Big plans

Dubai Logistics City is about to become a major force in global logistics, capitalising on the city’s insatiable growth, east-meets-west location and proximity to two billion consumers

Michael Proffitt, CEO, Dubai Logistics City

The seismic ripples of the GCC’s meteoric economic growth continue to be felt far and wide and its rapidly expanding logistics sector has been at the epicentre of all the activity. Now the ripples are set to become even larger, as Dubai Logistics City (DLC) prepares to start operations, serving as a powerful magnet for global and regional trade.

DLC is the joint brainchild of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, and Ruler of Dubai and HH Sheikh Ahmed bin Saeed Al Maktoum, President, Department of Civil Aviation, Government of Dubai and Chairman of the Emirates Group.

It is the first phase of many that make up the Dubai World Central International Airport (JXB) – a 140-square kilometre (sq km), $33 billion, multi-modal development comprising of a range of industrial clusters. When all phases are completed in 2017 and projected to house over 900,000 people when all phases are eventually completed in 2017.

Dubai World Central is unique because it is believed to be the first airport ever with cargo as its primary focus. Its first scheduled flight is likely to be a cargo carrier towards the end of 2008.

Work has begun on the first $75 million Air Cargo Terminal, which will be finished next year. It will be close to both the DLC Forwarding Area and the main runway and will stand directly on the aircraft parking aprons for quick access.

The 25-sq km DLC is set to become the Middle East’s unparalleled air-sea-road logistics hub – a key aspect of its design is the dedicated road link with Jebel Ali, now the world’s eighth largest port. It will provide access to a market of two billion people, encompassing the Indian Subcontinent, Middle East and Africa (MENA) and CIS countries, who live within three hours flying time of the GCC.

Artist impression of how the completed DLC will look like.

DLC will be instrumental in driving regional trade, which is predicted to top $1,225 trillion, and is conveniently placed to benefit from the boom in China, whose air cargo market is growing at 15% a year.

At full operating capacity, DLC will handle 12m tonnes of cargo annually through 16 dedicated air cargo terminals. It is estimated that approximately 65-70% of that freight will be transiting the UAE for re-export.

The scale is unprecedented. Dubai World Central will be larger than both London Heathrow and Chicago O’Hare combined. Its runways and parking aprons will accommodate the new Airbus A380-800Fs. Four of a possible six runways have been approved, with space between them to allow simultaneous take-offs and landings, and it is anticipated they will all be certified CAT III, allowing all weather operations and automatic aircraft landing.

Michael Proffitt, chief executive officer of DLC, says an operation of this size is essential, given that the region’s air traffic is growing at 15% per year.

“We are addressing the future needs of Dubai,” he says. “Dubai Cargo Village is quite congested, and the existing airport has two runways with a finite capacity. You look at Emirates’ orders and the growth, there are issues because you can’t expand the existing airport. At some stage, the main airport will flip from Dubai International to Dubai World Central, but there’s no timeframe. It’s not a competition, it’s a collaboration.”

Flexible options DLC, which offers 11m sq m of space, will be a one-stop-shop for all logistical requirements.

With Phase I grading at DLC completed, contracted logistics partners have begun constructing their own facilities. Suppliers will be able to keep pre-set levels of inventory in stock at DLC’s storage facilities and save them precious time when needed for distribution.

Left: Recent photograph of the work in progress, Right:Werner Kleymann, Regional Manager of Kuehne + Nagel Middle East and Michael Proffitt laying the cornerstone of Kuehne + Nagel new facility in DLC

Most of the businesses opting to set up their base there can either focus on warehousing and distribution or cargo handling.

Companies have the option of either sharing DLC’s own warehousing facilities, ideal for small to medium-sized operations, or larger companies can choose to build their own from scratch. Kuehne + Nagel (K&N) has opted for the latter, and is in the process of constructing a 50,000-sq m warehouse, which will principally target the pharmaceutical sector.

“At this strategic hub,” says Werner Kleymann, K&N’s Regional Manager Middle East, “adding to our established global facilities – we will be able to provide our customers with sophisticated, integrated logistics solutions across the Middle East, as well as Sub-Asia and Africa, thereby enhancing our already strong market position in the region.”

Danzas AEI LLC, part of the DHL Global Forwarding group, has also signed a contract for a 30,000-sq m facility in DLC’s Forwarding Area with a further possible option for an additional 15,000 sq m. They have also secured an extra plot of over 150,000 sq m in the specialised Contract Logistics Area.

The company, with 17 years experience in Dubai, sees the new facilities complementing its existing freight exchange and warehousing business situated in other Free Zones.

“We have come to a stage,” says Enver Morreti, CEO/President EMA DHL Global Forwarding, “where we say Danzas in Dubai is where the world meets because it is here where everything comes in from all over the world and we serve it to a vast geographical outreach – Africa, South Asia and the GCC – and the footprint keeps expanding as the emirate continues to be identified as a major hub.”

