TEAM BUILDING IN A HIDDEN CAVE

As most of us know, these days in Dubai, there’s no dearth of fun activities available to engage in – from places to visit, to restaurants to dine at, to the famous nightlife we have here. And most of us can claim to have “been there, done that.”

But a few weeks ago, some of us were privileged enough to add yet another fun experience to our Dubai diaries. (Well, “fun” for some, “torture” for a select few….and “fun torture” for most of us.)

I am referring to the exhilarating team-building activity that was organized at the TEPfactor Dubai, an indoor adventure playground. While the interiors were this fascinating cave-like structure, this activity center was unassumingly located at Dubai’s fancy Jumeirah Beach Residence. Also “unassuming” were we, when most of us had very little idea about what to expect (which was part of the fun) – “was it team-games,” “was it brain teasers,” “were we physically fit enough” etc. were all the questions in our collective minds.

And guess what? It was all of the above, and then some. Mentally, some puzzles needed us to think outside the box (almost literally!), and physically we discovered muscles in our bodies that may have only been used 15 years ago, if that!

But all in all, with “teamwork” being the name of the game(s), and while kudos went to ALL of the 11 teams that took this grueling but supremely fun time quite competitively, there was only one winner. The “Grey Falcons,” who used a very tight strategy to overcome literal obstacles, pulled their teammates up (literally) and worked together to come out winning with stiff competition from the contending teams right on their tail.

So despite the physical and mental exhaustion, all of us were thoroughly uplifted in spirit with this experience and surely cannot wait to go back again.

FREE ZONES – UAE’S SUCCESSFUL DIVERSIFICATION STRATEGY

UAE is home to 45 free zones across the country, notably the highest globally, with ten more under construction. Defining a large part of the country’s private sector growth, these zones attract marketing, trade, and investment opportunities that accelerate the growth and success of the country’s finance, IT, logistics, trading, and media industries.

As of February 2021, more than 60,600 companies are registered in the country’s free zones, invariably accounting for eight percent of the total number of companies registered in the UAE. The government’s targeted efforts have helped the country achieve the position to become the most favorable business destination globally in recent years. Incentives for start-ups, entrepreneurs, and freelancers include reduced registration fees, visa extensions, and capital finance.

The free zones include prominent pillars of the private sectors related to trade, industry, energy and renewable energy, media and communications, metals and commodities, finance, healthcare, and IT.

JAFZA and DMCC – The Path Breakers

Dubai is now home to 30 free zones, including giants like JAFZA and Dubai Multi Commodities Centre (DMCC). UAE’s first free zone -the Jebel Ali Free Zone Authority (JAFZA) caters to over 7500 companies and accounts for 28 percent of Dubai’s GDP. Another feather in its cap is that JAFZA is the largest free zone in the world. That which started as a central pillar of economic diversification, JAFZA is today the blueprint for establishing several other free zones across the GCC. The DMCC is the largest and fastest-growing free zone in the UAE, which marks the country’s appeal for its budding multicultural international entrepreneurs.

Dubai is right now identified as a de facto-free zone hub.

Benefits of Being Under The Free Zone Umbrella

So what exactly is the lure of being under the free zone?

Largely defined by flexible policies surrounding foreign ownership, labor regulations, taxes, etc., the other benefits are:

  1. Foreign entities under the free zone enjoy 100 percent ownership circumventing foreign ownership policies with ease.
  2. Attraction of global talent to UAE as there are no adverse regulations to foreign labor.
  3. Apart from being exempt from taxes and fees like custom duties, the companies are allowed 100 percent capital and profit repatriation.

In short, the free zones bring over job opportunities, competitive salaries, a solid knowledge base, and an overall level of excellence.

Ancillary Services

Free Zone authorities extend ancillary services for legal, medical, labor, and immigration. The free zones also provide freelance permits to international branch office licenses from shared desk space on annual contracts to industrial warehouse leasing for 25 years. Simply put, everything is designed to attract and help investors build a business, grow trade and investment and facilitate the transfer of skills, knowledge, and technology.

Success in Times of the Pandemic

While industries worldwide were fighting to survive the pandemic, the free zones in the UAE stepped up their efforts to strengthen the business climate by launching several initiatives. This helped the government pick up the broken pieces of the economy in the form of health crisis and dip in oil prices. This was achieved largely due to the economic policy tools that was in place by the UAE government. For example, the Umm Al Quwain Free Trade Zone started the business LYTE packages that help prospective investors continue with their business set up plans with a neat 50 percent off. Also, acquiring licenses was done in just days compared to the earlier timeframe of ‘months’. Some free zones in the UAE introduced online services for investors, while others recorded an increased number of new registrations and business expansions, with technologyfocused sectors seeing higher traction.

Foreign Policy Objectives

As part of the agreement between UAE and Israel to normalize friendly relations, many of the newly formalized commercial links came to fruition among Gulf Free Zones. Dubai uses its flagship commercial entities to cement ties with its Israeli counterparts. In September, DP World formerly known as Dubai Ports Authority, and several government entities signed agreements with Israel-based Dover Tower Group to assess port and free zone development opportunities in Israel and establish a direct shipping route between Eilat port and the UAE port of Jebel Ali.

Encouragement for Developing Clusters

Free zones will continue to encourage the development of clusters, enhancing the UAE as a hub that encourages broader build-out of specialized infrastructure and develops sectors that are key to the economy while also facilitating job creation. Noting that free zones have become an integral part of the diversification plans of each Emirate, there is likely to be divergence in the development trajectories of such business hubs. The Israel Diamond Exchange and the Dubai Diamond Exchange, which is part of DMCC, agreed to enhance cooperation in the diamond trade.

Free zones are more likely to support the development of technology-based strategic industries and offer global investors attractive growth propositions. As the country continues to build on strategic focus industries, flexibility and multipurpose utility will be the key traits of successful free zones in the UAE.

GLOBAL FREIGHT MARKET INSIGHTS

Insights into the current market dynamics helps us to stay informed, assists with decision-making and helps in potentially mitigating risk, therefore avoiding disruptions to our supply chain.

The logistics sector was hit the hardest by the COVID-19 outbreak in 2020. With the lockdown in many countries and a major focus on the production of essential products, the volumes of air and ocean freight had fallen significantly in 2020. Vaccine hesitation and ongoing transmission, regional resurgence and variants and also difficulties with social distancing in ports, warehouses, and terminals led to major disruptions.

Apart from this there has been issues of high labour cost. These labour constraints also arose because of surging consumer demand, which could not be backed because of labour shortage.

Many manufacturing facilities left incompetent to face increasing demand for goods, lead to limited supplies and thereby higher prices.

There have also been major operational changes with regard to export screening requirements, consolidation and ground handling agents.

Ocean carrier consolidation has thelowest inventory levels since 1990s. Many airports around the world have been impacted by congestion too.

Shut down of manufacturing facilities and ports, to container shortages and labor issues, to rising costs and the ongoing pandemic, it has been the opposite of smooth sailing.

Air Freight Update

With completion of the China International Import Expo, Shanghai will see a boost in capacity. In most of East Asia, the capacity is stretched and rates are high and was expected to continue through November.

In India, cargo demand (both inbound and outbound) is outstripping capacity resulting in extended transit time and higher rates. A travel ban was lifted on November 8 but the impact on capacity is yet to be determined. Due to the various challenges faced in ocean freight, there are heightened levels of ocean-to-air conversion cargo, particularly in south India.

Transatlantic demand has been increasing in recent weeks. Easing of travel restrictions into the United States started early November, but short-term capacity increases are unlikely until seats on existing flights are filled.

