DP World’s much publicised Jebel Ali Port is already congested. But there’s hope in the form of a second phase

Jebel Ali hasn’t had the easiest of years, with Dubai’s ongoing growth and the closure of Port Rashid causing berth congestion at DP World’s flagship port. Reports of ships being kept waiting up to 10 days just to find a slot have made it a trying period for shippers and carriers alike.

DP World’s volumes for Jebel Ali and Port Rashid topped 5.8 million TEU in the half year to June, a 17 per cent increase, with rising loads from Australia, India and Middle East. Jebel Ali’s volumes alone rose by 22 per cent in the six months to June 30, a rate which any port globally would find hard to sustain.

The decision by the Dubai government to redevelop Port Rashid for urban real estate and maritime activities, such as cruise tourism, prompted its closure and the switch of traffic further south – and this understandably further increased pressure on Jebel Ali’s operation.

Nothing stays the same for long in Dubai though, and respite may not be too far away. The port will continue to roll out the second phase of new capacity, totalling five million TEUs by February, taking overall capacity to 14 million TEUs. With its 17 metre draft capacity, Jebel Ali can cater to the next generation of ‘mega ships’ that exceed 13,000 TEUs – and with more emphasis on large vessels, that should mean fewer ships calling and theoretically, less congestion. One ship alone, the Grete Maersk, docked in July with a capacity of 8,200 TEU.

Remember Jebel Ali isn’t just serving growing container volumes. With all the major development projects on the go, including the construction of the AED121.2 billion (US$33 billion) Dubai World Central close by, the Middle Eastern hub is also dealing with increasing heavylift cargoes such as steel rebars, coils, plates, channels, angles and pipes. Dubai’s non-oil direct foreign trade jumped by 54.3 per cent during the first half of this year, and Jebel Ali is very much at the ‘coal face’ of dealing with this growth.

It’s not alone in facing challenges. Jebel Ali’s trials are all part of a wider GCC picture, in which the chief challenge facing port operators is providing enough capacity quickly enough to serve the region’s booming economies.

The Pearl Oil Project is requiring huge volumes to be delivered at Qatar’s Ras Laffan Port, which is struggling to keep pace with demand, and business leaders have been calling for urgent action to improve congestion at Jeddah Islamic Port, which is forcing many vessels to find alternative routes.

None of this is much consolation for shippers though, who are not only having to deal just with capacity constraints but also rising costs. A 20-foot container at Jebel Ali now costs AED750, up from AED380 in February last year, and 40-footers have risen to AED870, compared with AED460 at the start of the year.

Importers were additionally hit, as they weren’t able to raise the cost of goods following a decree by Dubai Municipality not to hike prices during the holy month of Ramadan.

All of which means logistics companies are having to put on a brave face at the moment. But with more capacity coming on stream, the tide should start turning by next year.

Cranes, construction and more cranes

Thanks to the continuing boom in its economy, the UAE has now seemingly become one major construction site. And the ripple effect of the construction phenomena has extended to project cargo.

In freight terms, project cargo means the movement of goods that are too big or too wide for a standard container. Traditionally, project cargo dealt with moving heavy equipment for the oil and gas sector. Now, although still considered a niche market, project cargo has grown from strength to strength in this part of the world, mainly because of the increased demand brought about by the diversity of projects.

One of the major reasons Barloworld Logistics acquired Swift Freight International is the company’s consistency and capability in providing logical logistics solutions, including in moving heavy duty cargo.

Although very young in the business of project cargo, or Project Management & Handling as we call it, Swift has dealt with of some of the most challenging projects, such as moving equipment for the Palm Island in Jumeirah. We also manage continuous assignments from loyal clients like leading engineering company ABB Group, by moving power transformers of various tonnage, measurements and dimensions from outside the country to manufacturing plants mostly in Abu Dhabi and Al Ain.

And looking at the lineup of UAE’s projects, such as Dubai Logistics City, Dubai Maritime City, Al Reem Island, Hamriya Free Zone expansion, Masdar City and Sadiyat Island, among others, it is not difficult to understand the country’s huge market potential for the transport logistics sector.

Swift has only been into project cargo for around six years, and although we have a dedicated fleet capable of handling heavy and oversized cargo, challenges are as abundant as opportunities in this industry.

For example, being situated in the Middle East, we have to overcome unique climatic conditions, such as sandstorms and extreme heat. Add this to worrying about the integrity of the shipment while meeting the timelines of the client. Indeed, project cargo is a massive undertaking that requires specialised cargo forwarding expertise.

Beyond heavy lifting In recent years, Africa and the Indian Sub Continent have become important destinations for project cargo and we see more and more companies setting up in the country to take advantage of the strategic location of Dubai as a transshipment hub.

