On top of the game

Like any other industry, the transportation business has more than its fair share of stresses. No two days are the same and challenges are plenty (driver shortages, spiralling fuel costs to name a few). Companies either sink or swim.

Khalid Abdullah Al Hawai, Managing Director, Mashaweer Transport

The transportation business is not perfect, it can never be. It is one business that can never be without problems,” says Khalid Abdullah Al Hawai, Managing Director, Mashaweer Transport.

Having said that, Al Hawai has a very positive outlook. “Our trucks are always on the roads, which means unending situations of maintenance, violations, heavy fines. But the more the challenges in your way, the higher is the level of satisfaction when you are able to overcome those challenges successfully,” he adds.

Driver shortages Speaking of his biggest challenge – driver shortages he says, “Since the beginning of this year the transfer of GCC heavy duty licences to that of UAE heavy duty licenses was stopped. Which means all those GCC heavy duty drivers were unqualified when they came to the UAE for jobs.”

This caused a mass exodus of drivers to greener pastures. And for those who stuck around, it meant costly training that could not be funded without a pay cheque. And for the lucky few who were UAE-qualified it meant high salaries as demand surpassed supply.

Ten months into the year, Al Hawai has managed to sort that problem out by recruiting a number of GCC-qualified drivers (they have fewer tests than those who are not) and getting them enrolled into driving institutes. “Each month I get around four to five licensed drivers. So steadily our driver situation is improving,” says Al Hawai. Although he admits, salaries being demanded are still very high.

“Because of salaries, drivers are not willing to stick around because they know they will get fatter salaries else-where,” continues Al Hawai. “At Mashaweer, we offer them a good working environment and three-year contracts so we can atleast recover the investment we made in getting them trained.”

Al Hawai says forward thinking goes a long way in keeping any venture afloat. He now has 10 drivers on standby and a satisfying rotating stock to cover for emergencies.

“These days we face a very big problem in the form of heavy fines for any violation on the road. A fine which would earlier cost AED500 now costs AED3,000,” says Al Hawai. Which means drivers lose their entire month’s salary paying for the fine. “That depresses them a lot,” he adds. “So, they just go to the GCC countries where fines are low and rules are not so strict and traffic is also not such a big issue.”

“We try and mentor them,” Al Hawai says, “and support them wherever possible. Such as when they are not able to complete their daily quota of trips due to road blocks, traffic or even delays from the client’s side. We allow them to make up for lost time the next day.”

“We have a very systematic way of working, solutions have to be found to the problems as no problem is without a solution. All our departments are working to their best efficiencies and so we’re very much above all the challenges that we come across daily.”

But he agrees that having friends in high places helps. “It gives us an edge over the competition,” Al Hawai elaborates, “Having and keeping good relations is a cultural thing. This country does not have a dishonest system of functioning, but having influence helps.” Which in simple words translates to quicker dates for driver tests.

Border issues When asked about the competition, Al Hawai says, “Business is good. In the last seven to eight years, we have experienced annual growths of 25 to 30 per cent. Volumes have increased in a big way. There’s room for all of us, the competition only makes us better at our job. We have a strong reputation in the market, we are committed to our clients.”

And for the sake of their clients Mashaweer is starting services to Saudi Arabia soon. “If we want we can start operations to Saudi Arabia today, but economically it’s a difficult decision,” he says.

Saudi Arabia is notorious for the delays at its borders clearing customs and Al Hawai opines that they can make much more money continuing as they are with operations across the UAE and Oman. “If we calculate the number of trucks going to Saudi Arabia and see how many trips they manage to make there, the numbers aren’t forthcoming.” And the rapid depreciation of the vehicles doing such long distances will only add to costs. “But some of our regular clients are insisting as it’s easier for them to handle one forwarder. So we are going to start soon.” Saudi Arabian rules and regulations make the requirement for Arabic-speaking drivers essential.

Is insurance another major cost when dealing with cross-border transport? Al Hawai doesn’t think so. “For the cargo we carry, we have haulers’ insurance which is covered all over the emirates and Oman. So it’s nothing special. In case of an accident we can claim up to AED200,000 each time. Usually the cargo is not worth that much, but when it is we have special coverage for it. Totally, all our vehicles are covered under a million dirham policy with unlimited coverage. Other than that, all our vehicles have third party insurance and on the Omani border vehicle insurance is bought for AED600 for a period of six months. We hardly have any accidents happening with our vehicles, though.”

Delays Speaking about delays, Al Hawai says, “The traffic situation we are finally managing to overcome. It used to be a nightmare, especially sticking to timeliness with our trucks. But with all the new roads and expansions of existing ones, congestions have reduced considerably.”

Currently 80 per cent of Mashaweer’s business is movement of containers from Jebel Ali port (they move approximately 500 containers daily) and 20 per cent is loose cargo (tiles, pvc pipes etc).

Out of their 140 Mercedes trucks, most are leased out on a fixed monthly basis, where Mashaweer receives a lump sum from the client which covers all their operation costs.

Fuel costs, too, are adjusted accordingly with clients. “Of course, our transportation costs were not increased in accordance with the high diesel costs which were changing daily in the last six months,” continues Al Hawai. Customers accepted the marginal increases in their rates, and the rest were absorbed considerably by Mashaweer. “We have to keep our relations,” he says.

So what about the bottom line? Al Hawai says Mashaweer continues to meet its goals. “We have transactions per day, and values haven’t gone below the rate of our interests, the rate of transportation is a standard rate which has never gone below our target,” he says.

Seasoned player “When we started off in the early 1990s, we had only one vehicle. We steadily added to it making a fleet of 140 trucks and about 400 multi utility trailers today,” says Al Hawai. But with all the inflation, a second hand truck which costed Mashaweer AED50,000 about 10 years ago, costs them AED200,000 today. “A new Mercedes truck from Al Gargash will cost me half a million,” he says.

Having a new truck is not what one needs in the business. “Right now our trucks are 1995, 1998 models, they’re all road worthy vehicles and don’t require much maintaining,” he says. But that’s because Mashaweer has invested heavily over the years towards a mechanical and electrical division and its own garage and even several mobile workshops which are three to seven tonne pick ups completely geared to handle any kind of breakdowns.

“We’ve even invested in GPS and GPRS on about 70 of our vehicles,” says Al Hawai proudly. One of the main reasons for this was client satisfaction, so as to provide complete visibility to the client in the trucks leased out to them as well as reducing operation costs of tracking vehicles for the clients on Mashaweer’s side.