It may be a long and roundabout route, but it gets the job done and clients are happy. That’s the operating policy of shipping companies operating in Saudi Arabia, where customs bureaucracy is a thicket best avoided when possible.

Transport and logistics firms with experience in the region know that importing goods into Saudi Arabia often requires unorthodox measures. An executive at one international courier company describes the route he often uses for shipments destined for the kingdom’s capital, Riyadh: First, the cargo lands at Dubai airport, where they are unloaded and packed onto trucks destined for the Saudi border. As Dubai is a major logistics hub for the region, it makes sense that kingdom-bound merchandise would make its first touchdown on the Arabian Peninsula here, rather than Riyadh, for instance.

Then, at the UAE-Saudi border crossing at Gweifat, east of Abu Dhabi, the truck is sealed. But instead of heading toward Riyadh, the truck’s final destination, the driver takes it through Saudi Arabia up the coast to Bahrain, where it crosses into the island kingdom and does an immediate U-turn. The truck then enters Saudi Arabia again, going through customs clearance at the causeway on Saudi-Bahraini border – where clearance takes a couple of hours – before finally driving to Riyadh.

Why such a circuitous path? Those with less experience in the Saudi transport sector might well be inclined to make the direct trip from Dubai and clear the goods upon arrival at Riyadh’s dry port. They are likely to wait an extra two days or more while the goods wait to clear customs. The simple reason, according to both company executives and government officials, is that customs officials in Riyadh are notoriously slow.

“If it’s coming into Riyadh, it requires a completely different set of documents than if it comes in through Bahrain, and the same for Jeddah,” says one of the managers at the company, who spoke only on condition of anonymity. “So basically, there is no standard for clearance throughout the country. They have the same rules, in general, but it also depends on the customs manager who is available in that port. This is why we have decided to bring 95 per cent of our goods into the country through Bahrain. They are so strict on the documents here in Riyadh, while at the causeway, things are going much easier. I find it strange, to be honest. They have the same rules all over. If you are going to be strict, be strict all over.”

For goods that require clearance from the Ministry of Information, such as books, it gets even worse. At the causeway, there is an official from the ministry who is able to give approvals on the spot. “He gives you an approval directly – yes, this book is allowed, you can go ahead and enter,” says the manager. Not so at the port in the country’s capital – which, ironically, is physically closer to the Ministry of Information – where officials can sometimes keep the books at the airport for up to two weeks pending approval.

It might sound like a plotline from a novel by Franz Kafka, but executives say that is simply the nature of doing business in the kingdom. With a population of up to 28 million, and a relatively affluent one at that, Saudi Arabia is the region’s largest and most important economy. As tales such as these demonstrate, it is also the most difficult one to break into, and a lack of familiarity to the way things work here can lead to a brick wall of bureaucratic delays.

We’re working on it Due to the sensitivity of the subject, none of the company officials interviewed for this article were willing to talk openly about the inconsistent application of Saudi customs laws. Even one government official, who admitted that the relevant authorities are aware of the problem and are working toward a solution, was reluctant to speak publicly about what might be seen as a laudable effort to streamline the customs regime.

Reform-minded officials in Saudi Arabia aim not only to improve the clearance process, but to build the country into a logistics hub for the region. To do so, it has brought in many Saudis who used to work in the private sector to promote investment in the kingdom’s transport and logistics industry. “I’m a logistics background guy, and to bring products into Saudi I used to do that myself,” says one government official when confronted with the story of the roundabout route to Riyadh.

Inconsistency is a hurdle that needs to be overcome, the official admitted, and both the customs bureau and the Ministry of Finance recognise the problem. These agencies are working in conjunction with the Saudi Arabian General Investment Authority (SAGIA) to study the problem and come up with solutions in an attempt to “modernise the process,” the official says.

As though to emphasise the point, he described an even unlikelier route for goods entering the country: the official, when he worked in the private sector, would often bring Jeddahbound goods into Jeddah, but rather than clearing the goods at the port, he would haul them overland Riyadh – over 600 kilometres – to clear them in the capital and send them back to Jeddah.

Accounts from the private sector concur that slow as things may be at Riyadh dry port, they are even slower in Jeddah. “You can see that there is a complete difference in the approach to implementing the same body of law from one location to another,” says the government official. “Is it the same product? Yes. Is it the same country? Yes. Are you going through the same law? Yes. Different execution.”

The government plans to tackle the problem by using King Abdullah Economic City(KAEC), a mega-development that will begin its initial phase operations next year on the Red Sea coast in Rabigh, as a pilot for a streamlined customs process. Under the kingdom’s scheme for transport and logistics development, authorities will then roll out an improved regime to the rest of the country, starting with the other economic cities in the pipeline. The hope is that this will demonstrate to the rest of the customs community that greater efficiency can result in higher volumes – and therefore more revenue for the state.

The port at KAEC is now scheduled to go online in 2011, and crucially, the port will be supervised by SAGIA, which is spearheading the drive to make the country’s bureaucratic framework friendlier to private investors. “Customs are going to be under the supervision of SAGIA, which will ensure that we are top class, efficient and serving the private sector,” says Abdullah M. Hameedadin, Deputy Governor for Economic Cities at the authority.

KAEC will ideally be a model of efficiency, he adds. With a total of six economic cities planned, officials are envisioning an expansion of the improved customs regime. “It is going to the strongest argument,” says Hameedadin. “Because you know what’s going to happen? Everybody will move to the economic cities after that. People will say, ‘Why should I stay using Jeddah port, or wherever?’”

This approach doesn’t impress everybody, however. “There has to be an improvement, but you don’t necessarily create islands of excellence when you need to make the whole country perform better in the area of customs clearance,” says John Sfakianakis, Chief Economist at Riyadh-based SABB bank, formerly Saudi British Bank. “The rest of the country might be left out.”

Geography lessons Going on geography alone, few can doubt that Saudi Arabia should be the transport hub for the Arabian Peninsula. It has the central location, the largest land mass and the longest coastline. Why, then has it been overtaken by Dubai and Bahrain? “I know that Doha Airport and Dubai Airport are handling a greater volume of cargo than all the airports of Saudi Arabia combined – all 33 of them,” says the operations director for another logistics company based in Riyadh. “And most of the shipments landing in these airports are actually bound for Saudi Arabia."

There are several reasons for this. First, as even government officials are now ready to admit, airport development has lagged in the kingdom. With their greater capacity, it is simply easier to fly into and out of the airports in Dubai and Doha. At King Khalid International Airport in Riyadh, a project financed by the oil boom of the 1970s, one entire terminal has never been fully fitted out since the airport opened in 1983.