In Frankfurt and Amsterdam, imports and exports has been affected due to Terminal congestion as a result of labour challenges.

There is a lot of constraint in southbound cargo from North America to South America. Freighter operators are already using their full fleets. As COVID-19 restrictions remain in place, limited additional passenger flights are entering the market and spot markets continue to trend up. This has resulted in the U.S air import terminals being congested.

However, some of these extreme delays have been eased since summer, with gradual improvement on labour.

Air Freight Capacity and Demand

With the reduction in passenger flights since the start of the pandemic, the air freight capacity has seen a -12% decline. Flights arrive in waves versus daily pattern of passenger flights pre- COVID-19 and this creates a large influx at one time and overwhelms warehouses, which are further constrained by labor shortages. Even the increase in freighter activity cannot cover this gap.

As on the demand front, inventory levels as percentage of sales are at a historic low. The disruption in global supply chain has lead to surge in demand. However, this all-time high demand has lead to ocean reliant cargo switching to air.

Challenges and Solutions

There are innumerable challenges at hand at Airport terminals and warehouses. These challenges can be tackled by proactive conversation, weekly guidance, increased notifications on terminal dwell times and adding alternative vendors, warehouses, and trucking options. Also re-directing freight to airlines or airports, which are less, impacted and leveraging truckload capabilities at origin and/or destination can ease the situations.

Air Freight Market Outlook

There are many strong future growth indicators. A steady increase in export order has been predicted. The rebound in jet fuel, during peak season is a positive trend. Terminal congestion variability and capacity at a premium is to be the order of the day.

Ocean Freight Update

In Northern America, there has been consistent improvement with regard to availability of vessel space. U.S. East Coast ports to Europe, and the Canada gateway for U.S., Midwest cargo to Europe through Montreal and Halifax ports have seen improved activity. Port of Los Angeles/Long Beach terminals, such as TTI, are taking steps to relieve congestion by extending their gate hours.

There are continued rail delays from the U.S. Midwest to both U.S. East Coast ports and to Canada. However, some railways such as the Burlington Northern Santa Fe (BNSF) are offering weekend gates to try and improve fluidity.

Nevertheless, congestion in the United States continues. Most terminals are congested at 80-90% utilization. The average dwell to berth is around 13-16 days, at LAX/LGB, 77 ships were at anchor or in the drift area and port wide there are chassis shortage.

As of now European ports of Hamburg, Rotterdam and UK port congestions issues still persist. There is increase in Europe port omissions. At UK ports, the surcharges are applied to ocean carriers.

In Australia, in the wake of resolution with MUA, delays at Australia are 7-9 days. On the Asia-Europe trade lane, space is expected to be extremely tight as high demand persists.

As a result of COVID-19 safety protocols, Suez Canal blockage, and Yantian port closures has created vessel bunching, berthing delays, and reduced yard capacity. Demand continues to increase; carriers must use blank/void sailings to mediate the congestion.

Oceans rate trends in US East and West Coast peaked in August-September 2021 and dipped. But trends are showing improvement. Schedule adjustments improved congestion briefly.

Key Factors to Consider

In order to navigate in today’s ocean market, forecast need to be made prior to 6-8 weeks minimum. There need to be flexibility in all facets of shipment-routing, carriers/services, modes, equipment and pricing. Also there should be prioritization, keeping variability in SKUs and/or parts. The success in the sector will depend on consistency and smoothing of volumes week to week.

 

FIFA WORLD CUP! “GETTING YOU IN THE GAME” FORUM: INDUSTRY EXPERT LOGISTICS LINE-UP REVEALED

As one can imagine, Logistics is critical to an event as large and complex as the FIFA World Cup. And it is no wonder that Logistics industry giants, GWC Logistics, was awarded the honour of Qatar’s Official Host Nation Logistics Provider for the FIFA World Cup 2022.

GWC Logistics was established in 2004 and has become a key player in the region’s logistics and supply chain sector. The company offers end-to-end logistics and supply chain solutions to many FMCG, Oil & Gas, Fine Art, Pharmaceuticals industries, to name a few. GWC also provides consulting, record management, and local and international relocation services.

On 16 November 2021, GWC revealed its panel of top industry experts for a virtual forum called ‘Getting You in the Game’.

FIFA’s Head of Event Logistics, Jose Dhooma, said in his keynote speech, “There has never been a more appropriate moment to discuss the role of logistics in the delivery of mega-events. This year, we have seen the critical role of logistics in the world’s economy, and now, with almost a year to the FIFA World Cup Qatar 2022, this forum is bringing together panels of experts to discuss and bring you further into the game of delivering logistics for mega-events.”

The forum featured two panels and two workshops. The first panel focusing on mega-event logistics featured Kirsten de Bruijn, Senior Vice President Cargo Sales, and Network Planning at Qatar Airways. Mark Novack, HC Event Logistics Assistant-Director at the Supreme Committee for Delivery & Legacy. Christopher Nelson, Operations Manager, Middle East Region inKObator, at The Coca-Cola Company and Mathew Phelps, General Manager at GWC. The discussions show-cased “what it takes to create a winning formula to turn visions of events’ enormity into a reality”.

The second panel included Afraa Al Noaimi, Executive Director at Josoor Institute. Laila Al Jefairi, Vice President of Business Development at Qatar Financial Centre, Bader Al-Madhadi, Investment Promotion Lead at Qatar Free Zone Authority, Lauri Becquart, Head of Retail & Private Holdings at Google Cloud and Hamdan Merchant, Senior Director, Innovation, IT & BPI at GWC. The panel analyzed the role of digitalization in the Middle East region and identified the impact of investments in making it an increasingly attractive place for largescale events.

Both panels were moderated by Al Jazeera English’s Senior Presenter Emily Angwin.

Two workshops followed the panels:

1. GWC’s large-scale planning to execute FIFA World Cup Qatar 2022, led by Syed Maaz, Chief Business Development Officer at GWC

2. The legacy of sustainability that the World Cup will leave behind led by Meshal AL Shamari, Director at Qatar Green Building Council.

The FIFA World Cup Qatar 2022 will take place from 21 November 2022 until 18 December 2022 in eight stadiums around Qatar – three of which are already fully operational, with two more scheduled for completion by the end of 2021. GWC has a logistical infrastructure covering more than three million square meters, including the region’s largest privately owned logistics hub, along with a team of dedicated and innovative specialists and state-of-the-art IT systems. GWC on board as a Regional Supporter and the Official Logistics Provider for the tournament will provide FIFA and its commercial affiliates with crucial support and expertise in logistics and supply chain management, which will ensure seamless efficient delivery of the competition.

“Logistics plays a significant role during sporting events to ensure the smooth and efficient delivery of complex, large-scale events, which involves executing a broad spectrum of logistics services in the lead-up, during, and after the final whistle. Moreover, the forum will bring attention to the hard work that goes into the FIFA World Cup Qatar 2022, turning it into a showcase for Qatar and the region,” said Group CEO at GWC, Ranjeev Menon.

35 MULTI-MODAL LOGISTICS PARKS TO COME UP UNDER BHARATMALA PROJECT: MINISTER NITIN GADKARI

Multi-Modal Logistics Parks (MMLPs) is a key policy initiative of the Government of India, led by Ministry of Road Transport and Highways (MoRTH) and the National Highways Authority of India (NHAI), to develop Multi-Modal Logistics Parks in huband- spoke model to improve the country’s freight & logistics sector.