As the project forwarding industry continues to grow bigger and branches out into new markets, the needs of the clients have also become more sophisticated.

Beyond heavy-lift resource equipment, value-added services are expected. At Swift, we have clients require delivery from origin to job site with export packing, customs clearance and trade documentation. In other instances, clients require warehousing, charters, insurance, managing the quoting process, route surveying and expediting purchase orders.

In today’s global marketplace, the key to survival for logistics service providers is to go further than ensuring clients technological advancement, sophisticated logistics capabilities and precise timing. Following an old school of thought, my idea of maximising the benefits of the burgeoning project cargo industry boils down to more than coordinating cargo movements from origin to destination – what matters is the continuous nurturing of new relationships, while exploring different distribution channels throughout the world.

Warren Erfmann is Group CEO, Barloworld Logistics Middle East and Asia

Although he’ll never admit it, one can guess from a chat with him that Hussein Hachem is Aramex. The GCC CEO’s first job, after all, was with the company, and it may be his last. “Aramex gave me lots of opportunities from the time I joined,” he explains. “It has turned out to be a good decision. Ten years from now, I think I’ll still be around these offices.”

Hussein Hachem, CEO – GCC, Aramex

Hachem joined Aramex in their Management Trainee programme in 1990, right after he graduated from the American University of Beirut.Beirut was recovering from a civil war and Hachem took the job as way to leave the country. At a time when opportunities were limited, Hachem considers himself lucky to have gotten out.

And, luckily, Hachem’s career grew with the company. “When I joined, I was sent to Jordan for eight months of training,” he says. “After that I went to Kuwait to set up a new office. It was very exciting as we were witnessing the construction and rebuilding of the city after the Gulf war.” The company’s growth in Kuwait was staggering, says Hachem – a matter of being in the right place at the right time.

After eight years in Kuwait, he moved on to Sri Lanka, what he describes as the logistics hub of the Indian Subcontinent. Four years later, in 2002, he moved to the UAE. “When I came to Dubai, I was handling Dubai and the Northern Emirates, then I moved to handling UAE and Oman and now I’m running the Gulf,” he says proudly.

Hachem even refuses to talk about his himself without taking Aramex into consideration. In fact, he knows himself very little outside Aramex. “I do not know myself as a professional outside the industry because I haven’t worked anywhere else,” he says.

The courier business is his comfort zone. “I’m a demanding, aggressive and results oriented person,” he says. “For me things have to happen now.”

But he is not fiery enough to shout at his staff. He believes in nurturing his employees, giving them the right work environment and a satisfying career path. He feels because Aramex has been around – through price fluctuations, depression, war – the company has been able to evolve its culture, its leadership and its customer confidence. This in turn has given employees an environment of transparency, mutual support, competitiveness and aggressiveness.

Hachem says, “We let our new recruits exercise their ideas. We self-criticise and challenge each other for the best of the company. It’s not an individualistic but a group approach.”

Being in an industry where every minute counts, Hachem says that he is accessible 24/7, even when he is on holiday with his family. But he enjoys spending time with them most. After seven years in Dubai, he feels he is at home.

Hachem also seems comfortable with his routine, commuting from Barsha to either the Aramex office near the Dubai Airport or the office in Jebel Ali, if he is not travelling. And by 10:30 am, he is on his third cup of coffee. “I like my coffee,” he says, “and I like to smoke.”

Sea transportation of hazardous goods is a lucrative business. But in order to make profits, necessary safety expenditures need to be in place otherwise profits would be as far away as the horizon

The oil and gas sector has always been a big payer for the Middle East transport (sea/air/road) industry. The number of transport vehicles and ships catering for this sector are increasing on a regular basis. However, for those wishing to indulge in this thriving industry, it is important to remember that the million dollar contracts come with a hefty responsibility to ensure maximum safety standards in the transportation of hazardous cargo.

Hence, it is imperative for those involved in international transportation (including shipping) of such cargo to ensure their procedures meet with international regulations. The International Maritime Organisation (IMO) provides a series of guidelines on tanker safety and the prevention of accidental pollution.

Fortunately, awareness of such issues in the region’s sea freight industry appears to be running high with many ship owners and operators actively looking to improve the quality of service, safety and environmental protection standards.

For example, the Emirates National Oil Company (ENOC) hosted its first Marine Environment, Health and Safety (EHS) conference in Dubai last year – aiming to share best practice and quality assurance. ENOC is just one of many oil companies keen to unite with the sea and road freight industry to ensure that it is operating in a safe and environmentally sustainable way. At the conference, Yusr Sultan, Chief Executive Officer of the company’s terminals, shipping and LPG division, told delegates, “ENOC believes marine EHS performance is a partnership between the various parts of the supply chain.”

