The Official Journal of The Logistics & Supply Chain Management Society

FEBRUARY 2017 this issue

THE FORCES BEHIND ONE OF THE WORLD’S FASTEST GROWING PORTS 28

THREE-LEVELS OF PARTNERSHIPS IN DYADIC SUPPLY CHAINS 32

2017 TOTAL LOGISTICS REPORT RELEASED 36

DISRUPTIVE TECHNOLOGY – RUNNERS AND RIDERS 39

The Forces Behind One of the World's Fastest Growing Ports

An Interview with Mark Geilenkirchen CEO, SOHAR Port and Freezone

air | maritime | logistics | supply chain | technology | events | www.logisym.com Crown Lift Trucks. The full product solution for Southeast Asia. Electric, Diesel and LPG Forklifts.

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36 Feature Articles 28 The Forces Behind One of the World’s Fastest Growing Ports 32 Three-Levels of Partnerships to in Dyadic Supply Chains 36 2017 Total Logistics Report Released 39 Disruptive Technology – Runners and Riders to Contents 39 From the Editor 04 A Word From the President 06 Contributors 08 Air News 10 Maritime News 15 Whether partnering with established global companies or Logistics News 18 rising industry stars, Crown Equipment provides complete Supply Chain News 22 material handling solutions for efficient warehousing and E-Commerce/Technology 26 effective logistics in any application. Events 43

Contact Crown’s Southeast Asia headquarters on (65) 6861 3669 or [email protected] crown.com 1604.1339 4 LOGISYM MAGAZINE FEBRUARY 2017 | FROM THE EDITOR

from the editor

……how are we coping with high dosage of disruption that we see around us?

Dear Readers, potential of the disruptive moment, one must be positive and un-bias in the outlook. As we start 2017, we are already inundated with so many disruptive elements in our In business and in particular the supply chain business and private life. The talk of so many industry, disruptors can easily decouple and news items reaching us from across the world, destroy what were robust relationships seems to saturate our lives. With such an and effective supply lines. Changes in overload, are we likely to skip a lot of the news bureaucratic processes and regulations can updates and general chatter? But can we also create unforseen havoc. ignore the news if disruption affects us now or will do at some point down the road? How do we cope with these elements of change in our business environment? The For most, disruption means change and answer can vary from situations to another. change means uncertainty and uncertainty But it is the underlining core enablers of sometimes means fear. But today we are Leadership, Collaboration and Core Values, seeing an uncertainty with a major shift in the that will steer a course of robust correction. stability factor. What we could trust, seems no longer the given. And it is this change This is the right time for new or refreshed that creates an unprecedented anxiety in our Collaborations, Alliances & Partnerships in environments. your business environment. With a focused leadership coupled with an outward looking We must also note that perceptions of perspective of the disruptors around us, uncertainty, fear and instability come mainly change & uncertainty will become just from those who have the most to lose. And another routine challenge in our daily work then we see those that have least to lose schedule. welcome change and the disruptions we see. How then do we reconcile this difference? In this issue there are two excellent related articles on Levels of Partnership in the To find the answer, one has to think in the supply chain & Disruptive Technologies – “neutral” - “I have nothing to lose & nothing hope you enjoy the reading. to gain” – this approach provokes an un-bias thinking process of what should we do? It is We wish all our readers very best wishes & very clear to me, that when thinking is un-bias, prosperity in the year of the Rooster. no matter what you face in the environment and landscape in your path, the opportunities As usual, I look forward to receiving your are unlimited. feedback at [email protected] and even publishing an article of yours. It is in state of visioning that most productive and effective solutions are formulated. And it is the very disruptive energy that stimulates Joe Lombardo such possibilities. But to realise the full International Editor

6 LOGISYM MAGAZINE FEBRUARY 2017 | A WORD FROM THE PRESIDENT

a word from the president

Making it up as we go along

The latest buzzwords making the rounds in edge technologies. Because of these reasons, Supply Chain at the moment are Industry or I have been attending events, learning and Supply Chain Management 4.0 and Blockchain reading up on these topics wherever possible Technology. and one thing has become apparently obvious. We stand on the brink of a technological revolution that will fundamentally alter the way Many so called 'experts' or protagonists of we live and work. Industry 4.0 will in its scale, these changes are literally making things scope and complexity lead to a transformation up as they go along. I attended a FinTech that will far surpass those of the first, second meetup kindly organised by the good people and third industrial revolutions. When this will at "Block Chain Startups" last week and what happen is hard to tell but the transformation one of the speakers, a supposed expert on will be unlike anything humankind has Block Chain and the Supply Chain was saying experienced before. The fusion of technologies simply did not make sense. The other speaker will blur the lines between the physical, digital, was a fairly clued in chap from a Block Chain and biological spheres and the velocity at start-up and he was was honest enough to say which these start to happen, coupled to the that many things are being made up as they velocity of these transactions and information went along simply because the technology taking place - along with the scope to which and even the very concepts around what we this can be applied, is to me, mind boggling. are seeing is so new.