With help from the private sector, the government in Riyadh is now embarking on a major effort to upgrade the airports, starting with the Hajj Terminal at King Abdulaziz International Airport in Jeddah. In a US$250 million (about SAR937 million) public private partnership, the government selecteda joint venture between local Binladin Group construction and France’s Aéroports de Paris Management to refurbish the terminal, using a 20-year BOT (build, operate, transfer) funding agreement whereby the private sector investment is recouped by managing the airport for a set period. The government expects to pursue similar upgrades to the other main airports in the country.

Doha and Dubai are also major centres for bonded shipping. Cargo facilities at these ports include secure zones where goods for re-export can be unloaded and reloaded, be it from plane to plane or from plane to lorry, without undergoing customs checks. Bonded areas also exist in all three major ports in Saudi Arabia – Damman, Jeddah, and Riyadh dry port – but service is limited and suffers from the same inconsistent execution that plagues the customs law. Moreover, the service suffers from poor marketing. One Riyadh-based transport company executive says he found about it from a client. The government official admitted this was the case, and says that as with the customs law, the government plans to roll out the bonded shipping services to their fullest extent in the new economic cities.

Saudi transport firms also have the eyes set on Electronic Data Interchange (EDI), a system allowing for pre-clearance of goods. In effect, EDI will plug the IT systems of private transportation companies directly into the government’s customs clearance system. An electronic manifest would be sent before the shipment even arrives, and officials would, ideally, pre-clear those shipments that are not suspect. After the plane lands or the ship docks, the goods then sail through customs with minimal hassle. Such a system has been under discussion for over a year now, and many say it could be up to one more year before it gets off the ground. “I would say only the groundwork has been done,” says one executive.

These projects, all of which are designed to bring Saudi customs clearance out of the bureaucratic boon docks and into the 21st century, are part and parcel with the kingdom’s overall plan to shape up the transport and logistics sector. This includes ongoing improvement to the road networks, which private operators say has been impressive; airport upgrades; the development of the economic cities, including the development of the northern city of Hail as a logistics hub; and, significantly, the country’s massive investment in railways. The railway is seen as key to internal movement, as thousands of kilometres of tracks are laid around the kingdom, criss crossing the desert in a network that will ease road congestion and reduce transit time by two to three days.

With all these projects, the Riyadh government aims to bring the transport and logistics business closer to the end users. “We recognise that if we fix ourselves internally, the businessmen will recognise that it will be cheaper for him to take (the logistics business) to where his consumers sit,” says the government official.

Private operators agree the Saudi logistics sector has huge potential, if only the government is able to cut down on the reams of paperwork often required to move cargo into the kingdom. “Saudi Arabia could end up playing the role of leader,” says one manager. The government has shown a willingness to change. The focus is now on the execution.

The region’s airports are something to watch

These days, the GCC is getting downright dusty. Ever notice how the sky just refuses to be blue, preferring rather an opaque haziness? Some attribute all this dust in the air to “construction induced pollution”. This, they say, is the price of progress. Dubai is no exception, as the colossal undertaking of building the Al Maktoum International Airport is certainly swirling up dust and sand particles. Rather than look to bluer skies, we decided to check out all the new airport construction in the region, to see what’s happening.

Al Maktoum International Airport With a price tag checking in at US$82 billion, the Al Maktoum International Airport (JXB) will be a record breaker. Just to give you an idea, prior to JXB, the Hong Kong International Airport (HKG) was the most expensive airport to construct, and cost US$62 billion less, at a mere US$20 billion. The numbers on this still uncompleted project are staggering, and when the dust settles on construction, JXB will be the world’s largest passenger and cargo hub, sitting 10 times larger than Dubai International Airport (DXB) and Dubai Cargo Village combined.

Consider that with 16 cargo terminals and an annual capacity of 12 million tonnes, JXB will have more than three times the handling capabilities of Memphis International Airport (MEM), today’s largest cargo hub, and a passenger capacity of more than 120 million – almost 30 percent more than Hartsfield-Jackson Atlanta International Airport (ATL), currently the world’s busiest passenger airport. It will have the required volume to handle all next-generation aircraft, such as the A380 and Boeing 787, and will be able to facilitate up to four aircraft landing simultaneously, 24 hours a day, which should minimise in-air queuing.

Meanwhile, construction of the airport’s approximately US$75 million cargo terminal is more than 50 per cent complete. The first phase of the project will see the terminal initially handle 700,000 tonnes per annum. By 2013 it is expected to become the largest of its kind in the world, at full capacity and handling 12 million tonnes of cargo annually.

According to reports, JXB will be open to all foreign carriers. Emirates operations (both passenger and cargo) will remain exclusively at DXB. Plans call for a link between the two airports through a high-speed express rail system. “A customs-bonded road and rail corridor between the two airports will enable fast cargo and passenger movement,” says H.H. Sheikh Ahmed Bin Saeed Al Maktoum, President of the Dubai Civil Aviation Authority and Chairman of Dubai Airports.

In addition to the express rail, the Dubai Metro and designated light railway throughout Dubai World Central will also facilitate traffic in and out of JXB.

JXB Specifics- Al Maktoum International Airport will have six parallel runways, 4.5 kilometres in length, each separated by a distance of 800 metres (2,600 ft). It will also have over 100,000 parking spaces (most likely underground) for airport staff and passengers.

New Doha International Airport Built over 22 sq kilometres, half of which is reclaimed land, the New Doha International Airport (NDIA) airport will feature some 40 contact gates, 22 remote gates. NDIA’s hub will have a runway of 4.2 kilometres and a second one at 4.8 kilometres in length, each capable of handling the superjumbo A380s and 787s.

“The core business of the airport would be the transfer of passengers. We will definitely reach the 24 million-passenger mark in 2010,” says Abdul Aziz Mohammed Al Nuami, Chairman of Qatar’s Civil Aviation Authority.

Eventually, NDIA’s cargo facilities will be capable of facilitating 750,000 tonnes of cargo movement per year. One major staple of the project will be the multiple cargo aircraft maintenance centres, worthy of hosting aircrafts of all sizes. This capacity expansion seems to be the regional trend, as carriers’ ever-increasing size dictates such infrastructure upgrades.

An additional expansion phase, planned between 2020 and 2025, expects an ultimate airport capacity of 48 million passengers and 80 contact gates.

Abu Dhabi International Airport For the past few years Abu Dhabi International Airport (AUH) has been undergoing expansion. And with the proposed midfield terminal, they have no intention of stopping.

The new US$6.8 billion Abu Dhabi terminal will be opening in phases, beginning at the end of 2011. Once phase I is operational, the new airport will be able to accommodate 20 million passengers per year. Upon the completion of phase II, capacity is expected to increase to 40 million passengers.

