Ouch! Be careful what you wish for

by Kathryn SemcowNovember 1st, 2008 | Editorial, Issue 12 November 2008

What have we done? We spent the last six months praying for fuel prices to drop, and now our wishes have come true. However, this descent has accompanied the global economy’s steepest decline in modern history. We can now drive our trucks for cheap, but will we lose our homes?

How will this affect our industry? Are we going to be okay? On the one hand, we can say that lower fuel prices will give us an advantage. Transport operators can reduce their prices, 3PLs can earn a bit more profit and customers can stop complaining.

On the other hand, if market conditions continue, those customers might cease to
exist. Logistics providers could slowly watch clients drop like flies, or at least reduce their demand for services. If global demand slows, so too will global trade.

My non-expert opinion is ‘Ouch!’

We tend to be a fairly optimistic magazine,presenting plans for the region’s airports, ports, logistics villages and warehouses as if they are sure to come true. In this issue, for example, we take a look at airports on the rise in Ras Al Khaimah, Dubai, Abu Dhabi, Doha and Kuwait. We also share regional ambitions for railways, which come with high price tags. I wonder if this optimism is still warranted. Will the money supply and trade demand still exist for these projects over the next few years?

If the logistics sector does slow down, however, it will not face the doom of other industries such as banking and real estate. We are a bare bones industry, driven out of necessity and practicality rather than ego and glamour. Ambitious plans for new islands and soaring towers may move aside for things we really need, like warehouses and roads.

But some experts say our region will be relatively okay. The Gulf region is fairly insulated against bank closures, homes losses and unemployment. Hopefully, life will continue as usual and we can all forget the world around us is crumbling apart.

Even if our world does crumble apart, you can still count on LOG.Middle East holding the LOG.LEO Awards at the Westin at the end of this month! Check out the candidate profiles in this issue and visit log.ae to vote for your favourite Young Achiever, Innovator and Supply Chain Manager of the Year.
See you there!