Three ways you can hang on to your most valued resource.

Many organisations tell their employees how important they are. Why did I stress on tell? Because it seems to be the only thing they do.

In our environment, with rising inflation resulting in a higher cost of living – hanging on to your most valued resource can be challenging, as Robin Lyndhurst and Darryl Judd tell us in this issue.

Here are three principles I gathered on how to value and be valued by your most important resource.

• RESPECT Treat your employees, peers and superiors with respect, from the lowest janitor to the CEO of the company. In Kathryn Semcow’s feature Better than the Boys, for example, you will see how women in the supply chain take notice when they are treated with respect. Basic humaneness pays, acknowledge that your employees are human beings first and your employees only next.
• TRUST It’s not a good idea to monitor every aspect and moment of their
  working day. The realisation that you trust them to do their jobs effectively without supervision will drive them to justify that faith. As Dan DeSoto with Kuehne + Nagel shares with us, managing relationships is key to the industry.
• ALLOW MISTAKES It happens. Allow your employees room to make mistakes and you’ll find that they do a perfect job. Running a tight ship will only make them nervous and lead to a lot of errors. Experience is the best teacher but also the costliest one. Accepting that mistakes happen also requires having a good lawyer. Check out Jasamin Fichte’s guest column on page 60 for advice on liability. If all this sounds too preachy for one issue, please bear in mind, none of these will work if you are paying people peanuts. Find out if you’re making enough in our salary survey. In keeping with our people theme, I’m sure most of our regular readers will be delighted to know that this is the last time you will see me. From next issue on Kathryn Semcow will be sharing her thoughts on the editorial for LOG.Middle East.

Until next time,

Jacob Joseph
Executive Editor
jacob.joseph@dvvmedia.com

Skilled candidates are like gold dust in all industries today – none more so than the recruitment challenged logistics sector. Robin Lyndhurst outlines some of the key issues and tries to suggest ways to boost competitiveness and
appeal

The 21st century battlefield won’t be fought outside castles or on grassy plains, but in the recruitment department of every company globally. Everyone is scrambling for skilled staff, developed and developing countries alike.

Paul Stuiver, CEO, Barloworld Logistics

Some employment experts believe the battle for talent that we see today could be just the start, and it’s all going to get a whole lot tougher in the decade ahead.

In today’s globalised world, the location of jobs that can be moved is continuously being challenged. Currently, Singapore, Peru, Japan, Argentina, New Zealand and South Africa are among the nations which are hiring most rapidly – but tomorrow, who knows? That’s the guessing game that is globalisation.

One thing we can be near certain of is that the developing world will account for 45 per cent of global trade by 2030 – which has as much significance for the developed world as it does for those emerging on the world stage. Consider this: Europe could lose up to 60 million of its workforce in the next 10 to 15 years.

Barloworld Logistics, which recently bought the Dubai-based Swift Group in a US$70 million all-cash deal, envisages that the agreement will help it spread its wings internationally – although it would be the first to acknowledge that this strategy will depend on finding the best people to do the job.

“Recruitment is a problem everywhere,” said CEO Paul Stuiver. “In Dubai, South Africa, Spain, it’s a worldwide problem. We’re not looking to export South Africans to other parts of the world. One of our core strategies is to recruit decent, local talent as much as we can.”

The logistics industry is facing challenges at all levels, from an increasing shortage of fleet drivers, which has the potential to cause severe service disruptions, to problems filling mid and even senior management positions. At a local level, many migrant drivers are being poached by driver-hungry construction firms and another complication has come from the issuing of licences – it used to be easy to transfer from a GCC licence to a UAE licence, but no longer, and applications are prone to delays.

Higher up the ladder, issues of pay, as in any industry, are vitally important, particularly for any overseas expats looking to relocate themselves, and their families, to the Gulf at a time of widespread inflation.

A click on an internet recruitment site, picked entirely at random, shows that a Warehouse Operations Manager (chemicals) currently working in the UAE can expect to earn US$90,000 a year, plus family tickets and medical. In local currency, that works out AED 27,525 a month – not an impoverished wage, but equally not a fantastic one either, when you consider the responsibilities, and what an ops manager in another field (take energy) is taking home. It’s only when you get into the top tier – eg ‘Head of Logistics’ – do you find salaries take a noticeable jump (AED 560,000 a year or 46,000 a month), but naturally, so do the responsibilities.

Perhaps it’s not all doom and gloom. Private sector salaries in the six countries of the GCC increased at an average rate of 9 per cent over the last year, according to an 18,000-strong survey conducted by GulfTalent.com, with increased competition, public sector pay rises, the depreciating US dollar, and growth in Asia all driving Gulf pay increases.

Oman led the way (11 per cent), followed closely by the UAE (10.7 per cent) and Qatar (10.6 per cent). Across the Gulf, sectors enjoying the highest pay rise were construction, banking and energy – although logistics was noticeable by its absence.

