Retail sales across four Gulf countries (Kuwait, Oman, Saudi Arabia and the UAE) are projected to increase by more than $24 billion over the next five years, with the UAE expected to lead this trend with an estimated growth rate of 16%, according to Euromonitor International.
Not only that, the same study indicates that the retail industry in the UAE is currently worth $55 billion and is forecast to steadily rise to $63.8 billion by 2023.
According to Alain Kaddoum, general manager, Swisslog Middle East, this is having a marked impact on the back-end operations of retailers and their logistics partners in four key ways.
Robotics: While automated picking and packing has been around for a while now, the next wave of change is being brought about by robotics. A warehouse that deploys robots reduces costs significantly while boosting efficiency.
Focus on Supply Chain Visibility and Orchestration: Increasingly businesses in the Middle East are focusing on better visibility of supply chains. This is only natural, given that the Middle East is a retail-strong economy. Greater visibility will mean an improved ability to orchestrate the supply chain for efficiency, service and lower costs.
Smart Last Mile Fulfillment: Last mile fulfillment is always a big expense for companies. Therefore, there is a clear need to look for efficient and economic solutions. It is becoming increasingly popular in the Middle East to use telematics and route planning software to achieve smart last mile fulfilment.
Blockchain & Smart Contracts: Blockchain and smart contracts are very popular in the financial services industry. While it is still a relatively new concept in warehousing and logistics, the current trend indicates that this will be a way of life in the future. Blockchain enables ‘smart contracts’, which is the ideal solution for quality issues, late payments, and delivery disputes etc. that are daily issues for logistics companies.
“These trends are driving customers to focus more and more on intelligent automation using flexible and scalable technologies that deliver the dual benefits of performance as well as the ability to adapt to changes in supply,” says Kaddoum. “This allows retailers to better cover seasonal peaks such as White Friday and the holiday season.”
The flexible and modular technologies and software in Swisslog’s Retail & E-Commerce portfolio are specifically designed to meet these dynamic needs of retail, e-commerce and multichannel logistics. “Retailers can increase the speed of order fulfillment, improve order accuracy and effectively manage an ever-increasing number of SKUs with Swisslog’s automated systems for e-commerce,” Kaddoum explains. “Order fulfillment rates can be up to five times faster than manual systems.”
Modern warehouse automation and software systems must rise to today’s retail challenges then, as customers are looking for solutions ranging from world-class automated storage and retrieval systems to goods-to-person automation and advanced robotics.
“Swisslog’s automation solutions for retail range from the latest goods-to-person technologies such as CarryPick to dynamic storage and retrieval systems such as the CycloneCarrier and AutoStore solutions, integrated with advanced robotics as well as its next generation picking technology for retail and e-commerce, operating at up to 1,000 picks an hour,” says Kaddoum.
Kerry Logistics Network Limited is set to capitalize on the growing potential of China’s e-commerce exports by joining hands with Spain’s national postal service Sociedad Estatal de Correos y Telégrafos, S.A. (‘Correos’) to establish a joint venture (‘JV’) to provide end-to-end cross-border e-commerce solutions from China to worldwide destinations, in which Kerry Logistics holds a majority interest.
Leveraging Kerry Logistics’ broad experience in origin sortation, line haul and Customs clearance, and Correos’ years of expertise in the postal services, the JV aims to bring service experience to the next level for customers including marketplaces and e-tailers.
Cross-border e-commerce exports from China recorded a 67% year-on-year increase in 2018, amounting to RMB56.12 billion, according to China’s General Administration of Customs.
To fulfill an increasing emphasis on e-commerce parcel security and compliance, a world-class sortation center will be set up in Southern China under the new JV, equipped with an automated sorting system and stringent parcel screening and security controls to ensure speedy parcel handling and full compliance. The facility, targeting to open in 2019 Q4, will occupy an area of over 200,000 sq ft and have a sorting capacity of 500,000 parcels per day.
