Making Money

You, too, can bring in the big bucks. Just ask Farook Al Zeer, Managing Director for Schenker in the UAE

Farook Al Zeer, Managing Director, Schenker for Dubai and Abu Dhabi

Walk into the Mirdiff villa office of Farook Al Zeer, Managing Director for Schenker in Dubai and Abu Dhabi, and you will quickly understand you are not dealing with an average freight forwarder. The artwork on the walls looks pricey, the suit is certainly designer and the personality is definitely debonair. After a few minutes of conversation, this first impression will make sense, however, because you will understand that you are not dealing with merely a freight forwarder, but rather an investor.

“During the time I was with Kuehne + Nagel, I was building up my investments,” says the Jordanian who started his career with K + N as a clerk and later returned to be Managing Director for its UAE office. “It was a win win situation.”

During this time, in 2001, Al Zeer and a local partner invested in a local franchise of the massive freight forwarder BAX Global.

“BAX was always a big company, especially in the United States, and they had certain valuable products. This is why we invested in the name. We owned the company 100 per cent.”

And BAX in the UAE took off. “BAX had an excellent start,” says Al Zeer. “We started with three people, and in two to three years we were close to 40 people, with nice operations, a nice office and good staff.”

While he will not reveal numbers, you can see the dollar, or dirham, signs in his eyes.

“BAX was a very successful project. We made profits in the first year. It was very good. Even we were surprised. We were prepared to invest and inject money for three years. In our studies, we thought that in the first year you need to build and expand, in the second year you need to stabilise the company and have branches outside, and the third year you make money.”

He likely saw even more dollar signs five years later in 2006 when Deutsche Bahn, owners of Schenker, bought out BAX. While Schenker already had an agent in Dubai, it chose to go with the BAX office instead. “In BAX we were Making history also a franchise, so Schenker had to make a decision between us and its own agents,” says Al Zeer. “The decision came to our own benefit.”

This may have to do with the fact that Al Zeer was already in Shenker’s good books. “Fortunately, I have known Schenker for quite some time,” he says. “In fact, we worked together in Abu Dhabi, because Salem Freight was their agent for several years. That made their decision even easier.”

In 2006, the two companies set up a joint venture in the UAE, and as of September 1 this year, the company was officially established as Schenker LLC. “It was the official announcement that Schenker has started its own operations,” says Al Zeer.

Unlike most mergers, this consolidation came without lay-offs in the Dubai office. “Fortunately, we employed more people in Dubai,” says Al Zeer. “When Schenker took over, BAX was a relatively small company, but the potential was huge. We moved from 40 people to almost 140 people in less than two years.”

Al Zeer seems confident that the venture has made his company stronger than ever. “Schenker brought many more opportunities to sell in the local market,” he says. “The good thing about them is that they have many products. They have a strong sea-air service, they are strong in fairs and exhibitions, they have a projects department, as well as aero parts and marine parts divisions.”

He says one of Shenker’s hottest products is sea-air freight, in which goods move by ship from Asia to Dubai and are transferred by plane to Europe and the United States. The company has two regular charters a week on Emirates’ Boeing 747, as well as many other ad-hoc charters.

“We make use of our Schenker capabilities,” says Al Zeer. “We use the flights from Dubai to Hann, Germany, and in Germany, they use the flight from Hann to Toledo, USA. It’s a good combination between Dubai, Hann, Toledo and return. This gives us a great opportunity. We, as Schenker, have our own space. We control the space, and we have the cargo for it.”

His office can now benefit from BAX’s strength in the United States and Schenker’s team in Europe. “You need a strong network behind you,” says Al Zeer. “How good you are locally is important, but you need those international contacts.”

He insists his team has the perfect combination of global reach and local knowledge. “We know the local market,” he says. “We’ve been here for so long. We know the customers. We have our reputation behind us. People know us.”

“A lot of multi-national companies make terrible mistakes when they move to different places in the world. They think they know the market, and then they make a mess. They make a mess with their people. They make a mess with their operations. They make a mess with their costs.”

Al Zeer seems to feel strongly that he has invested properly: “First of all, our investments are not, ‘I put money in a company and it has to give me returns in one or two years.’” he explains. “That’s not the right way to do things. I have a commitment to a multinational partner and I have a commitment to the local market. To build a company, you should have enough money to inject whenever needed.”

So is logistics a good industry to invest in? “It’s not about being a good industry or bad industry,” answers Al Zeer. “You have to have people specialised in the industry. If someone comes from outside the industry to invest, he might make mistakes and lose a lot of money. You need people who are specialised in every business. If you are specialised, definitely the Dubai market is excellent for business.”

CAREER PATH

In 1981, Farook Al Zeer started his career with Kuehne + Nagel in Amman, Jordan, working as a clerk. Within six months he had moved to Aqaba to work as second man in operations. “It was a big job,” he recalls.

In 1982, Al Zeer moved to Dubai and spent most of the decade working for a local freight forwarding company. In 1989, he started the Air Express International office in Dubai. Today, the company is known as DHL/Danzas.

In 1993, he opened both Al Naboodah Cargo Centre in Dubai and Salem Freight International in Abu Dhabi. “I wanted to start something of my own,” he explains.

Al Zeer later became Managing Director for Kuehne + Nagel’s UAE branch, and it was during this time that he and a local partner invested in the BAX franchise.

In 2005, he left Kuehne + Nagel, and in 2006 BAX and Schenker signed a local joint venture.

www.log.ae