel, continue to rise, we wanted more control over both our fleet and cargo while simultaneously raising the efficiency of our drivers and our back office to better service our customer base. The new solution will also enable us to further boost our stringent safety requirements, which is our number one priority,” he added. 28 MAY – JUNE 2020

Suzanna Perrier, WABCO’s Regional Sales Leader, Eyad Hamzah Arafah and Osama Mohamed Zeid, Account Manager WABCO ME at the signing ceremony.

WABCO’s TX-GO 2™ onboard computers will be fitted in Almajdouie trucks WABCO as their partner of choice After a thorough market study, Almajdouie selected WABCO as its partner of choice. As part of the agreement, WABCO’s advanced TX-GO 2™ on-board computers will be fitted in all Almajdouie trucks. Installed behind the dashboard, TX-GO 2™ is connected to the CAN bus. The solution delivers advanced fuel management capabilities, cargo and temperature monitoring, trend reporting and driver authentication and driver scoring. Almajdouie expects the new telematics solution to support its ambitions around leaner, greener and safer operations. The combined truck and trailer solution will

help the company gain real-time visibility of its fleet and cargo, enabling it to deploy vehicles and trailers to their maximum capacity as well as increase vehicle uptime.

Expanding coverage in Middle East Almajdouie is the second largest logistics company in the Middle East to choose WABCO solutions. WABCO has been helping Saudi Arabia-based AlMarai, one of the world’s biggest dairy companies, to future-proof their fleet. With this new agreement, WABCO is significantly strengthening its foothold in the fastgrowing MENA logistics market. “We are honored to welcome a market leader like Almajdouie Logistics as a greatly valued customer,” commented Peter Bal, Business Leader Fleet Solutions EMEA, WABCO.“We are confident that our solutions will boost their ambitious digitization journey and will enable them to take their already highly rated customer services to the next level,” he added. n

Pandemic PreParedness

The indispensability of effective Healthcare and Pharma Logistics in Pandemic times Medical logistics is increasingly coming to the fore and under the scanner in the combat against the spread of the virus There is no doubt that with the onslaught of the novel coronavirus (Covid-19), Healthcare and Pharma logistics are grappling with a challenging and changed medical landscape with consequences of gigantic proportions. Two senior experts from Hellmann Worldwide Logistics provide their take and perspectives on how healthcare and pharma logistics can be better harnessed to effectively deal with the fast proliferating health crises. In these critical times, new demands are now being made on logistics services providers for the healthcare and pharma sectors. Gordon Barnard, Vice President Salesâ&#x20AC;&#x201D; Middle East & South Asia (MESA), Hellmann Worldwide Logistics, and Anna Mansurova, Director, Commercial, Hellmann Calipar Healthcare Logistics, describe in first person narrative how the company is meeting the complexities of the current situation. 30 MAY â&#x20AC;&#x201C; JUNE 2020

ith the ongoing spread of the Coronavirus Disease (Covid-19) across the globe, various efforts and effects are being observed in the logistics and supply chain industry. As a globally active logistics service provider, Hellmann Worldwide Logistics has set up a task-force to continually assess the situation and carry out daily risk analysis at the global, regional and local levels. The current events are very concerning, and so we continue to make every effort to protect the health of our employees, our customers, and our partners. We have imposed additional measures intended to ensure the safety of our colleagues on the one hand and the maintaining our operations on the other. The global lockdown situation and

Pandemic PreParedness

its distressing impact on global trade has meant that supply chains are facing multiple complications with almost 500 blank sailings, impacting with a carrying capacity of almost 3.4 million containers per week and with passenger flights for the majority grounded with a severe lack of lower deck cargo space is putting strains never before handled. In our Middle East and South Asia offices, we have been in close touch with our partners, working closely with them in streamlining operations and enhancing capabilities.

Streamlining logistics To mitigate this impact, Hellmann has been working on customer-based solutions

on a case-to-case basis, accommodating their forecast volumes to reduce impact on supply chains. These solutions include alternative routes, sea/air programmes, and short-term charter flights where available and applicable. While air movements are restricted, there is an increasing demand observed for LCL consolidation services. We have been supporting our healthcare, perishables and FMCG industry customers with tailored air charter solutions to ensure that medical supplies, food items and hygiene products reach markets in time to fulfill demand. In many cases, there were orders ready to ship from the factories or already on board vessel but cannot be received at the destination country due to enforced strictures. This necessitated the demand

for warehousing solutions at multiple hub locations where the cargo can be stored until the situation eases out. Across multiple industries there is a potential increase in demand for inventory management services where stockpiles need to be reassessed to meet customer demands locally, with more immediate focus being taken on healthcare, food supplies and general household basics.

Ramping up road transportation Road transportation in the Middle East, where local distribution is required for cargo leaving from warehousing hubs, has been subject to stricter regulations for border crossing. Whilst many borders are closed MAY â&#x20AC;&#x201C; JUNE 2020 31

Pandemic PreParedness

Knowledge and expertise across Hellmann’s global network are key when dealing with healthcare.

to passenger traffic on cargo greater checks and rules are in place to curb the spread of the virus. Logistics support in terms of planning alternate supply chain routes and regulatory paperwork has been critical in this situation, which is an area Hellmann is very proud to support with its specialized logistics experts.

Anna Mansurova Anna Mansurova is Director, Commercial at Hellmann Calipar Healthcare Logistics. Based in Dubai, Anna heads commercial strategy of the company and solution development for the regional healthcare supply chains. She has been associated with healthcare logistics since 2010 when Hellmann established its first regional Healthcare Distribution centre in Dubai. Since then, Anna has held number of operational and leadership roles and worked on various supply chain models. Under her stewardship, Hellmann Healthcare has since developed into the market leader in the regional Healthcare logistics with a well qualified and knowledgeable team.

32 MAY – JUNE 2020

Hellmann continues to work hard to ensure freight keeps moving, and that you receive the best possible service in this tense situation though a varied of solutions from Air-Charter, Oceanfreight (FCL and LCL services) as well as support warehousing solutions around the world to keep goods safe until the situation eases. The current events are very concerning, and so we continue to make every effort to protect the health of our employees, our customers, and our partners.

Part II Hellmann Calipar Healthcare Logistics was formed in 2010, when Hellmann Worldwide Logistics and Calipar Integrated Logistics from India’s Parekh Group joined hands to bring specialized healthcare solutions into the region. Since then Hellmann has striven to create market leadership by carefully investing in advanced infrastructure and systems and expanding healthcare operations to the Kingdom of Saudi Arabia where it commenced operations in 2015. In Saudi Arabia, Hellmann is the market leader in value-added services to the healthcare industry. We work closely with multinational companies as partners in the Kingdom as in the UAE as we understand the challenges they face and can offer our expertise and experience to overcome logistics-related hitches. Our differentiations have always been

Pandemic PreParedness

our focus, level of quality and solutions we deliver and our flexibility to adapt to new market requirements and regulatory challenges. You cannot approach Healthcare logistics in the same way as you would approach logistics for other business sectors.

Purposeful vertical Within the company we have created a dedicated vertical solely focusing on providing strong logistics services to the healthcare industry. Through customized systems and high levels of training we focus on creating healthcare specialists within our teams. Hellmann constantly endeavours to raise the bar in service standards across our business. Our customers appreciate this dedicated vertical approach and through positive audit performance this is clear evidence of the competence we have attained in healthcare logistics. Our Global Healthcare team is a crossfunctional competence centre consisting of product, quality, commercial and strategic development experts. Through this collaboration, Hellmann delivers innovative and competent solutions and a consistent level of service. Knowledge and expertise across Hellmann’s global network are key when dealing with healthcare logisticsrelated issues. Some examples of services for global healthcare supply chains include distribution centres with compliant product handling (receipt and order preparation) and storage, product quality releases, inventory, shelf life management and recalls, handling of non-conformities, transport route risk assessment, handling of passive and active shipping solutions and end-to-end visibility.

Expertise and experience Knowledge and expertise accumulated over the past 10 years helped us tremendously to respond to the current challenges posed by Covid-19. Given the current environment of supply chain disruptions, many exporters and importers are struggling to adapt to the new norms. In our distribution centres, Hellmann implemented robust contingency plans, addressing employee’s safety and assuring business continuity. On the transport front, recently for instance, a manufacturer of hand sanitizing soap based in Thailand reached out to

Gordon Barnard

Gordon Barnard started his career in Logistics in 1998 and has been with Hellmann Worldwide Logistics since 2006. Based in Dubai, UAE he is currently responsible for all sales activities within the company’s Middle East, North Africa and South Asia entities. In addition to extensive multi-modal operational and sales experience, Gordon has Air, Ocean, Road and Warehousing Management exposure to support key Hellmann operations. He has also been involved in all major Hellmann Middle East customer industry implementations. Gordon has also worked in Spain, Sudan, Nigeria and Qatar prior to relocating to the UAE.

Hellmann for help with transitioning a significant portion of their shipments to Japan from sea to air. Hellmann supported the customer with advice on how to properly package the goods, supervised the packaging process on-site and secured air freight capacity specific to the client’s needs.

shipping and the MRI magnet would suffer damages if the helium drops below a certain level, we have set up a route mapping and contingency plan to ensure smooth and expedited shipment handling.