35 multi-modal logistics parks will come up in the country under the Bharatmala project. The facilities envisaged in this MMLP are warehouses, cold storage, inter-modal transfers, handling facilities for container terminals, and bulk/break-bulk cargo terminals, among others. These Multi-Modal Logistics Parks (MMLPs) will help lower overall freight costs and time, cutting warehousing costs, reducing vehicular pollution and congestion, improving the tracking and traceability of consignments through infrastructural, procedural, and information technology interventions.

Among 35 strategic locations identified for the development of MMLPs across India by MoRTH, Nagpur is one of them. Nagpur, being centrally located in the country and well-connected through road and rail, provides location advantages to establish industries, warehouses and associated facilities to link to ports. The proposed project site to develop MMLP Nagpur is located at Sindhi in the Wardha district of Maharashtra and the total area of the project site is 345.54 acres with an estimated project cost of Rs 780 crore. Within the site, the MMLP is to be developed in an area of 230 acres, while the balance land might be used for industrial development based on demand. The land acquisition for the dry port has been already completed by JNPT (Jawaharlal Nehru Port/Nhava Sheva port), with an MoU (memorandum of understanding) for the MMLP at Sindhi, having been signed between JNPT and the NHLML (National Highways Logistics Management Ltd), a special purpose division of the NHAI. MMLP Nagpur at Sindhi will in turn make Nagpur and Wardha, the logistics capital of India. It will also boost opportunities for export and import for businesses in the region.

The Bharatmala project proposes to have four MMPLs in Maharashtra, including Jalna, Nasik, Solapur and Sangli. Similarly, an MoU has been signed for starting another MMLP in Chennai. MoRTH Joint Secretary (Logistics) Suman Prasad Singh said that out of around 35 MMLPs, work on one in the northeastern region has already been completed.

Union Road Transport and Highways Minister Nitin Gadkari has stated, “These MMLPs will give a big boost to our economy and exports.”

The statement also said around 10 million tonnes of cargo is estimated to be handled at the MMLP in the horizon year of 2051.

The ministry has in its pipeline a plan for an Expressway between Nagpur and Hyderabad as well. Keeping pace with India’s economic growth is the expansion of the country’s logistics sector. The government expects freight movement in the country to continue its growth trajectory.

SMART SHIP VS. DIGITAL TWIN – THE INEVITABLE CHANGE IN SHIPPING

The International Maritime Organisation (IMO) Strategic plan of 2018-2023 was one of the first steps taken by the IMO’s Maritime Safety Committee (MSC) to adapt to the advancement of technology in the Shipping sector. The strategic plan demonstrated the need to include and integrate the advancing technology within the Regulatory Framework. This included finding ways to balance the safety and security concerns of the parties and the advancing technology, mitigation of cost and environmental damages, etc. The advancing technology brought into the picture two alternatives for the shipping industry, i.e., Smart Ships and Digital Twins. Although both these alternatives may sound synonymous, in reality, they differ. Every shipping company must understand the difference to make the best choice possible for meeting its business needs.

SMART SHIP

Fuel consumption, energy efficiency, and carbon emissions are three of the most debated concerns in the shipping industry. These three problems are addressed once Smart Ships are brought into the picture. The Commercial-off-the-shelf (COTS) technologies being used in the ship, when coupled with the available Internet of Things (IoT) and Information and Communication Technology (ICT), brings to life a cloud-based monitoring system, which analyses the performance of the vessel and addresses the issue of optimization of fuel consumption levels, energy efficiency, and control or limits of the CO2 emissions for the entire life of the vessel.

The use of Artificial Intelligence (AI) and Machine Learning (ML) allows faster data processing methods, thereby avoiding human errors/accidents and helping in achieving greater autonomy. Stena Lines, a European Enterprise dealing with exports, was able to reduce crew and passenger accidents, improve fuel efficiency, and reduce the use of plastic on board with the help of AI and ML-based calculations.

The use of AI-based sensors onboard the vessel will allow tracking of the cargo throughout the journey via AI-based apps. This allows the evaluation of real-time data by all the parties involved in shipping the cargo. Other forms of real-time data might include information about vessel position, vessel speed, fuel and emission reports, wind speed, etc.; the huge volume of data being collected will also help determine future shipping operation and processing needs.

Other advantages include efficient reduction in vessel turnaround time, i.e., once ports receive data regarding vessel position and movement, AI can further analyze the time of arrival and departure. This not only helps the incoming vessel but also allows the port to efficiently manage and guide other vessels as well, thereby reducing the overall time for which a vessel stays at the port. `Remote sensing technology has simplified the means of off-shore management of vessels. With the ability to constantly monitor the operational efficiency of both old and new vessels, the incorporation of Smart Ships would enable IMO to achieve its Greenhouse Gas (GHG) strategy, which aims to reduce carbon emissions in the shipping industry by 40% by 2030.

DIGITAL TWIN

As the words suggest, a digital twin is the digital representation of a physical entity, i.e., the digital representation of the vessel and its machinery. It is a virtual environment wherein all the data and simulations that would have occurred during the vessel’s lifespan can be studied and analyzed in real-time. The technology allows analysis of billions of possible outcomes, design systems, fuel management techniques, simulator-based testing, virtual system integration, etc. It helps the shipping company analyze the best possible solution for efficient vessel management. This technology is not limited to providing real-time analysis and future forecasts regarding the vessel.

Shipping companies provide a wide range of services, and to have the upper hand, and it is important to understand the market trend and move accordingly. The Digital Twin analyzes past and present trade patterns and market transactions to provide future scenarios/possibilities, thereby aiding better operational and strategic decision-making. It also helps in strategic planning at ports. A Digital Twin model incorporates past and present port data and provides suggestive improvements in port design, its capacity, etc. It predicts an increase or decrease in future arrivals in the port, allowing the port managers to run simulations and identify necessary steps to accommodate the vessel efficiently. Connected Digital Twins enables all stakeholders to view and analyze the vessel during the voyage. Tests w.r.t future risks, structural reliability, etc. help the stakeholders to improve efficiency during the voyage by making suitable changes.

Apart from this, Digital Twins can also be used to deal with cyber-security threats. With the advancement of technology and smart ships using several IoT and AI-based tools, a huge amount of data is now available over the web and could be remotely accessed if proper measures are not taken for its protection. Creating a Digital Twin helps with supervision, maintenance, and control over such data. It analyses the data network over the web and provides strategic inputs to both external and internal cyber-security threats. It predicts real-time and future threats, thereby aiding in the identification of such threats at the early stages and elimination of the same, with minimum damage. It helps create simulations where various cyber threats could be analyzed and tested with practical solutions, thereby increasing preparedness for realtime cyber threats.

 

TRANSPORT LOGISTICS COMPANIES RIDING GROWTH WAVE AS COVID WANES

After a year and a half of COVID-19 pandemic hitting the world, rays of revival across many sectors can be seen. And India’s logistics companies seem to be riding on a wave of growth after the waning of the second wave.

Transport Corporation of India (TCI), one of India’s leading supply chain and integrated logistics players, expects its net profit to grow 30%-40% and its revenue to grow 20% in FY22. One of the world’s largest logistics players, DHL Express, recently opened an airside facility in Bengaluru airport. The gateway is said to handle 650,000 to 700,000 shipments a month. The cargo facility in Bengaluru is one of the biggest investments the company has made in India, said the India Managing Director. French logistics player FM Logistics has recorded a 58% growth in its India turnover in the first half of this fiscal year.

Companies are bullish and are investing in new infrastructure in spite of global supply chain constraints and fuel price hikes. According to Vineet Agrawal, managing director of TCI, increased freight rates in coastal shipping have helped increase revenue.