“When it opens, the new midfield terminal at Abu Dhabi airport promises to be one of the finest passenger buildings in the world and as it is the first impression for visitors flying into the capital city of the UAE,” says Greg Brennan, Etihad’s Project Manager for the new midfield terminal. “The challenge will be to deliver this massive development on time, within budget and to the very highest of standards.”

One of the first parts of the project will be the construction of a second category III runway 2,000 metres north of the current runway. The new 4,100 metres parallel runway and taxiway will be able to cater for the latest generation of superjumbo aircraft. The development master plan also includes a large (mega) terminal building, a new 110 metre Air Traffic Control (ATC) tower, a cargo and logistics centre, maintenance facility and commercial area incorporating a free zone and associated retail development.

Kuwait International Airport Cargo operations at KIA are really flying high with the introduction of upgraded facilities dedicated to meeting the needs of Kuwait’s freight community. Already handling in excess of 126,000 tonnes of cargo annually, the launch of the new consolidation facility has boosted throughput by roughly 10 percent,enabling local forwarders to improve efficiency. The new facility is just one of a series of upgrades to the airport’s 8,000 cubic metre cargo complex, to ensure it doesn’t get left behind in the Gulf freight community. While in comparison to other regional airports it seems minimal, over KD1 million (US$3.1 million) has been invested in the last few years to modernise and expand KIA.

In addition to large quantities of belly hold cargo carried on scheduled passenger services, several airlines operate regular freighter flights to and from Kuwait. Comprising a 5,600 cubic metre import warehouse and 2,300 cubic metre export facility, KIA’s cargo terminal is equipped to handle a diverse range of traffic. With capacity for up to 600 tonnes of freight, the cargo complex boasts a range of specialised facilities, in addition to general storage, enabling it to handle any kind of consignment.

Kuwait International Airport can currently handle six million passengers a year and has a new terminal under construction that seeks to increase the annual passenger handling amount to 14 million. Terminal II is due for completion by the end of 2010.

Thomas Varghese seems angry. He doesn’t mince his words. That’s not to say he’s having a rough day or that he doesn’t like his job. He loves being a driver, he says and likes the three-tonne pick up he drives all around Dubai and Sharjah making deliveries for his company Nikai Electronics.

But still I get the impression he feels life could have been better. From when he was little, Varghese wanted to be in the military defending his country. “But God did not help me,” he says. He flunked his pre-degree exams when he was 18, which left him with almost no options. He could either choose to work on his family’s medium-sized rubber plantation in Kerala or do something else. He chose to drive taxis around his small town for a living. Soon, he was good enough to drive buses, too.

After getting married and settling down with his little family in his father’s house, an artificial flowers company in Saudi Arabia offered Varghese a position as driver. He grabbed the opportunity and left India to make a better living. Since his parents have passed away, Varghese’s wife was left to manage the plantation which he co owns with his brother.

Ten years ago, he came to Dubai and has been working here ever since. “This is a good place to work. I don’t want to go back and work on my plantation, as I manage to make good money here and also save for my daughter’s education and wedding,” he says. “My daughter is going to be a nurse once she passes her BSc in Nursing.” He is very proud his elder son is already a qualified nurse, working at the Apollo Hospital in Kolkata.

So what is his typical day like? He wakes up early to wash clothes, cook, eat breakfast and leaves his crowded accommodation around 7.30am to report for duty at Nikai’s Dubai Investments Park office. “I don’t manage to cook daily,” says Varghese, so on those days it’s the hotels and many cafeterias around the city he relies on for lunch and dinner. Once he reaches the office, he picks up all the deliveries he has to do for the day and goes about his routine.

His beat used to be Ras Al Khaimah and Abu Dhabi but those areas are now being covered by newer recruits. So, although Sharjah and Dubai are congested, he still prefers working in these cities, “as it’s less dangerous on congested roads than on roads that are relatively free”. Being with the company for six years gives him a little bit more freedom than others to choose the areas he has to cover.

Weekends are spent cooking and watching television. Even after all these years of cooking on his own, he hasn’t yet managed to replicate the perfect fish curry his wife effortlessly conjures up in minutes whenever he visits.

December this year is the time he goes to Kerala on his annual leave and according to Varghese, “It cannot come soon enough.”

The region’s rail plans are best described as immense

These days, the GCC’s rail sector is receiving global attention. And for good reason. The plans are ambitiously immense, as well as being a lucrative incentive for private investment. It is no wonder then, that updates on the ongoing projects are being received with open ears.

These days, the GCC’s rail sector is receiving global attention. And for good reason. The plans are ambitiously immense, as well as being a lucrative incentive for private investment. It is no wonder then, that updates on the ongoing projects are being received with open ears.

From Saudi to Sharjah, rail initiatives are materialising almost daily, seeking to lessen the congested roads as well as facilitate borderless trade. Some plans are local, like light rail and automated metro systems, to regional, which include an international GCC line, similar to Europe’s Eurorail. Once completed, this GCC line will provide a direct link between ports on the Arabian Sea and the Gulf.

Regarding the GCC line, there are issues still to be worked out however, as countries have not reached consensus on the cost structure of the project. “If each state built its share of the rail network, it would be a very feasible project,” says Abdullah Alkatheeri, Director of the land transport department at the National Transport Authority. “I think it’s a political project and I think it is something we have to work on to tie the economics.”

“Final recommendations for the GCC line should be expected within the next six months,” says Dr. Ramiz Al Assar, a senior transport analyst at the World Bank, who has been advising the GCC secretariat on establishing rail links.

Saudi Arabia and the UAE have continued to drive the region in terms of rail progress. Aside from the GCC project, each is exercising its own initiatives. Saudi’s desire to diversify its economy away from oil remains a crucial role in the Kingdom’s upcoming North-South line. With an abundance of natural resources in the mining sector, specifically phosphate and bauxite, the North-South line is forecasted to handle 10 million tonnes of mineral deposits annually. By October 2010, Saudi expects to have the mineral line operational, with an initial 780 wagons set to go. Through time, additional traffic will include petrochemical and agricultural products, and eventually make way for passenger travel.

When complete, the North-South line will span a distance of 2,380 kilometres, consist of 107 bridges and 2,679 culverts. To say the line’s construction is a large assignment, would be an understatement. In terms of earthworks, the project is unprecedented. Official figures have calculated that 497 million cubic metres of sand must be removed to make way for it. Consider that when the pyramids of Egypt were constructed, some 2.6 million cubic metres of sand was relocated. The Great Wall of China required 322 million cubic metres of soil removed. These were enormous projects, that took centuries to complete. Factor in Saudi Arabia’s unforgiving climate, and the timely supply of goods in such desolate regions, and the size and expediency of the project remains unparalleled.

