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Wed 15 Aug 2007 09:15 AM

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Ask the expert: Nigel Rea

Each month Sea Freight Middle East will pose a topical question to an industry expert. If you have a question you would like answered, or a topic discussed, please send it to seafreight@itp.com.

Question:How can a major international retailer implement sea freight to improve its green credentials?

Expert:Nigel Rea
General manager, Marks & Spencer in the United Arab Emirates

Answer:UK retailer Marks & Spencer has entered its most ambitious growth strategy to date in the Middle East, and is pioneering an environmentally friendly supply chain, with a more products sourced locally and a greater shift towards sea freight transportation.

Recently, Marks & Spencer announced a US$400 million ‘eco-plan', which will fundamentally change its global supply chain operations, to reduce the ecological impact of our business.

We have stores in the UAE, Kuwait, Bahrain and Qatar, so an environmentally sound business model is very important to us.

In addition, as Marks & Spencer enters its most ambitious expansion programme to date in the Middle East, the decision to make its logistics operations more environmentally friendly will have a direct and positive impact in this region.

We have responsibilities for stores in the UAE, Kuwait, Bahrain and Qatar, so an environmentally sound business model is very important to us here.

As Marks & Spencer increases its international business the company is looking to establish more overseas distribution hubs, which will lead to obvious supply chain advantages, especially since goods are sourced from the UK, even though some products are manufactured closer to the Middle East.

The products are transported from the UK directly to Dubai, using a combination of airfreight and sea freight. The majority of cargo arrives in Dubai by air, because we're a fashion brand and need to remain relatively quick to the market. At the start of 2007 we were Virgin Atlantic's biggest cargo customer on the UK to Dubai route. We also ship a lot of products by sea, such as fruit, which is more viable for sea freight transportation, as long as there are no shelf life problems.

In the future, we are looking to move a greater amount of sea freight, especially for the core flow products, which are not particularly high fashion. It's actually a lot more cost effective to transport them by sea.

Earlier this year approximately 80% of products were being transported by airfreight and 20% by sea freight. However the group would like this ratio to shift within the next six months to 60% by air and 40% by sea.

We have already had some success in this regard, and the shift has been very quickly implemented. A great deal has happened in recent months. We have already shifted large volumes to sea freight, so our aspirations have come to fruition much more quickly than anticipated. For example, we now move 70% of our clothing and homeware products by sea, and only fly in the high fashion products, where speed to market is critical. In June we imported 44 x 40ft containers via sea freight, earlier this year most of that would have come by air.

This strategy is particularly timely as Marks & Spencer recently announced its eco-plan, labelled ‘Plan A', which includes a reduction in airfreight.

Earlier this year, the company started to label food imported to the UK by air. The label, which features a small aeroplane symbol and the words ‘air freighted', will initially appear on over 20 different food products, rising to 150 by the end of the year, giving environmentally conscious consumers important information regarding the transportation of produce.

Clearly, our own ambitions here in the Middle East to increase sea freight activities will help make a major contribution. The initiative doesn't stop there and we're always looking at other elements of the logistics operation where we can improve on a local level.

The move towards a more environmentally friendly supply chain for the Middle East operations will be managed in partnership with GAC Logistics, which operates the Marks & Spencer warehouse in Jebel Ali Free Zone.

GAC Logistics handles a range of warehouse operations for Marks & Spencer, such as receiving the delivery of stock, processing the cargo and placing everything onto the warehouse racking system. As our logistics partner, the company also manages orders from each store and prepares the items for dispatch. Everything is dispatched by road to each store, on a schedule which is calculated on a weekly basis, depending on the volumes being dispatched.

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