Despite supply chain businesses having been affected due to a global shortage of semiconductors and their impact on the automotive and white goods industry, automakers are optimistic about the situation, and production has started to improve from the last quarter. Automotive companies, which were hit the hardest, have assured an increase in production, with hope that the overall market can absorb the higher fuel prices. Furthermore, in India, as elsewhere, a spurt in demand in some segments such as e-commerce has kept companies confident.

The global pandemic led to a prolonged partial closure of ports worldwide, creating a glut of containers in some ports and an abject shortage in others and of course freight rates and container prices have shot through the roof. Companies like the TCI have said it will only spend half of their planned capital expenditure of INR200 crores due to the increase in costs of ships and containers. About 60% of its CAPEX was to buy new container ships and containers. According to a report by ING, the supply of new containers will only ease the pressure by 2023.

Needless to say, many companies saw a big dip in revenue a year earlier. However, things are looking up. Most prominent companies are making noticeable investments foreseeing this trend. The new airside facility in Bengaluru airport for DHL will save 12-24 hours in terms of transit time for DHL’s customers.

Consolidated revenue grew 38%, and net profit trebled in the July-September quarter. Agrawal, says, “The estimate we are giving the street is, of a 30%-40% increase in the bottom line and a 15%- 20% increase in topline.”

 

CONTINUED DISRUPTIONS IN THE GLOBAL FREIGHT MARKET

It is established fact that COViD-19 has clearly created a new pattern regardless of where we stand. Most industries today face the challenge of rebuilding and managing the recovery phases. As far as retail and logistics is concerned, the pandemic has introduced so many consumers to online shopping and has increased freight volumes. In the words of the economist Stephen Burks, “It dropped like a rock and came back like a rocket, but coming back has been uneven, and the demand patterns are not the same as what it was before the downturn. There have been all kinds of glitches in the supply chain as the final demand pattern has shifted and the supply chains are struggling to get back. Right now, in terms of demand for trucking in the US, it’s high. There is huge demand with supply constraints regarding trucks and drivers.”

Stressed Supply Chains

During the holiday season, retailers have most of their inventory stocked, but the major retailers have announced shortages this year. According to the American Trucking Associations, the latest trucking and logistics indexes have shown stressed, flashing red warning signs in maintaining supply chain lines. Stores like Costco and The Home Depot plan to lease out their cargo ships to get items to the US and Canada in an uninterrupted pattern.

The Association of Supply Chain Management Executive Vice President Douglas Kent spoke about the situation, “Transportation is riddled with disruptions. Whether it’s port capacity on the shipper side from China or the receiving side from the US, the shortage of truck drivers, and concerns about recruiting people into warehousing and transportation jobs, they continue to disrupt the industry. This is not very easy. It seems like every time we find a path out of disruption, and another path is created for us.”

The Southern California Coast, home to the nation’s biggest ports – Los Angeles and Long Beach is cited as the worst choke point in the supply chain. On 27th September 2021, 64 container ships with millions of dollars worth of toys, electronics, furniture, and other goods lay at anchorage waiting for an unloading berth.

As far as the White House Supply Chain Disruptions Taskforce is concerned, the Biden administration had appointed John Porcari to work as its port envoy whereby he announced the facilities for its 24/7 operations. The port of Los Angeles was getting ready to work 24/7, while Long Beach planned to increase operations and eventually move forward to a 24/7 supply chain. Both facilities are expected to work closely with the trucking industry to ensure operators understand how to take advantage of incentivized gate hours and expanded opportunities that will be created to move cargo during non-peak times.

The nation’s major ports have seen a peak in container volumes during the past year where, Los Angeles ports alone passed out 1 million containers a month. At the same time, the East coast ports like New York, Baltimore, Virginia, South Carolina, and the Port of Savannah have shown double-digit increases since the cargo surge last year. The Investment banking company Goldman Sachs cited supply chain issues responsible for its decline in the third-quarter economic growth forecast from 6.5% to 5.5%. Goldman Sachs economists also added, “Spending on dining, travel, and some other services is likely to decline in August, though we expect the drop to be modest and brief.” As the Economist, Rajeev Dhawan, Director of the Economic Forecasting Center at Georgia State University, states, “I think because of the virus, the state of the economy can change very quickly, and it is changing, and it’s downward. If you had asked me this question a month ago, I would have said it was moving upwards. Remember, this virus is leading this economic tango”.

According to revised estimates released by the Bureau of Economic Analysis in August, the real Gross Domestic Product (GDP) increased at an annual rate of 6.6% in Q2 2021. The supply chain mismatch between the surging imports and an over-exhausted transportation network are reasons for a slowdown of economic recovery.

Warehouse Woes

Another issue faced is the warehouse capacity. Warehouse space is tight once the product is taken off the ships. National vacancy rates are less than 5%, and less than 2% near ports as shippers say they do not have enough space to store the goods. Kent points out two aspects here, “You have a tightening of warehouse capacity, but at the same point, are the goods that are in the warehouse the right ones? The consumer is going to pay the price for this amount of disruption. Who can ignore the fact that the consumers will pay when the supply chain is not working well?” Another concerning factor is the higher inflation at the retail level. Initially, a 20-foot container that cost $3500 to import from China to the US, post-Covid, cost more than $10000 for the same journey. Fed Chairman Jerome Powell had mentioned that the supply chain problems might fuel inflation longer than anticipated earlier. “Inflation is elevated and will likely remain so in the coming months before moderating,” Powell said.” As the economy continues to reopen and spend rebounds, we see upward pressure on prices, particularly due to supply bottlenecks in some sectors. These effects have been larger and longer-lasting than anticipated, but they will abate, and as they do, inflation is expected to drop back toward our longer-run 2% goal”. Kent said, “I hate to be the Grinch that stole Christmas, but I don’t think it’s going to line up the way we would like it. Most of the items consumed during the holiday period have a manufacturing location outside the US. If you look at the big exports, it’s computers, bicycles, accessories, toys, and the reality is this should be all clicking smoothly now, and a lot of those expectations are now being foiled. We see continued disruptions”

The Drewry World Container Index that provides weekly assessments of container freight rates has mentioned that the prices have increased for 19 consecutive weeks and are 351% higher than the last year.

DRONE DELIVERIES-AN ULTIMATE SOLUTION FOR TIME-CRITICAL SHIPMENTS

A Dublin, Ohio-based distributor, Cardinal Health is now seeing a way to alleviate delivery delays to pharmacies, restocking inventory, and volatile last-minute shipping prices by moving its first foray through drone deliveries. This decision comes when companies like United Parcel Service Inc., Merck & Co., Walmart Inc. have started using drones in the domestic shipment of medical products and supplies and is seen as a success story.

In collaboration with drone operator Zipline International Inc, the pilot program will start next year to speed up pills, inhalers, and other critical items to US pharmacies. Transport cost cut for time critical shipments is an added benefit of the program. The Aerial drones are expected to carry loads of up to four pounds about 10 miles from Kannapolis NC based distribution center, to local pharmacies in a short span of 15 to 30 minutes.

Cardinal Health’s senior vice president Pharmaceutical Operations, Josh Dylan, is hopeful that the new program would allow the company to bypass road obstacles including those caused by natural disasters and replenish high turnover items and also prove help in emergency situations in remote areas, including scenarios where the time of delivery is important for e.g. like delivering anti-venom for snake bites, etc. Mr. Dylan stressed that apart from speed and reliability being key factors for drone delivery, the program would allow the company to avoid fluctuations in prices for last-minute courier or helicopter deliveries.

The drone operator based in South San Francisco, California, Zipline International Inc has delivered medical supplies to remote parts of Africa, flown in blood and vaccines to outposts in Rwanda and Ghana, and the latest Corona vaccine developed by Pfizer Inc and BioNTech SE. Its latest deals include delivering merchandise for Walmart in Northwest Arkansas and delivering prescriptions and medical supplies for the hospital system Intermountain Healthcare in Salt Lake City.