The blockchain for example has the potential to The fist chap, the CTO of a company listed transform the Supply Chain and disrupt the way on the ASX was not doing our industry any we produce, market, purchase and consume favours. We should always be mindful of such our goods. The increased transparency and individuals but characters like that aside, Compact and Cost-effective – traceability to the supply chain will help make there are developments taking place that our discrete transactions between multiple will soon turn what we do on it’s head. Along parties infinitely more secure. This will in turn One-Level Shuttle System CUBY the way that will be much trial and error and make our economies safer and much more not everything will succeed – or even make reliable by promoting trust and honesty, The Cuby is the single-level shuttle system from the SSI Schaefer shuttle and preventing the implementation of sense. What we can do is keep abreast of what family. It is designed for bins and cartons up to 35 kg. The system combines questionable practices. The blockchain has the is happening and learn to separate the wheat potential to transform the supply chain. from the chaff. LogiSYM plans to be with you excellent storage density with high availability and achieves high rentability in on this journey and as always, certainly more a short payback period. The patent-pending and ingenious use of the support The topic has piqued my interest and is also interesting times ahead. beam as a guide for the shuttle‘s load handling device is one of a kind. A a key topic for LogiSYM Singapore in May. scalable lifting system with double-story function ensures high performance I had also been trying to work within my and compact system layouts. The Cuby system is suitable for a wide range of organisation to set up an R&D group that Raymon Krishnan would be staffed with the 'best and brightest' President applications and fits perfectly to an impressive line-up that comprises Navette people from within the organisation to work The Logistics & Supply Chain (multi-level shuttle for small containers), Schaefer Tray System (multi-level on solutions centred around these bleeding Management Society shuttle for individual pallet layers) and Schaefer Lift&Run (multi-level shuttle for pallet).

www.ssi-schaefer.com

210 x 297_5_LogiSYM_Cuby.indd 2 4/11/2016 9:27:04 AM Compact and Cost-effective – One-Level Shuttle System CUBY

The Cuby is the single-level shuttle system from the SSI Schaefer shuttle family. It is designed for bins and cartons up to 35 kg. The system combines excellent storage density with high availability and achieves high rentability in a short payback period. The patent-pending and ingenious use of the support beam as a guide for the shuttle‘s load handling device is one of a kind. A scalable lifting system with double-story function ensures high performance and compact system layouts. The Cuby system is suitable for a wide range of applications and fits perfectly to an impressive line-up that comprises Navette (multi-level shuttle for small containers), Schaefer Tray System (multi-level shuttle for individual pallet layers) and Schaefer Lift&Run (multi-level shuttle for pallet).

www.ssi-schaefer.com

210 x 297_5_LogiSYM_Cuby.indd 2 4/11/2016 9:27:04 AM 8 LOGISYM MAGAZINE FEBRUARY 2017 | CONTRIBUTORS

contributors

Kim Winter Dr. Can Eksoz Mike Ghasemi Global CEO Demand & Supply Planning Team Leader Research Director, Retail Insights - Asia Pacific Logistics Executive Group Transmed Overseas, UAE IDC

The founder of the company, Kim Dr. Can Eksoz is Demand & Supply Mike Ghasemi is the Research is an acknowledged specialist Planning Team Leader at Transmed Director for IDC Retail Insights in Executive Recruitment across Overseas, UAE. & Hospitality Asia Pacific, where Logistics and Supply Chain sectors. He holds his PhD Forecasting & he leads the definition, creation, He has held senior executive (Food) Supply Chain Management and production of IDC market positions within international from Brunel University London, intelligence solutions for countries Logistics, Supply Chain and UK; MSc Manufacturing Systems across the region. Before joining Freight organisations during his Engineering from Warwick IDC, Mike spent 15 years in the 35 year career. Kim often speaks at University, Coventry, UK; and IT industry, with 10 years in retail international conferences / events BSc Industrial Engineering from information technology software and regularly contributes thought Eastern Mediterranean University, solutions. leadership to industry media. Famagusta, Cyprus. His (research) and area of expertise involve (Food) Supply Chain & Operations Management, Logistics, Forecasting, Collaboration (CPFR, VMI and S&OP) and Inventory Management.