Historically under-represented in the region, it is clear the HR function is now in the corporate front line as Gulf employers grapple with the challenge of attracting, developing and retaining staff.

BIGGER PICTURE You’d think China, with its 1.3 billion population, would have no problem filling positions. Wrong. The skills drive is as fierce as in many parts of the Western world. It’s estimated the booming country needs 75,000 leaders and it’s only producing around 4,000 a year. Skilled workers, particularly those with technical training, are increasingly at a premium in urban areas and special economic zones. Consequently, pay rates are currently going “through the roof” as companies scramble for the best staff.

Andy Weber, Managing Director of Kuehne + Nagel (Asia-Pacific), said that the lack of talent within the sector is even bigger in Asia compared to Europe and America.

“There are insufficient candidates with adequate working experience or academic knowledge in the logistics industry in Hong Kong and China, compared with Europe or the Americas.”On land and water, the skills shortage crisis seemingly

The officer class of seamen who ply over 90 per cent of world trade along global shipping lanes are in ever-shorter supply – ironically at a time when carriers are returning to healthy levels of profitability.

The shortfall of trained senior off icers is estimated to be around 10,000, equating to 2 per cent of the total workforce, which is expected to increase in the next 10 years.

Many experienced seafarers from the global talent pool are reaching retirement age at a time when fewer young people are joining the industry, and even those that are joining will take years to complete their training. It’s not only skills attraction which companies need to consider, but the changing nature of the workplace itself. With the global population ageing, more corporations need to attract and retain older workers and the savvy employers will be the ones that have a strategy in place.

In the concrete flooring industry where speed and efficiency are paramount, the question remains: how flat is your floor?

As demand for warehouse and industrial space in the GCC soars, so to does the outcry for greater regulation in concrete flooring standards. The CoGri Group is coming forward with a solution, seeking to implement an internationally recognised certification for flooring contractors within the Middle East.

“The floor is arguably the most important part of the building. It is the table on which all operations take place. Not only is it part of the structure, but also an integrated part of the materials handling system,” says Kevin Dare, Managing Director of CoGri Group Ltd.

The CoGri Group’s reputation in the materials handling and flooring industry predicates such lofty ambitions. Established in 1989, they began as a small manual hand grinding service and are now a globally recognised brand, with subsidiary companies including FACE Consultants Ltd (FACE), Concrete Grinding Ltd (CG), and CG Flooring Systems (CGFS). CoGri Group appears to have hedged their bets on what looks to be an ever-expanding market in the GCC, most notably Dubai.

“The CoGri Group has been working in the Middle East for some time now. As the demand for our services continues to grow, it makes business sense that we are also based there, so that we are able to work closely with our clients and operate more efficiently.

With the recent launch of FACE Middle East, Dare is convinced the region will benefit from CoGri’s expertise and locality. “We chose Dubai for its strategic location, given all the advantages of a highly developed economy. As a regional trading hub, the location also offers convenient access to businesses in neighboring countries, of whom we have had dealings with.

“Dubai is one of the fastest growing business centres in the Middle East and presents international business essential is within aisles of high density warehouses where defined path, very narrow aisle trucks operate.

“When talking about VNA (very narrow aisle), you spend 10 per cent of your time talking about the machine and 90 per cent of the time talking about the floor,”Godbold says.

There are two types of warehouse floor usage, ‘free movement’ and ‘defined traffic’ floors. Free movement floors refer to areas where material handling equipment operates in random, non-defined directions and have an infinite number of travel paths. Defined traffic floors are where forklift trucks are fixed in the path they run, such as very narrow aisles. Both types have different floor flatness specifications.

The CoGri Group’s FACE Middle East branch will offer Floor Flatness Compliance Testing on industrial concrete floors, providing accurate and detailed results for defined movement (narrow aisle) and free movement (open area) surveys, to British (TR34), German (DIN), and American (Fmin) standards. CG Flooring Systems Ltd (CGFS), another subsidiary of CoGri Group, conducts the refurbishment of warehouse, industrial and commercial floor surfaces. Their industrial cementitious screeds can quickly and effectively upgrade most floors.

In addition to the FACE and CGFS, the CoGri Group also provides Concrete Grinding Ltd (CG), which specialises in upgrading aisles in new and existing VNA/narrow aisle warehouse units. “At this moment in time we’ve got a big grinding contract going in Kuwait. “Once the floor has been grinded, measured and tested we’ll then issue a certification saying the floor meets the required standard of flatness.”

“With VNA, the clearances are critical. If you’ve got a floor which is only a couple millimetres out, left to right at ground level, by the time you’ve got 14 metres in the air that could be 50, 60, 70 mm you’ve lost at the top. And that’s static.