At the end of the day, accidents do happen and will continue to happen during the transportation of hazardous goods. However, with the correct safety measures in place, the likelihood of this can be nearly eliminated.

All that is required is a major commitment from companies dealing with the land and sea transport of dangerous goods – and the region itself certainly appears to be upping its game to achieve this.

Alex Borg, MCIPS (Stam) MIM MILT UK, is a trainer and consultant in logistics and supply chain management. He is also the Executive Director and Co-ordinator of CILT – UAE Council in Dubai (www.ciltinternational.com).

With shorter work hours and regular deadlines, how does anything get done during the Holy Month?

Meeting Ramadan deadlines is challenging for all Middle Eastern companies, given the shorter working hours and allowances for Muslim staff who are fasting and praying. But for logistics companies, the Holy month can present additional challenges, since global trade never stops and the industry, in any given month, ticks to a 24-hour beat.

This Ramadan effectively means an even longer summer than usual. But with all GCC countries tied up in a plethora of infrastructural, real estate and energy-related projects, and the peak season around the corner, it’s unlikely to be a quiet time for the logistics sector.

But ultimately, everything slows down noticeably across the Middle East, and that’s why one decision taken in one office – “the manager is out now, sorry, you’ll have to wait” – can soon impinge on the operations of another. That said, it would be wrong to see Ramadan as ‘anti business’ it’s quite the opposite. Many managers see the chance to network after sunset over a leisurely iftar or sohour meal, as particularly beneficial. In these CSR-conscious times, it works out to be the perfect opportunity to showcase a company’s charitable or humanitarian credentials.

As it’s a convivial, interactive month, ideally sales teams should tear themselves away from their emails and blackberries and see key clients face-to-face. They should catch up with old contacts and make new ones. It’s a month of spiritual reflection at heart and a good time for everyone to reflect on where they’re heading.

For express operators, the biggest issue is working out the vagaries of the traffic flows in their immediate neighbourhood and making allowances for roads becoming clogged in the pre-iftar rush. Employees out and about on deliveries or meetings also have to make additional provisions on where and when they will eat – for most, the ‘no eating or drinking in public during daylight hours’ isn’t restrictive, but it can pose challenges for drivers who are out on the roads for hours on end. It’s also a dangerous time of the year to be on the roads, with impatience, hunger and fatigue fuelling accident rates.

Agility strives to make sure it’s ‘business as usual’ during Ramadan and that its customers’ SCM requirements remain unaffected. Ali Mikail, Country Manager, Kuwait, says the key is to prioritise tasks and realign resources to meet operational demands.

The challenges vary for specific operations, for example, co-operatives see a surge in demand for foodstuffs, so its warehousing facility operates round-the-clock to ensure speedy and efficient delivery of items. On the other hand, freight logistics works closely with clearance of import shipments through port/airport, and deliveries for military cargo must match mission objectives.

“We lay emphasis on our people and in view of this, we try our best to maintain shorter work hours for our employees, especially those that work outdoors in field operations,” says Mikail.

From top-down to bottom-up, Grand Mills for Flour & Feed Company is harvesting the benefits of a new supply chain

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

If flour and water are two of man’s most basic needs, imagine the demand for these products in the booming UAE market. Perhaps this is the reason for Emirates Foodstuff and Mineral Water Company’s (Agthia’s) financial high. In the quarter ending March 31, 2008, for example, the Abu Dhabi-based entity which includes Al Ain Mineral Water and Grand Mills for Flour & Feed, 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.

Or perhaps these staggering numbers come in part from Agthia’s new supply chain. In the past year and a half, new management has entirely changed the company’s structure, says Syed Wajihuddin, Supply Chain & Logistics Manager and Senior Sales Manager, Grand Mills for Flour & Feed Co, over pizza in his office at the factory in Port Zayed.

“When we joined this organisation, it was not a supply chain organisation, so we built it from the basics,” he recalls. “There was no planning function. The organisation was running on order-based production.”

Wajihuddin, who has worked for both Gilette and Unilever, says his team started from the top down.

“We put in place a supply chain unit and demand planning function. Then we started building on the sales business intelligence, based on averages, seasonalities and trends. This top-down forecasting system gives you visibility as a business unit in terms of a sales forecast across a rolling period.”

But once this orthodox system was up and running, it was time to change again.

“In quarter one of this year, we moved to bottom-up supply chain forecasting, which was always my dream,” says Wajihuddin.