PUBLISHER Peter Raven ADVERTISING

INTERNATIONAL EDITOR Joe Lombardo Asia Pacific/ M.East/Africa Mike King & Associates General Contact: Mike King COPY EDITOR Maria Judd Email: [email protected] DIGITAL EDITOR Myla Morales Tel: +61 2 8003 7208 (AU) ART DIRECTOR Fauzi Lee EMEA/USA Ceri Healey Email: [email protected] LAYOUT/GRAPHIC DESIGNER Myla Morales PRODUCTION Ambiguous Design www.ambiguous.design

LogiSYM Magazine COPYRIGHT Level 15, Langham Place All material appearing in LogiSYM Magazine is copyright unless otherwise stated or 8 Argyle Street, it may rest with the provider of the supplied material. LogiSYM Magazine takes all Mong Kok, Hong Kong care to ensure information is correct at time of printing, but the publisher accepts no Tel: +852 3958 2313 responsibility or liability for the accuracy of any information contained in the text or Fax: +852 3958 2300 advertisements. Views expressed are not necessarily endorsed by the publisher or editor. Email: [email protected] LOGISYM MAGAZINE JANUARY 2016 | AIR NEWS 9 10 LOGISYM MAGAZINE FEBRUARY 2017 | AIR NEWS

Swiss logistics services provider the global market is still fragmented Swiss Panalpina is on the lookout for which offers a plenty of growth acquisitions to boost its growth, CEO opportunities. The chief executive sees Panalpina Stefan Karlen said in an interview with increasing demand for personalised newspaper Finanz und Wirtschaft. offers and since Panalpina's business model does not require much capital Seeks Acquisitions are the top priority for investment, the company is flexible the logistics company, Karlen told in terms of clients' needs, Karlen was To Grow the paper. Panalpina is currently cited as saying. focused on smaller takeovers as it is Through in the process of introducing a new Earlier in January, Panalpina got software platform which will allow the the green light from the European integration of bigger companies in Commission to acquire a majority Acquisitions future, the chief executive added. stake in Kenya- and Netherlands- based Airflo, a freight forwarder for Asked about whether there is potential flowers and vegetables. for organic growth, Karlen said that

Dubai's DWC Airport Saw Cargo Volumes Up by 0.8% in 2016

Dubai World Central (DWC), the Middle international destinations and is home steadily in stature as a passenger hub, East emirate’s second international to 64 scheduled cargo operators that and we are pleased with the growth in hub, recorded a slight increase in 2016 fly to as many as 138 destinations passenger traffic in 2016. airfreight volumes at 897,998 tonnes, around the world. up 0.8% versus prior year. “Considering the unique proposition Sister airport Dubai International DWC offers to airlines in terms of easy Owner Dubai Airports stated: “[DWC] Airport (DXB), reporting its full year availability of slots, quick turn-around Cargo volumes registered strong 2016 results last week, shrugged times, quick transit times though the growth in the fourth quarter with off a 2016 third quarter cargo lull to airport for passengers and access to 252,300 tonnes of air freight, up 10.3% rebound with a 3.4% rise in volumes new catchment area – not to forget compared to 228,770 tonnes recorded to just under 2.6m tonnes. the expansion project underway that in Q4 2015.” will more than quadruple its capacity Paul Griffiths, chief executive of Dubai to 26m passengers by next year – we DWC in the UAE is currently served Airports, said: “After having emerged expect the growth trend to continue by 27 passenger carriers, operating as one of the top 20 international this year, and beyond.” an average of 108 flights weekly to 44 cargo hubs, DWC is now growing LOGISYM MAGAZINE FEBRUARY 2017 | AIR NEWS 11