Helium conundrum

Being a truly multi-modal logistics services provider, with local knowledge and global expertise, we help our customers navigate through exceptional times with confidence and peace of mind. Several new clients are now reaching out to Hellmann to find solutions during these challenging times. Looking forward, as people, organizations and economies learn to adopt, life with Covid-19 and greater risk of new pandemics could be a new norm and occurrence. Topics like personal health and safety, contingency planning, building in redundancy, strengthening domestic healthcare systems and economies will continue to be at the top of the agenda. At Hellmann Healthcare Logistics, we see ourselves as an important player to support those strategies across Middle East, North Africa and South Asia. We are committed to changing the face of Healthcare Logistics for good. n

Another great example of our Hellmann Healthcare team’s expertise was an extremely sensitive MRI (Magnetic Resonance Imaging) unit movement from Japan to Myanmar. Under normal circumstances, these devices which are filled with helium, are moved as oversized cargo by air freight, but in this case, the destination airport of Yangon International Airport could not support any freighter operations. There, we arranged for air freight from Japan to Singapore first, then transshipping the unit to our cross-dock facility at Changi Airport, where after carefully conducted refill of helium, MRI sailed in 20-foot opentop container from Singapore to Yangon. This delicate process was required because helium is lost throughout transportation at an average rate of 3% per day. Since only a certain amount of helium can be used for

Versatility

MAY – JUNE 2020 33

Yanbu Port—KSa

Yanbu’s King Fahad Industrial Port launches JEDDEX service from CMA CGM

Newly introduced ervice links key markets in Saudi Arabia and East Africa with weekly sailing schedule

ulf Stevedoring Contracting Company (GSCCO), part of the Gulftainer group of companies, welcomed the CONTSHIP ONO, the first container vessel of the new service from CMA CGM’s recently-launched JEDDEX service, at its King Fahad Industrial Port in Yanbu (KFIP) on 19 April 2020. This marks the first new container call at KFIP since GSCCO was assigned the management and operations of the port in 2019. The maiden vessel call at KFIP successfully handled a combination of import and export shipping consignments. The newly launched JEDDEX service links the rapidly growing markets in the Kingdom of Saudi Arabia (KSA) and East Africa by connecting KFIP directly to Mogadishu and Mombasa, via Jeddah, to CMA CGM’s global network. This service enables end users to benefit from direct weekly calls at KFIP with the 34 MAY – JUNE 2020

following port rotation schedule through four dedicated ships on a weekly basis: Yanbu– Mogadishu – Mombasa – Jeddah – Yanbu. It has opened up direct routes for import and export of products further boosting the trade ties between East Africa and KSA. “We are delighted to welcome the first call of CMA CGM’s new JEDDEX service at Yanbu. This service is the first to call Yanbu since we took over operations, and we look forward to additional services providing further connectivity to the exciting regional markets of the Red Sea and East Africa,” remarked Jason French, Group Managing Director, GSCCO. The port is strategically located in Yanbu Industrial City on the Kingdom’s Red Sea coast, which is home to over 200 major exporters. Approximately 80 per cent of the industrial output of the West Coast of Saudi Arabia originates in Yanbu, and the city is home to companies manufacturing

a wide variety of products, including petrochemicals, industrial products, ceramics, plastics, edible oils, sugar and building materials. GSCCO handles all types of cargo at KFIP, including containers, breakbulk cargo, vehicles and bulk cargo. To support operations at the port, the company has invested in significant amounts of new equipment to ensure it can deliver its award-winning levels of operational excellence and turn KFIP into another jewel in the crown of Saudi Arabia’s growing maritime presence. This year, GSCCO celebrated its 35th year of operating ports in Saudi Arabia. The company was founded in 1985, as a company specializing in the management, operation and maintenance of seaports. In June 2013, through a 51 per cent acquisition, GSCCO became a part of the Gulftainer group of companies. n

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Covid-19 impaCt on Supply ChainS

Leadership outlook on Supply Chain & Logistics in Covid-19 times and beyond The CoronaVirus (Covid-19) pandemic currently sweeping the globe has triggered the worst financial meltdown since the ‘Great Depression’ of the 1930s. The ravaging pandemic is indeed taking a heavy toll with increased daily infections, deaths (and recoveries) but also a devastating effect on the economies of nations in its wake. Anecdotal evidence points to CEOs worldwide coming to terms with the reality that business will be anything but normal over the coming months. Most are bracing for a protracted, long drawn U-shaped recession seeing the virus outbreak as a growing risk and a real threat to their business survival – Editor 36 MAY – JUNE 2020

e find ourselves in difficult and challenging times. For supply chain leaders, it is more important than ever before to be flexible, willing and able to adapt to change. Adaptability, flexibility and the use of innovative technology are essential for supply chains to operate effectively in what many of us are calling the “new normal”. I recently asked a few of my contacts in senior leadership roles if they would be willing to share their thoughts in writing about the bigger picture in terms of the impact to the supply chain. More specifically, I asked them how they think this crisis may impact the way in which the supply chain is managed and structured in the future. I was interested to know how they believe relationships will change on a local, regional, and global level with customers, partners, and service providers, and what long-term changes they anticipate once the crisis is stabilised.

Covid-19 impaCt Covid-19 on impaCt Supply Chain on Supply BuSineSSeS ChainS

kia Groen-Int-Woud s a S

Brian Cartwright, Client Partner at Pedersen & Partners, discusses the post Covid-19 supply chain and the future of work with a cross section of senior executives and professionals from multiple industry verticals. Here are the first-person narratives of the officials interviewed. Here’s what they had to say: RFQ (Request for Quotation) periods and Saskia Groen-Int-Woud, Chief Executive Officer–Damco The writer Brian Cartwright is Client Partner, Supply Chain and Logistics for Pedersen & Partners and is based in Dubai, UAE. He specialises in Supply Chain & Logistics-related functions for CxO, VP, and Director level in global, regional, and country level roles, working with service providers and end-user companies across the globe including large listed corporations, family-owned conglomerates, SMEs and start-ups. Cartwright has over fifteen years of experience in Executive Search and Recruitment. During his career he has owned and managed successful businesses in the Middle East and Europe.

One of the ways in which I see the supply chain changing in the future will be the dampening of the just-in-time trend. As a result, I expect to see a combination of near sourcing and diversified offshore sourcing, plus – from a finance perspective – a rethink of inventory management. I expect business resilience to become a core demonstrable quality in service provider selection processes. My personal wish, once we are through the crisis, is for a trend towards more sustainable consumption and an e-commerce model that supports this. More pragmatically, I believe there will be a shift towards companies having a more diversified supplier strategy, as well as a shift in purchasing priorities – more health-related demand and less large capital spending. Business relationships will change, likely with a shift towards potentially longer

an emerging trend to find reliability and dependable quality through relationshipdriven sourcing, deeper quality assurance management and a strong focus on business resilience.

Working remotely While working remotely, we have been really well-connected, and we addressed the additional VPN (Virtual Private Network) connectivity required very early. We deployed our business resilience capability early on, and it’s been a very worthwhile investment. We have been able to keep our customers informed and our people aligned, and ensure that we keep lines of communication open regarding how best to stay close and meet their needs. Our air charters continue to be wellcoordinated and well-aligned with customer requirements. In the long term, once the crisis is stabilised, we’re going to continue to drive MAY – JUNE 2020 37

Covid-19 impaCt on Supply Chain ChainSBuSineSSeS

Djamel Rezzig

Miguel Ibarbia Post-Covid-19, companies will invest more in logistics, technologies, robotics, and automation to avoid business continuity disruptions in the future. our business resilience, to find the right way to balance working from home and on-site, to develop our people’s skills and to take the capabilities of our cloud-based backbone to the next level.

focused to delight our customers. I predict that post-Covid-19, companies will invest more in logistics, technologies, robotics, and automation to avoid business continuity disruptions in the future.

families (which might come as an opportunity to finally get rid of all those non-performing products).

Djamel Rezzig,

Miguel Ibarbia,

The retail industry is facing a major challenge, with stores being closed and employees asked to stay home. The supply chain was totally disrupted as the main source of supplies was cut. Restrictions were imposed on fulfilment centres and last mile delivery teams, together with a stack of constantly changing regulations, curfews, and permits. For most supply chain leaders the solution has been to create a contingency plan and reassess the situation daily. While import activities for organisations were reduced, the e-commerce business has boomed. In the future, I believe that the impact of the pandemic on the supply chain will change the way that companies look at our activities. Our role as supply chain leaders has suddenly become ‘essential’ within the retail industry, and I am confident that the level of attention has changed. Supply chain, logistics and in particular e-commerce fulfilment and last mile will be

It is evident at this stage that the Covid-19 situation will impact supply chain management moving forward. Managers will need to focus on building much more agile and resilient supply chains, as great swings in supply, demand, and costs will become the new normal. In terms of demand, we will need to get used to working with several different scenarios at the same time – high, low, optimistic, pessimistic – and plan accordingly. Demand shaping will become increasingly important as supply constraints and product shortages start becoming apparent. In terms of supply, practicing social distance at manufacturing sites, or even warehouses, will have an impact on overall capacity, and suppliers might struggle to deliver original output levels. This will probably increase product costs as well. Product allocation will become normal, and considerable range rationalisation will be needed to free up capacity for the most important product

Balancing demand and supply in this context will probably require the S&OP (Sales and Operations Planning) to become a more frequent exercise than today, in order to support supply chain agility. It will also be necessary to develop supply chain resilience by continuously monitoring supplies and suppliers, while building alternative plans. Nevertheless, I believe it is important to acknowledge the great level of agility and resilience that supply chains around the world are already displaying, even as we consider how much more will need to be developed moving forward. In the middle of this considerable disruption, most supply chains are successfully fulfilling market needs, albeit through alternative means or alternative offerings.