William Ma, Group Managing Director of Kerry Logistics, said, “The JV combines the diverse capabilities of its two partners, each complementing the other to refine the process of e-commerce parcels handling and deliveries. As China’s cross-border e-commerce exports grow, we are determined to prepare ourselves for seizing emerging opportunities. Utilising our deep understanding of customers’ needs both in China and abroad, Kerry Logistics is confident in meeting the rapidly growing international demands through working closely with Correos.
Juan Manuel Serrano Quintana, President of the Board of Directors of Correos, said, “The new partnership with Kerry Logistics presents a unique opportunity for Correos to capture the outbound e-commerce parcel deliveries from China, which is the largest trade and economic partner for Spain in Asia. It also offers a way forward for Correos to create a sustainable business model to meet the growing demand in the booming e-commerce business and the ever-changing customer needs.”
The fast-changing logistics landscape in China called for innovation and flexibility in order to capture and serve new and emerging business models and brands. Kerry Logistics will continue to broaden and deepen its reach in China selectively.
Emirates Global Aluminium (EGA) has announced the arrival of the first fully-laden Capesize vessel to call at any GCC port at its quay at Khalifa Port in Abu Dhabi, inaugurating the import of bauxite for EGA’s new Al Taweelah alumina refinery.
EGA imports bauxite ore from the Republic of Guinea to supply Al Taweelah alumina refinery, and using Capesize vessels reduces shipping costs per ton. Abu Dhabi Ports has modified the approaches to Khalifa Port to accommodate Capesize vessels bound for EGA, making it the first port in the Gulf able to accommodate these fully loaded ships. The approaches have been deepened from 16.5 metres to 18.5 metres draft and widened from 250 meters to 280 meters. With a draft of 18.2 metres fully-laden, Capesize vessels are amongst the largest bulk cargo ships in the world.
At other ports, Capesize vessels must be partially unloaded offshore before they can dock at the port safely. The enhanced capability of Khalifa Port enables new trade opportunities, supporting other local industries and boosting Abu Dhabi as a regional maritime hub. Last month, the world’s largest container ship MV Solar berthed at Khalifa Port for the first time. Capesize vessels are up to 300 meters long – more than the length of 2 football fields – and 50 meters wide. They can carry around 180,000 tonnes of bauxite ore.
Abdulla Kalban, managing director and CEO of EGA, said, “The arrival of Cape Taweelah is a landmark moment for EGA, but these huge ships will become a familiar sight at Khalifa Port over the years ahead. We are glad Abu Dhabi Ports addressed our need to bring Capesize vessels to our quay and decided to further develop the capabilities of Khalifa Port, also benefitting trade in Abu Dhabi and the UAE more broadly.”
Captain Mohamed Juma Al Shamisi, CEO of Abu Dhabi Ports, said, “Welcoming this Capesize ship at EGA marks another first for Abu Dhabi’s maritime and trade industry, and demonstrates our commitment to ongoing innovation and expansion in response to market and tenant demands. Our investment in deepening and widening the channel has created better business opportunities for all partners, including CSP Abu Dhabi, which recently received one of the largest container vessels at Khalifa Port with a capacity of 21,000 twenty-foot equivalent unit.”
Dubai International Airport (DXB) have announced that they are expecting over 16 million passengers in July and August this year, and have urged people travelling at that time to allow themselves extra time by arriving early to the airport.
DXB is the busiest international airport in the world and is always a hive of activity, but never more so than in the summer, with many UAE residents escaping the heat, heading to cooler climes and people from all over the world coming to or through Dubai for a holiday.
As a result of the surge in passengers, travellers should expect roads to the airport to be busy too, so aiming to arrive at the airport three hours before your departure is advised.
DXB have provided a list of Smart Tips to ensure passengers have a smooth as possible journey throughout the airport’s busy period, including checking your airport and terminal details, arriving early, checking in online, ensuring you have the right baggage weight as well as checking what you have in your hand luggage.
