We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Wed 13 Aug 2008 04:00 AM

Font Size

- Aa +

Coping mechanism

Tough times call for tough measures. With the global crisis over the oil upsurge, hardest-hit sectors like transport and freight logistics operators are picking up their placards and protesting at the top of their lungs.

Tough times call for tough measures. With the global crisis over the oil upsurge, hardest-hit sectors like transport and freight logistics operators are picking up their placards and protesting at the top of their lungs.

Others choose to plainly abandon their trucks and go on an indefinite strike. Finally, there are those who quietly take on the challenge like the swan - gracious and calm on the surface, but briskly working its webbed feet underwater to stay afloat.

During times like these, each has his own way of coping. Are you feeling up to the challenge? As is the case in the rest of the world, companies in the Middle East are also feeling the crunch.

Since the complete abandonment of oil is presently out of the question, companies here have come up with alternative solutions to negate the problem of the increasing oil price.

More and more companies now are looking into (or have already started) investing in hybrid vehicles. Recently, General Motors and the Road Transport Authority (RTA) in the UAE have announced a one-year test-run to utilise hybrid cars as taxis in Dubai.

According to the RTA, this move would not only answer its goal to minimise pollution from vehicle exhausts and improve quality fuel used for public transport, but should also lower significantly the consumption of fuel.

On the same issue, Aramex has also announced that it plans to start using hybrid cars on its fleet and networks starting in 2009.

While we're on the topic of investing in new technology, airline companies here in the Middle East are very aggressive in acquiring fuel-efficient aircraft. However, not all carriers can afford to do this and, unfortunately, the smaller players (and their clients) will continue to suffer the inadequacies of using second-hand planes.

In addition to those measures, there is also fuel hedging - which again is only for the bigger and more financially stable companies. Emirates Group, for example, announced in the early part of 2008 that the company has saved just under a billion dollars since the year 2000 from fuel hedging.

For others, fuel surcharges are being passed on to their clients, who, in my company's case, understand the current situation. However, we at Swift Freight make it a point to offer alternative and logical transport logistics solutions.

For example, we have SAM (Sea Air Model) - a product that moves cargo from Far East to Africa via transhipment in Dubai using multimodal transportation with six-month fixed departure schedules, thus providing clients with the option of looking into their business cycles better, with an improved understanding of time lines and, more importantly, capacity issues.

Another coping mechanism in this day and age is consolidation. Many companies in the region, including Swift Freight, have been acquired by other companies to establish a more stable conglomerate.

Aged 19, Swift is now part of a company that is 104 years old, which means Barloworld has already passed through the all the volatility of growth and the infrastructure is there on which to build a solid future.

The only good thing about an economic downturn is that logic dictates that better times will eventually return.

While we all worry about the weak US dollar, the inflow of speculative money, geopolitical risks (the Iranian nuclear problem, instability in Nigeria and the US-Venezuela conflict) and the ever-growing economies of China and India that cause supply and demand imbalance, perhaps the most positive thing we can do is to focus on things that we can control and contribute what we can to the community as we all try to navigate these challenging times.

As history has a habit of indicating time and time again, people come through. These challenges are simply temporary setbacks that prompt us to rethink and re-evaluate the goals and directives in our lives.

Issa Baluch is chairman of Swift Freight International and past president of FIATA. He is the author of Transport Logistics, Past, Present and Predictions (www.transportlogistics.com).

Arabian Business: why we're going behind a paywall

For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Real news, real analysis and real insight have real value – especially at a time like this. Unlimited access ArabianBusiness.com can be unlocked for as little as $4.75 per month. Click here for more details.