Group Head of Last Mile–Chalhoub Group

38 MAY – JUNE 2020

Supply Chain Manager, Middle East and Africa–BIC

Demand-supply balance

André N. Verdier,

Managing Director, Middle East–Blue Yonder (previously known as JDA) In terms of the big picture, the Covid-19 crisis has brought a significant major development for supply chain professionals. It is now true that the

Covid-19 impaCt Covid-19 on impaCt Supply Chain on Supply BuSineSSeS ChainS

André

N . Verdie

Take advantage of any bandwidth you have now to ensure that your operations and your supply chains are agile, efficient and robust. Remember change is an inevitable part of growth and evolution. majority of people outside the field, from individual consumers to global CEOs, have gained unprecedented knowledge and focus on supply chain as an activity. Consumers who were previously unconcerned with issues such as the source of goods, shipping routes, and transportation networks are looking at not only the origin of the contents of their shopping baskets, but the end-to-end process that put those contents there. The heightened awareness that the supply chain exists to fill those baskets increases the pressure on professionals in this field. Large corporations and SMEs alike are realising the importance of their own supply chains, and the agility and robustness of their operations are now at the forefront.

Agile supply chains Most companies are realising that their supply chain operations are not as agile and resilient as they had anticipated and hoped, although some are doing well, mainly because of their prescient adoption of technologies and systems. In retail environments, traditional selling and distribution methods will continue to shift from in-store to homebased, and e-commerce will be the order of the day. Advance visibility for supply, production, inventory and distribution

will be a standard requirement, irrespective of the industry. There will be changes in the way we manage supply chain in the future due to the Covid-19 situation, and these will be mainly to do with planning, visibility, automation, AI and machine learning. These will have to be part of any future supply chain management strategy and operation. Without an integrated supply chain platform which includes these components, business operations cannot be sustained.

Wa lid Kh o ury and ensure that you have an integrated supply chain management platform which links all aspects and allows for full visibility of your supply chain. Take advantage of any bandwidth you have now to ensure that your operations and your supply chains are agile, efficient and robust. Remember that the new normal will soon just be normal, and that change is an inevitable part of growth and evolution.

Walid Khoury,

New reality

Managing Partner–ALS Logistics Solutions

This new reality of our current method of interaction will continue going forward. Remote working and electronic/video communication will become increasingly more acceptable as the norm. However, there will be some return to the previous ways of working; a personal face-to-face meeting still has a distinctive value, even if such meetings happen less frequently in the future. On an operational level, teams, departments, customers and suppliers within the supply chain will interact in situation rooms that are created to deal with exception management cases, while the day-to-day routine will be automated, powered by AI and machine learning. My advice to people in the supply chain domain is to review your solutions strategy

Covid-19 is spreading globally faster than ever predicted, which means increased supply chain disruption and significant change in people’s daily habits and behaviour towards one another. The supply chain is impacted by very limited access to manpower due to quarantine, factory shutdown and limited or insufficient access to logistics providers for the movement of goods. The entire supply chain is in crisis management mode, with work being assessed on a daily basis. In the meantime, customers are impacted with increased costs of shipping and companies increased costs. In my opinion, this crisis will lead most organisations to realise that their current technologies are no longer competitive, and MAY – JUNE 2020 39

Covid-19 impaCt on Supply Chain ChainSBuSineSSeS

Gaurav Biswas We are already seeing the increased use of remote working, video conferences and virtual networking, and this trend will remain. that they must move towards automation and the need to implement technologies that support business continuity. The cheap manpower handling version will no longer be a good strategy if they wish to remain afloat. Supply chain providers must put innovation and futureproof process handling at the centre of their planning. They must anticipate customer needs, manage solutions and prepare for critical demands, consumer demands and instability, and similar challenging conditions.

Planning and managing Additionally, supply chain leaders must start planning and managing their processes beyond the current market platform and create robust models and tools that will cater for future challenges. I would remind my friends and colleagues not to lose their heads in the current situation, and instead start preparing for the coming return to normalcy, and the challenges that await us all after the lockdowns are lifted and people are allowed to move freely. No one can predict the behaviour of the markets after this crisis; if management can keep their staff on the payroll and not sacrifice them to maintain their former profit margins; this will pay off in the future. 40 MAY â&#x20AC;&#x201C; JUNE 2020

This crisis is not the end of the world, so please do not make it so for the people around you.

Gaurav Biswas, CEOâ&#x20AC;&#x201C;Trukker

The Covid-19 spread has caused unprecedented levels of disruption across multiple industries and geographies. Everything that is transported by air, sea and land has been affected. The first impact was on exports from China, where importers faced disruption of the supply of raw materials. However, over the last few weeks, the impact has been on entire supply chains, from the supply of raw materials to the reduced demand for finished products. The lockdowns have impacted the demand for all discretionary consumption. However, supply chain management will go through multiple positive changes as a result of Covid-19. While there are current challenges, the crisis will accelerate the adoption of technology at all levels, including the digitisation of cumbersome paperwork and the automation of processes with the use of predictive algorithms. Supply chain management will thrive with multiple technology innovations that facilitate shared economy principles for otherwise asset-heavy businesses.

Roger Philips

Upswing in remote working We are already seeing the increased use of remote working, video conferences and virtual networking, and this trend will remain. However, humans are social animals, and virtual networking will not replace the need for a handshake and hug. These are unprecedented times, and no one really has the past experience to know how exactly how to deal with it. The best way to handle such a crisis is to remain positive, remain informed and spread positivity. Innovation-driven companies should focus on building solutions that allow supply chains to keep moving in a safe environment, prioritising the safety of the thousands of workers who are contributing towards moving cargo across the world.

Roger Philips,

General Managerâ&#x20AC;&#x201C;Tranzone Logistics Tranzone has seen an impact on supply chain and trade routes globally. Our inbound shipments by both sea and air freight have been affected. For sea freight, we are seeing delayed containers en route, increased customs clearance times due to a skeleton staff working at customs, and reduced driver availability to bring the container to the warehouse due to screening.

Covid-19 impaCt on Supply ChainS

management, as a formerly face-to-face meeting might now be conducted by phone or videoconference. These are lessons that we can incorporate into the business world, as IT providers continue to develop tools that we can grasp and use to do business in a smarter way, thus enhancing shareholder value and operational efficiency.

Brian

t Cartwrigh

Globally, the main impact on air freight has been cargo availability, while airlines cope with the change of environmental conditions due to Covid-19. International cargo flights are changed at the last minute to maximise flight capacity, the type of aircraft used is changed, ground handling is being done by skeleton crews, and office staff are working restricted hours. Moreover, we have seen road freight exports from Dubai delayed at the border by up to 10 days due to additional customs clearance checks, and the sheer volume of trucks in a single location. We expect this to continue for the coming months while the containment of Covid-19 continues.

Right questions We will see companies learn from this, asking themselves: Do we have the right business continuity plans in place? Do we have manufacturing sites in the right locations? Do we have enough safety stock in the right locations? Can we increase manufacturing to meet the high demand? These questions and many more will be considered in the future when we restructure and redesign our supply chain models. We have seen this crisis as a global stress test of working from home. We can use it as an opportunity to see which areas of a company can work smarter and more effectively, considering that staff are in different locations. People’s behaviour will change, and so will relationship

Brian Cartwright,

Client Partner, Supply Chain & Logistics–Pedersen & Partners In summary, we can probably agree the world is going to be very different once we come out of this pandemic. Above all taking appropriate measures to ensure the safety and welfare of people is paramount. Global supply chains will be adapted to become more robust and resilient. It is likely companies will gravitate towards local or regional sourcing models, with a diverse supplier base being selected and managed as partnerships, with a quality-focused approach taking priority over cost. Planning and forecasting exercises will have to be completed more frequently. Companies will change their stance on inventory management. They may end up holding more inventory than they did before the crisis to ensure they have backup stock in local or regional hubs to ensure business continuity in the event of future disruptions. All these changes will have a major impact on the way global logistics networks are structured and operated.

More technology There will be an increase in the use of technology, systems and automation in manufacturing, retail, warehousing, and materials handling, and in the use of robotic process automation and machine learning for repetitive or administrative tasks. The crisis has served to accelerate digital transformation which is a positive development for people and organisations alike, although some organisations have a lot of catching up to do. The last mile delivery space is currently one of the hottest opportunities for logistics companies to capitalise on. In doing so it is vital to have a clear and innovative strategy, a suitable technology platform, and the

right people in place, but the customer experience is fundamental to success. For retailers and bespoke kitchens or restaurants, it is imperative to have the right delivery partner. The delivery partner is the only point of physical contact for customers when they receive their order, and the experience – whether positive or negative – will speak volumes about the seller.

Last mile delivery The cheapest last mile delivery option will quickly turn out to be the most expensive in the long run, as customers are lost due to poor delivery experiences. Working from home has become the normal practice for many people. Some companies already had the processes, infrastructure, and technology in place for a quick shift to remote working, but others have had to rapidly adapt to this. It has been necessary to quickly get up to speed with current technology, and to make use of cloud services and video calls to ensure that real time collaboration and contact with co-workers and regular contact with clients and suppliers remains possible.