In the UAE, Dubai and Abu Dhabi continue to implement their own individual light rail systems, as well as a cohesive trans-Emirate network. The requirement for a rail link in the UAE remains motivated by the need to move freight faster and cheaper, and in time, passenger services will lessen the congestion on the Emirates’ roads.

Dubai’s rail and master plan will tie together all future light and railway networks with existing projects, such as the metro and Al Sufouh tram system, each designed to take the strain off the city’s congested roads. It will also integrate these with the proposed national railway network traversing the UAE. The first phase of the UAE’s rail network will have a double track railway built from Ruwais in Abu Dhabi and stretching to Fujairah. Eventually, there would be about 900 kilometres of track running from the Saudi border to the northern UAE coast.

Some of Abu Dhabi’s current plans indicate a metro with stations on Abu Dhabi island, connecting to Musaffah industrial zone, the planned cities of Capital City and Masdar, Abu Dhabi International Airport, as well as various islands under development, including Yas Island, the future home of the Formula One Grand Prix. “This is not final, but basically the numbers that we have indicate that we need a metro network in Abu Dhabi,” says Abdelgader Elshabani of the Abu Dhabi Department of Transport. “In the future, it will be important to link Abu Dhabi to Dubai. We need to have this connection to Dubai through a regional rail system and as a matter of fact we have begun reserving space for that.”

Abu Dhabi’s network of tram lines is scheduled to open in 2015, while the metro is planned for 2020 and regional rail may be completed between 2020 and 2030. So while the Emirate is still a while away from completion of such projects, at least officials have acknowledged the need for such transport and are actively seeking solutions. Time will tell.

Tom Ronell is the CEO of Istithmar World Aviation Holdings

Once upon a time, going to the airport was a special experience. The airport was a place of dreams and flights of fantasy – both literally and figuratively. It was a place of excitement: people embarking upon new adventures, others arriving to the cheers of their families and friends.

Somewhere along the way, the romance of the airport disappeared and airports stopped being fun. Air travel became mass transit, an everyday event to be minimised by arriving at the airport as late as possible in order to catch one’s flight without having to spend any time in the airport. In the age of heightened security, that equation has been reversed: we must now allow plenty of time in order to arrive at the front door of the terminal (or as close as we are permitted to get), not to mention checking in and going through multiple levels of security checks before arriving at our distant departure gate, stressed and exhausted by the effort already expended.

The airport is the last place most people want to be, made worse by flight irregularities or lengthy connections. Facilities are mostly inadequate for the volume of departing and arriving passengers, not to mention the in-transit passengers who are often strewn all over, appearing as third-world refugees. The design of most terminals separate us from that instrument of magic – the aircraft. We often never see anything but the doorway of the aircraft from the jetway, or perhaps the nose of the aircraft. Gone are sweeping views of the airport and runways; forget about outdoor observation decks or places to park under the flight path.

On your next trip, consider what a self-contained city an airport is: thousands of workers, police department, fire squad, security, food court, hotels, ground transportation, infrastructure, etc. Imagine the organisation which is required to make everything work, from the traffic police on the approach to the terminal to the skycaps at the curb, through check-in and security to the gate, where various organisations are servicing your aircraft, cleaning, catering, supplying fuel, performing maintenance, loading bags and cargo, pushback crew, air crews, air traffic controllers, people who maintain the runways and cut the grass along the taxiways, etc. You should agree that it is remarkable how well things actually do work.

We are fortunate to be at the crossroads of the world, the Middle East. Notice faces of the people and crews that you pass in the concourses. If you find a window with a view, look at the unusual airlines from all corners of the world and the unusual aircraft types. Consider the exotic places from which these aircraft come, the passengers who travel these routes and what cargo might be carried to and from their home bases.

Imagining all these distant locales will return the flights of fantasy about the magic of aviation and the privilege of travel. Airports can still bring out the kid in us, if we will only take a moment to marvel at our good fortune to be in the airport, going somewhere….

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.

Ras Al Khaimah Airport is expanding its cargo facilities. But can CEO Michelle Solimon fill it with freight?

CEO Michelle Solimon on the Ras Al Khaimah tarmac

Walk around Ras Al Khaimah Airport with CEO Michelle Solimon and it becomes clear she is different from all the others working there. She is six feet tall, blonde and from a small town in Montana, USA. The male employees who flock to greet her are shorter, darkened from the tarmac sun and
almost always Arab. They are happy to see her and you can tell they want her to feel welcome. But all the Arab hospitality in the world cannot prevent Solimon from standing out.

And perhaps that is just why the powers that be in Ras Al Khaimah have hired her -to make their airport stand out. Solimon began her career as an officer in the US Airforce where she earned her MBA; and, after being stationed in the South Australian town of Woomera, moved on to work for Sydney Airport Corporation. While in Sydney, she moved from IT to systems development to business development to Freight Manager. And, since arriving in Ras Al Khaimah in 2007, she is now applying this experience to transform the sleepy airport into a hub suitable for the emirate’s ambitious plans.

“The airport has been here for 30 years, but it has only been in the last two years that the board and the emirate have been concentrating on bringing up its profile and really putting in those investments,” says Solimon. “People who have maybe looked at Ras Al Khaimah in the past or only know a little bit about it haven’t seen what is happening now.”

The government of Ras Al Khaimah certainly has a lot happening. Capitalising on its location and a booming region, its development plan includes becoming a major financial, real estate, industry and transportation centre. On the logistics side, the government is pumping billions of dollar into ports, roads and, of course, the airport.

Solimon is overseeing a 20-year master plan for Ras Al Khaimah, which includes a new arrivals terminal, general aviation area and cargo bays.

On the passenger side, the new 3,000 sq metres for arrivals will be able to handle two arrivals per hour. When this is ready in the next few weeks, the current 2,600 sq metre arrivals and departures terminal will then take care of only departures. This capacity will help cater to home-based carrier Ras Al Khaimah Airways, which is looking to increase its business.

“RAK Airways is obviously the biggest business here at the moment,” says Solimon. “They’re doing Calicut, India, daily and every other day they go to either Dhaka or Chittagong. They’re operating with one Boeing 757-200 at the moment, but they have expansion plans over time.”

On the cargo side, they are building a new 1,855 sq metre cargo terminal, nearly tripling the existing space dedicated to freight. This terminal will have a 1,380 sq metre manoeuvering and staging area linked to Ras Al Khaimah’s arterial road network. “The new terminal features state-of-the-art handling equipment, comprehensive air cargo security, loading docks, electronic weighing equipment and a professional management and operations team,” boasts the promotional power point Solimon’s team presents to potential clients.