Emirates SkyCargo has significantly boosted its worldwide pharma handling capabilities and infrastructure by commencing handling pharmaceutical cargo at a new purpose-built facility in Chicago.
The facility, dedicated solely for pharmaceutical shipments, is spread over 1,000sqm, with scope for additional expansion and provides comprehensive protection for pharma cargo through temperature controlled zones for acceptance and delivery, pharma cargo build up and break down, storage and direct ramp access. Developed in partnership with ground handling company Maestro, the facility has a capacity of 15,000 tons of pharma shipments per annum.
“Emirates SkyCargo is committed to the safe and secure transportation of temperature sensitive pharmaceutical shipments. Having a dedicated facility for pharma at one of our busiest stations for pharma in our network is a big boost to our pharma handling credentials and capability,” said Nabil Sultan, divisional senior vice president, Emirates SkyCargo. “This was also a unique model wherein we worked closely with the ground handler and were involved in the planning for the facility from the very beginning. Using our learning’s from transporting pharma across six continents, we were able to collaborate to make the new pharma facility fit for purpose.”
The facility offers temperature controlled zones for acceptance and delivery, pharma cargo build up, breakdown and storage. The proximity of the facility to the ramp also means that cargo has to spend lesser time in transit to and from the terminal to the aircraft. The dedicated pharma facility in Chicago is part of Emirates SkyCargo’s broader strategy to enhance protection for temperature sensitive pharma shipments not just at its hub in Dubai but from origin to destination. Following up on the success of the pharma corridors initiative, which was announced in Jan 2018, Emirates SkyCargo has expanded its initial network of 12 pharma stations to 20.
As part of pharma corridors, Emirates SkyCargo works with ground handling partners and other local stakeholders at the stations that are important origin or destination points for pharma, in order to ensure a high standard of handling operations for pharmaceuticals in line with Emirates SkyCargo’s stringent norms.
Henrik Ambak, Emirates’ senior vice president, Cargo Operations Worldwide, said: “Pharmaceutical cargo being transported by air are growing in their sophistication and complexity in terms of the strict regulations for handling and temperature control. We introduced the pharma corridors initiative because we wanted to expand the required high standard of handling for pharma shipments further into our network and serve markets better from origin to destination.”
Saudi Airlines Cargo Company launched two new Cargo routes from-to Athens, Greece & Marrakesh, Morocco starting June 2019, aiming to meet the growing demand for cargo operations & stimulate trade movement to/from both destinations.
Athens is Saudia Cargo’s new destination to be operated year-round, with four weekly flights from Riyadh starting in June on-board the Billy-capacity of Saudia A-320 aircraft.
Saudia Cargo signs breakbulk charter deal with Air Charter Service
Furthermore, Marrakesh destination is operated by Seasonal flights from 2 June till October 25 with three weekly flights from Jeddah through the Billy-capacity on board Saudia 787 aircraft.
Through these flights Saudia Cargo aims to increase its presence in the African & the European continents to fill the exceeding demand for Air Cargo & logistical services through freighter flights & the belly-capacity on-board Saudi Arabian Airlines
The latest figures from IATA have confirmed air cargo continued to face weak market conditions in May.
Data from the airline association show that demand, measured in freight tons kilometers (FTKs), decreased by 3.4% in May compared with the same period in 2018.
This was a slight improvement on the 5.6% contraction in April and IATA said that the low point of this cycle might be behind the sector.
Freight capacity, measured in available freight ton kilometers (AFTKs), rose by 1.3% year-on-year in May 2019 and capacity growth has now outstripped demand increases for 13 months in a row.
IATA said that the air cargo demand has suffered from “very weak global trade volumes and trade tensions between the US and China”.
This has contributed to declining new export orders and the indicator for new manufacturing export orders, part of the global Purchasing Managers Index (PMI), has indicated falling orders since September 2018.
The IATA figures mirror those of analyst WorldACD which reported a 5% year-on-year decline in the chargeable weight of cargo in May.
