heralds even greater opportunities for ocean carriers such as Maersk and Emirates that are fast making waves in the region.
entered into a joint venture with Al Naboodah, a locally owned manu- facturing and investment company, to better coordinate activities in the Middle East and East Africa. Dubai is also home to GAC Logistics, a global third-party logistics provider that has played a vital role in the region’s development. With offices throughout the Gulf, its services and facilities have helped provide the logis- tics and transportation backbone to facilitate industrial and infrastructure development projects in Dubai. Bill Hill, group vice president of logistics services for GAC, sees Dubai’s logistics potential only expanding, espe- cially with the planned development of Dubai Logistics City and a new cargo
airport 25 miles outside Dubai at Jebel Ali. Both facilities will be part of Dubai World Center, a proposed 87-square mile project that will feature an international airport – with the current combined capacity of London’s Heathrow and Chicago’s O’Hare – as well as a num- ber of sector-specific business offerings including aviation, logistics, commer- cial, residential, and recreation. “Development policies such as the Dubai Airport Free Zone, the proposed cargo airport in Jebel Ali, and Dubai Logistics City have made Dubai an appealing site for companies wanting to allocate portions of their global sup- ply chain here,” Hill says. One major concern surrounding Dubai’s continuing growth, however, is the instability of the Middle East in the wake of the Iraq war, and the continuing threat of global terrorism. Justifiably, questions about security and safety abound. Yet equally important from a supply chain perspective, trans- portation and logistics infrastructure development is progressing in spite of, and perhaps as a result of, the ongo- ing conflict. “The continued massive inflow of capital and the magnitude of multi- billion-dollar construction projects are ongoing in the Gulf, indicating that the war did not dampen investors’ con- fidence in the region,” notes Hill. In addition, the war’s resulting demand for food and services, human- itarian aid, materials for reconstruction, and military logistics remains, giving logistics service providers a role to play in moving essential goods and materi- als into the region. These concerns notwithstanding, the UAE’s location and logistics poten- tial are difficult to ignore. Leveraging on the Emirates’ multi- modal connectivity, companies gain access to a vast geographical area and markets with different demographics. Dubai is a gateway not only to the Gulf Coast countries and Levant, but also to the global market. A three-hour flight will give a company access to more than two billion people. For global businesses looking to stay ahead of the curve, two billion people is an investment well worth banking the future on. ■
3PLs: ALLURING TERRITORY
As the region’s infrastructure and ser- vice capabilities continue to expand, global 3PLs are following. Their path offers a clue to the emerging transpor- tation and logistics potential of Dubai, the UAE, and the Middle East. Itasca, Ill.-based SEKO recently set up a regional facility in Dubai to marshal growing air, ocean, and ground opera- tions throughout the UAE. Following suit, German service provider Schenker
Emirates SkyCargo Flies With Demand The Middle East’s flagship airline, Emirates, is pushing its cargo operations full throttle as demand for capacity in the region continues to accelerate. Emirates SkyCargo recorded strong growth across its entire network during fiscal year 2006-07, carrying a record 1.2 million tons of cargo while surpassing the previous year’s best by 13.5 percent, according to The Emirates Group’s annual report. The Emirates Group comprises Emirates Airline, Dnata, and several other subsidiary companies. Overall, cargo revenue topped out at $1.5 billion, a 19-percent increase over 2005-06, and contributed 20 percent to the airline’s transport revenue–one
of the highest contributions of any airline in the world with a similar fl eet. Dnata, Emirates’ ground handling services arm, similarly matched the carrier’s growth. In its 48th year of operation, Dnata remains at the heart of the rapid traffic growth at Dubai International Airport, handling 535,132 tons of cargo (up six percent) during the 2006-07 fiscal year. Dnata revenue mirrored cargo growth as gross income ballooned 16.5 percent to $565 million during the period.
Its profits of $98 million represent an increase of 11 percent compared to last year’s $88 million, despite ongoing construction and expansion projects at Dubai Airport. As a result of this unprecedented growth, Emirates SkyCargo is making considerable investments in its cargo carrying capabilities. In addition to 10 Boeing 747-8 freighters currently on order, it has signed a lease agreement with TNT Airways for a Boeing 747-400ERF that began operations in May. It also contracted for another two aircraft from Guggenheim Aviation. These two aircraft are expected to debut in late 2007 and spring 2008, respec- tively. In total, Emirates SkyCargo carries freight on 102 aircraft, including nine freighters, to 89 cities globally.
154 Inbound Logistics • July 2007
Powered by FlippingBook