While the airport currently handles only around 15,000 tonnes of cargo per annum, Solimon insists that is about to change. “This new facility will have the capacity to handle somewhere between 300,000 and 350,000 tonnes per annum, which is roughly about the same as Sydney Airport,” she says.

But they cannot rely on Ras Al Khaimah Airways for this throughput. “RAK Airways is really focusing on their passenger services,” says Solimon. “They don’t have any plans to buy wide-bodied aircraft or anything like that.”

So, while they currently have playerssuch as Bin Majid, DHL, E-Freight, Sky Gate, Ukranian Cargo Airways and Volga Dnepr as clients, Solimon’s team is out courting cargo operators to come set up shop.

“There’s a lot of opportunity now to build custom freight facilities, and on the other side we are looking at developing additional freight facilities ourselves, just to generate business,” she says.

“The opportunity for any cargo company to come in and build their own facilities is there now,” she adds. “Our own facilities should be finished by the end of 2009, early 2010.”

“The opportunity for any cargo company to come in and build their own facilities is there now,” she adds. “Our own facilities should be finished by the end of 2009, early 2010.”

This argument, however, is unlikely to convince any other big UAE airlines to bring over their cargo. “The thing about these airlines is they support their home base,” says Solimon. “Emirates is about Dubai and Etihad is about Abu Dhabi.”

But she insists that’s not a problem. “This actually creates opportunity for us, because the other customers at those airports are the ones that we would be targeting to come to Ras Al Khaimah. There’s a lot of opportunity for airlines to come in right now and they can have really special personalised customer service from RAK Airport.”

“I think we are finding a niche in the market,” she continues. “A lot of the bigger airports place a heavy emphasis on their home-based carriers, while I think that we have the opportunity to service those customers who do not have a home base and make them feel like this is their home base.”

Why would a cargo carrier come to Ras Al Khaimah? “Because it is very uncongested,” says Solimon. “Because they can have opportunities here for very reasonable prices. They can invest in their own facilities and we are just so well-linked to the rest of the emirates. Doing business in Ras Al Khaimah is very, very easy. The government is very pro-business and pro-development.”

But they still have to convince potential clients. “The challenges are gaining exposure for Ras Al Khaimah, making sure people know what we have; doing additional expansion to make people comfortable that we have the capacity to handle them long term; and the third thing is investment in our facilities,” she says.

Solimon will have to wait and see if international carriers are buying her arguments. “The airlines are currently making their networking decisions on where they are flying to,” she explains. “The decisions have already been made for Northern Winter 2008, so we’re really working on getting them for Northern Summer 2009, which gets announced in April.”

Readers have nominated the best of the best to be the LOG.LEO Young Achiever, Innovator and Supply Chain Manager of the Year. Who will you choose?

YOUNG ACHIEVER

Bilal Arif,
Deputy General Manager,
Mitsubishi Corporation Trade
Middle East

At the age of 32, Bilal Arif is managing one of Dubai’s hottest 4PLs, Mitsubishi Corporation Trade Middle East (MCTME). The Deputy General Manager answers only to Mitsubishi’s CEO in Dubai. “It is a big role,” he admits, describing how his staff of three takes care of more than 20 major multinational clients. “It’s a small team, but effective. We are managing everything from their warehouses to transport, or even just customs clearance, depending on their requirements.”

Bilal started working with United Arab Shipping Company in Dubai while he was earning his Bachelors of Technology in Computer Information Systems at the University of British Columbia’s branch in Sharjah. Upon graduation, he joined Caterpillar Logistics, where he eventually earned his 6Sigma greenbelt. As Inventory Management Executive he was responsible for Daimler Chrysler’s spare parts in the region. “We increased the right parts availability to the customers and tremendously increased the company’s service level,” says Arif. “A team of three people were looking after a stock of 45 to 50 million Euros in that warehouse.”

During his three-year tenure with Al Futtaim Exel, Arif transformed the more than 50,000 sq metre Al Futtaim Parts Distribution Centre in Jebel Ali into a “one bin one article” warehouse. For this, he used the Kaizen Methodology, a technique employed by Toyota in their parts warehouse in Japan. “Basically, I designed the warehouse from scratch, which included the warehouse layout, racking systems for different types of parts, picking and binning strategies in SAP and marking of the warehouse as per the Kaizen methodology,” he says. “This resulted in easy and accurate picking, reduction in damaged parts and space optimisation.”

Why does he deserve to win? “I already have 12 years of hardcore supply chain experience,” he says. “I have moved between all areas. I started out in shipping; then went to Caterpillar where I worked on inventory systems, warehouse improvements and racking; then I went on to Al Futtaim where I worked on projects worth millions of dollars and moved into operations, and then into transport.”

But he knows he still has a long way to go. “What’s amazing about this industry is that it is extremely vast and any number of years will not be enough to learn everything there is to learn. I’ve still got a lot to learn and new heights to get to.”

Arif says he would like to eventually set up his own business, which he would want to expand globally. And his ultimate career goal? “I would like to retire at around the age of 40 or 45,” he says smiling.

Atif Rehman,
Logistics Consultant,
Xvise Innovative Logistics

At the age of 23, Atif Rehman was the youngest operations manager in the history of multinational Caterpillar Logistics. “At that time I wasn’t married, so my focus was entirely on work,” he says as he recalls working 14 to 15 hour shifts, simply out of pure passion. “I loved it!”

Fresh out of university with a Bachelors of Science – Business Administration from Eastern Connecticut State University, Rehman had moved his way up in Caterpillar from IT to warehouse supervisor within two months, then to project supervisor within a year and operations manager within another year. He participated in major facility start-up operations for the company in Dubai, Singapore and Poland, and also earned his 6Sigma black belt from Caterpillar University. “To get certified by Caterpillar, you need to save the company US$300,000,” he explains. “I did that in the first year. Over three years, I saved about US$1 million.”

He insists his black belt keeps him above the competition. “The way I think has completely changed. I’m much more analytical now. I always want to see the facts and figures.”

He says he owes a lot to Patrick Van Heurck from Caterpillar Logistics. “I learned a lot for him while reporting to him during my tenure with Caterpillar,” says Rehman. “He was so passionate about work as well. Working in a start-up, we would be in the warehouse at two o’clock at night, totally lost, looking for inventory.”

Today, at the age of 31, Rehman serves as Logistics Consultant for Xvise Innovative Logistics, an Austrian-based consultancy which recently opened an office in Dubai.