WorldACD said that the year-on-year decline for May was slightly better than the April figure, but was still behind the figure for the first four months of the year.
IATA director general and chief executive Alexandre de Juniac said: “The impact of the US-China trade war on air freight volumes in May was clear. Year-on-year demand fell by 3.4%.
“It’s evidence of the economic damage that is done when barriers to trade are erected. Renewed efforts to ease the trade tensions coming on the sidelines of the G20 meeting are welcome.
“But even if those efforts are successful in the short-term, restoring business confidence and growing trade will take time. And we can expect the tough business environment for air cargo to continue.”
Looking at regional performance, Asia-Pacific airlines saw demand for airfreight contract by a “hefty” 6.4% in May “as the US-China trade war and weaker manufacturing conditions for exporters in the region have significantly impacted the market”.
North American airlines saw demand decrease by 1.6% year on year in May, which IATA also put down to US-China trade tensions, while capacity was up by 1.4%.
For European airlines there was a 0.2% decrease in freight demand in May, but this is a “significant improvement on the 6.9% contraction in April”. Capacity was up by 2.5% on a year ago.
“Weaker manufacturing conditions for exporters in Germany, indications of a slowing in the regional economy, and ongoing uncertainty over Brexit, have impacted the recent performance,” IATA said.
Middle Eastern airlines’ freight volumes decreased 6.9% with weakening air freight volumes to/from North America and to/from Asia Pacific contributing to the softer performance. Capacity declined by 1.6% on a year earlier.
Latin American airlines experienced an increase in growth in May 2019 of 2.7% on last year but capacity increased by 6.6%.
Finally, African carriers posted the fastest growth of any region during the month with an increase in demand of 8% compared to the same period a year earlier. However, capacity was up by 13.4%.
“This continues the upwards trend in FTKs that has been evident since mid-2018 and makes Africa the strongest performer for the third consecutive month,” IATA said.
Etihad Cargo has seen a significant change of focus in the last two years, according to Abdulla Mohamed Shadid who joined as managing director cargo and logistics at Etihad Aviation Group a year ago.
In the light of changing market conditions, it was evident that the airline had concentrated too much on creating a global footprint and not enough on developing other key areas of the business such as the technology, which customers are demanding to improve business processes, he says.
“Abu Dhabi is right in the middle of the Europe – Asia corridor, the world’s busiest trade lane,” he explains. “In the past, we may have been overly ambitious and tried to be too global. Now it is more about choosing the trade lanes we can be competitive in.”
Etihad exited its A330F fleet last year and now operates B777Fs, which are flying mainly to core markets such as Europe and Asia (eg India, Vietnam and China), complementing the bellyhold capacity that feeds over 90 destinations including North America, Africa and Australia.
With reduced capacity effectively helping Etihad eliminate ‘bad revenue’, the smaller footprint has allowed Etihad to refocus and finetune the network, and this allowed it to open up Singapore as a new route and increase Shanghai frequencies.
“We need to be conscious of the ecosystem we are in, where there is industry overcapacity,” says Shadid. “That is why we right-sized our fleet, and today are confident that we have sufficient capacity to meet our needs for the foreseeable future.”
“We are maintaining our fair share with key customers – if we are not doing that, we are doing something wrong. If you operate transparently with customers, there is no reason why they would leave.”
This transparency and communication with customers has been greatly enhanced by the introduction of Etihad Cargo’s new technology platform, IBS iCargo, last October.
“The change has been like a switch between night and day. In a short span of time, we have probably become more digitized than most other airlines of our size. Only a handful have managed to do more than we have – in a few years we aspire to be ahead of the rest,” claims Shadid.
“We are investing heavily to offer customers a differentiated service – from live quotes to knowing the exact temperature of their product at any point in the journey.”
He says 22% of the business went online in the first six months after the launch of etihadcargo.com.