“When the machine is working in the aisle its running up to 9 km per hour, with only minimal clearance. So the floor has to be very accurate, because then you start to get dynamic movement. And that’s the reason why you have to have a very flat, what we call a Super Flat floor.”

Utilising their patented Laser Grinder ®, aisles on new and existing floors can be upgraded to the flatness standards required to operate VNA forklift trucks safely and at their optimum efficiency.

“As the order book filled up and our client list grew, we needed to find a cleaner, more efficient method of grinding in operational warehouse aisles. There was no suitable equipment available to hire or buy, so we decided to build our own” said Kevin Dare, inventor of the Laser Grinder®

The Laser Grinder® has not always been confined to warehouses. A couple of years ago it was used to flatten a 200 metre concrete section of a drag racing track in Umm Al-Quwain, United Arab Emirates.

As control within the industry is not always met with open arms, contractors are somewhat hesitant to have ‘experts’ peering over the shoulders. In attempting to reign in industrial Super Flat flooring standards, Godbold believes greater regulation and supervision will ultimately serve in the customer’s best interest.

“The problem is what has happened in the past is the contractor has come in, laid the floor, and said there you are. Has it met the tolerances we gave you? Yes fine, but what were the tolerances? There weren’t any standards here at all, and no one to test it. So nobody knew what the result was. So the contractor said thank you very much, took his money and walked away.”

With the advancements in technology currently available, floors can be accurately measured within nanometers. Such advancements also allow for digital printouts of the area that may not comply to the precise standard required, allowing the owner or contractor to see the floor’s actual flatness or defects.

“To whatever degree we are involved. It is always in the customer’s interest to at least get the floor independently measured and tested afterwards. While the contractor is still on sight, and is responsible, because he can be held responsible for that floor if has not met the tolerances specified. Whether you decide to work with us or not, at least get it independently tested in the end.”

Traditionally seen as a bastion of male workers, the logistics sector is gradually opening up to women. But a ‘glass ceiling’ that limits opportunities remains to be removed

Demographic trends suggest that businesses will increasingly be faced with the challenge of managing a more diverse workforce as the twenty-first century progresses.

Among of the most notable manifestations of such diversity is the growing number of working women, some of whom have fashioned highly successful business careers. In 1965, women held only 15 per cent of management and executive positions compared to approximately 40 per cent today in some developed countries. Furthermore, an increasing number of women are starting their own businesses.

The growing number of women in the workforce has highlighted a number of key human resource issues, including pay inequality, sexual harassment and unpaid maternity leave.

One of the most significant human resource issues affecting working women involves the so-called ‘glass ceiling’ – the notion that women have great difficulty in advancing into top management positions.

In this regard, logistics appears to present an intriguing paradox. While it is considered to be one of the most lucrative careers for women in developing countries, the ‘glass ceiling’ limits opportunities for them. According to Martha Cooper, a logistics professor at the Ohio State University: “Getting hired doesn’t seem to be a problem; but getting promoted does.” Indeed, it has been estimated that only slightly more than 10 per cent of director-level logistics positions are currently occupied by women.

There have also been a number of recent empirical studies dealing with employment opportunities and issues facing women in logistics in the USA. For example, several studies indicate that women are generally satisfied with their current positions and hold favourable views regarding their future in logistics. At the same time, several other studies reveal concerns regarding opportunities in the profession, with women likely to find fewer openings than those available for men. In addition, women are more likely than men to perceive the existence of gender discrimination in the sector.

WOMEN LOGISTICS MANAGERS AND CAREER BARRIERS

THE EFFECTS OF RESTRUCTURING ON WORKING PRACTICES- SENIOR AND JUNIOR WOMEN

A survey conducted by the Institute of Logistics in the UK of women transport managers through the Women’s Transport Network, has shown interesting results on the impact of restructuring on work conditions and work cultures; the impact of work practices and the implications for women’s experience of career barriers. Restructuring, in this case, referred to changes in middle management positions through delayering as the organisation takes on a more competitive position. Senior women working in the logistics field are more likely than women in junior positions, to identify the positive effects of increased promotion prospects, autonomy, team working and job security after restructuring. Despite the fact that they were also more likely to experience increased hours and work in the evenings due to de-layering, women in senior positions placed greater emphasis on increased motivation and loyalty to the company.

In terms of career barriers, as the table below illustrates, women logistics managers tend to experience attitudinal barriers, as evidenced by the relatively high proportions of women who identify the men’s club, prejudice of colleagues, and sexual discrimination. However, lack of career guidance was also seen as an important barrier. Senior women were more likely than junior women to complain of these attitudinal barriers. For example, sexual discrimination was experienced by 30.1 per cent of senior women but by only 9.1 per cent of junior women.