Logistics operators can take advantage of a wide range of services including proprietary facilities management

DLC will offer its own specialised aviation area with air cargo terminals situated directly on the aircraft aprons

This brings the total area at DLC reserved by the DHL Group – which also owns Deutsche Post World Net, DHL Express, DHL Exel Supply Chain, and DHL Global Forwarding – to over 300,000 sq m. DHL will be looking to increase its current daily cargo movement levels of 200 metric tonnes and DLC will play a major part in those expansionist ambitions.

Aramex, the GCC’s freight express and logistics specialist, has also secured a 140,000-sq m plot with a possible extension of another 100,000 sq m.

“Innovation is in Aramex’s DNA, so it was easy for us to take the initiative on a project of such immense significance,” says CEO and President Fadi Ghanour. “We took a strategic decision almost 22 years ago to make Dubai the hub of our global operations. We are, therefore, well positioned to capitalise on our presence in DLC, which has an important role to play in Aramex’s logistics service offerings, especially our third-party logistics.”

Panalpina World Transport is availing themselves of 30,000 sq m in the Free Zone’s Forwarding Area, and has plans for its own purpose-built 2,600-sq m office complex, plus a high-tech 10,000-sq m storage facility.

The new warehouse will function as a transit base and include air-conditioned and temperature controlled spaces. The firm is keen to take advantage of the project’s pivotal location which places all major markets in the Middle East within 24 hours driving distance, as well as the region’s major sea ports, which are accessible within two days.

Additional benefits DLC will offer extra value added services, such as some limited assembly operations and a smattering of smaller scale manufacturing facilities. And these services come in a Free Zone and single customs bonded environment.

René Wernli, Panalpina Area Managing Director along with Michael Proffitt at the ground breaking ceremony of Panalpina’s new facility

Alongside the locational benefits, companies operating within the Free Zone enjoy 100% foreign ownership and the freedom to repatriate profits outside of the UAE.

Logistics operators can take advantage of a wide range of services, including proprietary facilities management, office facilities for start-ups and property management services ranging from design of infrastructure to “turnkey” DLC facilities.

A shuttle link is proposed between DLC and Dubai International Airport, ensuring smooth, customs bonded connectivity around the clock, and Dubai Customs Authority will soon be offering a new E-Customs service enabling operators to rapidly handle and clear all imports and exports.

DLC will offer its own specialised aviation area with air cargo terminals situated directly on the aircraft aprons, providing air cargo handling operators with direct access.

Shippers and operators will benefit from close links to Jebel Ali port, which now hosts more than 120 leading lines, as well as the neighbouring Jebel Ali Free Zone Authority (JAFZA), whose packed site now houses more than 1,100 companies. The port is on course to handle 11 million twenty-foot equivalent units (TEUs) this year, and in the process of expanding its capacity to 15m TEUs to keep up with demand.

Containers can be transferred from the port’s terminal to the airport’s cargo terminal without customs clearance or incurring any related delays, another major attribute.

Right: DLC’s passenger terminal taking shape, Left: airport tower

Sheikh Ahmed bin Saeed Al Maktoum, President, Department of Civil Aviation, Government of Dubai and Chairman of the Emirates Group, says geography makes this vision possible with huge land availability in a prime location.

“The long-term benefits of Dubai World Central to the UAE, GCC and the wider region are phenomenal and will place this emirate firmly in a “pole position” for regional logistics, tourism and commerce,” he says. “Dubai World Central will not only cater to economic growth, but will be a strong catalyst for our next wave of development as a truly global commercial, trade and logistics hub.”

By the time Dubai World Central International Airport is fully operational, Dubai Logistics City will be an integral and essential cog in the economic machinery that is powering growth in both the tiny emirate and the wider Middle East.

Michael Proffitt the man in charge left Deutsche Post/Danzas and his role as Executive Director for Europe, along with his board membership of Mail International after eight successful years, to take the helm of DLC.

Originally from the UK, the 58-year-old industry stalwart holds an MBA awarded by Cranfield University and is a Fellow of The Chartered Institute of Logistics and Transport.

The role as CEO of DLC is the pinnacle of a career that has also seen Proffitt employed at a senior level in some of the world’s most distinguished and successful logistics operators, including XPL GmbH and McGregor Cory (now owned by Excel Plc).

Proffitt says he is extremely confident that DLC will live up to its expectations and remains remarkably sanguine about the rate at which the project will develop. His approach, he maintains, will be a measured one.

“While it’s a visionary project, it’s also an evolutionary one. We have the capacity for six runways but we will build them at the pace we need to build them. We’re not rushing out to build the biggest airport in the world.”