Zipline’s drones are about six feet from head to tail, resembling miniature planes that travel 300 to 400 feet above the ground over terrains dropping packages with parachutes into landing zones about two parking spaces wide and can travel up to 100 miles round trip or 50 miles from the distribution center. A spokesperson mentioned that the company is still working out routes with aviation regulators. Eventually, the company aims to expand the program to more products and regions depending on FAA approvals.

DISRUPTIONS: KEY INDICATOR FOR SUPPLY-CHAIN OPS TO MEASURE RISKS

“Resilience and sustainability of supply chains is a matter that is engaging urgent attention of political and business leaders in all major economies,” according to Singapore-based business leader Girija Pande (Chairman of Apex Avalon Consulting).
As far as the Indian government is concerned, improving logistics, sourcing and procurement are major focus areas currently, where Third-Party Logistics is expected to grow at 8% CAGR (compound annual growth rate) during 2021-25.
And globally, these are the major supply chain trends:

Impact of a pandemic: The shock of COVID-19 will continue to be felt worldwide as organizations continue to recover from the initial impact on global supply chains. The unprecedented nature of COVID-19 has forced companies, and industries, to rethink and transform their supply chain models.
Impact of geopolitical rivalry playing out between China and the US: The supply chain industry is transforming by diversifying supply sources, going beyond China, who until now has been a clear choice for most as a manufacturing hub of the world.
Increasing impact of climate change: For many, the reality of our climate emergency was brought into sharp focus in 2020. For example, the worldwide financial sector understands that the investment risk of global warming is real, and even before the pandemic, they had started to adjust their behavior accordingly.
Environmental, Social, and Governance: The global push for overall sustainability is clearly enshrined under three popular ESG goals, that is, Environmental, Social, and Governance goals. Investors increasingly apply these non-financial factors as part of their analysis process these days to identify material risks and growth opportunities. These trends will force businesses to take a harder look at how companies organize themselves to source and procure their supplies, precisely and effectively, select suppliers who will survive this upcoming disruption to future proof their supply chain to become resilient and sustainable. This means that ESG frameworks have now gone beyond a simple tick-box exercise.

Currently, many global and regional companies tend to favor large, centralized procurement functions, which can be better monitored and provide businesses with cost efficiencies involved in company-wide purchasing. Many have regional procurement hubs that source from varied regional suppliers. They have built long-term relationships as a major concern in the industry was lowering costs while maintaining standards and reliability.

However, procurement and logistics will become very difficult to manage in the new world impacted by the scourge of geopolitics, pandemic, and sustainability. According to Mr. Pande, “Instead of just in time, very often it may become just in case!”

Specialized Procurement Vendors

He envisages that specialized companies or vendors that are solely tasked with successfully navigating such changing environments will emerge. These specialized entities will then handle procurement functions for many organizations using specialized skills, scalable processes and state-of-the-art tech platforms to improve transparency in procurement. The norm will soon be “See better, buy better!”

The tasks that these specialized procurement vendors will focus on will be four-fold:
1. They use their preferred bulk buying position to drive price-effectiveness across multiple companies.
2. Leverage a diversified supplier base.
3. Providing a digitalization platform as a service.
4. Embedding ESG framework as part of procurement services, i.e. Organizations must put ESG principles into practice when managing supply chain impact, adopting a ‘Procurement with Purpose’ approach to boosting resilience from profit and planetary perspectives.

Such specialized vendors are becoming more prominent. Chain IQ in Zurich a spinoff of UBS Bank, decided to outsource its procurement and sourcing functions by creating a neutral entity. Large IT/business process outsourcing (BPO) vendors such as IBM and Accenture have taken on this task in addition to their existing services, or, as in the case of Indian procurement vendors like GEP and WNS Holdings, tech-focused companies setup by procurement specialists. Indian tech giant WNS is among heavyweights with solutions in the global market. Many of these entities provide some or all the above tasks and many have, often, in-sourced procurement staff from customers in a BPO deal that benefit both.

India can use its seasoned IT service providers to provide tech-led procurement services to take up new and exciting roles. Moreover, as China moves out as a clear choice for most as only a manufacturing hub, it’s an opportunity for India and other countries as the next potential supply source.
Pande suggested, “It’s time for businesses to comprehensively relook at their supply chain operations to consider resultant risks arising from triple disruptions that lie ahead. The winners will be those that take heed and restructure early.”

CHAIRMAN’S MESSAGE

As we turn back and look at another eventful year, there have been ups and there have been downs. But we have been able to ride over the waves. The sky-high freight rates, driven by increasing consumption and port congestions have been a deterrent to our services. However for Team CSS, 2021 has been a year of several important milestones.

Resilience in Crises

Despite the pandemic raging on in several parts of the world, it was business as usual at CSS. We have been able to provide logistical support for various critical shipments like the oxygen supply when India was reeling under the second wave of the COVID-19 pandemic to helicopter shipments to South America. Despite the economic slowdown brought on by the pandemic, CSS has spread its wings to open a new branch in Ras Al Khaimah to provide logistics support to the burgeoning markets of the Northern Emirates of the UAE. We have also resumed service offering for Fine Art shipments as Dubai grows into a hub for fine art exhibits.

Expo 2020 – Ushering in a New Era

With Expo 2020 opening its doors in October of this year, Dubai has been playing host to the nations of the world. Delayed by a year due to the COVID-19 pandemic, the event has serendipitously coincided with the golden jubilee of the founding of the nation of the UAE. UAE came into being as an independent nation in the year 1971. President His Highness Sheikh Khalifa Bin Zayed Al Nahyan has termed 2021 as ‘The Year 50’ as the UAE celebrates its Golden Jubilee milestone.

Expo 2020 will usher in an era of change and spark innovation as it forges new alliances and inspire path-breaking discoveries across industries. With its focus on Opportunity, Mobility and Sustainability as interconnected drivers of progress, I believe that this great event will set the pace as the world emerges out of the pandemic. For the first time, each of the 192 participating nations has its own pavilion. May new ideas spring up, spurred on by fresh new perspectives as we march on ahead into a whole new world that’s more inclusive yet diverse.

Expo 2020 will leave a lasting impact on the business landmark of the nation, revamping it alongside global proportions. Let’s leverage the far-reaching benefits of Expo 2020 and be a trailblazing leader pioneering sustainable growth and progress for the company and the nation of UAE. As businesses rebound, the year ahead is indeed promising. I expect business to pick up as forecasts predict an increase in economic activity worldwide.

As we close this year, I want to express my sincere gratitude to our network partners for their unstinting support. I also want to thank our valuable customers, bankers, and business associates who have been the wind beneath our wings. And I want to personally thank every member of Team CSS. It’s your tireless contribution that has spurred our growth for the last 25 years and will continue to lead us to expansion and prosperity in the year ahead

 

CSS FORAYS INTO FINE ART LOGISTICS

CSS has added another feather to its glorious cap by completing a Fine Art export for a prestigious client. These high valued paintings needed to be moved from UAE to its destination in the USA. We were successful in achieving this complex shipment which involved several intricate details being looked into.

Fine Art shipments require thorough pre-planning so that it is executed without any issues from start to finish. Since the shipment was delicate and high-priced, CSS facilitated a seamless process till door delivery in the USA.