But he is looking ahead to his future. “In five years I wish to be a part of a strategic initiative overlooking supply chain and logistics operations across the Middle East,” he says. “Within 10 years, I wish to broaden my geographical reach across Asia and Europe; and within 20 years time would like to build my knowledge base in such a manner that I draw my experience from different parts of the globe and effectively manage supply chain and logistics operations.”

And why should we choose him? “I have created a lot of value for different organisations by analysing their supply chain and logistics operations,” he explains. “Through the work I have done I feel that I have uncovered the real value that can often lay dormant in these departments. That gives me great pleasure since promoting supply chain and logistics through value creation allows organisations to respect the work that is done as a first step and secondly elevates its importance within the business cycle.”

Khalid Fawzy,
Founder/Executive Manager,
Trimar Forwarding

This is the project of my life,” says Khaled Fawzy about Trimar Forwarding, a company he set up in Egypt five years ago, when he was only 23. “I had no business background, no business family to build upon and with a relatively small capital of US$30,000,” he recalls. “I self taught myself all aspects of the freight forwarding industry, and managed to achieve relatively good results.”

Fawzy beams with pride as he describes his success. “Today, the company has over 50 employees, nine departments, two local branches, a warehouse and the first regional branch in Jeddah is about to open by January 2009 with much more expansion plans ahead,” he says. “The growth figures are very impressive, and are climbing in double digits from one year to the next. Our services have been developing, earning us several acquisition offers, and also giving us the chance to compete with multinational companies and take multinational accounts, such as ABB, El Swedy, Cloride, Fine, Bavaria, Hebi, Alcoa and CSI. We currently have over 50 regular customers.”

Fawzy also managed to sign a representation agreement with APL Logistics after competing with several well-established companies in Egypt. For APL, he has developed a 1,530 sq metre warehouse in Port Said to receive textile cargo from local producers for consolidation and export.

In 2005, he also developed a business plan for a company looking to set up a trucking network in Egypt. He was offered the position of Managing Director for the company which would have started out with 50 trucks and trailers, but he turned it down. “I did not join the company because it would have required me to leave my own business and take on the position on a full-time business, which I was unable to do at the time.

Fawzy has also taken over the responsibility of writing the transportation section of the Egyptian Junior Business Men’s Association. “It was my duty to address all the current problems facing the sector and to come up with ideas, solutions and suggestions to fix these problems,” he says.

In 2007, Fawzy was named the FIATA Young International Freight Forwarder of the Year for Africa and the Middle East. He has also earned a Train the Trainer FIATA Diploma in Freight Forwarding this year, which makes him a certified FIATA Instructor.

So, after all these achievements, does Fawzy still have goals? Of course, he says. “My dream is for Trimar Forwarding to become a global and multinational company.”

And he certainly has the confidence to pull it off. “I hope this does not seem arrogant, but I truly feel that I am my own and biggest role model,” he says. “The belief I have in myself and in my abilities to achieve great things are endless and has fuelled my drive to succeed.”

INNOVATOR OF THE YEAR

Geoff Wheatley,
Managing Director,
SS I Schaefer International DWC

Geoff Wheatley, Managing Director, SSI Schaefer Dubai, says his hobby Chinese brush painting is just like logistics. “It is 80 per cent formula,” he explains. “There is only one way to paint Chinese style. It has been developed over 5,000 years. The other 20 per cent is creativity.”

“There is always that scope within a logistics environment for a person like me or you to use some creative thinking while looking at a logistics solution or problem,” he continues. “That’s why all warehouses are different, all solutions are different. Every project we do is innovative.”

Wheatley’s innovation dates back decades, having started his career with a major international storage and racking provider in Australia, and developing the industry in Southeast Asia before coming to Dubai. “I coined the word ‘logistics’ in 1983,” he declares. “I used it in my company name then in Singapore. It was MHE Materials Handling and MHE Logistics. Everyone looked at me like I was stupid. I said, ‘This word is going to be much more common and used over the next few years, and within five years there were a million companies called ‘Something, something logistics’.”

He also pioneered the first wireless technology warehouse in Southeast Asia. In the 1980s, I put in the first radio data collection system, with handheld terminals and vehicle-mounted terminals,” he says.

Wheatley says he holds regular think-tanks to determine how his Schaefer team can use existing technology to satisfy demands of the marketplace. “We’ve introduced newer products into the marketplace, like the Schaefer Satellite System, which has been a resounding success,” he says. This system uses a robot to retrieve pallets from racks.

He is also proud of his driverless VNA trucks. “We’ve now combined the driverless trucks with mobile racking for cold storage environments, using the latest laser technology, which means we have a manless operated cold room. Everything is guided by lasers and sensors. We’ve already installed five or six systems in Europe which are working dramatically well. That was a concept developed by myself and people in Switzerland.”

But he doesn’t believe in technology merely for the sake of technology. “One of my missions is, ‘let’s automate the process, rather than automate the system’. And that’s where people can expect efficiencies and cost savings. To use software and handheld terminals with conventional warehouse equipment – normal forklift trucks, normal racking, normal pallet handling, pick to voice, pick to light – I call ‘automating the process, rather than the system’. This can carry enormous benefits. This is what is happening now in this part of the world.

Wade Thompson,
Sales and Marketing Director,
CEVA Logistics

When war broke out in East Timor in 1996, food companies supplying the military units were copying Wade Thompson’s supply chain solution. At the age of 22, Thompson had developed a transportation strategy for moving products from Australia to the Sultan of Brunei’s chain of grocery stores through Indonesia’s poor infrastructure. “I then got picked up by TNT and was working on the food and military supply chain to the Indonesian war,” he says. “I ended up moving to East Timor.”

With TNT in Saudi Arabia, Thompson developed the country’s extensive land network from scratch. He also set up IKEA’s home delivery and assembly system in the kingdom.

Today, as Sales and Marketing Director for CEVA Logistics, Thompson continues to create innovative solutions, managing the company’s freight and logistics divisions. “I’m so happy,” he says. “I’m busy as hell, but I’m totally invigorated. I love my job.”

Thompson’s bragging rights include revamping the automated ambient retail system for a major group in Dubai. He and his team designed a conveyor that was able to handle 100 per cent of the diverse company’s brands, everything from ladies knee high boots to small watch boxes. “Based on the back of that, we have then been able to roll this design out with another two Arab businesses,” says Thompson. “This is an innovation that will be coming into the market.”

Thompson makes effective use of technology, in particular, CEVA’s Click software, which tells you exactly where to place a pallet based on its space requirement and rate of use. “We use this software to produce more space,” says Thompson. “Customers before would charge for a full CBM. If a customer only had a half cubic metre of space, we would charge for a full cubic metre and lose the other half cubic metre. Our business was running at a loss through us not being efficient enough.”