“Another channel is to link via API’s into our forwarders’ systems which will digitise another 40-50% of the business. We have run very successful pilots with DHL Express and DB Schenker, so between this and our online offering we expect to have about 70-75% of our bookings through these new distribution channels by the end of the year. No other airline does that.”
He also supports independent portals. “If customers want a choice, we have to be part of that and one of the first few to do it. It will become standard, so it is better to be there at the beginning.
“Big customers will continue to have block space agreements and price schedules but the portals give us access to more and new customers.”
Shadid says his team is working more closely with lots of customers to look at their five-year business plans and “work out how we can get there together. We could open capacity in new markets with customers – but it has to be a joint effort.”
He cites the weekly Hanoi to Rickenbacker, Columbus service, operating outside the ‘core focus routes’ as an example. “We launched that with Trinity Logistics, mainly carrying garments and it is the only direct link between Hanoi and the US.”
He identifies China as an important market as it has a strong economic relationship with the UAE, which is involved in the One Belt, One Road project.
“There is a major drive by the Abu Dhabi stakeholders to see more industrial and manufacturing activity in Abu Dhabi, and as these become major sources of exports for our country, Etihad is well positioned to can carry these products.
It is an exciting time for Etihad with all the transformation we are undergoing, says Shadid, despite the air cargo market going through a tough period and yields being “much softer” than last year.
“But hopefully they will recover before year end and this continues to support our positive transformation journey.”
Halal shipments are taking off at MASkargo, having received Malaysian Halal certification issued by the Department of Islamic Development, Prime Minister’s Office, Malaysia (JAKIM).
Ibrahim Mohamed Salleh, chief executive officer of MASkargo says the global halal market is worth almost $2 trillion, and the airline reviewed all processes to ensure they met strict requirements.
He says: “Additional facilities were also added to cater to the need of maintaining segregation and separation between Halal and non-Halal shipments. We are most probably the first Cargo Terminal Operator in the world to be classified as a Halal cargo handler from a globally recognised and renowned Islamic Affairs Regulator for Halal products.”
Following certification, MASkargo shipped 720 kilos of frozen food to Japan under its Halal Logistics service.
Flight MH088 left Kuala Lumpur at 23.30h on 24 June and arrived at Tokyo’s Narita International Airport at 07.40h the next morning.
The shipment was booked by Nippon Express (Malaysia), with Roslan Osman, general manager of the Halal Logistics Division commenting: “The reality of an integrated halal supply chain is made possible by such collaboration between stakeholders in the halal ecosystem. A halal certification makes exporting products to Muslim markets much easier.”
The Freight Transport Association is demanding for a dedicated freight chapter in the UK government consultation Aviation 2050 – the future of UK aviation.
Stressing that airfreight will play a pivotal role in achieving post-Brexit trading ambitions, the association says the government must set out a clear and ambitious vision for airfreight.
Alex Veitch, head of multimodal policy at the FTA says as airfreight represents around 40% of UK imports and exports by value, and the importance will only increase following Brexit, the White Paper must have a dedicated airfreight chapter.
Veitch and the association are calling for the government to adopt a more ambitious stance to grow global trade, such as liberalising visa requirements for travelling business passengers.
He says: “While the third runway at Heathrow Airport is an essential step forward, FTA also needs to see freight growth at all other UK airports, for example by providing clearer direction to planning authorities that they should support industry to make the best use of capacity. Failure to provide suitable freight capabilities will only mean bleak prospects for British businesses seeking new global markets.”
Veitch adds that surface access is a major barrier to growth, calling for the government to commission an Airport Connectivity Study to highlight where transport links and freight parking facilities need to be improved and set a program for action.
He says, “Security should also be a priority and policies consistently implemented across Whitehall departments. Digitalisation is also crucial and while government support for industry initiatives is welcome, the government should also review wherein the supply chain they require paper documents and move these to digital.”
Technology has made the world smaller and faster.Real time communication with people from all over the world at different time zones through phones and gadgets