There were four pieces of very expensive paintings done by one of the most renowned international artists of Dubai who wished to ship for one of their buyers in the USA. The timeline was tight with plenty to do right from gathering the packing materials, arranging soft-packing, erecting the paintings, ensuring wood treatment is done to avoid any bending etc. Post packing, a sensitive movement was required with escorts from CSS warehouse to Airport. Being an unusually large packed crate it could only be carried by cargo freighter. Thereafter liaison with airline ground staff was carried out to ensure the crate is boarded on time to its destination. In the last-mile we performed the customs clearance in USA, valuation by customs, survey of the crate condition, pick this valuable Art-Crate to deliver and unpack to shelf to the new proud owner’s gallery.

Big Thanks to the splendid job done right from the sales person to identify the prospect, the Operations team to carry out the job with precision and deliver on time at destination.

Dubai – A Hub for Fine Art

Dubai’s cosmopolitan culture attracts both artists and art lovers, a gateway for the east and the west. With many galleries, exhibitions and museums always open, the art scene in Dubai is a burgeoning one. The city’s vibrant art scene has established Dubai as a cultural centre for the global arts community. Dubai’s art connoisseurs and ongoing fine art exhibitions aplenty. Therefore, there is a continuous need for the movement and handling of multi-million-dollar arts.

Fine Art Logistics – Proud to be included in the CSS portfolio

CSS offers specialized fine art logistics services to museums, institutions, galleries, auction houses, and private collectors. We understand that moving art is different as compared to our regular logistics services. Fine Art Logistics calls for specialized packing and unpacking, and installation. It has to be handled with utmost care and precision from start to installation. Our art logistics experts have been specially trained to handle priceless pieces with care and commitment to ensure safety during the entire shipment process.

Portfolio of services offered by CSS Fine Art Logistics

  • Soft packaging, palletizing, and made to order crating as per the client’s need.
  • Humidity and temperature-controlled storage with individual lock facilities.
  • Specially equipped trucking to insure safe and secure movements.
  • Global transportation by air/sea/land with complete documentation for all purposes.
  • Art insurance for door-to-door services.
  • Comprehensive Fine Art installation services in residential, commercial, public spaces, hotels, and exhibitions.

Our Audience:

  • Artists (paintings containing acrylics, oils, tempera, water colour & mixmedia)
  • Sculptors
  • Fine Art Collectors
  • Fine Art for museums and galleries
  • Complete project Handling for Fine art auctions, events, and exhibitions

 

TALENT WINS GAMES, BUT TEAMWORK AND INTELLIGENCE WINS CHAMPIONSHIPS

With IPL fever in the air, cricket seems to be ruling the roost everywhere. And when employees are in a cricket frenzy, can corporates be far behind? CSS Play Club comfortably sealed yet another championship by winning the finals against Dubai Tellicherians.

It was a classy batting display by our one and only star player, Rowhmas, who was also adjudged as the Man of the Match for the Finals. Seventy-nine runs in a quick span ensured CSS had a good start. This was followed by firecracker innings by our captain, Riyas. Other teammates like Shahir, Shajil, and Shibith also pitched in with their innings, helping CSS Play Club register an impressive total score of 228 runs.

All of our bowlers did a decent job by taking wickets at regular intervals to restrict the opponents to the score of 150 runs. Prashob PK was awarded the best bowler of the finals with three quickies, well supported by Ranjith Haridas with two key wickets.

Kudos to Shajil Balan, Reji Mohan, Prashob PK, Mohammed Rowmahs, and Mohammed Shahir for their contribution throughout the tournament.

At CSS, we are passionate about cricket. We believe that it helps with team building as we encourage our employees to continue with their passion for the gentleman’s game.

The Chairman, Mr. Kaladharan, emphasized, “As our employees represent the company in corporate tournaments, it makes winning these tournaments immensely satisfying.”

EMPLOYEES OF THE MONTH


JAYANDAN –Team Leader, CFS,
CSLC awarded by Manish Kumar,
Manager Operations-NVOCC & CFS

 

 


CHUCHU VISWANATH –Operation
Executive, Forwarding, Jebel Ali
awarded by Chandrakala(CK),
COO, NVOCC, CSS Group

 

 


MUHAMMED JINSHID –Import
Operation, NVOCC
awarded by Manish Kumar,
Manager Operations-NVOCC & CFS

 

 

 

 

CSS CELEBRATES OUR PEOPLE AND OUR TRIUMPH OVER THE ODDS THAT FACED US LAST YEAR

CSS celebrated its people, the very strength of the company, with a grand office party at Fortune Hotel, Dubai on 8th October 2021 at Fortune Plaza hotel. The night of festivities was marked with joyous celebrations and a fantastic display of the talent of Team CSS. The special night was also significant as we honored the people of CSS for their tireless hard work and dedication during the tough seasons.

CSS has always has displayed strength in the face of battles, and we have managed to emerge resilient and even stronger post the pandemic. Our Chairman, TS Kaladharan, spoke at the gathering, emphasizing, “At CSS, we believe in a culture of camaraderie and a celebration of every individual that makes Team CSS. It’s your commitment and perseverance that has brought us this far and will continue to propel our growth story”.

As we emerged out of the pandemic’s restrictions, we wanted to bring everyone together across operational teams to connect and find commonalities outside of work we would not have done otherwise.

ABU DHABI PORTS INK AGREEMENT WITH CMA CGM GROUP TO INVEST AED570 MILLION FOR THE NEW TERMINAL

The new Khalifa terminal will be the first semi-automated container port in the GCC region. Abu Dhabi Ports Group and Francebased CMA CGM Group, a world leader in shipping and logistics, announced on Thursday the signing of a 35-year concession agreement that involves an investment of AED570 million in the new terminal at Khalifa Port. A new terminal will be established in Khalifa Port, the first semi-automated container port in the GCC region. The terminal will be managed by a joint venture owned by CMA CGM’s subsidiary CMA Terminals (with a 70 percent stake) and AD Ports Group (30 percent stake). The partners are expected to commit approximately Dh570 million to the project, AD Ports Group said.

A new regional trading hub

With construction starting in 2021, the new terminal is set to be handed over in 2024. In phase 1, an initial quay length of 800 meters and an estimated annual capacity of 1.8 million TEUs. AD Ports Group will be responsible for developing a wide range of supporting marine works and infrastructure. This includes up to a total of 1,200 meters of quay wall, a 3,800-metre breakwater, a fully builtout rail platform, and a 700,000 sqm terminal yard, it said.

The terminal will provide CMA CGM with a new regional hub. It will enable the Group to develop its service offering between Abu Dhabi and South Asia, Western Asia, East Africa, Europe, and the Mediterranean, and the Middle East and the Indian sub-continent.

Rodolphe Saadé, chairman and chief executive officer of the CMA CGM Group, said the new project marks an important milestone in CMA CGM’s development strategy in the region.

“This state-of-the-art terminal will contribute to enhancing Khalifa Port’s position as a leading global hub and to boosting the region’s economy, accelerating trade flows in and out of Abu Dhabi.”

Building up the nation’s economy

Abu Dhabi and UAE, in general, have seen increased economic activity thanks to their stable economic environment. This is the reason that has contributed significantly to the economic growth of Abu Dhabi and the UAE and made it a viable destination for foreign investment.

The CMA CGM Group- Abu Dhabi Ports agreement is another milestone in the country to significantly accelerate trade and the development of industry in the UAE and beyond. Falah Mohammed Al Ahbabi, chairman of AD Ports Group, said the UAE has become a key investment destination among many of the world’s leading players seeking to extend their reach into the Middle East.