Paradigm shift Taking the above into account, I would suggest that as paradigms shift, employers may want to consider reassessing the expertise and functions required within their future supply chains. Businesses that have already started to review their organisational structure and make these assessments will have a significant strategic advantage over their competitors. It will be particularly advantageous for businesses to make concerted efforts to identify people with the required skills now, (in terms of required expertise, functional areas and geography) with an eye to potentially making external hires when restructuring. As each country begins to come out of the crisis, having the first-mover advantage of knowing who to approach and where to hire them from will be a critical factor in gaining market share from the competition. In conclusion, Covid-19 has already had an immense impact on the area of supply chain and logistics but is simultaneously bringing great opportunities for innovation. It is imperative that we stay positive in this situation and remain agile. n MAY – JUNE 2020 41

Providing Safety with PPe wear

Ramping up safety on air and land with PPE Kits Maintaining safety for air passengers and essential employees in workplaces is now the new normal for companies. Now as more and more airlines and companies are beginning to open up for business, strict health protocols demand the use of proper Personal Protective Equipment (PPE) to ensure personal safety from the virus.

ince the outbreak of the Covid-19 pandemic early this year, the use of Personal Protective Equipment (PPE) for healthcare workers (HCWs) and all levels of employees in manufacturing workplaces and the shopfloor and now even passengers in airlines and public transportation is compulsory. 42 MAY – JUNE 2020

In an effort to keep essential businesses operating, many Governments , regulators and industry watchdogs have issued guidance for employers on implementing safety practices for ‘critical infrastructure workers’ who may be vulnerable to contracting the virus through proximity or the sheer infectiousness of the virulent virus. UK-headquartered Global Clean

Environmental Concepts Trading (GCECT), with extensive UAE operations, is also playing its part in combating the pandemic. Given that the use of PPE is becoming increasingly prevalent and essential, demand has outstripped supply. GCECT was able to source competitively priced and readily available products that meet the highest standards of quality and

Providing Safety with PPe wear

certification. Global Supply Chain interviewed Mohammad Sulaiman, Founder-CEO, GCEC Trading, to gain more insights on the nature and efficacy of the company’s PPE products. Global Supply Chain (GSC): What is the standout for this PPE body kit? What makes it more advantageous compared to others available in the marketplace? Mohammad Sulaiman (MS): It is now obligatory for workers in multiple categories particularly for those exposed to public workplace environments be it a factory, warehouse, office buildings, healthcare facilities, and even passengers to use PPE on top of their regular clothing for their own safety and the protection of persons they come into contact with. Our PPE kits are locally manufactured and produced to the highest specifications and strict quality-control standards. We rigorously monitor and oversee production processes to ensure they comply with set benchmarks. These quality assured products are now available and can be supplied within agreed and stipulated timelines. A complete overall PPE kit or body piece comprises an elastic hood, sleeves, leg cuffs—face mask, protective gloves, hooded overalls and shoe covers. GSC: Describe briefly the material composition of your PPE Kit? MS: Our PPE kits are made from non-woven polypropylene with proven protection abilities, durability and reliability. Polypropylene fabric is a modern textile used for protective clothing manufacturing applications. It’s soft, lightfast, and easy to clean because polypropylene has no active dye sites. It’s also super strong and can be cleaned with bleach, dust proof, antiviral. The polypropylene material is also sturdy and robust, thereby making it long-lasting. Besides offering stain resistance, protection of contraction, it can hold up to repeated use. The plastic fibers are less prone to the typical wear and tear and breeding of viruses experienced by other fabrics such as cotton or polyester blends. Polypropylene is a material often used by the military as base layer clothing. This synthetic material helps the wearer to stay warm and dry, contaminate free without all of the bulk which some other protective clothing materials can cause. GSC: Who should wear these and where? MS: Anyone who is likely to meet or be in contact with other people, travelling be it on flights, trains, buses or any type of public transport even pedestrians and those going shopping. This constitutes a protective step to shield the wearer from contracting the virus.

Our PPE kits are locally manufactured and produced to the highest specifications and strict quality-control standards. We rigorously monitor and oversee production processes to ensure they comply with set benchmarks.

Mohammad Sulaiman, Founder-CEO, GCEC Trading MAY – JUNE 2020 43

Providing Safety with PPe wear

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We believe in the old adage that prevention is better than cure itself and it is in the best interests of anyone to take precautionary measures to follow health protocols and mitigate risks. GSC: Where are these PPE kits produced? MS: Considering the current market situation and receiving products from the Far East, we are manufacturing this equipment from the UAE, which is of impeccable quality and durability. We also source other equipments under the strict guidelines of World Health Organization (WHO). GSC: How competitive is the pricing? MS: Given the economic challenges we have gone to great lengths to ensure price economy and easy affordability. Our pricing regimen is extremely competitive we have direct agreements with our manufacturers for providing genuine vale-for-money. GSC: Where can one purchase these from and how are these being made available to end-users? MS: For the retail sector, customers can source our products from the neighbourhood grocery shops and local supermarkets. For 44 MAY â&#x20AC;&#x201C; JUNE 2020

online or bulk purchases, buyers can contact us directly @ www.gcect.com. GSC: Are these of one-off usage and are these reusable? MS: Although disposable by nature, our PPE wear can be washed and reused depending on the purpose it was used for. Yes our products allow for multiple usage. GSC: What opportunities do you foresee for these PPE kits in the region?

MS: We foresee phenomenal growth as we believe prevention is essentially the cure in these pandemic times. Given the ease of the spread of the contagion, it is best to stay safe and endeavour to avoid infection. This is sound advice and we believe our PPE products will keep you secure to the best possible extent under the chancy circumstances GSC: Do you customize for individual companies as applicable? MS: Yes we are happy to tailor to individual needs and stipulations. If required, we can embroider and print logos. GSC: What industry verticals and business sectors broadly are you targeting? MS: Our intended target constitutes airlines, air travellers, large work forces, factory employees, pedestrian, passengers on public transport services, food production companies, farm workers, staff involved in catering services, food delivery personnel, those involved in janitorial and custodial services and the list is very extensive. Our PPE kits have wide ranging applications. n

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Challenges for IaTa

IATA: Relief is critical for Middle East Airlines as Covid-19 impact deepens The collapse of air transport as a direct consequence of the onset of the pandemic will have devastating effects on countries’ economies and jobs, says an IATA regional official.

he International Air Transport Association (IATA) renewed its call for government relief measures as the impacts of the Covid-19 crisis in MENA deepen. The region’s airlines could lose US$ 24bn of passenger revenue compared to 2019. That is US$ 5bn more than was expected at the beginning of the month. Job losses in aviation and related industries could grow to 1.2 million. That is half of the region’s 2.4mn aviation-related jobs. Previous estimate was 0.9mn. Full-year 2020 traffic is expected to plummet by 51% compared to 2019. Previous estimate was a fall of 39%. GDP supported by aviation in the region could fall by $66 billion from $130 billion. Previous estimate was US$ 51bn. These estimates are based on a scenario of severe travel restrictions lasting for three 46 MAY – JUNE 2020

months, with a gradual lifting of restrictions in domestic markets, followed by regional and intercontinental. “Airlines in the Middle East continue to be battered by the impact of Covid-19. Passenger traffic has all but ground to a halt and revenue streams have evaporated. No amount of cost cutting will save airlines from a liquidity crisis. The collapse of air transport will have devastating effects on countries’ economies and jobs,” commented Muhammad Al Bakri, Regional Vice President, Africa and the Middle East, IATA. Some of the impacts at national level include: Saudi Arabia: 35mn fewer passengers resulting in a US$ 7.2bn revenue loss, risking 287,500 jobs and US$ 17.9bn in contribution to Saudi Arabia’s economy. UAE: 31mn fewer passengers resulting in a US$ 6.8bn revenue loss, risking 378,700 jobs

and US$ 23.2bn in contribution to UAE’s economy. Egypt: 13mn fewer passengers resulting in a US$ 2.2bn revenue loss, risking 279,800 jobs and US$ 3.3bn in contribution to Egypt’s economy. Morocco: 11mn fewer passengers resulting in a US$ 1.7bn revenue loss, risking 499,000 jobs and US$ 4.9bn in contribution to Morocco’s economy. Iran: 8.7mn fewer passengers resulting in a US$ 1.8bn revenue loss, risking 206,900 jobs and US$ 4.3bn in contribution to Iran’s economy. Kuwait: 5.2mn fewer passengers resulting in a US$ 1bn revenue loss, risking 24,100 jobs and US$ 1.6bn in contribution to Kuwait’s economy. Algeria: 5.8mn fewer passengers resulting in a US$ 0.8bn revenue loss, risking 169,800 jobs and US $3.1 billion in contribution to

Challenges for IaTa

Muhammad Al Bakri, Regional Vice President, Africa and the Middle East, IATA.

Alexandre de Juniac, CEO, IATA.

ACI and IATA push for immediate financial assistance to protect aviation jobs and operations Financial relief will assist the industry to lay foundation for a balanced recovery Airports Council International (ACI) World and the International Air Transport Association (IATA) have come together to call for governments to quickly grant financial relief to assist airport operators and airlines during the unprecedented pandemic crisis and support the essential connectivity the industry will provide for economic recovery. The industry is united with governments around the world in efforts to stop the spread of the virus, and, in the face of massive government imposed travel restrictions, the industry is doing all it can to maintain air cargo operations vital to supporting global supply chains, including medical shipments critical to fighting pandemic, the two associations said in a joint press release. The current state of the global air transport industry risks the loss of millions of jobs. The aviation industry supports 65.5mn jobs around the world, including 10.5mn people employed at airports

The aviation industry supports 65.5mn jobs around the world, including 10.5mn people employed at airports and by airlines

Algeria’s economy. Qatar: 4.8mn fewer passengers resulting in a US$ 1.7bn revenue loss, risking 70,000 jobs and US$ 2.8bn in contribution to Qatar’s economy. Tunisia: 4.3mn fewer passengers resulting in a US$ 0.6bn revenue loss, risking 92,700 jobs and US$ 1.2bn in contribution to Tunisia’s economy.

and by airlines, and supports $2.7tn in world economic activity.