He applied Click to a fashion retail customer, with outstanding results. “They were doing just over 2,000 units a day with 13 staff,” says Thompson. “Now they’re up to 12,000 units a day. On a good day, when they’re on overtime, they can go up to 17,000 items, just through the implementation of this IT system.”

He has a passion for fashion logistics and has spent time studying from the best fashion retailers in Europe, including Christian Dior, Zara, Mango, Massimo Dutti and Diesel.

Thompson also has several other innovative projects in the works, but they are top secret until deals are signed and government approval is earned.

Vincent Brank,
Executive Director – Group,
Swift Freight International

Most people would consider freight forwarding a relatively simple business – moving goods from A to B in the most efficient manner at the lowest price. But, as Vincent Brank, Group Executive Director for Swift Freight International, demonstrates, the industry leaves plenty of room for creativity.

Innovation in freight forwarding is usually brought on by customers’ conundrums, for example the congestion in Far East airports which brought on Swift Freight’s Sea-Air Model (SAM) from Asia to Africa through Dubai. “Air freight was a huge problem, as there was no capacity in Hong Kong, Bangkok or Singapore,” says Brank. “Shipments were coming in two or three lots.” Air freight that should normally take seven days would show up in 18 to 25 days, he explains.

So in 2006, Brank led the development of one of his company’s biggest products, shipping cargo by sea from Hong Kong to Dubai, transiting in Dubai and air freighting to Lagos. Customers were taken aback. “We said, ‘We’ll do it for you in 18 days at a 30 per cent lower cost,’” he recalls. “The customer said, ‘That’s not possible.’”

Goods, however, made it from Hong Kong to Lagos in 16 days, and SAM to Africa took off. “In the first month, we had two or three tonnes going through SAM,” says Brank. “Now we are doing over 100 tonnes per month.”

While sea-air was already happening from the Far East to Europe, Brank who had travelled throughout Africa for over a decade was the first to make an official scheduled product into the intimidating continent. “No one knew how to handle Africa,” he recalls. “They found the customers complex and demanding and didn’t know how to arrange payments.”

Brank has also stepped out of the box by turning to Khorfakkan Port for SAM, a solution when faced with congestion at Jebel Ali. Freight arrives at Khorfakkan and then is quickly transferred to either Dubai or Sharjah Airport. “These containers are hot-spot containers,” he says. “They are loaded last-in and first-out.”

Another innovation includes setting up shop at the Dubai Flower Centre. Previously, forwarders had been shipping flowers from Africa to Asia through Europe. “We found many of the customers were having problems getting the shipments in good condition, and it was taking a long time via Europe,” says Brank. “We had to attack the market.” Thus, Swift Perishable Logistics was born, cutting around nine hours off the transit time by using Dubai as a hub. “It saves 30 per cent on the airfreight costs, because of reduced transit time and zero pilferage,” says Brank. “Now we are over capacity. The flights are completely chock-a-block. We’ve totally introduced a new product on the market.”

SUPPLY CHAIN MANAGER OF THE YEAR

Rob Kennaugh,
PDO Account Director,
Bahwan DHL Exel Supply Chain

Rob Kennaugh is Account Director for Bahwan DHL Exel Supply Chain, which provides fourth-party logistics services to Petroleum Development Oman (PDO), the country’s leading oil exploration and production company. He manages PDO’s primary logistics activities of cargo haulage and transportation of land-based oil rigs. With the 3PLs he moves 35 oil rigs, very “lumpy pieces of equipment” weighing up to 50 tonnes each, around Oman approximately 400 times per year. Overall the rigs and supplies he oversees travel around 36 million kilometres per year.

Kennaugh says his job is to translate the geologists’ drilling sequence into a logistics sequence. “Maximising efficiency and minimising downtime has been our key value proposition to the PDO over the past 12 to 18 months, because downtime for rigs is very, very expensive.”

His strategies for maximising efficiency include setting a tough target to reduce the time it takes to move rigs by 10 months over a year. That’s 10 months of 30 days, 24 hours a day. “Since January 1 this year we have cut down eight and a half months,” exclaims Kennaugh. “We will surpass our target.”

He has made this possible, in part, by securing rig moving equipment, which can be hard to come by in Oman. “Previously the 3PLs were not encouraged to invest, so we ring-fenced a bunch of rig-moving assets,” he says. “We pay the owners every day for those assets. If they do nothing, we pay them 70 per cent of their daily rate. When they move, they get the other 30 per cent. That means this equipment is ours all of the time. The 3PLs are commercially locked in.”

He has also changed how his business measures its performance. “A lot of the measurements were based on historical averages, but if you manage your business by averages you will get average performance,” he says. “If you measure to the best performance, then you will only ever arrive at best performance.”

Kennaugh also places a heavy emphasis on training and staff development. “I like to empower my team. I like to let people make decisions, even make wrong ones, as long as they make them. I have a very open door. People are more than comfortable to ask for advice.” He has also developed seminars for 4PLs and 3PLs in Oman, and has started a national training scheme to encourage Omanis to participate in the work force.

And what are his strengths? “Apart from being a pretty cool boss, one of my key skills is identifying value-added areas, such as how to streamline savings and how to express the value of logistics savings to your client’s core business,” he says.

Syed Wajihuddin,
Supply Chain & Logistics Manager
and Senior Sales Manager,
Grand Mills for Flour & Feed Co

Since joining Emirates Foodstuff and Mineral Water Company (Agthia) early in 2007, Syed Wajihuddin who serves as Supply Chain & Logistics Manager and Senior Sales Manager has completely revamped the Grand Mills for Flour & Feed Co supply chain.

Improving how the company moves approximately 21,000 TEUs worth half a billion dirhams (more than US$136 million) a year, has helped the company grow phenomenally. In the quarter ending March 31, 2008, for example, Agthia reported an increase in net revenue of 41 per cent and growth in profits of 104 per cent compared to the same quarter of the previous year.

These improvements include converting from a top-down forecasting system to one that moves from the bottom-up. “You start managing your budgets with a realtime forecast coming from each individual salesperson,” explains Wajihuddin. “Each month, a sales man will sit down on a tailor-made system outsourced to an ERP company and he will input a forecast for each SKU and for each customer, predicting what
he will sell in the current month and for the next three months.” Sales and operations then agree on one number – a financial goal for the entire company. Sales, supply chain, finance, logistics, customer service are all aiming to reach this one target. “With any function, the language becomes the same,” says Wajihuddin. “We have developed a culture where people talk one single business plan.”