The fact that disadvantages associated with restructuring are less pronounced may point to greater opportunities for training in a changing organisation, more
challenges and a higher probability of new posts and positions, as older managers retire or as proverbial “dead-wood’” is shaken out. Perhaps more importantly, however, the climate of change may help to “unfreeze” and challenge entrenched attitudes detrimental to women and to create a new atmosphere of meritocracy, in which women can compete on a more equal footing with men, especially in the Middle East region.

The thought of labourers in the Middle East conjures up images of
heavy, manual work…but is the life of a labourer here only that?

It is said that life is what one makes of it and that happiness is a state of mind. Quite right, but does that still hold when one is a labourer working eight hours a day lifting unimaginably heavy loads around one’s workplace – the warehouse –

far away from one’s family? Add to that, a shrinking salary that isn’t keeping up with the rising cost of living and there’s less and less to send back home each month? It’s still not so bad, say the main characters of this story.

Nadeem Ahmad is 22 and has been in Dubai for almost a year now. Working as a labourer at Al Rais Logistics in Jebel Ali, he has to do anything and everything around the warehouse. He’s a happy-go-lucky young man from Karachi, in Pakistan, where he ran his own electrical store before deciding to come to the UAE on a visit visa. After applying for a few positions, he got this opportunity and took it because the company treats its employees far better than many others. He’s shopped around so he knows.

Ahmad says he’s very happy doing what he does because he likes the people he works with and is happy with how he’s treated, too. Work is basically assisting the forklift operator, besides other routine tasks such as lifting containers, loading and unloading materials and helping his colleagues. There are days when he has nothing to do in the warehouse at all. So, he says, life’s good and although he’s all alone here in Dubai, he tries his best not to miss his family too much. Back home in Karachi, he has a small house where his parents and brothers and sisters stay. He calls them every Friday.

Budgeting is very important for Ahmad. “Costs are increasing,” he says, “and one has to be careful.” But as he is still unmarried, his priority is himself and not sending money back home. Having said that, he admits to sending half of his income to his parents each month!

What is a typical day for him like? Well, like many others, his workday is from 9am to 6pm with an hour-long lunch break in the afternoon. Weekends are spent renting and watching movies and basically just staying in his room, which he shares with a few of his friends.

Ahmad hasn’t seen much of Dubai as he doesn’t know anyone outside of his work and he feels getting around places in Dubai is a problem and is expensive too. He’s careful about how he spends his money as he has to have enough to eat and also keep a little extra for emergencies.

Allan Jazmin, 28, from the Philippines is not as upbeat as his colleague, Nadeem. Perhaps, the fact that he has just returned from a two-month vacation has something to do with his mood. Everyone knows what it is like going back to work after a blissful 60 days away from it!

Jazmin is a qualified seaman but the lack of opportunities in his field of choice in his home country and family responsibilities made him to come to the UAE and try his luck and lucky he was, he says. When he got this job three years ago, a few of his friends who were also here on visit visas looking for employment were not as fortunate as him. “It’s not about doing something of your choice but making the best of the choices available to you at any given time,” he says.

Jazmin’s work day is no different from that of any other labourer and involves arranging the correct documents to receive cargo, working the racks of materials, loading, unloading and lifting heavy materials, but he chooses to look at all the experiences as stepping stones that will come in handy for better opportunities in the future. And although he’s satisfied with his pay for now, he’s hopeful that he will get an increment sooner rather than later.

For Jazmin, family is his foremost priority. He sends about a third of his income back home to his wife who looks after their oneyear- old son and his aging parents. Talking about his family makes him feel good and reminds him of the precious days he spent with them…days that came after a year of hard work and that flew by too soon, he adds philosophically.

For now, weekends and free time are difficult for him having just returned from home, but ordinarily Jazmin’s weekends are spent with his cousins with whom he shares his accommodation. He likes to stay in most of the time as he feels going out is problematic. “It’s expensive, difficult and basically a hassle.”

Also, he feels he is here for a purpose which is to save as much money as he can for his family so he likes to focus on that and stay out of trouble by staying in. He likes to eat well and so cooks for himself as he finds it difficult to get food that suits his taste and is within his budget.

Muna Hamood, Supply Coordinator,                               Reshu Lakhanpal, GM, Azeyan e-gistics
Shell Trading Middle East

There’s no room for tears or makeup in the logistics industry, say the many women working in the supply chain.

When Muna Hamood started her position as Supply Coordinator for Shell Trading Middle East, she says she knew very little about the supply chain. “I didn’t have a clue what logistics was, or how it worked,” says the 35-year-old Associate of the Chartered Institute of Marketing (ACIM), whose former position was with Shell’s Country Chair for Iraq. “I was struggling to get out of the skill pool of a PA, so I needed more challenge and to move out of my comfort zone.”

“On my first day I was wondering, ‘What is a berth?’”