Record Cargo Year for Singapore's Changi Airport

Singapore Changi Airport recorded capabilities, Changi Airport last a 6.3% rise in airfreight throughputs year formed a community of cargo versus prior year to reach 1.97m partners to attain IATA’s Center of “ tonnes in 2016. Excellence for Independent Validators 2016 was a record-breaking on pharmaceutical handling (CEIV year for Changi Airport, The Asian hub, the world's 15th Pharma) certification. with passenger traffic and largest cargo hub by volumes in 2015, Beyond the establishment of a CEIV ended 2016 with a strong December, Phama certified community, Changi cargo throughput both handling 177,360 tonnes, up by 8.4% Airport Group also joined Pharma. registering new peaks. on the same month in 2015. Aero, an organisation focused on achieving reliable end-to-end air Lee Seow Hiang Changi Airport welcomed two transportation for pharma cargo. CEO freighter carriers — Neptune Air and Changi Airport Group Silkway West Airlines — to its family In October 2016, the DHL Express of over 100 passenger and cargo South Asia Hub, a 24-hour express airlines last year, while freighter airline hub facility located within Changi K-Mile Air resumed operations to Airfreight Centre, was officially throughput both registering new Singapore. A spokesperson for the opened. This has tripled DHL Express’ peaks. airport authority said: “In terms of cargo handling facility in Singapore airfreight throughput, growth was and allows shipments to be processed “Despite a backdrop of economic recorded across imports, exports and six times faster. and socio-political uncertainties, we transhipments. maintain a positive outlook for the Together with SATS’ upcoming year ahead. We see opportunities in “Perishables and pharmaceuticals e-commerce AirHub, expected to open emerging markets within Africa and were segments that performed well, later in 2017, “these developments will Eastern Europe. contributing a significant portion of boost Changi’s position as a leading Changi’s total cargo throughput.” air cargo hub in Asia”, added the “At the same time, we will continue spokesperson. to grow our long haul routes to The top five country markets for Changi Airport Group CEO Lee Seow Western Europe, and strengthen our airfreight were China, Australia, Hiang said: “2016 was a record- connectivity within the region to Hong Kong, the US and India. To breaking year for Changi Airport, secondary cities in South East Asia, strengthen its pharma cargo handling with passenger traffic and cargo China and India.” 12 LOGISYM MAGAZINE FEBRUARY 2017 | AIR NEWS

Preliminary airfreight figures for 2016 percent, leading to a 1 percent decline Asia-Pacific from the Association of Asia Pacific in the average international freight Airlines (AAPA) reaffirmed continued load factor, to 62.5 percent for the year. Airlines strength in the second half of the year, after a weak start. Commenting on the results, Andrew Herdman, AAPA director general, said See Cargo International air cargo freight tonne that the quickened pace for air cargo in kilometers (FTKs) increased by 1.8 the second half of the year came about Rebound in percent for the year, pushed up by thanks to “broad-based expansion strong second-half growth of 5.7 in manufacturing production and Late 2016 percent, year-over-year, following a 2.2 international exports, supplemented percent, y-o-y, contraction during the by growth in demand from expanding by Lewis King first six months of the year. Capacity consumer markets in Asia.” over the same period expanded by 3.5

Amazon to Spend $1.49B on New Air Cargo Hub

Amazon is making a major planes to ship its packages around up to US$40 million over 10 years for investment to boost its air the country. Today, 16 of those Prime the new project. The hub should start delivery capabilities. Air planes are in service, with more construction this year and take five to coming online over time. The new air seven years to complete, the Northern The world's largest e-retailer plans cargo hub will support this new fleet Kentucky Tribune said. Kentucky's to spend US$1.49 billion to create its by loading, unloading and sorting Mazurak said that the full incentive first worldwide air cargo hub at the packages. amount will be given to Amazon only Cincinnati/Northern Kentucky Airport if it meets specific investment, job in Hebron, Kentucky, the company The new hub shows just how big creation and wage targets. and state officials said Tuesday. The Amazon's ambitions are to grow new hub is slated to create up to 2,700 its logistics and shipping, in hopes The new hub adds to Amazon's new full- and part-time jobs. of keeping up with the growing employment in the state, which mountains of packages it has to deliver already includes over 10,000 full-time The project, spanning up to 900 and, perhaps, someday competing workers in 11 fulfillment centers. acres around the airport, would be with UPS and FedEx as a shipping The announcement also keeps up the largest-ever single investment by company. Amazon's plans to hire many more any company in Northern Kentucky, workers in the US. Cincinnati.com reported. For now, though, Amazon has continued to say it values its Along with the new air cargo hub, "It will change the entire shipping and partnerships with its shipping Amazon has bought 4,000 truck fulfillment industry," Jack Mazurak, partners and sees its expanding trailers to boost its trucking capacity. communications director for the shipping infrastructure as a way of The company's worldwide shipping Kentucky Cabinet for Economic supplementing UPS, FedEx and the US and logistics network includes 149 Development, said in an interview. Post Office. fulfillment centers and 20 sorting centers. Last year, Amazon partnered with two State officials granted preliminary carriers to lease 40 Prime Air cargo approval on an incentives package of LOGISYM MAGAZINE FEBRUARY 2016 | AIR NEWS 13