“You start managing your budgets with a real-time forecast coming from each individual salesperson,” he explains. “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.”

Each salesman’s forecast is then tallied to create a total sales forecast.

“A bottom-up forecast challenges the business intelligence of an organisation, because it comes directly from its roots,” proclaims Wajihuddin.

The demand planner then consolidates these numbers, sanitises them, reviews any variances and passes the forecast on to the sales manager. The sales manager reconciles the data and agrees upon a final number with the supply chain manager.

“Sales people tend to get excited, so you tone the numbers down,” explains Wajihuddin. “If a sales guy is not enthusiastic, he does not belong in sales. If a supply chain guy is not logical, if he is not thorough, he does not belong in the supply chain.”

This unconstrained demand plan then goes to the production planner who determines the feasibility of the forecast and formulates a rough cut capacity plan (RCCP). “RCCP tells you if you need to make a long-term investment decision, or if you need to manage within given operations by pre-poning and post-poning production,” says Wajihuddin.

The RCCP helped his team decide to outsource certain stages of production. “We needed support with packing for the feed business,” he admits.

Wajihuddin insists bottom-up forecasting is highly accurate and detailed. “When you get to the level of forecasting each SKU by each customer, it’s amazing,” he exclaims. “Immediately you start having more analytical power within your organisation. Which segment is growing the most? Which sales guy is bringing in the most business? With which customers are we losing sales? With which customers are we increasing sales? Which are the exact SKUs we need to rationalise or discontinue? Where are the sales guys failing to focus? This comes from the ground.”

The finance team then reviews the demand and supply plans and converts them into financials, focusing on costs, profits and inventory, asking, ‘Do we see a gap?’” says Wajihuddin. “Fortunately, we as a company are doing so well that we need to fill a gap on the production side,” he adds.

Lloydstar provides Grand Mills with a dedicated fleet

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.”

He says this bottom-up forecast clarifies ownership amongst company departments and tells them exactly what they have to do: “We know that we need to deliver that one single number.”

This new supply chain has brought the company a reality check, according to Wajihuddin. “You bring people so close to the reality of the business that all the flashy slides and power point presentations mean nothing,” he says. “What makes the difference for us at Agthia is numbers. Reality. We don’t like butterflies. We like things on the ground.”

Stocking up Wajihuddin says accurate forecasting helps the organisation know exactly how much inventory it needs to keep, and how many pallets to spare. “Warehousing functions are then aligned with the requirements. Each unit knows how much it will stock.”

This comes in handy in a touchy grain market. “Grain buying is very strategic, so at times it is not linked with your planned demand. In some situations you buy for the next nine months. Other times, you buy for only one month,” he says, explaining that grain has an extended shelf life.

“You can then take the money you saved and put it into sales and marketing, rather than focusing on inventories.”

On the ground When faced with a scarcity of transport providers in the UAE, Grand Mills came up with its own solution – partner with a transport provider who will supply a dedicated fleet in exchange for guaranteed business.

Grand Mills processes its grain on site

Wajihuddin’s team convinced Lloydstar to set up an office on the Grand Mills premises. “We told them, ‘Listen, why don’t you outsource your fleet to us? This is our full year requirement, this is our monthly spread, this is our daily spread and this is our SKU spread. This is the proper number you need to deliver, with variations of 10 per cent.’”

He says the two companies no longer work on an invoice-by-invoice basis. “That can be very tedious,” he explains. “Imagine you make up to 5,000 shipments per month. Each invoice has to be checked, signed and paid – so much complexity.”

Instead, Lloydstar hands Wajihuddin one invoice per day to keep track of shipments.

He says having a transportation company on site makes life at Grand Mills much easier. “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.”

And the well-established relationship with Lloydstar benefits Grand Mills’ relationship with its customers. “Logistics is the physical contact between you and your customer,” says Wajihuddin. “If you fail in logistics, you have actually failed physically.”

What would you do with a billion dollars? The UAE Red Crescent Authority is using it to save the lives of thousands, perhaps millions, of people

Dr. Saleh Moussa Al Taee, Secretary General, UAE Red Crescent Authority

While the UAE may be a small country, its Red Crescent Authority is larger than most other Red Crescents or Red Crosses.

“Our organisation is the second largest and most powerful in Asia,” says Dr. Saleh Moussa Al Taee, Secretary General of the UAE Red Crescent Authority (RCA), referring to the 185 other members of the Federation of International Committee of the Red Cross (ICRC). “We are also number four in the world, in terms of the amount of relief and emergency support we supply.”