But she picked up the job quickly. “I hit the ground running and I hit the ground fast,” she says.

“I’m very hands on, so I’ve actually climbed the tanks and stood on the top. I’ve even gone inside the tanks.”

Today, she has her hands on the primary transportation for Shell Middle East’s downstream sector, moving products from refineries to tanks for the corporation’s aviation, commercial fuels and marine divisions. She also manages stocks for Shell Aviation’s joint venture with BP and Emarat. Hamood describes her position in Dubai as a “one-man show”, as she works with a virtual team, reporting to Pakistan.

She says her goal of having “zero stock-outs” can be stressful. “You have to be available on your phone all the time.”

And supply tends to take most of the blame from traders and customers when anything goes wrong. “You have to have thick skin,” she says. “If you take things personally and are very sensitive, this is not the job for you.”

Still, Hamood insists being a female in the supply chain is no problem. “I have never felt I was in a male-dominated industry.” In fact, her three predecessors were all women.

“On the trading floor I sit on, I’d say 35 per cent are women,” she adds. “Shell is generally good with diversity.”

Hamood even says being a female can be an advantage in the industry.

“It comes down to how you manage people and conversation, and that’s one of the key requirements for this job.”

“I think women are naturally good at multitasking, relationship management, networking. These are qualities most women have.”

Reshu Lakhanpal, General Manager of Ayezan e-gistics agrees. “I think being a woman has always been an asset. I have never had a problem where a client felt, ‘Oh, she’s a woman and I can’t deal with her.’”

She says, she deals mostly with men. “It’s easy. Men don’t expect women in this field, so it’s a breather for them to work with a woman.”

“Some people even look at it that a woman is more practical. I have clients who feel that a woman will give them more practical solutions.”

“Men are more aggressive in business, especially in the service industry,” says her business partner, Geoffrey Moore. “But women are more able to open doors.”

“A woman will make her surroundings more calm in any meeting.”

Lakhanpal and Moore founded Ayezan, which specialises in post-production supply chain management, in 2000, after working together at Triburg Freight Services. Today, the business turns over more than US$400,000 a month, and is building a new 5,500 sq metre warehouse in Jebel Ali next to its already existing 4,000 sq metre facility. “Together, we will have approximately 18,000 pallet positions,” says Lakhanpal.

She says her son Dhruv was only 11 months old when she started the company and her daughter Annika was born three years ago. “I say I had three children, Dhruv, Ayezan and Annika,” she says, smiling.

Lakhanpal, who has her Masters in Banking and International Trade, admits balancing a growing family and a growing company can be difficult. “Your phone is on 24/7. You’re waiting for a client 24/7. We never say, ‘Oh, it’s a Friday”, or ‘It’s a holiday’. In the service sector, you cannot say you are not available.”

“It’s very difficult to juggle, but then again I made the choice to have both a professional and a personal life.”

She says her husband, who has his own trading company in Jebel Ali, has given her tremendous support, and she has no plans to be a stay-at-home mum. “I think of it all the time, but I know it’s not me. I’ll never stay at home,” she says.

Four women who are rarely at home are Abigail Garcia, Hina Abdul Rahim and Alma Mangalindan with Unilever, and Deepa Bhatia with Lipton and who shared their stories in a group interview at the Unilever off ice in Jebel Ali.

“We spend almost 70 per cent of our time at work,” says Bhatia, Supply Chain Coordinator F&B at Unilever’s Lipton Jebel Ali Factory, who commutes from Sharjah every day.

“You are not lifting any weights, but your mind and body and soul are very, very exhausted,” says Mangalindan, Customer Service Officer, Finished Goods Imports, for Unilever.

“When I first started at Unilever a few years ago, I didn’t have time to comb my hair, I didn’t have time to put powder on my face. I basically went to my chair in the morning and at the end of the day went home as is.”

“I can’t wear makeup anymore. I don’t have time,” she exclaims. “Even if you want to pee, you won’t have time.”

And how about getting married? “I cannot think about it,” says Mangalindan. “When you’re in the supply chain you become independent, your perspective becomes wider. I don’t need a man, I can take care of myself.”

Garcia, a Demand Planning Assistant with Unilever, whose boyfriend is in the Philippines, admits working so hard can get lonely. “Sometimes it gets to you, but I have to work,” she says.

While these women are working in jobs traditionally designated for men, Abdul Rahim, Planning and Customer Service Executive for 3rd Party Manufacturing with Unilever, says the trend is changing.

“Initially, when I started off, I was the only girl working in the supply chain with four men, and all the people we were communicating with were male. But now, I find the transporters have ladies communicating with us and the truck drivers, we have women working in warehousing, and we have a good number of women in customer service.”

She says she has at least three or four truck drivers calling her every day. “Sometimes truck drivers are so astonished to hear a female voice calling them from Unilever,” she says.