IATA’s plea ACI and IATA called for urgent balanced support to the industry via taxation relief, including alleviation of payroll taxes, corporate taxes, concession fees or other government incomes from the industry and loans, loan guarantees or direct support to maintain financial liquidity across the aviation ecosystem. “The financial impact of the current crisis is unlike anything we have ever seen and requires urgent action by governments to assist the aviation industry to protect jobs, ensure essential operations, and plan for recovery,” remarked ACI World Director General Angela Gittens. IATA’s Director General and CEO Alexandre de Juniac said the situation could not be more dire.

Oman: 4.3mn fewer passengers resulting in a US$ 0.7bn revenue loss, risking 51,500 jobs and US$ 1.7bn in contribution to Oman’s economy. To minimize the broad damage that these losses would have across the Middle East economies, it is vital that governments step up their efforts to aid the industry. IATA is calling for a combination of: • Direct financial support • Loans, loan guarantees and support for the corporate bond market • Tax relief

Looking ahead In addition to vital financial relief, the industry will also need careful planning and coordination to ensure that airlines are ready when the pandemic is contained. IATA is scoping a comprehensive

approach to re-starting the industry when governments and public health authorities allow. A series of virtual regional summits, bringing together governments and industry stakeholders are taking place this week.

The main objectives Understanding what is needed to re-open closed borders, and agreeing solutions that can be made operational and scaled efficiently “As governments struggle to contain the Covid-19 pandemic, an economic catastrophe has unfolded. Re-starting aviation and opening borders will be critical to the eventual economic recovery. Airlines are eager to get back to business when and in a way that it is safe. Cooperation and harmonization across borders will be essential to restart aviation,” concluded Al Bakri.. n MAY – JUNE 2020 47

ThoughT Leadership: Tom Craig

Wake up call for retailers, 3PLs, manufacturers, transportation and logistics services providers The pandemic is creating the need for transformation for all supply chain industry stakeholders In this thought leadership contribution, Tom Craig, President LTD Management, Pennsylvania, USA, a leading authority and professional consultant on logistics and supply chain management and regular contributor to Global Supply Chain makes the case for changes in the way processes and systems function in the supply chain realm — Editor

his is clearly a high-risk and resilience situation for operators in the logistics and supply chain domain. Firstly, the pandemic is creating the need for transformation. This particularly applies to supply chain management for manufacturers and retailers. It also applies to logistics, transportation, and 3PLs. Takeaways for the change include risk reduction, building resilience, developing agility and need to streamline operations. Risk is listed first. The others tie to and are derivatives of risk mitigation. This paper reflects lessons learned and adaptation. Did you notice, even before the pandemic, there were signs that changes were needed and were coming to 48 MAY – JUNE 2020

transportation, logistics, and 3PLs? Much of this is based on e-commerce. Now with the pndemic isolation, online sales have surged which escalates transformation needs.

Amazon now A+ The same Amazon that turned e-commerce from a minor, retail annoyance into a dynamic new way to sell is the leader here. Order delivery is driven by a new supply chain management (SCM) that is strategic and weaponized. This supply chain management is disruptive innovation. Amazon began to bring outside transportation and logistics services inhouse—reverse outsourcing / in-sourcing.

They made these changes in their endto-end supply chain and its logistics and transportation to the extent of leasing airplanes to move products. ‘Business Insider’ had two articles in April 2020. One, by Eugene Kim of Bank of America estimates that Amazon’s own delivery service could be worth up to US$ 230billion by 2025. This charge shows a growing warehouse footprint that’s already as big as 7,300 football fields. The other, by Rachel Premack, also from Bank of America says Amazon is the No. 4 largest delivery company in the USA after UPS, USPS, and FedEx. Amazon, once mocked for what it would take to build its own logistics network, is now generating concern. To its e-commerce

ThoughT Leadership: Tom Craig

competitors, the power of such operations, cost savings, and customer convenience, the latter when compared to click and collect, cannot be ignored.

Eliminating middlemen By removing middlemen—disintermediation— it can increase the speed of its end-to-end supply chain and improve its order delivery velocity. This disintermediation streamlines supply chains. It also builds agility with fewer participants. Plus, it opens itself up to greater integrated technology by having fewer players for visibility, digitalization, and blockchain. All these improve its control and performance. For transportation, logistics, and 3PLs, what Amazon is doing is a threat to who they are. The potential it creates for other companies to adapt parts of Amazon’s approach, the volume/business loss that would mean, and fear that Amazon could offer its services to other shippers. These service providers appear to be standing firm on their offerings and capabilities despite what is happening. That ups their risk. The pandemic impact on supply chains has redefined the global risks landscape. It has strained and frayed supply chains, logistics, and transportation both upstream and downstream. The efforts by supply chain management organizations and

Bank of America estimates that Amazon’s own delivery service could be worth up to US$ 230billion by 2025

transportation and logistics personnel have been outstanding.

issues. It is about adapting to the adjustments that CoViD19 makes on companies. The dual challenge is dealing with the daily crush of what is happening and developing a supply chain strategy for after coronavirus with attention to end-toend design and operations. The pandemic has placed incredible stress on supply chains—end-to-end-- and their underlying, transportation / logistics service providers. It has established the importance of supply chain management (SCM) as it carries the operational responsibilities of company after company.

New service models

More than bullwhip

For those not bringing transportation and logistics in-house, there is a need for a new kind of service. It is about customer supply chains, not logistics. The pandemic has pointed the way to the need for resilience. This new service—call it 3PSCM or SCMaaS-- addresses what has been missing— focus on the supply chain and integration into supply chains for better performance and visibility—not separate transportation or logistics services. 3PSCM is a needed evolution from 3PL. SCMaaS is what 4PL should have been. A fixation on transportation and logistics—and that is related to the overemphasis on their costs—has caused misdirection. This is important. It has taken attention away from managing total product flows. Instead, manufacturers and retailers have a stop-start or node / link approach that is central to their supply chain management. When the pandemic concludes, supply chains must be reinvigorated, restarted, or even rebuilt. Customers will come back wanting their order delivery speed.

Much of the pressure is on the upstream supply chain. There was supply shock as Asia suppliers and manufacturers shut down. Caught in the middle were all these supply chains and transport / logistics providers, warehouses, truckers, ocean carriers and more. All this goes beyond the bullwhip effect both at the global magnitude of supply shocks and demand shocks and at the company level. Transportation and logistics firms are struggling. Ocean carriers are dealing with reduced volumes, export shipments from Asia and importers not knowing what to do with containers with their businesses at a reduced activity or closed. Ships have been laid up. Sailings have been blanked. Ports and warehouses are congested. There is even a suspension of transit in ocean transportation because of port congestion.

Restart, Rebuild and more

Tom Craig

To start, supply chain management is leading retailers and manufacturers through this crisis. Businesses and supply chains are changing and may be permanently changed. Many of these changes will remain after the pandemic ends. There will be no discussion of specific companies. This is about bigger issues. Use your domain expertise and experience to lead. This is not a time for 40,000-feet terms and comments. It is about practical supply chain management

Indigenous models The supply chain management that emerges should be developed by SCM people. This is their domain, their expertise, and their efforts that are carrying retailers and manufacturers through Covid-19. There is the idea of supply chain resilience (and supply chain resilience may become the new buzz term). The question is at what scale considering another global crisis. This concept / buzzword can also distract from the work required with restarting, even rebuilding, manufacturing and retailing. Again, this is about the end-to-end total supply chain and not parts, such as fulfillment. We need to relook and assess the bigger issues and the bigger picture. n MAY – JUNE 2020 49

Pandemic musings

The business impact of Covid-19 in the GCC Region

Multiple industry sectors are affected but on the flip side some exciting opportunities are emerging. Sarwant Singh, Managing Partner, Frost & Sullivan, Middle East examines the implications and opportunities for growth amid the pandemic.

ike other economies, countries in the GCC have been rendered vulnerable by the ongoing Covid-19 crisis. Wholesale & retail trade, transportation & storage, and financial & insurance sectors, all of which collectively account for nearly 50% of Dubai’s GDP in 2018, have all been affected. In the oil & energy sector, plunging jet fuel demand, paralleled by higher oil production by Saudi Arabia from April, threaten to push crude oil prices to a 17year low in Q2-2020. However, it’s not that everyone and everything is capsizing. Some sectors in the GCC have made gains and exciting opportunities are emerging while careful risk mitigation strategies are helping others chart a new course for the future. 50 MAY – JUNE 2020

A Changed Global Environment What could the depth, length and shape of recovery look like? ‘Gradual Containment’ entails a sharp V-curve recovery process, whereas the ‘Severe Pandemic’ scenario entails a more stretched U-curve recovery Based on dynamic, real-time updates, Frost & Sullivan research indicates that Covid-19 could play out in three ways. In the first, and most hoped for, the scenario of ‘Gradual Containment’, the outbreak will be largely contained by April, with most economies showing signs of industry and economic rebound by May, with full recovery by Q4-2020. If the pandemic is not contained to a large extent by April 2020, a ‘Severe

Pandemic’ scenario would ensue, marked by downturns in consumer demand, industrial production and world GDP growth. The possibility of a year-long recession is real with full recovery only by Q3-2021. Finally, the third and least-hoped for scenario, ‘Global Emergency’, will be marked by the uncontrolled spread of the pandemic with economies limping back to recovery from Q1-2021 and a full recovery only by Q1-2022.