IATA 2017 Air Cargo Innovation Awards Finalists

Air Cargo Innovation Awards 2017

LIST OF FINALISTS (in no particluar order):

• Astral Aerial Solutions – UTM Concept for Africa (Kenya) • Etihad Cargo – Smart Electric Cool Dolly (United Arab Emirates) • Gate chain – Redefining trade with block chain (Switzerland) • Jettainer – Innovative Decision Support System (DSS): synergies from big data and expert system technology for ULD management (Germany) • OpenAirlines – SkyBreathe Fuel Efficiency (France)

The second edition of the IATA Air • Jettainer – Innovative Decision • Darryl Judd, Chief Operating Officer Cargo Innovation Awards received Support System (DSS): synergies from of Logistics Executive Group 46 entries from across the industry big data and expert system technology from small start-up companies to for ULD management (Germany) • Bernd Maresch, Owner, MARESCH Ltd. large multinational corporations. Submissions covered a wide-range • OpenAirlines – SkyBreathe Fuel • Holger Buerskens, Partners, Arnecke of topics including drones, ULDs, Efficiency (France) Sibeth special cargo and dangerous goods. Applicants used cutting edge and Seven members of an independent • Marco Bloemen, Partner at Seabury emerging technologies such as jury which included industry experts, block chain and big data to develop academics and CEO’s evaluated • Stephen Miles, Research Affiliate and innovative solutions to benefit the the submissions based upon their Consultant at MIT industry. assessment of the idea, its coherence to the program objectives, its • Wolfgang Lehmacher, Head of Supply The finalists, in no particular order are: potential for value creation, and the Chain and Transport Industries, World likelihood of achieving success based Economic Forum • Astral Aerial Solutions – UTM upon the submitting team's plan and Concept for Africa (Kenya) experience. The finalists will present their project at the 11th IATA World Cargo Symposium • Etihad Cargo – Smart Electric Cool Below are the seven members of the in Abu Dhabi, UAE. Delegates will then Dolly (United Arab Emirates) independent jury: vote for their preferred innovation and the winner will receive USD • Gate chain – Redefining trade with • Alain Lumbroso, Economist at 20,000 during the conference’s closing block chain (Switzerland) International Transport Forum / OECD plenary on the 16th of March 2017. What14 doesLOGISYM MAGAZINE end-to-end JANUARY 2016 | AIR NEWS logistics planning look like?

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E: [email protected] | I: quintiq.com A Dassault Systèmes company LOGISYM MAGAZINE FEBRUARY 2017 | MARITIME NEWS 15

INTTRA Container Orders Grew by 16% in 2016 - More than 5x Industry Rate

INTTRA, the world’s ocean shipping shipment performance by providing a marketplace, announced that it comprehensive view of their shipment generated 16% growth in 2016 over “ histories based on their own data. 2015 in container orders, which include INTTRA played a INTTRA’s Dwell Time Dashboard bookings, shipping instructions significant role in 2016 as measures turnaround time for various and shipping orders. The company the rate of technology and phases of the shipping lifecycle, while processed 38.5 million container the Status Event Dashboard enhances orders on its platform. Containership digitization accelerated planning and container management sailings in the industry rose by just 3% rapidly in the ocean with full visibility into shipment in 2016, according to Container Trade industry. notifications. Statistics. Introduced in the fourth quarter, John Fay In addition, INTTRA tracked a record CEO INTTRA’s new cloud-based user 427 million container status events INTTRA interface expanded functionality and in 2016 through its Track & Trace improved ease-of-use on the INTTRA service, the world’s largest source of portal, saving customers time in container tracking information and processing orders, while the company’s the foundation of INTTRA’s growing In 2016, INTTRA introduced its cloud- customer service satisfaction ratings data analytics business. based eVGM Service – the industry’s reached all-time highs. most comprehensive, flexible and “INTTRA played a significant role in efficient SOLAS VGM compliance INTTRA CEO John Fay added, “The 2016 as the rate of technology and solution. INTTRA led the industry changes in ocean shipping over the digitization accelerated rapidly in initiative to develop common past twelve months show that the the ocean industry. We believe that standards and express a preference for digital divide is widening and the digitization is now indispensable,” said a digital approach to VGM compliance. path to success in ocean shipping is INTTRA CEO John Fay. “ INTTRA estimates that today, the vast combining the best of digitization with majority of VGMs are being submitted a strong physical network. This trend In 2016, INTTRA introduced digitally. will continue and INTTRA is committed innovative regulatory compliance to helping our customers achieve this and data analytics products, and also INTTRA also broadened its portfolio synergy with innovative solutions that strengthened its industry leading of Decision Support Dashboards, leverage the technologies of today platform, expanded its network and which help customers optimize and tomorrow.” improved customer experience.”