“I get more respect being a lady, because people hear you more and are really willing to help you out. Also, women are better at handling relationships in a healthy way.”

But, she admits working in the supply chain is a thankless job. “It’s not a job for every girl. I’ve seen girls initiating into this sector and they only last a few months.”

“If you’re not tough, khalaas, finished,” interjects Mangalindan. “They will eat you up.”

“In a supply chain organisation, people will not look at your gender, they will look at your work,” she says. “All people are equal. You have to perform. If you cannot, go. Do or dare. Take it or leave it.”

Faraj Bassil, Country Manager, Jordan Aramex

A regional leader in total transportation solutions, Aramex has spread its
wings around the globe. Kathryn Semcow talks to Faraj Bassil, Aramex
Country Manager for Jordan, where the company was born in 1982

Aramex is expanding its facilities in Jordan. It has recently doubled its warehouse space with a 10,000 sq. metre duty-paid distribution centre near Queen Alia Airport. The Jordanian-born company, which already has warehouses in the Queen Alia Airport Free Zone, the Aqaba Special Economic Zone and Sahab Industrial Estate, is also building a 2,000 sq. metre facility at Muqablain, which Faraj Bassil, Aramex’s Country Manager – Jordan, says should be ready in 2010.

Bassil says he’ll have no problem filling up this space. “There’s always a need for our services,” he says. “We see a growing demand in Jordan.”

If anyone knows the Jordanian market, it is Aramex. CEO Fadi Ghandour founded the business by servicing its current competitors. “Aramex purely delivered courier packages for companies that did not have a presence in the region, companies such as FedEx, UPS, and Airborne Express in the US,” says Bassil.

Today, Aramex has expanded out of Jordan and has more than 30 offices around the world. It has also expanded its services, offering everything from freight forwarding, logistics and warehousing to publication distribution and specialised shopping services such as the Shop&Ship US mailbox and Shop the World catalogue shopping.

Bassil says Aramex can be considered a source of national pride. “We are a success story and we raised the bar of what we were expected to do.”

Within Jordan, Aramex has stepped outside the expectations of what an integrator is supposed to do, for example partnering with the government to deliver court notifications to the public. “We are official notifiers of court orders,” says Bassil. “We saw the justice system required faster delivery and we set up a team and product to do it.”

Aramex also saw the need for a food delivery service in Jordan, partnering with restaurants to deliver their orders. “Any restaurant that does not want to have its own delivery service can come to Aramex and have exposure to the market,” says Bassil.

He says the company hires university students who want to work their way through school as evening drivers. “Most of these kids that work with us end up being hired by Aramex after they finish their studies,” he says, smiling.

In fact, Bassil says he has no problem finding qualified staff in Jordan, thanks to the country’s highly educated workforce. “Jordan has a lot to offer. We always find what we are looking for. We also export a lot of people to the Gulf and other countries.”

However, working in Jordan, according to Bassil, has its challenges, for example, rising fuel prices. He says Aramex recently purchased seven delivery scooters, and plans to expand its fleet to 30. “We see scooters as a quick solution for less fuel consumption,” he says. “We are also looking at hybrid cars.”

Bassil also says Amman’s heavy traffic can slow business down. “Cars have become much more affordable than 10 years ago, and car sales have increased tremendously, that’s why you see traffic jams,” he adds.

As supply chain management experts argue the growing importance of the information flow over the physical flow, academics are proposing the concept of 5PL, which integrates the benefits of both 3PL (third party) and 4PL (fourth party) logistics providers

THE LEAD UP TO 5PLS Trends to outsourcing supply chain management (SCM) to 4PL service providers are likely to continue to drive more effective and efficient business practices in the 21st century. Distribution and transportation, like purchasing and customer service, are critical functions of SCM that have greatly impacted on economic systems in recent years. With the more aggressive competitive global environment, SCM portrays a great deal of potential to provide a competitive edge by its tailor-made customer service. A question still remains as to who would be most appropriate to have intrinsic knowledge of the customer’s requirement, and while maintaining the accountability, responsibility. This entails capability to not just strategize, but also to possess the necessary competencies to execute the operational aspects of the firm. In this respect, it can be clearly seen, even through the many cases that have occurred in the last couple of years, that in order for a 5PL to emerge, the entity must be built and grown from ground up, and not top down.

PROBLEMS OF 4PL INTERFIRM NETWORKS Consequently, managers dealing with SCM functions within firms will have to develop heightened collaborative skills in their interactions with 3PL and 4PL interfirm network partners. Despite the proliferation of interfirm network partners, however, interfirm networks are problematic. This is rather disturbing for those firms considering outsourcing the SCM function, because of the close strategic link between the organisation and the 4PL service provider, and the necessity to share sensitive information.