Impact & Implications for six key sectors in the GCC Notwithstanding pockets of growth in network implementation and management services, the IT Services sector is likely to decline as a whole. The pandemic will, however, catalyze

Pandemic musings

unprecedented growth in digital services and technologies that enable digitalization. While most hardware segments will shrink, rising demand for workforce managment, collaborative, security, remote access, and productivity tools will energize the enterprise software segment. Big Data, the digitalization of government services and healthcare services, and wider 5G use cases across industries will characterize the IT services sector in a post-Covid period. Travel restrictions have pummeled the Food & Beverages (F&B) sector. The Hotels, Restaurants & Cafes (HORECA) segment, which comprises 30% of the GCC’s economy, has been particularly hard hit because roughly 20% of its revenues are related to tourism. Meanwhile, quick-service restaurants (QSRs) and fast-food eateries have realigned operations to serve only delivery and takeaway orders. F&B retail is in flux with disrupted supply chains, consumers bulk-buying long-shelf-life F&B products, and hoarding/panic buying throwing traditional demand projections into disarray. The nascent e-commerce

About the Author: Sarwant Singh is the Managing Partner in Frost & Sullivan, Regional Leader of its Middle East, Africa and South Asia (MEASA) operations and the company’s Global Practice Head of Mobility, Aerospace, Defence and Security teams. Sarwant consults Fortune 1000 companies (clients like P&G, Ford, Philips, BMW, Fiat Group, Nissan, Toyota and UNIDO). An engineer having done his MBA from Leeds University Business School, he has also done an executive course at the Kellogg School of Management.

If the pandemic is not contained to a large extent by April 2020, a ‘Severe Pandemic’ scenario would ensue, marked by downturns in consumer demand, industrial production and world GDP growth. The possibility of a year-long recession is real with full recovery only by Q3-2021. industry has received a fillip with new growth opportunities for primary packaging materials manufacture. The Healthcare sector is expected to experience a short-term decline of about 15%-20% in revenues across all major sectors in 2020. This will be a result of reduced consumption caused by delays in elective surgery and lower purchases of medicines due to fewer prescriptions. Shortages in medical devices like ventilators and test kits and operational issues, including the disruption of clinical trials and inadequate virtual care, will further exacerbate challenges. On the positive side, Covid-19 is poised to trigger double-digit growth in telemedicine and virtual care solutions, highlight the need for higher local production of essential drugs and underpin the growing importance of online pharmacies. Ongoing uncertainties will have a short, sharp impact on the Mobility sector. Consumer traffic in physical showrooms is expected to dip by 70%-80% with an up to 24% drop in new car sales in 2020. Demand for vehicle servicing and parts, short-term car rentals and shared mobility services will wane steeply. Promisingly, moderate pick-up in GCC new vehicle sales is expected in 2021. This will be reinforced by the fact that the 3.5 million vehicles purchased during the peak years of 2014-2015 will need to be replaced within the next 2-3 years. After-sales will prove resilient as customers move to extend the useful life of their vehicles. Sustained infrastructure development and growing segments like e-commerce will moderate the impact of Covid-19 on GCC’s Transport & Logistics sector. More immediately, the sector will face challenges in the form of supply chain disruption, capacity constraints and cost pressures. However, the crisis will motivate the building of shock-resilient supply chains in food and healthcare logistics while

creating greater impetus for supply chain digitization. Warehousing space will expand with the establishment of more free zones, even as warehouses gain greater operational efficiencies through the use of robotics, artificial intelligence, and augmented reality tools. The Industrial & Energy sector will embrace new paradigms—digitalized, decentralized, de-carbonized, circular and curative—in the aftermath of Covid-19. Currently, disruptions in material supply and logistics and labor mobility are having a significant impact on the construction segment. Projects at the bid evaluation stage and those under execution will be particularly impacted. As the sector regroups, there will be newer and wider applications for automation and digitalization technologies. In addition, autonomous operations in manufacturing, oil exploration, supplydemand assessment, site inspection, and predictive maintenance will pick up pace.

Look ahead, anticipate and adjust The duration and severity of Covid-19’s impact on economies and sectors will undoubtedly vary. However, companies would do well to set in motion a ‘look ahead, anticipate and adjust’ roadmap. Over the near term, companies should explore supply chain diversification and leverage new opportunities arising from changing customer demands. Over the long term, product and service portfolio diversification will be critical to ensuring greater resilience. Externally, strengthening brand equity and shifting sales channels online will be strategically important. Internally, adopting technologies that support workplace and operational continuity will enable companies to hit the ground running following the Covid-19 crisis. n MAY – JUNE 2020 51

Maersk Group

Maersk ups its offerings to ExxonMobil affiliate in UAE

aersk has reported that it now offers warehousing solution for ExxonMobil affiliates’ airline and maritime products as part of its integrated logistics solutions in addition to import container storage and intermodal transport. It will also offer customs house brokerage and allied management activities such as 4th Party Logistics (4PL) and cross docking that have been a part of its product offerings and services in the United Arab Emirates (UAE). The global integrated container logistics company and ExxonMobil have had a longstanding relationship of 15 years in the UAE wherein Maersk has provided import container storage, intermodal transport of cargo to Gulf Cooperation Council (GCC) countries and Jordan, customs house brokerage and allied logistics management activities such as 4PL and cross docking. Furthermore, Maersk will now manage third party warehousing for ExxonMobil’s airline

and maritime products that include lubricating oils, antifreeze and specialities, greases, cold sensitive products and short shelf-life products at a warehouse located in Jebel Ali. As a part of solutions provided under the new offering, Maersk will execute operation planning and reporting. Maersk’s warehouse management will cover handling of products in the warehouse, their storage, physical inventory mapping, and all inbound and outbound processes. In addition to core warehousing activities, Maersk will also provide container import shuttling and customs clearances for all processes. “Maersk is on a transformational journey wherein we are connecting and simplifying the supply chains for our customers.

We provide innovative products that are tailor-made to suit their requirements,” commented Christopher Cook, Managing Director, Maersk UAE. “Maersk has been a reliable partner for us over a long time for our chemical products. Not only has Maersk provided us with top notch service, but also shown the readiness to adapt to our evolving and specific requirements that range into warehousing of Aviation and Marine lubricating oil and greases,” observed Amr Wafaa, Operations Director, ExxonMobil. Maersk will be operating the warehouse from Jebel Ali. With certain pallet positions reserved for ExxonMobil, the warehouse has enough capacity to increase operations for other customers in the future.

AP Moller-Maersk grew profitability in Q1-2020 Profits delivered despite growing fuel costs, lockdowns and pandemic AP Moller-Maersk has reported a financially strong start to the year. Despite the Covid-19 pandemic’s profound impact on global trade the company kept momentum in its strategic transformation and demonstrated robustness to weather the crisis, the company stated in a press communiqué. “In the first quarter of the year, AP Moller-Maersk again delivered profitable growth. Operating earnings increased by 23% YoY, and cash return on invested capital increased by 3.5 percentage points to 10.5%. The strong results were made during a quarter despite sharp fuel cost increases derived from the industry’s switch to low-sulphur fuel and on the backdrop of a contraction in global trade due to lockdowns in most regions,” stated Søren Skou, CEO, AP Moller-Maersk. Earnings before interest, tax, depreciation and amortization (EBITDA) improved 23% to US$ 1.5bn compared to Q1-

52 MAY – JUNE 2020

2019 and the EBITDA margin increased to 15.9%. Revenues increased slightly to US$ 9.6bn, despite lower volumes and were mainly driven by Ocean. Return on invested capital after tax (ROIC), last twelve months, grew to 3.8% as earnings improved and invested capital was reduced. Free cash flow was US$ 506m after capitalized lease payments and gross capital expenditures excluding acquisitions (CAPEX) was at US$ 310m compared to US$ 778m in Q1-2019, reflecting ongoing strong capital discipline. In the landside businesses, Logistics & Services excluding the freight forwarding business improved EBITDA to US$ 69m from US$ 49m. Infrastructure, which covers Terminals & Towage, and Logistics & Services, but excluding freight forwarding, reported a decrease in revenue to US$ 2.1bn compared to US$ 2.3bn in the same period last year due to lower revenue following Covid-19. n

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The Cold Chain

Warming up to Cold Storage Automation Alain Kaddoum, General Manager, Swisslog Middle East, shines a light on the Cold Chain as it applies to the food and pharma chain in the downstream, upstream and midstream facets. These comprise refrigeration facilities and associated distribution, cold storage and well-controlled and monitored transport services — Editor

he food industry is changing fast with new products, convenience meals, organic foods and exclusion diets. The rise in consumer demand for perishable food items, growth of international trade due to trade liberalization, and expansion of the organized food retail industry are some of the factors driving the change for this market. With an estimated global value of US$ 203billion in 2018, the market is projected to reach a value of US$ 293billion by 2023. Government support for infrastructural development in several developing regions is a major factor fueling the growth of this industry. In line with the UAE government’s vision to achieve poll position on the Food Security Index by 2051, the leaders across the country are prioritizing food security, quality and 50 MAY – JUNE 2020

safety to protect a growing population, which in turn has transformed the landscape of food supply chain and led to a huge demand for sophisticated cold chain solutions in the Middle East. When it comes to food, a recent study from Harris Interactive survey stated 16% of consumers would never buy a recalled food product again, and 17% of people impacted by a recall would not buy any product from the same manufacturer, proving that regulators and consumers have been on guard.