Al Ahbabi said the agreement would aid the Group to realize its long-term ambitions to become a top 10 ports, industrial, and logistics operator by expanding our capacity and growth across the region and beyond. The project will be completed over five years. It will further develop the Khalifa Industrial Zone Abu Dhabi (KIZAD), which will make a significant on the GDP of UAE. With this development, Khalifa port will become a hub for three of the world’s top four shipping companies. It will open up trade routes to new markets in Europe, Africa, Western Asia, and South Asia.

Captain Mohamed Juma Al Shamisi, group CEO, AD Ports Group, said the addition of a new container terminal at Khalifa Port opens a new chapter in the organization’s efforts to become a key facilitator of global trade.

“At home, we expect the presence of the shipping line terminal, which will link directly to Khalifa Port’s upcoming rail terminal and utilise its services, to accelerate trade flows moving in and out of the UAE, while also encouraging CMA CGM Group’s customers to consider establishing a presence in Abu Dhabi” said Al Shamisi.

WHAT ARE THE REAL REASONS BEHIND THE RISING FREIGHT RATES?

In a recently organized webinar by the HSBC group, Brian Hay, the Chief Executive of the Cardinal Group from the UK spoke about the real reasons behind the rising freight rates worldwide. He said that while the coronavirus pandemic continues to disrupt the natural rhythms of global container freight, he expects demand for consumer products to drive the industry forward. He emphasized, “The ships are full, and freight rates are high, not just because of demand, but also the fact that equipment has been displaced as a result of COVID-19.”

Brian Hay revealed that freight rates have risen from USD2000/40’ high cube container to today’s market rate of USD20,000.00. There are several real challenges, but he expects freight rates to improve towards mid-2022 till 2023. With the capacity growing year on year, this could bring down freight rates as it eases the demand for space on shipping vessels.

Real Reasons for the Sky High Rates

He threw light on the four key areas for this pricing behavior, influencing the dramatic rise in freight container prices:

1. Reduced velocity in the usage of equipment

2. Consumer behavior and the surging demand for space

3. Port closures and congestion

4. Shipping line behavior

It is also to be noted that the pandemic has fueled all these factors.

Usage of Equipment

From relatively small to larger vessels of 22,000 TEUS, about 5.5 K container ships are in operation now around the globe. Shipping lines have been painted as the bad guys, making hay while the sunshine. However, most shipping fleets are in full circulation, and the parking of ships is not driving the demand.

Shipping vessels are not available mainly due to the pandemic, interruptions in scheduling, and problems in the WHAT ARE THE REAL REASONS BEHIND THE RISING FREIGHT RATES? deployment of empty units. It is more of care of slower circulation rather than deployment of empty containers. For example, Hapag Llyod, one of the largest shipping companies in the world, needed 300,000 units to reach their pre-pandemic levels and fulfill pre-pandemic bonds. This requirement is not due to the rising consumption and demand for space in ships. However, it is just to manage their pre-agreed bonds.

According to Hay, the current situation is not driven due to equipment shortage but due to slow circulation, rescheduling, port congestion, and general in-availability of vessels.

The freight rates are expected to remain at record levels for a more extended period impacting the sector as it is susceptible to rate volatility, weak economic recovery, and trade protectionism. The Q42020 and Q12021 supply chain disruptions involved container box shortages and port congestion, resulting in frenzied container freight rates. Most shipments during the period are being booked at higher rates than recorded and add on priority load surcharges.

All freight and logistic companies worldwide face operational nightmares as they try to secure container space for their clients.

Brian Hay mentions that they are often fighting for equipment as they are reallocated elsewhere due to the slow circulation of the containers due to the pandemic. Typically a container is used in deep-sea service six times per year, and it could be even below 4 in 2021.

Consumer Behaviour and Demand for Space on Ships

The consumption resulting from the pandemic is phenomenal and will continue to remain so unless we switch our behavior from products to services. Since almost everyone worldwide has been cooped up at home, people have been on a buying spree to make their living and working spaces more comfortable. Most retailers are trading beyond their expectations. The freight liftings in the USA in Q4 of 2021 are 35% higher than in Q1 2020. The deployment has been more to the USA as the demand has been more.

Port Congestion

Port Congestion has been phenomenal in pandemic times and can be seen even from outer space. Currently, all ports, particularly in Asia, are saturated due to a strong rise in inactivity. Ports are also operating from lower productivity rates due to pandemic restrictions. For instance, the port of Liverpool is struggling to meet increased demands due to a severe lack of manpower. In China, Yantian port was closed due to a COVID outbreak. The sky-high freight rates are all a result of these contributing factors.

Shipping Line Behavior

Shipping liners made a combined profit of $16.2 B in the first three months of 2021. What is astounding is that all their Q1 earnings are more than they did in the same period of the previous ten years combined. Mr. Hays noted that their action destroys years of collaboration and loyalty and might be fuelled by profits. He also reiterated that logistics companies are working on their values of integrity and are not increasing the freight rate to take advantage of the situation.

How shipping lines used to sell out a vessel typically was long-term contracted rates, the large volume moves, named account deals, and the rest on the spot market. But the pandemic has reversed the ratios. Service agreements have been put aside, and most of the deals are on the spot market. It does not allow freight operators to operate the way they want to.

It is next to impossible to provide the right service in the current situation with no real prospects of rates easing in the near future. Usually, rates soften in July and August and go into a peak with the Christmas shipments. There might be a leveling by the end of the Chinese New Year, between Feb and March 2022.

With people moving to more experiential services rather than products, inflationary pressures due to rising prices may ease demand and decrease freight rates. Brian Hays pointed out that the rates will not return to the old levels of $1000-#2000 – for a container from Asia. He believes that being forewarned is being forearmed, and the figures can be pegged at $5000-$10,000 per container. Brian Hays is the CEO of Cardinal Global Logistics, the UK’s fastest growing logistics service provider with 22 offices worldwide and over 400 staff, with its head office located in Manchester. Cardinal provides integrated end-to-end supply chain solutions to businesses ranging from SMEs to large-scale multinational entities. Known for designing and implementing transformative supply chain solutions, Cardinal provides customized innovative approaches for each client.

THE PANDEMIC HAS ACCELERATED DIGITAL TRANSFORMATION IN LOGISTICS AND SUPPLY CHAIN SPHERES

Covid-19 has driven change across all industry sectors within a short period. According to a recent McKinsey report, six percent of global supply chain shutdown, while 85 percent faced a reduction in operations during the pandemic. This massive disruption of activities has largely driven digitalization. Logistics and supply chain management companies have adopted technology with organizationwide changes. Cutting-edge technologies like cloud, IoT, automation, Artificial Intelligence, and Machine Learning are ruling the roost as companies try to stay agile and on top of the game in these challenging times.

Five industry experts discussed these topics in detail in the Innovation in Logistics & Transportation Summit organized by the Logistics Middle East magazine. The Innovation in Transportation and Logistics Summit was held at the V Hotel Dubai. The Logistics Middle East Innovation & Transportation Summit brought together thought leaders and pioneers from the worlds of tech, logistics, transportation, and sustainability to explore how the industry can continuously innovate while optimizing the consumer experience and considering the environmental implications of these advancements. This panel discussion will also look at the changes, the winners in the adoption of automation space, and how technology, automation, and digitalization can revolutionize logistics and supply chains.

Panellists for this session are Praveen Sashi, Senior Director IT & Logistics, Head of Digitalisation MENA, from DHL; Fadi Amoudi, Founder & CEO, IQ Robotics; Gorka Sudupe Belloso, Director and Founder Member, SmartLOG Group; Jaideep Dhanoa, Co-Founder and CEO, FENIX; Mark Heald, Supply Chain Director, Logistics Executive.

With more than 100 industry leaders from across the MENA region, the summit was a success as it is brought multiple experts on the same platform.