The UAE RCA has activities in 135 countries and larger projects in 35 countries. “Our organisation not only does relief action,” explains Al Taee, “we also build cities and hospitals, amongst other things.” He estimates that the charity has touched the lives of “millions”.

Al Taee says the RCA’s biggest projects are in Palestine, for example, for the redevelopment of Jenin. “We built up the city completely, including 230 flats for the needy, as well as schools, hospitals and mosques.”

They also developed Sheikh Zayed City in the Gaza Strip. “Everyone is talking about problems in Gaza, but we have many projects there,” says Al Taee. “We have two hospitals, one city and we have a small, small clinic.”

But the Red Crescent helps more than Muslims. “We are not looking at the colour or religion or geographic area of the people we help,” he says. “For example, following the South Asian Tsunami, we worked in Phuket, Thailand. They are not Muslims, yet we built and bought many things for them.” He says they have even built Buddhist temples in Sri Lanka.

While most of the UAE RCA’s efforts have focused outside the UAE, Al Taee says they plan to start looking inwards as well. They will, for example, start offering their mobile open heart surgery team free of charge and work to increase health awareness in the country.

He says money for charity flows quite freely in the prosperous UAE. “We are lucky that our Chairman, His Highness Sheikh Hamdan Bin Zayed Al Nahyan, pays from his pocket. And his mother, Her Highness Sheikha Fatima Bint Mubarak is also with us.”

In fact, between 2002 and 2007 donations from wealthy individuals and the UAE government allowed the UAE RCA to spend over US$1 billion outside the country.

“You can buy five fighting planes with this money,” says Al Taee. “But we are saving thousands of people with it.”

For fleet managers, nothing is more important than keeping vehicles running and productive. Maintaining vehicles, including repair, upkeep and downtime, can have a huge impact on a fleet’s bottom line. A proactive, preventive maintenance programme can help fleet managers keep vehicle repair costs and downtime to a minimum

Many fleets simply take a reactive approach to vehicle maintenance because they do not have access to the right tools. In a widely distributed fleet, that could mean costly repairs, not to mention vehicle downtime. Fleet managers need to be able to monitor and collect data on the “health” of their vehicles to fix problems early and reduce costs.

Scheduled maintenance Even simple maintenance like regular oil changes can help reduce engine wear and make the vehicle run cooler and last longer.

Setting preventative maintenance schedules requires knowing the type of vehicle, the usage (mileage, hours, operating environment), OEM warranty, recall status and regulatory requirements. In addition, it is beneficial to know the types of diagnostic problems that typically occur with different vehicle types.

Vehicle performance Information on individual vehicle performance on the road is vital to reduce maintenance costs. For example, when trucks are travelling in high heat and steep grades; monitoring the temperature of the engine, the air intake temperature and oil pressure can help fleet managers gauge engine performance. Having access to statistics on vehicle diagnostics over time is also important to determine if a vehicle is performing optimally.

Fuel economy Improving vehicle performance through preventative maintenance can improve fuel economy. Monitoring unauthorised vehicle use, excessive speeding, mileage and idling can also greatly reduce fuel usage. Repairing a vehicle that is out of tune can improve its gas mileage by an average of four per cent. Furthermore, fixing a serious maintenance problem, such as a faulty oxygen sensor, can improve your mileage by as much as 40 per cent.

From the whitepaper “Optimising Fleet Maintenance with Wireless Vehicle Management” by Networkcar.

Ever wondered about the charity supply chain? Or even its logistics? Charitable activities heat up during Ramadan, Fahad A Rahman Bin Sultan with the UAE Red Crescent

Ramadan, being a time for introspection, for cleansing one’s soul and for peace, is also a time for giving. It is a month in which piety, asking for forgiveness and charity are advised in abundance. These are things to be done all year, but the month comes with a mission to make people mindful of these qualities.

The UAE’s Red Crescent Authority speeds up its activities of spreading cheer, peace and charity in Ramadan, but that does not mean they are idle at other times. Ramadan or not, their logistics office in Jebel Ali Free Zone is a full house.

And Fahad A Rahman Bin Sultan, Manager, Red Crescent Humanitarian Logistics Centre, Dubai, is at the centre of this.

But he’s not complaining. In fact, he might have more job satisfaction than anyone else in Dubai, as his days are full of stories of goodwill. “Working in charity, there is no pressure,” he says. “You do your job because you are driven out of the peace that comes from seeing someone in need happy. It’s selfish.”

“We are here because of the donors,” he continues. “There is so much good in this world, it cannot be expressed.”

His team starts preparing for Ramadan two months in advance. “Usually, we have some very rich people who approach us who want to have Ramadan tents providing free iftar daily for everyone,” he says.