Dynamism is key This highlights the need for companies to have a highly dynamic warehouse and distribution system to cope with higher outputs and shorter change-over times and

to provide better traceability from the farm to the fork. The automated warehouse solutions not only provide the flexibility that companies need from production to the point of sale, but also fulfill the customer demands for faster, more accurate orders as well as meet high standards and government regulations set for the cold chain management. Positions that require working in sub-zero temperatures can be especially difficult to fill in and hence automation presents an ideal solution to simplify implementation and accelerate ROI. Automation, when tightly integrated with building design and supported by advanced management practices, can resolve labor issues and contribute to improved efficiency. Agile and scalable Swisslog’s solutions for the cold chain industry are designed around

The Cold Chain

PowerStore pallet shuttle system enables storage of up to 60% more pallets compared to manual systems. PowerStore pallet storage systems can be used in a wide range of environments, from -30°C in frozen food storage to 50°C. the unique requirements of company’s temperature-controlled operations, ensuring freshness and quality, while reducing costs, human errors and order fulfillment time. An inherently harsh environment for workers, cold storage facilities present an ideal scenario for logistics automation, which can deliver:

PowerStore: High density shuttle system for pallet warehousing: With the possibility to individually tailor for all shapes and sizes of warehouse buildings, the modularity of the PowerStore pallet shuttle system enables storage of up to 60% more pallets compared to manual systems. PowerStore pallet storage systems can be used in a wide range of environments, from -30°C in frozen food storage to 50°C, opening up new possibilities for automation in existing warehouses. PowerStore control software is fully integrated in Swisslog’s SynQ suite of warehouse management software and designed to work seamlessly with customers’ WMS and host systems. Pepsi Bottling Ventures (PBV) in Garner, North Carolina,

USA, has installed the revolutionary Swisslog PowerStore pallet shuttle warehouse automation technology to increase storage capacity by over 60% in its existing flatceiling building.

CycloneCarrier: Dynamic shuttle storage and retrieval system for small loads: CycloneCarrier is an automated shuttle system for storage of small loads. The shuttle system is designed for applications where high throughput and excellent availability are essential for returns handling, replenishment or buffer for order consolidation. Suitable for chilled storage environments, the shuttle offers double to quadruple deep storage of totes, trays and cartons and can be used as a feeding engine for goodsto-person pick stations, a buffer system for order consolidation, or an intelligently designed combination of both. Using Swisslog’s dynamic CycloneCarrier warehouse shuttle system, Alnatura expanded its store network with lowvolume personal care items from one central location, shortening transport routes while managing a larger SKU range.

The Vectura automated storage and retrieval stacker crane: Vectura is a multi-talented and energy efficient high bay warehouse pallet stacker crane which can handle one, two or more loads in single, double, triple and multideep layouts, depending on the storage density and throughput requirements of your warehouse. Vectura brings together the best engineering and pallet stacking knowhow in the industry, capable of handling large and unusual loads from car bodies to boats and everything needed in a high bay warehouse. Almarai in the Middle East on-boarded Swisslog as a partner to automate processes with an aim to increase the transit quantities, reduce costs, eliminate the laborious and un-ergonomic working operations while boosting the efficiency of logistics. By automating product flows within the cold storage warehouse, operators can reduce their dependence on manual processes, protect their workers from harsh environments and achieve new levels of efficiency and safety. MAY – JUNE 2020 51

The Cold Chain

exCluSive intervieW

Alain Kaddoum

Global Supply Chain conducted an exclusive interview with Alain Kaddoum, General Manager, Swisslog Middle East, on a range of issues related to the Covid-19 impact on the company regionally and his reboot mission going forward.

52 MAY â&#x20AC;&#x201C; JUNE 2020

Global Supply Chain (GSC): Briefly, what are your key takeaways / broad observations / general comment of the fallout of the ongoing Covid-19 pandemic from the Swisslog corporate perspective? Alain Kaddoum (AK): With halted supply chains and blurred production timelines, the outbreak has presented several challenges for companies across the globe as consumers are stocking up. Lack of staff due to the quarantines, isolated periods and shortage in transportation have also led to serious issues that many labour-intensive companies are struggling with their operations, particularly in the distribution and fulfilment centres. The negative effect to the global flow of goods is bothering many organizations, especially industries where suppliers and distributors rely on single-source markets which have led to a high risk of operations for them. GSC: How is the onset of the pandemic impacting your regional (and global) operations? AK: At present, our ongoing projects and service operations have been affected only minimally. The team at Swisslog has been working round the clock to support our customers as they push the limits of their supply chains to provide needed medical supplies, maintain the food supply and meet the demand for other important sectors. Globally, over 70% of our staff are engaged in mission-critical business and are working diligently through this time of crisis, to meet the demand of our customers and our communities. The team is stationed at our customersâ&#x20AC;&#x2122; facilities running the automation systems our customers depend on. We are also helping our customers get new automation systems installed and operational so that food, medicine, and other supplies can continue to flow. But the crisis is revealing the vulnerability of global value chains. It is important to emphasize that this crisis, like any other, is an opportunity for companies that remain customer-focused and help society to overcome this crisis. We operate in the right industries to make a difference. When it comes to consumer goods and e-commerce, it is all about ensuring supply, even at a time when many

The Cold Chain

stores are not open. Companies that have already invested in automation now have an increased need for services to keep this technology running. We are trying hard to support our food & pharmaceutical customers to keep their supply chain going. With automation systems, businesses can ensure higher safety for their staff as well as smooth execution of operations for the fast delivery of products to their customers. Our service technicians, engineers, and specialists for plant commissioning on site are particularly challenged and are bearing a great responsibility. At the same time, it is also clear that some companies are putting many major investments on hold. That includes investments in technology as well as buildings, infrastructure, staff, and everything else. GSC: How much of your professional work environment / ecosystem in the operations realm has changed as a result of the Covid-19 virus onslaught? AK: As a global company, you always need to have processes in place. What has changed is that a section of our staff is supporting teams in other regions, because the colleagues actually responsible for those tasks cannot do them due to travel restrictions. We are taking advantage of connectivity, our resources and expertise in other countries. We have projects where a section of our staff in Australia is managing projects for Europe and vice versa. This works because many projects are software- and data-driven. Flexibility is important. We also have remote access to many of the systems we have implemented via a so-called digital twin. This way we don’t necessarily have to be physically present for system analysis or troubleshooting. We also actively use this time to support the industry globally and share our expertise via professional webinars held for various sectors. Connectivity and various apps help us connects experts from different continents and time zones to share their diverse experience, this is something unique and valuable to the sectors, especially during these changing times. We are getting positive feedback from attendees and planning to organize more sessions like this. GSC: How have your priorities been rearranged and what kind of new demands and pressures are being put on your business now?

AK: We want to be seen as the leading provider of data- and robotics-driven solutions. In other words, solutions that are based purely on data instead of lists of requirements, that are as flexible and sustainable as possible and, most importantly, that are developed as digital models. The worlds of software and hardware will come closer and closer together, and that will create new opportunities for meeting ever-changing customer needs. Data analysis and self-learning systems can generate significant added value for the entire population of a smart city. We are very confident about this, which is why the majority of our investments are in the area of data software and automation solutions featuring robotics. The systems that are already automated today will be automated even further in the future, and with a higher degree of flexibility than today. Also, the number of manual work steps in large distribution centres or within supply chains, in general, will decrease drastically in the coming decades. And once that happens, we will have to focus on offering appropriate service models, including software-driven models, of course. Before the pandemic, businesses thought about the advantages of automation, but they didn’t rush to invest in it. That is changing now. When it comes to the adoption of software and technology, of course, there is a lot that can be done. As long as physical goods are still being transported from A to B, machines are needed. We are still consumers and products have to get to us somehow. This requires machines, systems, and logistics. We can refine smart machines with software in order to deliver an intelligent, data-driven system to our customers. Companies need to keep up with changes and maintain efforts to stay competitive. GSC: How can the Cold Chain Logistics Services Providers such as Swisslog better contribute to ensure more streamlined and speedy transportation and availability of desperately needed pharma and protective supplies? AK: We would advice more and more cold chain and pharma companies to invest in a track and trace software that can help them monitor products and transportation routes and also develop better inventory strategies. Solutions for proactive distribution management can help allocate products to the right channels to deliver everything to

the retailers on schedule and to avoid costly errors and returns. With the right supply chain solutions from companies like Swisslog, businesses can simplify their processes, increase accuracy, and decrease their labour costs. GSC: What opportunities and challenges confront Swisslog going forward in the light of the pandemic outbreak? AK: Swisslog’s aim will be to continue our efforts to help businesses address the strong need to shape the future development of logistics automation. With the global economy affected, it makes a strong case for companies to invest in innovative tech-enabled business models that address conventional supply chain inefficiencies.

