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Sat 16 Feb 2008 04:00 AM

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Congestion zone

Traffic congestion may be an everyday part of Middle Eastern life but is it becoming a major business problem?

Traffic congestion may be an everyday part of Middle Eastern life but is it becoming a major business problem?

Just the mention of traffic jams is enough to hear universal groans of recognition from across the Middle East region.

A common scenario for the region's roads during peak-hour timings, being stuck in traffic congestion has painstakingly become an everyday part of life in some of the busiest Middle Eastern cities.

The current road infrastructure changes and the lack of alternative routes do cause delays in certain areas.

According to a survey conducted by the internet recruitment portal, GulfTalent.com, Dubai emerged as the most congested city across the Middle East, with daily commutes to and from work averaging a staggering one hour and 45 minutes.

Cairo followed closely behind, with Jeddah seeing the lowest average journey time of 45 minutes a day.

Whilst being stuck in a traffic jam can be a major annoyance for many daily commuters, for fleet managers of logistics companies providing time-specified services, major delays on route due to congestion can have serious implications for the business itself.

In the case of courier companies, it can make the difference between a delivery arriving to its destination on time as promised, or a client being letting down.

As one of the leading courier services in the region, DHL Express admits that congestion has had an impact on its business.

"DHL has been affected by traffic congestion over the past years within the Middle East and this has been in line with the relevant countries rapid growth," says Geoff Walsh, operations manager for DHL Express.

In order to meet client's stringent delivery times, courier companies are faced with having to dedicate further resources and maintain high productivity.

"As well as possible delivery delays, it also impacts on productivity and the number of couriers required, as well as type of vehicles and where the company needs to be geographically within the country, to overcome such issues," Walsh continues.

Further measures to tackle congestion, such as road tolls for example, can also have cost implications for courier operators.

"The cost of driving in Dubai increased in 2007 and it is set to soar from next year if a municipality proposal to impose road tolls gets official approval," complains Iyad Moussa, operations director, UAE, of another leading express delivery services provider, TNT Express.

It is not all doom and gloom however. Whilst fleet managers clearly cannot solve the issue of traffic congestion, they can at least ensure that their businesses have contingency measures in place.

"The current road infrastructure changes and the lack of alternative routes do cause delays in certain areas. However, as a part of our commitment, we have increased the number of routes that we have in order to reduce impact as much as possible," says Moussa.

Likewise, Walsh believes that fleet managers need to exercise diligent forward planning in order to limit the impact of traffic congestion on their business.

"DHL, for example, has always been very close to the situation and spoken with local authorities on future plans concerning major industrial developments and future road projects," he explains.

"By doing this we are very pro-active and have developed our strategy in line with such projects."
DHL Express is always looking at other ways to overcome traffic congestion.

"Some examples of such strategies include new service centre facilities closer to our customers ahead of change, bikes in central congested areas and many new customer service points in line with our retail strategy," describes Walsh.

As well as possible delivery delays, it also impacts on productivity and the number of couriers required.

Another solution can be through cutting time delays at other stages of the courier process. "A great example is in the UAE where we were the first to introduce an EDI solution along with Dubai Customs."

"With this in place we can pre-clear 90% plus of all inbound dutiable shipments before it physically lands, saving many hours and allowing the customer to receive the shipment on time even with heavy traffic," he says.

By adopting this positive, pro-active approach to traffic congestion, courier companies such as DHL Express and TNT Express can take action to control the extent of impact on their business.

On the flip side, of course, traffic congestion is the inevitable consequence of factors which, in other respects, have been very positive for the courier sector, such as the booming industry and corresponding population growth.

Indeed, these very factors have been drivers for the growth in the GCC's express market, quoted as being a healthy 15% in 2006.

Furthermore, as many of these regions adapt their transport infrastructure to keep up with this thriving development, the problems of traffic congestion look set to improve significantly in the next five to ten years and beyond.

Infact, the Middle East region has been investing heavily in this area, committing the hefty sum of around US$147 billion to transport-related projects.

The region's indicated worst offender for congestion, Dubai, alone has invested in excess of $4 billion on various transport initiatives including tolls, road construction, bridge building and an upcoming modern metro system.

"It is very clear that governments in the Middle East and the Gulf region are taking the issue of congestion very seriously given the economic losses it entails, not to mention the negative impact on safety and the environment," agrees Ali Anouti, country director of Dornier Consulting in the GCC and Yemen.

According to the consultant, there is increasing evidence that the region is not resting on its laurels, hoping that its traffic crisis will simply disappear.

"This intention of governments to fight traffic congestion can clearly be seen in most cities in the region," he says.

"However, whether governments will be really successful in eliminating congestion depends, first and foremost, on the political will and commitment to implement the measures which are crucial to enhance traffic situation in their regions, and also in making available the necessary budgets to implement needed projects of high costs."

As advisers to governments on transport issues for over 40 years, Dornier Consulting knows what it is talking about when it comes to tackling traffic congestion.

The firm has successfully conducted several traffic-related projects in Middle Eastern and Gulf countries, including a strategic traffic management plan for Riyadh in Saudi Arabia.

"In order to mitigate and overcome congestion, governments need to adopt a comprehensive strategy, consisting of a well-balanced combination of supply management measures on the one hand, and demand management measures on the other hand," explains Anouti.
Supply management measures basically aim at expanding and/or improving the capacity of the traffic-related infrastructure and facilities, to enable them to better absorb and accommodate traffic volumes.

"Typical measures consist of expanding the road network and building new roads, widening and maintaining existing roads, etc."

"This is in addition to implementing public transport projects and infrastructure such as light rail systems and advanced bus systems," he says.

"Demand management measures, on the other hand, target restraining traffic growth and encouraging a shift from private car use to public transport.

It is very clear that governments in the Middle East and the Gulf region are taking the issue of congestion very seriously given the economic losses it entails.

Typical measures would include, for example, introducing road tolls, raising fuel prices and fuel tax, or introducing on-street pay parking."

Overall the need for governments to pre-empt and tackle congestion from the very early stages of land use planning is critical to avoiding this scenario as much as possible.

"The definition of the urban zoning plans should ensure that trip distances and the need to make a trip in the first instance are minimised, so that alternative modes of transport are made possible."

"In other words, transport consideration should lie at the heart of the land use plans," continues Anouti.

With the region's governments indeed showing a serious commitment to tackling the issue of traffic congestion head-on, fleet managers can rest assured that improvements are undoubtedly on the cards for the future.

In the meantime, contingency planning can help to assure that courier companies manage to avoid disappointing on their express delivery promises.

"I do believe that traffic issues will slowly but surely improve," concludes DHL Express' Walsh.

"The main goal for DHL is to always be one step ahead and to continue to deliver the high reliable service our customers have come to expect."

Company profile: Dornier ConsultingGerman company, Dornier Consulting GmbH advises governments, organisations and companies worldwide on strategy, planning and implementation of tailor-made solutions for transportation and traffic systems.

With its regional office in Abu Dhabi and several branch offices, the firm has undertaken various transport-related projects in the United Arab Emirates and Saudi Arabia, including the following:

• Comprehensive transport and traffic masterplan for Al Raha Beach development in Abu Dhabi (including intelligent transport systems).

• Improvement of the traffic control centre of Abu Dhabi.

• Preparation of an operation and maintenance contract for Dubai Metro system.

• Transportation and traffic masterplan for Jeddah in Saudi Arabia.

• Review of traffic model for Jeddah.

• Strategic traffic management plan for Riyadh region.

For further information, visit: http://www.dornier-consulting.com.

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