Bin Sultan’s office then takes it from there, contacting restaurants and tent suppliers, scouting for suitable locations to set up the tent, as well as sources of electricity, furniture and carpets. When the Red Crescent has the final cost of the iftar, they contact the donor who provides the financial backing. An iftar meal for one person costs about AED15 (US$4). A tent generally feeds thousands daily.

“You don’t have to provide a tent, we are here for donors from all walks of life,” says Bin Sultan. “If you want to donate a meal for one person or 10, it is up to you.”

For the convenience of all, the Authority provides drop boxes at supermarkets and malls, so anyone can give whatever they are comfortable giving. At different locations volunteers collect money for iftar, zakat (financial support), sponsoring an Eid meal, or Eid clothes.

“Our government helps out a lot, too,” says Bin Sultan. “They’ve provided us with unlimited supplies of air conditioners and fridges to provide to those who need them to beat the summer heat. There are a lot of people who are not exactly needy but this kind of assistance helps. In the charity business, we have to be careful of recognising who the real needy person is, as a lot of people approach us. To establish the truth, we do our own research, of course.”

UAE Red Crescent Authority helps in times of crisis and provides general aid

The UAE Red Crescent also does work outside the UAE. “We have been given directives by the government to prepare to send supplies two months in advance, things such as dates to surrounding Muslim and non-Muslim countries such as India, Yemen, Africa and other Middle Eastern countries, as all have Muslim populations,” says Bin Sultan.

The Red Crescent charters planes in times of crisis, but also to transport Ramadan essentials. “Chartering works out to be a better solution for us rather than having our own air crafts,” he says.

What about unavailability of flights when a disaster strikes and there is a worldwide rush to provide aid to the needy country? “We do not wait,” says Bin Sultan. “The minute there is an appeal from a country, we move in any way we can. If there are no commercial flights available, then we send a few of our volunteers with cash to the strife-affected region. There we start buying the necessary items and distributing. Within three to four days when we get a flight available, we have another delegation go over with more essentials.” But they have a different modus operandi when the disaster struck country does not appeal for help. “Recently, when there was an earthquake in Sichuan, China, they did not appeal for three to four days,” says Bin Sultan. “In cases like this, we can do nothing. In crisis when countries don’t appeal, it could be because they think they are capable of handling the repercussions themselves or they are so overwhelmed they do not know what to do.”

Eventually, the Red Crescent approached the Chinese government with support and were accepted into the country. “The disaster-affected area was in the mountains so it was also a logistical nightmare to reach it,” says Bin Sultan. “The existing roads had collapsed.”

During the Southeast Asian Tsunami, the Authority was flooded with offers of support by UAE residents. Even people with very few clothes washed the few pieces they had, packed them and brought them to the logistics office to be sent to the affected areas, says Bin Sultan.

A shipping company offered its services free of cost, another company supplied around 75 to 80 containers and yet another offered its staff members to sort and pack all items to be sent. All this help resulted in about a 1,000 tonnes of aid.

Over the years, experience has led the Red Crescent team to keep warehouses stocked with essentials like non-perishable food products, mattresses, tents, blankets and to also have enough trained volunteers on their files. This prevents them from wasting time looking for supplies and manpower in times of disasters.

Bin Sultan says that the location of their logistics centre in Jebel Ali is crucial as it provides close proximity to all airports (approachable in about an hour). With Dubai World Central, things will get even better. The Jebel Ali office also provides close proximity to factories of essentials, making it easy to purchase large stocks. The same applies to their warehouse in Abu Dhabi.

HELP OUT

The UAE Red Crescent Authority accepts donations at any of their branches in all seven of the emirates. Those interested in donating their time can also fill in volunteer application forms.

www.log.ae

Iran wants a more active role in international markets. But will its goals of relaxing established trade regulations come to fruition?

Pick up any major newspaper and chances are Iran is headlined, in not so pleasant terms, on the front page. With so much negative press about the Islamic republic’s ‘ambitions’ it is often difficult to decipher
any substantive, unbiased information on the country. Yet as one of the world’s oldest civilisations, most experts agree that Iran remains largely untapped potential. So what gives? Well, self imposed regulatory hurdles and crippling western sanctions aren’t doing its economy any favours, while the looming threat of war assuredly wards off any potential investors.

And while possessing 10 per cent of the world’s proven oil reserves, and 15 per cent of natural gas reserves, Iran’s economy remains predominantly government administered, though a more liberalised approach remains the topic of much debate.

