Playing Monopoly?

Deutsch Post World Net has dibs on Dubai Industrial City’s logistics Transpark. Is the global leader getting too much of a head start?

The official partnership between Dubai Industrial City and Deutsch Post World Net (DHL) was recently announced at MEED’s Gulf Logistics Forum. When it came time for questions, the crowd of supply chain managers expressed their concerns about the deal’s potential to stifle competition. Perhaps the answers provided were unsatisfactory, as the subject matter remained paramount throughout the question and answer session.

LOG Middle East recently sat down with Rashed Al Ansari, CEO of Dubai Industrial City, to let him clarify the conditions of the partnership. "Usually, you bring in multiple companies if you think that one of them will fail. I don’t think that Deutsche Post World Net will fail us in any way. We believe in them, and we believe this partnership will work," says Al Ansari.

We chose Deutsche Post World Net because they are the number one company in terms of market share, they are number one in warehousing in storage, in freight courier service. Naturally we would choose the best company.”

Al Ansari believes the decision makes sense for many reasons, and will ultimately serve in Transpark’s client’s best interest.

“One is that for many small and medium-sized enterprises, they usually do not have their own logistical companies or setups. Having 450 factories in one place allows for economies of scale, which leads to a discounted price for investors using Transpark/DHL services,” says Al Ansari. “They have 230 aircraft. They have a very strong presence here in the UAE. Their customs and freight forwarding are very advanced.”

But the question remains; is Transpark’s exclusivity towards DHL monopolistic? Al Ansari doesn’t think so, though he will admit they are getting a head start.

“Deutsche Post Worldnet is not a monopoly. The investor has the option of taking services from Transpark, or they can approach any other 3PL provider to come and take care of them.”

“Look, the days where there were monopolies are long gone. Look at Etisalat, they have competition now. Look at Emirates Airline, they are now competing on an ‘open sky’ policy here.”

So are there any other 3PLs scheduled to sign on with Transpark, unofficially? “We have examples of those, but I’m not at liberty to disclose them, because we haven’t finalised the details. Come on, we are building 12 million sq feet of warehousing, there is plenty of space for the players to come set up here. We have no monopolies. At the end of the day, our goal is to provide service to the client, high quality, at an affordable price.”