The summit showed the learning from the past 18 months and how transformation and innovation are realigning the entire industry worldwide. The attendees were also looking ahead to the industry’s future, focusing on drones, digitization, and automation. Companies are readying for the future of the new digital era. The event also focused on the need for companies to drive sustainability and decarbonization forward. Karl Feilder, CEO, Founder, and Chairman of Neutral Fuels, pointed out that governments in the MENA region are specifying biofuels as part of their sustainability strategy, meaning that companies will have to embrace the decarbonization roadmap.

VIRTUAL ADMIRALTY CASE: SETS THE RECORD OF MANY FIRSTS IN ITS NAME

The last year 2020 accelerated the concept of “Work from Home” and helped to realize that even the Civil Court Proceedings can also be done virtually. With the pandemic, the Court proceedings had to switch completely to virtual hearings, without any Judges, Lawyers, or the Parties to the suit, being personally present in the courtroom. Many countries even introduced new regulations or rules to regulate remote hearing.

Amid all this chaos, the year 2020 also marked its first virtual admiralty case, and interestingly, its hearing took place by telephone due to the COVID crisis.

In the case, Qatar National Bank (QPSC) vs. The Owners of the Yacht “Force India” (No. 2) [2020] EWHC 719 (Admlty), the claimant bank had a mortgage over the Yacht following a default under an underlying loan agreement and even obtained a judgment for the sale of the Yacht in the Admiralty Court for the sums secured by the mortgages. Interestingly the unusual arrangement, in this case, was that the Mortgage was not in place to secure a loan taken out by the owner of the Yacht. Instead, the loan was taken out by a related company to finance a property purchase in the South of France. The Yacht was mortgaged as additional security concerning that property purchase. However, following the order made by the Admiralty Court for the sale of the Yacht, the claimant bank applied to the Court to have the order for sale set aside, on the final day for bids to be received. The Court declined this request instead gave some time to enable a hearing to take place, allowing the Court to consider the arguments of all the interested parties. The order was set aside on the basis that a third party had paid the sum secured by the Mortgage, and so the judicial sale of the vessel was no longer required. Where the sum secured by the Mortgage has in effect been paid by a third party, the judicial sale of the vessel was no longer required.

Under English Law, there are no specific rules as to how the sale should be organized. In most of the judicial sales, the Marshal invites the potential purchasers to send written tenders that usually include the bidder’s name, its agents, the bid validity period, and the person/company who submits the highest bid above the appraised value purchases the ship. After the highest bid has paid the purchase price into the Court, the person/ company shall sign the conditions of sale. Subsequently, the Marshall will deliver the ship and the documents along with its certificates to the new buyer. This being the normal procedure of “Judicial Sale of the Vessel,” the Court also emphasized that this setting aside of sale should certainly not become a practice because if it becomes a practice, then those willing to incur the time and expense involved in making a bid for a vessel ordered to be sold, might feel disinclined to do so and this might lead to Vessels being sold for a value less than that of its Market Value, which might tarnish the reputation of the Court.

Mr. Justice Teare concluded the judgment of the aforementioned case to be “Special and Perhaps Exceptional” as it was a rare incident where an independent third party would discharge the judgment debt and render the sale unnecessary. That is what happened in this case.

Though there are few instances where application being made to set aside a sale, the Marshall and his Agents, in relation to this case, has commented that in their 40 years of association with the Court for conducting judicial sale of vessels, they have never known such an application being made to halt a sale at such a late stage and the only reported instance appears to be almost sixty years old.

UAE – THE EVERRESILIENT NATION AND SAFE HUB

With sovereign wealth funds for investment in development and infrastructure projects, healthy financial reserves, and an ideal strategic location, the UAE has created a modern and diverse economy. The economic hub that the UAE boasts of today came into being in a short span of fifty years. In a brief period, UAE has managed to redefine its limits. The pandemic outbreak is the best parameter that revealed the country’s solid economy, growth, and adaptability to the global challenge.

Productive Inflow

Cumulative inward FDI growth stood at 44.2 percent from 2019. UAE ranked first in the Arab world and 15th globally in the Kearney FDI Confidence Index for foreign direct investment in 2021. The UAE ranks first in the West Asia region, receiving 54.4 percent of total FDI inflows amounting to $36.5 billion and first in the MENA region with 40.2 percent of the total FDI inflows amounting to $49.4 billion. In a staggeringly short time, it has managed to redefine its limits.

Remarkable Infrastructure

The desire to extend the nation’s horizons, push forward, and have a favorable business environment along with the updated procedures to meet global standards keeps up the capital inflows. UAE exhibits a model environment for investment and entrepreneurship. UAE stands a class apart as a worldwide magnet for capital and talent. The country aims to excel in the following fields in the immediate future: artificial intelligence, the Internet of Things, Blockchain, Innovative Medical Technologies, highspeed transportation, augmented virtual reality, robotics, self-driving cars, and renewable energy. Having ranked second globally in the Resilience to Epidemics 2021 index issued by the Consumer choice center during the Covid scenario, UAE owes it mainly to the prompt action taken in handling the situation by strict sanitation, lockdown, and social distancing measures. During the pandemic, the Central Bank’s support was equally crucial contributing AED 100 billion and a range of support packages to the economy. In 2022, the growth chart is set to hit 3.5 percent growth in real GDP and 3.9 percent growth in real non-oil GDP.

Regulatory Environment

UAE is cited as one of the most advanced countries globally in creating a regulatory environment that protects the investor and supports commercial activity providing a flexible and competitive legislative and procedural umbrella that helps stimulate foreign investment and ensures business stability. Home to several businesses, including free zones, the total trade of goods for free zones rose to AED 658.9 billion in 2019, signifying an 11 percent increase compared to the previous year. Being a nation built on trade and with a logistics infrastructure connecting to more than 250 cities worldwide with shipping routes to more than 400 cities, the UAE is the most efficient and most geographically broad in the region.

Planning for the Future

The Emirates Energy Strategy 2050 is set to meet a mix of renewable and clean energy sources to balance economic needs and environmental goals. UAE will invest AED 600 billion until 2050 to ensure that the demand for energy and sustainable growth in the country’s economy is met. Its priority in the next 50 years is to accelerate economic development, encourage small and medium-sized enterprises, and instil an entrepreneurship culture. This comprehensive economic and developmental program will focus on developing a knowledge economy, fostering innovation, establishing strong bilateral relations with international partners, and upgrading the legal frameworks to attract investment, ideas, entrepreneurs, and highly skilled candidates from around the world.

Competitive Costs

AED 58 Billion is the allocated UAE 2021 budget to instigate the much talked about program “Projects of the 50”. The World Competitiveness Yearbook 2020 Report ranked UAE first in the list of countries with the best electronic infrastructure globally and 31st for quality of digital life in 2020. The UAE is a member of the World Trade Organization (WTO) and the Greater Arab Free Trade Area and has free trade agreements with the European Free Trade Association. Having signed 117 double taxation agreements with countries across five continents, UAE has no restrictions imposed on foreign exchange. Its competitive finance costs, extensive liquidity levels, robust banking system, low inflation, low tariffs all boost the economy. The country turned in 2021 when it allowed 100 percent foreign ownership of companies in many sectors, thus removing the need for an investor to secure a local partner. The Projects of the 50 also has revamped the visa and residency system to attract skilled professionals in key fields like health, scientific research, technology, and other sectors. With the help of the well-focused program “Projects of the 50”, the nation is sure of creating an optimum commercial and legal environment and forging international partnerships with futurefocused countries, thus making the UAE a catalyst for regional and global growth.