Iran’s main port is Bandar-Abbas on the Strait of Hormuz. Other major ports include Bandar Anzali and Bandar e-Torkeman on the Caspian Sea and Korramshahr and Bandar e-Khomeyni on the the Persian Gulf

Consider that today, with a population of 70 million, more than two-thirds of Iranians are under the age of 30, and boast an 80 per cent literacy rate. But with the average salary just US$2,700 a year, many young Iranians are leaving for greater opportunities abroad. The subsequent ‘brain drain’ is not going unnoticed by the government. According to Manouchehir Kabiri, the Director General of Iran’s Management and Planning Organisation’s Commerce Department, Iran’s current Five-Year Economic Development Plan (2005-2010) hopes to create more opportunities for its youth, while opening up Iran to outside investment.

“The focus will be on expanding trade interaction with the global community and pursuing an active presence in international markets,” says Kabiri. “To achieve this would require raising exports substantially.”

Iran’s major trade partners include China, Germany, South Korea, Japan, France, Russia and Italy. From 1950 until 1978, the US was Iran’s foremost economic and military partner; thus participating greatly in the modernisation of its infrastructure and industry. After the Iranian Revolution in 1979, however, the US ended its economic and diplomatic ties, banned Iranian oil imports and froze US$12 billion of Iranian assets. In 1996, the US government passed the Iran and Libya Sanctions Act (ILSA) which prohibited US companies from investing and trading with Iran, with the exception of pharmaceuticals, medical equipment, caviar and persian rugs.

So just what is Iran producing for export these days? Petroleum and petroleum chemicals, automobiles, agricultural, utilities, pharmaceuticals, textiles, construction materials, metallurgy, armaments and electronics are recognised as the largest industries.

In 2007, Iran’s GDP was estimated at US$206.7 billion. In 2008, about 55 per cent of the government’s budget is expected to come from oil and natural gas revenues, and 31 per cent from taxes and fees. The service sector contributes the largest percentage of the GDP, followed by industry (mining and manufacturing) and agriculture.

“Pistachio and saffron are traditionally the main agricultural products sold overseas,” says Kabiri. “Also in recent years, Iran has secured a foothold in fruits, vegetables and flower markets.”

Determined to increase exports, Iran is seeking to better utilise its free trade zones. Approved by Iranian Parliament in September 1993, Kish Island, Qeshm Island and the Port of Chabahar are the only designated free trade zones, though many liberalised economic zones currently exist as well.

“So far, free trade zones have acted as import channels,” says Kabiri. “The Economic Plan tries to change that status and make their activities export-based and to aim for global industrial production.”

Pistachios and saffron are Iran’s main agricultural exports

With the abundance of free trade zones springing up throughout the Middle East, Kabiri acknowledges that competition for investment will be stiff.

“One has to admit that Iran’s free zones are not able to rival those in the nearby states,” he says.

“Performance of Iran’s free trade zones has an impact on social, political and economic parametres, which is not the case on the other side of the border. What the government has tried to do within the Economic Plan is to continue eliminating import incentives and push for trade liberalisation policies.”

On the domestic front, Kabiri says the priority is on improving the overall situation; i.e. regulating the domestic market on the one hand, and maintaining a well functioning supply of basic commodities on the other. The latter would need improving the subsidy distribution system to relieve the government of the huge financial burden on subsidy payments. Another obligation the plan places on the government is to provide economic justification for the pricing of basic commodities and public services.

“By offering modern trade services, the government hopes to win the confidence of foreign investors and open the way for foreign banks and insurance companies to set up branches in the free trade zones,” says Kabiri.

One central issue when debating Iran’s trade sector these days is joining the World Trade Organisation (WTO). Since 2005, Iran has faced resistance from the United States, consistently blocking any Iranian attempt to join the WTO, citing among other things, copyright infringements.

“Discussions about joining the World Trade Organisation are high on the agenda,” says Kabiri. “Officials and experts continue to advise against protectionist production policies which they say contradicts principles and guidelines of the World Trade Organisation.”

Yet, if Iran does eventually gain membership status in the WTO, copyright laws will have to be obeyed. This would require a major overhaul of business and trade operations in Iran, a change which many experts believe would be a price too heavy for Iran’s economy to pay at the present time. Still, Iran is hoping to attract billions of dollars worth of foreign investment while creating a more favourable investment climate, such as reduced restrictions and duties on imports and the creation of free trade zones like Qeshm, Chabahar and Kish Island. Time will tell whether Iran gets its wish.

So Iran’s desire for liberalisation and modernisation is apparent, but what about its infrastructure? Currently, it has an extensive paved road system linking most of its towns and all of its cities. In 2007, the country had 178,152 kilometres of roads, of which 66 per cent were paved. There are 55 passenger cars for every 1,000 inhabitants. However, one statistic you won’t hear the Iranian government praising is the rate of road accidents. Iran ranks first worldwide in terms of having the largest number of road accidents claiming 38,000 deaths in 2007. In fact, road accidents account for the majority of deaths in Iran and are perhaps one reason the government is eyeing rail transport as a possible solution.

