Onwards and upwards

The features in this month's edition of Logistics Middle East are pretty varied, and seem to offer conflicting news for the logistics and supply chain industry.

While our article on DHL Excel Supply Chain's recent deal with oil behemoth Saudi Aramco shows the benefits that can be accrued by providing flexible solutions, our survey results on retaining talented employees, plus a review on the rising costs of fuel, are not so positive.

As a relatively recent entry to the Middle East, the industry is to a large extent still finding its feet amid the booming profits experienced in 2007 and which are predicted for 2008.

However, it would be remiss of industry observers not to point out the potential pitfalls that may lie ahead, in order to help supply chain professionals improve their profit margins still further.

In what is an uncertain period for a nascent sector, we aim to offer pragmatic solutions; for example, our assessment on the skills shortages now facing logistics providers, alongside other industries, offers a number of tips that should help operators find, retain and enthuse talent.

Similarly, our article on the rising fuel prices outlines the smart management that some of the logistics players are using to ameliorate the extra expense being incurred.

Having said that, a lot of the factors that are creating headaches for industry firms are external, and, to a certain extent, there is little that regional operators can do to offset challenging economic conditions.

While the industry itself is unlikely to suffer any let up in growth, the smaller regional operators may think it wise to consider their positions and look at streamlining their operations in the short term.

With the recent acquisition of Swift Freight by Barloworld, the region will also be looking at the prospect of consolidation, which would reduce the number of industry players in the GCC countries.

This possibility seems not to be one that is considered wholly palatable, judging by the mixed reaction to the news of the Swift takeover.

On the other side of the coin, however, it is encouraging to read of the many success stories that are currently being written by logistics providers in the Middle East.

Our cover story describes the multitude of solutions that toyseller Toys "R" Us is utilising in order to increase its share in the regional toy market, and the synergies found by DHL Excel Supply Chain have resulted in a ten-year contract worth an estimated US$500 million with Saudi Aramco, a deal that shows that no barrier is too high when it comes to making partnerships with even the world's biggest companies.

In addition, our regional news section outlines the potential rewards that exist in the Middle East's postal industry.

So while there are some concerns hovering over the logistics industry, as there are for many other sectors in the GCC and beyond, there are a number of positives that should be taken on board as well, not least the fact that the Middle East stands to weather the storms of an economic slowdown better than most other regions.

The encouraging aspects of the sector will be celebrated at the second Supply Chain And Transport Awards (SCATA), which will be held at the prestigious Al Marooj Rotana Hotel in Dubai on 28th May.

We have a preview of the awards in this edition, and a full report on the results will be submitted in next month's issue.

Any thoughts you have on the current state of play in the supply chain industry, or on this edition of Middle East Logistics, would be highly appreciated. Please send any comments to This email address is being protected from spam bots, you need Javascript enabled to view it .

Robeel Haq is the group editor of ITP Business' transport magazines.

RELATED LINKS: Toy story, Rig logistics

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Keiretsu - Relationship Building in a Volatile Logistics ME Market
Posted by Prof Philber Suresht, Mishref, Kuwait on 9 May 2008 at 08:10 UAE time

The prototypical keiretsu are those which appeared in Japan during the "economic miracle" following World War II. Before Japan's surrender, Japanese industry was controlled by large family-controlled vertical monopolies called zaibatsu.

The Allies dismantled the zaibatsu in the late 1940s, but the companies formed from the dismantling of the zaibatsu were reintegrated. The dispersed corporations were re-interlinked through share purchases to form horizontally-integrated alliances across many industries. Where possible, keiretsu companies would also supply one another, making the alliances vertically integrated as well.

In this period, official government policy promoted the creation of new robust trade corporations which could withstand heavy pressures from intensified world trade competition.

Dubai and the Middle East is evolving its own version of the Japanese keiretsu - where mergers and takeovers set the pace of business development in the regional market.

The article has identified the central issue of logistics skills shortage which will affect any future growth in this industry. It is also true of other developed regions of the globe that industry is always wrestling with talent management in a new discipline of Supply Chain Management.

Maybe it is time to take a close look at the Liberal Education: as a way out for Logistics Professionalism. This will be one of the topics at the upcoming conference where GUST GLF (Gulf University Kuwait) will contribute through its insights and experience on May 10, 2008.

This is true of the mandate today to address the skills shortage in logistics and supply chain management in the industry. GUST Logistics Forum (GLF) will give top priority to empower women-in-logistics that shows signs of good progress in Kuwait under the program dubbed as FUN (Friends in logistics University Network) in learning logistics. The linkage between university-based science and industrial application is often indirect, but it is sometimes highly visible, as in the case of Silicon Valley, an intentional creation of Stanford University, and Route 128, long populated by companies spun-off from MIT and Harvard.

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