Managers also need to be aware of the risks of outsourcing 4PL services, including:

• Loss of control: sensitive information must be shared.
• Lack of performance measurement: what should be measured, and what incentives should be put in place?
• Lack of internal expertise: the 4PL relationship must be effectively managed. Mangers often do not fully comprehend the nature of the interfirm linkage.
• Lock-in or dependancy: difficult to change partners should the interfirm linkage prove unsuccessful.

There is a tendency of 4PL service providers to be borne out of 3PL providers. For example, FedEx, UPS, TNT, and DHL are all players in both 3PL and 4PL. Despite 4PL service providers being portrayed as ostensibly ‘neutral’, it does raise a serious conflict of interest dilemma, in that a 4PL service provider will most likely form partnerships with its 3PL divisions. Overall, the system may be more effectively managed than the in-sourced option, but may not necessarily be optimised. These risks highlight the need for managers intending to outsource SCM to have sufficient trust in the service provider to accept the sharing of sensitive information must effectively manage cross-corporation and crosscultural relationship; and have an exit strategy if the partnership does not prove successful. The implications of the changing dynamic in SCM is that there will be an increasing need for strong interfirm networks connecting firms with their 4PL service providers.

Celestino reported that firms may save between 15 and 25 per cent in the cost of logistics by outsourcing to 3PL service providers, depending on industry and country. Outsourcing to 4PL service providers also offers similar cost reductions, but the exponential decay over time is more pronounced, with most savings coming in the first two years of implementation. Figure 1 graphically displays the cost reductions evident with the sequential introduction of 3PL and 4PL philosophies.

THE COST OF LOGISTICS In the constant search for global competitiveness, Figure 1 begs the question of what lies ahead, as 4PL cost reductions run their
natural course. Clearly, the necessary technology is available to deliver more advanced logistics systems. The question is will the cost involved in deploying
such a solution be justified given that the gains in productivity for 5PL systems are unlikely to be of the order of magnitude achieved by 3PL and 4PL systems? While productivity gains are likely to be somewhat less, they may well be enough to ensure a competitive edge is maintained. Incremental gains in cost reductions and efficiencies may well be enough to justify the investment in such systems.

As such, the next significant strategic initiative in SCM may be the ‘5PL’ service provision. This would entail the ‘transaction cost analysis’ approach applied to 4PL systems, requiring extensive evaluation and analysis of the performance of 3PL and 4PL service providers, and consequential optimisation of the entire system. There is a need to circumvent the often incestuous relationships that have become apparent in the 3PL and 4PL systems, as well as alleviate the lack of ‘comparative’ financial examination and performance metric evaluation currently evident.

Several of the factors that have determined the uptake and success of 3PL and 4PL are also likely to drive the adoption of 5PL. Frost and Sullivan identified the need for an even greater emphasis to be given to customers whose requirements will become far more demanding. Shippers who enter a logistics outsourcing project want a single-point contact with one firm and supply chain visibility. Customers will increasingly demand more strategic, solution-driven, global results. Many of the issues identified with the implementation of 4PL may well continue to mitigate against the successful development and adoption by firms of potential 5PL services. One of the problems with introducing 5PL services has been the adoption of sophisticated and complex services without regard to established business strategies. According to a recurring problem with the move to 4PL business is the need to maintain a ‘neutral’ position compared to traditional business modes of operation. Another issue associated with the internationalisation of 5PL service is the need to develop different patterns and networks.

TRUST MATTERS Cost considerations are a very important aspect of the control mechanism in interfirm relationships. An increasing dissatisfaction with the scope of 3PL and 4PL services, coupled with the greater complexity of supply chains, are likely to increase the demand for 5PL ‘metaproviders’, who are capable of being a trusted partner and taking on a substantial strategic role by sharing the associated commercial risk and rewards. This increases the need to build and maintain trust between the mutually dependent parties.

Issues around the business arrangements and performance expectations for 4PL service providers will need to be solved by 5PL aspirants. As with 4PLs, 5PLs will need to have a high degree of adaptability in meeting customers’ needs. The quality of the relationship between the 5PL service suppliers and their clients will determine how effectively the two parties are able to combine to aggregate available ‘inside’ and ‘outside’ resources.

Greater competitiveness in the transport industry has created higher quality value added services, further supply chain integration, and strategic partnerships. Alliances, mergers and acquisitions between 5PL provider and between customers are set to continue apace. When combined with continued global competition among firms this will force the speed and intensity of innovation and exert downward pressures on costs leading to further efficiencies. Thus, a congruence of goals and effective communication between both the supplier and customer are critical to generating real value in such partnerships. A continuing challenge for prospective 5PL providers will be balancing the capacity to be flexible to individual customers with the systems to coordinate and serve the needs of multiple customers.