President Mahmoud Ahmadinejad is acknowledging the need to further develop public transportation systems. As the average journey length currently for both passenger and freight is approximately 600 kilometres, the country remains ideally suited for rail development. To date, passenger tariffs are heavily subsidised and budgetary allocations for rail transport for 2008-2009 are poised to double. According to the Iranian government, the objective is to double its existing 8,300 kilometres of line. At the moment, the rail network is basically single track and there is substantial capacity shortage on several main routes, accentuated by inadequate levels of signalling. Only the Tehran area lines are double track including those going from Tehran to Mashhad and from Tehran to Qom. A programme of track doubling is in hand between Bafq and Bandar Abbas (613 kilometres) and all other routes remain under consideration. The government is financing rapid development of the rail system but rolling stock provision and managerial capacity has not kept pace with the growth inhibiting overall development. Not to be overlooked remains the lack of private investment coming in, compared to the likes of Saudi Arabia or UAE.

The country’s major port of entry is Bandar-Abbas on the Strait of Hormuz. After arriving in Iran, imported goods are distributed throughout the country mostly by trucks and freight trains. The Tehran Bandar-Abbas railroad, opened in 1995, connects Bandar-Abbas to the railroad system of Central Asia via Tehran and Mashhad. Other major ports include Bandar Anzali and Bandar e-Torkeman on the Caspian Sea and Korramshahr and Bandar e-Khomeyni on the Arabian Gulf.

Dozens of cities have airports that serve passenger and cargo planes. Founded in 1962, Iran Air remains the national airline, operating domestic and international flights. All large cities have mass transit systems using buses and several private companies provide bus service between cities. Currently, Tehran, Mashhad, Shiraz, Tabriz, Ahvaz and Esfahan are in the process of constructing underground mass transit rail lines, though the dates for completion are yet to be determined.

For all of Iran’s ambition, the future will be largely determined by external forces. Most notably, war. However, Iran is determined to maintain course, regardless of the potential consequences of her actions or ‘ambitions’. Time will tell whether Iran’s position within the global marketplace will improve, or be left behind.

BY THE NUMBERS

In 2006 Iran had more than seven million vehicles, mostly manufactured or assembled domestically.

Iranian trains operate on 11,106 kilometres of railroad track, though plans call for this to be doubled.

Agriculture contributes to 11 per cent of Iran’s gross national product and employs a third of the labour force.

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UNDER PRESSURE

The United Nations has imposed three rounds of sanctions on Iran over its refusal to halt uranium enrichment, a process the U.S. and others fear it will use to produce nuclear weapons. The sanctions bar financial dealings with 35 companies and impose travel bans and other restrictions on 40 individuals. The sanctions also prohibit shipments of material to Iran that could be used for its nuclear and missile programmes.

U.S. sanctions are stronger. They bar weapons transfers and dealings with a wider range of companies particularly Iran’s top banks although they don’t seek to halt all trade with Iran. In fact, U.S. exports to Iran have increased dramatically during the Bush administration, from US$8.3 million in 2001 to US$146 million last year.

Source: US Treasury Department

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COLD STORE COMPLEX FOR GULF WAREHOUSING COMPANY IN DOHA

Client:                      Gulf Warehousing Company (GWC)
Consultant:               Gulf Engineering & Industrial Consultancy
Contractor:               Amana Contracting & Steel Buildings
Location:                  Doha Industrial Area
Completion Date:       December 2005
Duration:                  8 months
Built-Up Area:           25,000m2
Total Area:              47,300m2
Scope:                    Design-Build

Situated on 47,300 square meters of land, this 25,000 square meters distribution facility is designed to contain over 43,000 pallet positions. The complex is a high-bay facility with an internal very narrow aisle (VNA) racking system and state-of-the-art material handling equipment with a useable height of up to 13.5 meters. The entire facility was designed and constructed in less than 210 days.

The facility offers a number of storage environments including:

• 4,200 pallets of frozen storage (-30ºC to -20ºC)
• 4,200 pallets of chill storage (0ºC to 12ºC)
• 12,604 pallets of A/C storage (12ºC to 18ºC)
• 22,776 pallets of ambient storage

The complex is also equipped with a positive power air system to significantly reduce dust contamination and humidity levels and a state-of-the-art security system consisting of full CCTV coverage and card-swiped access gates.

Supplied by Amana Contracting