Wajihuddin has also secured precious transportation for Grand Mills, by partnering with Lloydstar which provides a dedicated fleet in exchange for guaranteed business. “The beauty is that customer services, warehousing and logistics are sitting on the same lot. I don’t need to fax, I don’t need to call.”

With his team, he follows a Myers Briggs Type Inventory profiling system, in which each member’s strengths and weaknesses determine his or her role and objectives. He also leans towards Management by Objectives, which aims to increase organisational performance by aligning goals and subordinate objectives throughout an organisation. Employees get strong input to identifying their objectives, for example targets and time lines.

Under Wajihuddin’s watch, he says Grand Mills is currently fulfilling 98 per cent of its orders, with a 95 per cent on-time delivery rate, usually within 24 to 48 hours.

Hisham El-Sawy,
Supply Chain Director, Saudi
& Bahrain, IATCO , a member
of the Abu Dawood Group

As Supply Chain Director for IATCO, the distributor for Proctor & Gamble in Saudi Arabia and Bahrain, Hisham El-Sawy oversees the order and movement of 50,000 TEUs per year. He has organised these TEUs so precisely, however, that only 17,000 ever see a warehouse. “The rest we ship from the plants directly to the customers,” he says.

As a member of IATCO, El-Sawy has seen his business double in the last four years. “This was sudden growth,” he says. “Nobody was expecting this. We managed to sustain our service levels and grow our profits. This was huge pressure on everybody. To sell a case is easy, you just take a team of people, train them and go and sell. But to build an infrastructure of warehouses and fleets takes a long time.”

In this time, he has overseen the construction of a 12,500 sq metre distribution centre in Jeddah. “This was a breakthrough,” he says. “It is one of the best in Saudi.”

El-Sawy is also proud of building his customer service unit. Last year they received P&G’s “Leading Light” award for excellence in supply chain, due to their effort to reduce shelf out of stocks. His team is also building a “Logistics Services Business Unit” to serve business partners and others, expecting to launch its first services project in Dammam this month.

The company owns hundreds of vehicles, ranging from three to 24 tonnes, but it also leases vehicles. “We own our own fleets and outsource,” says El-Sawy. “Our volume is huge, so we are able to work with both.” He is currently in the process of introducing SAP to manage some of these vehicles, and will start to migrate to SAP as a platform for the whole company.

Demand planning can be complicated when dealing with such a wide range of products. “Forecasting depends on the brand,” he says. “We are focusing more now on bottom-up. With some brands like chocolates, they are too sensitive for a push model, we use a pull model.”

Another challenge is keeping his more than 250 employees on the same page. For this, he uses a monthly booklet called the ‘Canvas’, which states company plans. “Whatever we agree on is in this booklet,” he says. “This is the guide. Everyone goes through it and takes whatever is relevant to his function. We guarantee that everyone is working according to it.”

And he appears to be a team player. “I’m very much a people guy,” says El-Sawy. “I like to be with my team. I very much focus on people who are stars. I spend a lot of time on a one-to-one basis with my team. This is what takes most of my time.”

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!

Kathryn Semcow
Editor
kathryn.semcow@dvvmedia.com

With the abundance of heavy trucks on the GCC roads today, one rarely takes the time to consider the qualifications of these load hauling drivers. Before truckers receive the necessary category four license, they must partake in a rigorous seven week course in which they receive classroom instruction, testing, vehicle simulation and controlled and open-road driving lessons.

To date, the Emirates Driving Institute remains the largest and most successful driving institute in the Middle East. Based in Dubai, the 50,000 sq metre headquarters is bustling with aspiring couriers of cargo, both young and old. With an unquenching demand for certified heavy haulers in the region, the institute remains packed with applicants who are fully aware of recent trucker pay increases and job availability. Offering courses in heavy motor vehicles, heavy bus, light motor vehicle, motorcycles and forklifts, it seems as though anyone interested in attaining these abundant employment opportunities must come through EDI.

Additionally, the ISO certified institution retains close ties with The Motor Industry in the United Kingdom, The Institute of Advanced Motorists of the UK and the German Cultural Institute for Driver Education, and takes great pride in its reputation abroad.

I was fortunate enough to take a day course offered by EDI in heavy vehicle trucks and learned just what makes this course so renowned. My instructor, Khalid, was a well-built man in his late 30s and was as professional as he was instructive. By the
end of the day, I was required to have memorised the 19 elements for passing a driving test. This was no easy feat, however the elements’ usefulness remains unquestioned.

After our session in the classroom we were on to the driving simulators. I was amazed at the level of technology used as all monitors used were state of the art with up to the minute graphics translating to successful recreations of real life road conditions. The simulators were a favourite of the other students as well.

Finally, the time came where I could drive the big rig, with my instructor of course. Taking a drive around the enclosed track, the sheer mass of the vehicle quickly reminds me of the caution I must use. That, and Khalid sitting next to me with a keen eye on my driving (as well as any innocent bystanders).

After our session, I had a chance to ask Khalid a few questions about the trucking industry here. He was quick to attribute EDI’s rise in applicants to the UAE’s booming market and companies looking for qualified personnel. The labour shortage extends to certified heavy truckers as well and subsequently EDI’s applicants have indeed been steadily growing. Some companies have established contracts where their drivers’ education is paid for. However, more often than not, EDI’s fees are paid by the students themselves. This creates a level of stress on drivers, says Khalid, as they feel they must pass the first time because they cannot afford a second opportunity.

After a long valuable day at EDI, I can say I feel like a more astute driver. Though the chances of me getting on the open road behind the wheel of a 20-tonne hauler remain slim, I do have a new appreciation for those who do. And I still haven’t forgotten about those 19 elements.

Requirements: The minimum age for participation in the heavy vehicle course is currently 20 years old. Those interested in signing up must bring in their original passport with a valid Dubai visa, seven passport size photos, and a no-objection certificate (NOC) from their sponsor.

Those 19 elements: What you need to know to pass a heavy truck driving test:

1.  Vehicle starting
2.  Use of gear
3.  Proper stopping and parking
4.  Obedience to traffic lights, traffic
     signs and pedestrian crossing
5.  Applicant causing a serious
     danger (hazard)
6.  Precautions before starting the
     vehicle (seat belts)
7.  Use of clutch, accelerator, brakes, mirrors and hand brake
8.  Use of indicator, hand signals
    and horn
9.  Left turn, right turn and U-turn
10. Emergency stopping
11. Lane discipline and lane changing
12. Approaching junctions,
     roundabouts and traffic lights
13. Yielding to pedestrian crossing
14. Maintaining speed limit
15. Over taking
16. Maintaining safe distance
17. Ensuring that the road/
     roundabout is clear before entering
18. Control of the vehicle and
     attentiveness
19. Stalling