Over 70% of our staff are working diligently through this time of crisis to meet the demand of our customers. It will also help companies with certain laborious tasks in the warehouse which can be fully automated leading to a reduction in running costs and an increase in productivity and can prevent a recurrence of future plant shutdowns. One thing is certain: the winners in the corona crisis are companies that have their online channel under control as well as those who have set of processes developed to eliminate panic, mistakes and business fall down. Since many e-commerce companies are already reaching their limits or are not yet equipped for e-commerce, we expect an opportunity for our company and increased demand for automation solutions, especially in these areas. The outbreak of Covid-19 had a farreaching impact on the capacity layout and supply chain network for many enterprises which will now force manufacturers and retailers to rely more on automation and digitalization for efficient long-term operations in case of shortage of labour and to reduce the financial impact on the economy and other potential challenges. Multinational companies, in particular, will now further have to improve their supply chain management and establish robust disaster management mechanisms. n MAY – JUNE 2020 53

Saudi PortS authority (MaWaNi)

Saudi Arabia’s MAWANI and SGP ink the largest single BOT Agreement in the Kingdom The recent and remotely signed long-term agreement will span 30 years and with attract investments of SAR 7bn

audi Ports Authority (MAWANI) and Saudi Global Ports (SGP) recently signed a new Build, Operate and Transfer (BOT) agreement for the Container Terminals in the King Abdulaziz Port in Dammam in the Kingdom’s Eastern Arabian Gulf coast over a virtual signing ceremony today. Under the patronage of HRH Prince Saud Bin Nayef Bin Abdulaziz, the Governor of the Eastern Region, (MAWANI) has signed remotely the largest 30-year BOT Agreement in the Kingdom with SGP with investments exceeding SAR 7bn (US$ 1.861bn) to develop and operate container terminals at King Abdulaziz Port in Dammam. The remote Agreement Signing ceremony was held with the participation of the minister and several senior officials including HE Eng. Saleh Al-Jasser, Minister of Transport and Chairman of the Saudi Ports Authority; Khaw Boon Wan, Coordinating Minister for Infrastructure and Minister for Transport of Singapore; HE Eng. Saad Bin Alkhalb, President, Saudi Ports Authority; and Eng. Abdullah Al-Zamil, Chairman, Saudi Global Ports (SGP). 58 MAY – JUNE 2020

Planned goals The BOT Agreement represents a major step toward achieving the strategic objectives and development plan of the Saudi Ports Authority by conceding some of its services in partnership with the Ministry of Transport and with the support of the National Center for Privatization. The Agreement activates the MoUs signed in the presence of HRH Prince Mohammed Bin Salman Bin Abdul Aziz Al Saud, Crown Prince, Deputy Prime Minister and Minister of Defense, during the inauguration of the National Industrial Development and Logistics Program (NIDLP). Upon assuming the responsibility of managing both Container Terminals, SGP will embark on a development and modernisation program to transform King Abdulaziz Port into a mega container hub and increase the Port’s capacity to an estimated annual handling capacity of 7.5 million Twenty-foot Equivalent Units (TEUs) when the planned expansion works are fully completed.

The total estimated investment of more than SAR 7bn will provide more than 4,000 job opportunities in the port and logistics sector. It is a part of the continuous developments carried out by MAWANI in the Saudi ports.

Expanded Infrastructure Under this agreement with SGP, MAWANI is to invest and develop key infrastructure such as berths and container handling equipment, and will more than double the existing container handling capacity of King Abdulaziz Port in Dammam. The investments will focus on environmentally friendly and technologically sophisticated systems, including the adoption of automation to develop a modern Saudi workforce. “The continued developments in Saudi ports are consistent with the national efforts to attain the goals and pillars of our country’s ambitious vision to promote sustainable economic development and raise competitiveness,”affirmed HE Eng. Saleh Al-Jasser.

Saudi PortS authority (MaWaNi)

set environmentally friendly operating practices, which contribute to strengthening their leading role in the global maritime traffic and supporting the import and export operations,”Alkhalb added.

Singapore cooperation

The Minister also indicated the importance of this Agreement to raise the operational and logistical performance level and develop the infrastructure of Saudi ports, contributing to reaching regional leadership and international competition.

Top logistics player Al-Jasser explained the economic feasibility and expected impact of this new Agreement as it enhances logistics, raises the reliability of supply chains, supports local and international trade and contributes in raising the rank of the Kingdom at the logistics performance index to become among the 25 best countries around the world. This Agreement also attracts new investments to the national economy, support local content and national industries and increases the national exports and imports that contribute to creating promising investment opportunities. HE Eng. Saad Alkhalb, President of the Saudi Ports Authority (MAWANI), remarked that the new BOT Agreement at King Abdulaziz Port is a continuation of the

The SAR +7bn investment will provide more than 4,000 job opportunities in the port and logistics sector. Agreements concluded by MAWANI last December to develop container terminals at Jeddah Islamic Port with investments exceeding SAR 9bn (US$ 2,393bn). He further indicated that the total expected investments in Jeddah Islamic Port and King Abdulaziz Port in Dammam is expected to top SAR 17bn (US$ 4.519bn). “These new Agreements will contribute mainly to developing berths, increasing the capacity of container terminals in King Abdulaziz Port by more than 120%, and providing integrated solutions to operate container terminals. They achieve technological and information integration and automation of operating systems and

HE Khaw Boon Wan, Singapore’s Coordinating Minister for Infrastructure and Minister for Transport, valued this partnership as it strengthens the relations and cooperation between the Kingdom of Saudi Arabia and the Republic of Singapore. He also indicated that the Saudi ports are witnessing a qualitative shift in their systems and procedures by launching more advanced services in its ports along the western and eastern coasts. “I appreciate this successful and ambitious partnership with the Saudi Ports Authority, which reflects our commitment to achieving aspirations of our wise leadership in the Ports and Maritime Transport Sector. Our company relies on innovation in its products by applying the best international standards in the field of port operation with the assistance of qualified national cadres,” commented Eng. Abdullah Al-Zamil on the occasion. It is worth noting that King Abdulaziz Port is the largest Saudi port on the Arabian Gulf coast. It is an integrated trade gateway linking the Kingdom with the world. It has 43 berths. It has an area of 19sqkm. It has a capacity of 105 million tons.

Inland links The sea port is linked to the Riyadh Dry Port by railway which helps goods from all over the world enter the Eastern and Central Regions of the Kingdom. The port provides comprehensive operational services. It has modern handling equipment that enables the port to handle various types of cargo. It includes two advanced container terminals, one refrigerated cargo terminal, two general cargo terminals, two cement plants: one for exporting black cement and clinker and one for white cement, bulk grain terminal, Iron ore handling terminal, naval vessel manufacture area and gas and oil platform. The port contains a ship repair facility that includes two floating ship docks to accommodate ships up to 215m long. n MAY – JUNE 2020 59

EmiratEs skyCargo

Emirates SkyCargo operates cargo flights to multiple destinations despite pandemic The carrier has been operating an increasing number of charters to transport relief supplies and medical equipment in the shadow of the present pandemic to more than 50 destinations globally.

mirates SkyCargo has rapidly scaled up its cargo services to connect an increasing number of global destinations during the Covid-19 pandemic. The air cargo carrier currently operates flights to 51 destinations globally, out of which 19 cities are served by the Emirates SkyCargo Boeing 777 freighter aircraft offering up to 100 tonnes of capacity per flight and 38 destinations are served by dedicated cargo flights on Emirates’ Boeing 777 passenger aircraft offering up to 50 tonnes belly capacity. “We have particularly ramped up operations for transporting cargo in the bellyhold of our passenger aircraft in the last two weeks. Air cargo remains the fastest means of connecting essential supplies to those that need them and our expanded network allows for increased connectivity across different global origins and destinations,”observed Nabil Sultan, Emirates Divisional Senior Vice President, Cargo. During the week ending 4 April 2020, Emirates SkyCargo had operated more than 160 flights on its freighter aircraft and close to 90 flights on its passenger aircraft. The following week, the air cargo carrier had operated close to 160 flights on its passenger aircraft alone.

Charter Operations Emirates SkyCargo has also operated an increasing number of special charter flights for cargo both on its freighter and passenger aircraft. Since the start of April, the carrier has executed more than 30 charter flights connecting over 20 global destinations. The main commodities transported on the charter flights are medical supplies including face masks, protective covers, sanitizers, equipment for hospitals in addition to pharmaceuticals, raw materials and spare parts. 60 MAY – JUNE 2020

Timeline In the space of just three days between 7 and 9 April, some of the notable charters operated by Emirates SkyCargo included: • 100 tonnes of masks and other protective supplies were transported from Guangzhou to Dubai on 7 April. This was part of several other charters to bring medical supplies into the UAE. • Close to 100 tonnes of medical supplies including masks and other protective equipment were transported on 8 April from Shanghai to Mumbai on the Emirates SkyCargo Boeing 777 freighter • 100 tonnes of protective equipment were transported from Shanghai to Dubai on a Boeing 777 freighter on 8 April. The supplies were then be flown to Bucharest (Romania) on 10 and 11 April on four separate flights on the Boeing 777 passenger aircraft. • Over seven tonnes of medical supplies were transported to Los Angeles on 8 April in the belly hold of an Emirates’ Boeing 777 passenger aircraft. This was also the first dedicated cargo flight on a passenger aircraft operated by Emirates SkyCargo to North America.

• Close to one million Covid-19 testing kits were transported to Sao Paulo (Brazil) on 9 April. An earlier shipment containing 500,000 kits was transported on 30 March.

Bringing food and medical supplies to the UAE From across its global network, Emirates SkyCargo has helped import more than 33,000 tonnes of perishable items and more than 1,700 tonnes of pharmaceuticals into the UAE since the start of the year. “With our expanded network now covering more than 50 global destinations, Emirates SkyCargo remains committed to maintaining and constantly replenishing vital food and medical supplies in the country,” emphasized Sultan. Globally, the air cargo carrier has transported more than 93,000 tonnes of perishables and more than 20,000 tonnes of pharmaceuticals. The carrier has also transported more than 3000 tonnes of medical supplies for combating Covid-19 across the world. n

WHO GIVES YOU THE COMPLETE STORAGE SOLUTION? SSI Schaefer is the total solution provider in Intralogistics. Your one-stop shop for warehouse storage and automated systems needs in the MEA region and worldwide. P.O. Box 37600 Dubai Logistics City â&#x20AC;&#x201C; Plot WB54 | Dubai South, Dubai United Arab Emirates | 8100 804 4 971+ | ssi-schaefer.com