Innovation and efficiency drive the growth of GCC logistics

A prime geo-strategic location, strong investment in infrastructure and manpower, and innovative port development models all put the Middle East in a robust position to drive logistics growth forward, according to the most prominent official at the UAE’s National Association of Freight and Logistics (NAFL).

In the tenth part of a series of interviews ahead of Seatrade Maritime Logistics Middle East, Sudesh Chaturvedi, Secretary General of NAFL, Dubai, UAE, updated Seatrade Maritime News on developments in the industry.

“The countries of the Gulf Cooperation Council (GCC) have invested heavily in expanding their logistics infrastructure in recent years. “These countries, which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, are strategically located between Europe and Asia and are therefore important hubs for world trade,” Chaturvedi said.

“To expand logistics infrastructure in the Gulf Cooperation Council, these countries are implementing various initiatives, such as developing new ports, airports and rail networks, and investing in technology and automation to improve efficiency and reduce costs. In addition, they are also setting up free zones and offering tax incentives and other benefits to encourage more companies to set up operations in the region.”

He identified the innovative approaches of four regional ports as outstanding. UAE’s Khalifa Port has signed long-term agreements with MSC, Cosco and CMA CGM to manage their terminals. Saudi Arabia’s King Abdulaziz Port in Dammam is a major container port and is currently being expanded to increase its capacity.

“Oman’s port of Duqm is strategically located outside the Strait of Hormuz and is being developed into a major transshipment hub. Hamad Port in Qatar is one of the largest ports in the Middle East and is being developed as a hub for trade with Asia and Africa,” he said.

Other major current and upcoming logistics infrastructure projects in the Gulf Cooperation Council included DP World’s BoxBay concept at Jebel Ali’s Terminal 4, and the UAE’s Etihad and Hyperloop rail projects, he said.

“‘Build it and they will come’ is still conceptually anchored in many world-class projects.” However, there is a good understanding that infrastructure alone is not enough to attract the logistics industry to the regions. Therefore, there have been significant efforts in several GCC countries to offer competitive incentives such as tax breaks, simplified regulations and streamlined customs procedures to encourage companies to locate their operations in the region. At the same time, they are working on improving the quality and reliability of infrastructure, as well as the availability of a skilled workforce, which are undoubtedly still the key factors in attracting businesses to the region,” he said.

Founded in 1992, the NAFL is dedicated to advancing the interests of the freight and logistics industry. It was commissioned by the Dubai government to respond to the need to bring together the growing number of freight and logistics service providers in the UAE, Chaturvedi said.

“Since its inception, the NAFL has been actively involved in various activities aimed at improving the industry and advancing the interests of its members. From a total of 24 members at the time of its inception, the NAFL has now grown to a current roster of over 350 members,” he said.

Shortly after its formation, in March 1992, the NAFL joined the International Federation of Freight Forwarders Associations (FIATA) as the first and only national association of a Gulf state and continues to represent FIATA in the UAE.

“One of the main activities of the NAFL is advocacy. The organization works to promote policies and regulations that are beneficial to the freight and logistics industry. NAFL is committed to improved infrastructure, fair trade policies and streamlined regulatory processes to ensure the efficient movement of goods,” he said.

NAFL also offers networking opportunities to its members. The organization hosts conferences and other events that bring together industry professionals from across the country. These events provide members with the opportunity to network, share information and form partnerships. Another important NAFL activity is education and training.

“The shared vision of NAFL membership is to support the growth and prosperity of the freight and logistics industry in the UAE and beyond. NAFL members are committed to improving the efficiency, safety and sustainability of the industry. They share a common goal of promoting policies and practices that support the movement of goods in ways that are beneficial to both businesses and consumers,” he said.

Both the United Arab Emirates and Saudi Arabia have invested heavily in logistics infrastructure in recent years.

“Dubai has long been a major logistics hub for the region and the UAE has continued to expand its logistics capabilities through investments in ports, airports and free trade zones. Saudi Arabia has also invested heavily in logistics infrastructure, aiming to become a major global logistics hub and reduce its dependence on oil exports,” he said.

“Competition between the two countries in the logistics industry is not necessarily a bad thing as it can drive innovation, increase efficiencies and lead to better services for businesses and consumers. However, it is important that the competition remains fair and ensures that your logistics industry is sustainable and environmentally conscious.”

The recent market entry of Maersk Air Cargo and CMA CGM Air Cargo is proof that air freight is also important for the ocean freight industry. Qatar Airways and Emirates have recently been the world’s best-performing airlines in terms of freight tonne-kilometres, which is likely evidence they are operating from a “geo-strategic crossroads”, but Chaturvedi attributes their performance to other factors as well.

“Qatar Airways and Emirates’ geographic location certainly gives them some advantages in terms of their ability to connect different regions of the world, but there are also other factors that have contributed to their success in the cargo market,” he said.

“One of these is the significant investment both airlines have made in their cargo operations, including the acquisition of large fleets of cargo aircraft and the development of modern cargo handling facilities. Both airlines have also implemented efficient cargo management systems to streamline operations and improve customer service.”

In addition, he believes that both Qatar Airways and Emirates have focused on building strong partnerships with other airlines to offer their customers a wider range of destinations and services. This has helped attract more businesses and expanded cargo operations over time.

“Overall, while their geographic location is certainly a factor, it is not the sole reason for Qatar Airways and Emirates’ success in the cargo market. Their investments in infrastructure, technology and partnerships have also been critical to their strong performance,” he said.

“It is part of the NAFL’s mission to work closely with all industry stakeholders to promote efficiency, safety and sustainability values. Seatrade Maritime Logistics Middle East is a market leader in our industry and as such NAFL is interested in working together.”

Sudesh Chaturvedi, Secretary General of NAFL, Dubai, United Arab Emirates, speaking at Seatrade Maritime Logistics Middle East, May 16-18, 2023 in Dubai.

Source: News Network