CONCLUSION Any notion of 5PL will depend on providing a service capacity to develop and implement a networked, flexible supply chain capable of seamlessly integrating and meeting the demands of all partners, including manufacturers, suppliers, carriers, and vendors. Such productivity gains will probably result from breakout technologies capable of fully integrating and mobilising all the business aspects of SCM. One critical aspect of the soft skills required is the capacity to develop and maintain a sense of trust on commercial, operational and personal level.

Thus, it would appear that future 5PL service providers will need to demonstrably gain and maintain a holistic and fully integrated SCM to achieve a competitive advantage for their clients.

The above is an excerpt from the paper ‘Drivers of Fifth Party Logistics (5PL) Service Providers for Supply Chain Management’ published in the Conradi Research Review 2/07 by Peter Hosie, Albert Tan and Ying Li, University of Wollongong, Dubai, and Victor Egan, Curtin Business School, Curtin University of Technology, Perth, Australia.

When she worked as a business development manager in the IT industry, Nermeen Mahmoud managed a team of men in Saudi Arabia without ever going to the Kingdom. Because women are not allowed to work in Saudi Arabia, Mahmoud would travel from Dubai to Bahrain twice a month to meet up with her team.

“I never really needed to go there,” says the Cairo native, who now works as Business Development Manager for Dubai Logistics City (DLC), as she nibbles at a blueberry muffin at Costa Café in The Greens.

Mahmoud studied telecommunications in Egypt, and started her career fixing computers before moving into the marketing and, eventually, the business development side of IT. “I’ve always loved anything related to microwaves, radiofrequency, waves in general,” she says. “I just love those things that you don’t see, but they affect your life.”

And now, she loves logistics. “It’s almost the same concept as telecommunications. It’s something you don’t see that much, but it affects your life tremendously.” When DLC consultants hired Mahmoud in the last quarter of 2004, she and Project Director Roland Zibell worked alone for fivemonths to set up the entire business, choosing everything from the telephone system to computer programs. “It was so exciting at that time, because we were developing everything from scratch, including the rules and regulations for DLC,” she says.

Mahmoud says she has become emotionally attached to the project. “It’s my baby. I am so passionate about it.”

“It hurts you big time when something goes wrong, because you need your baby to have a healthy environment and grow up healthy.”

As for being a woman in the logistics industry, Mahmoud has no complaints. “Oh come on,” she says. “I don’t think the industry is male dominated, maybe in the top positions, but that’s just because they don’t know how smart we are.”

But it’s hard to imagine anyone doubting Mahmoud’s intelligence. In fact that’s the first thing her close friend and colleague Christa Soltau, Managing Director, Dubai World Central Airport, mentions when she walks by our table during her lunch break. “Nermeen is so smart, she’ll take my job,” she says.

Nermeen Mahmoud, Business Development
Manager, Dubai Logistics City, chats with Kathryn
Semcow at Costa Café in The Greens, Dubai

I started researching this month’s feature on women in logistics looking for drama. I wanted stories of sexual harassment, gender discrimination and glass ceilings. I wanted to blow the cover on an industry phenomenon I was sure existed. But I found nothing.

The women I spoke with told me men either treated them as equals, or gave them more respect because they were women. Jean Richmond with GAC Group said she was surprised by this when she transferred to Dubai from South Africa, because she had been warned about cultural attitudes towards women in the Middle East. Another woman confided in me that she felt more respected working in Dubai than she did in the West.

Perhaps if the industry had a tighter job market, the boys would be turning against the girls. But at this moment, managers will welcome whoever they can get. Male or female, young or old – if you can do the job, companies will be happy to have you. As Alma Mangalindan with Unilever, says, “In a supply chain organisation, people will not look at your gender, they will look at your work. All people are equal.”

And perhaps hiring more women is the answer to every logistics company’s staffing woes. Logistics is no longer sweaty men in a warehouse. It is ideas, planning, organisation, communication and relationships. At the risk of getting into the nature versus nurture debate, I would say these are all qualities women are known for.

My mother never worked for a salary when I was growing up, but I can say she was the best logistics professional I know. She kept the fridge stocked with groceries, dropped us off on time for school, and had dinner on the table every night before we got too hungry. Maybe companies in need of effective supply chain mangers should start recruitment campaigns for housewives.

Speaking of relationships, I noticed that the majority of the women I interviewed for this issue were single, while most of the men I meet in the industry are married. I wonder— can a woman be a successful supply chain manager and have a family? Does moving up the ladder entail being married to your job?

Finally, I have never enjoyed my job as much as when I was in Jordan for this month’s feature. From the Jordan Economic Forum to my trip to Aqaba, I was impressed with the national pride and overall eagerness to improve the country’s transport infrastructure. I was also blown away by the kindness and hospitality of the Jordanian people. If anyone deserves a successful logistics industry, it is them.