6 months Industrial Attachment required for Logistics and Supply Chain students. These students have completed 6 months of academic studies in STEi Institute in:

Diploma Advanced Diploma • Business Communication • Supply Chain Management • Entrepreneurship & the Environment • Transport Management • Marketing Management OR • Purchasing & Materials Management • Intergrated Business Logistics — • Warehousing & Distribution International Transport • Strategic Management • Managerial Economics & Information • Operations Management for Logistics

Please contact [email protected] for enquiries and arrange for interviews with students. STEi is a member of LSCMS. It is registered with the Council for Private Education (CPE) and is accredited with 4-year EDUTRUST Certification 16 LOGISYM MAGAZINE FEBRUARY 2017 | MARITIME NEWS

Japanese Carriers Expect Record Losses

Two of Japan’s “Big Three” container plan to merge their operations into a structural overcapacity and stagnant lines warned of record losses for the single unit. That process, expected to demand. fiscal year ending March 31, as all three wrap up in 2018, will be facilitated by reported revenue declines of roughly the fact they are all members of THE “In the container ship business, 20 percent year-over-year in the first Alliance along with Hapag-Lloyd and although the freight rate market three fiscal quarters. Yang Ming Line, which begins in April. appears to have bottomed out, mainly in the east-west services, the recovery NYK Line, Japan’s top container NYK predicts a fiscal year net loss of in short-term freight rates is expected line, and third-ranked “K” Line are 245 billion yen ($2.15 billion), while to stall on account of an anticipated anticipating record losses for the “K” Line expects to lose 94 billion weakening of the freight market due fiscal year while MOL, Japan’s No. 2 yen, more than double its previous to seasonal factors,” “K” Line said in a container line, expects no profit. NYK 45.5-billion-yen estimate for its full- statement. and “K” Line also reported losses in the year net loss. first three fiscal quarters while MOL Spot freight rates on the Asia-Europe managed to turn a profit. MOL had expected to turn a 7-billion- and trans-Pacific trades improved yen profit for the fiscal year, but that throughout the fourth quarter as The anticipation of record losses and no proved too optimistic amid a global the collapse of Hanjin Shipping profit for the fiscal year underscore the market of slumping freight rates and coincided with the traditional peak necessity of the three container lines’ cargo volumes in a market defined by shipping season, with the sudden gap LOGISYM MAGAZINE FEBRUARY 2017 | MARITIME NEWS 17

in capacity and increase in demand “K” Line said it will work to increase in the first three fiscal quarters to 1.4 helping to keep rates elevated. profitability “by adjusting vessel trillion yen, while “K” Line’s revenue allocation through its alliance scale in declined 22.2 percent to 761 billion Spot rates maintained much of that line with supply and demand,” cutting yen, and MOL’s revenue fell 17.9 strength even after the peak season costs, and focusing on more profitable percent to 1.08 trillion yen. began to subside thanks to the early cargo, such as refrigerated goods. Lunar New Year of 2017. That meant NYK Line incurred a net loss of 226 shippers kept moving goods to ensure MOL downgraded its earnings forecast billion yen in the April-to-December they had adequate inventory before because of concerns over the declining period, compared with a net profit of factories in Asia shut down for two value of its container shipping assets, 22.8 billion yen a year earlier, as “K” weeks starting Jan. 28. Many in the as the value of container ships has Line suffered a net loss of 54.5 billion industry, seemingly “K” Line as well, dropped significantly over the past yen, compared with a net profit of 9.27 believe that freight rates will weaken year, the company said. billion yen a year earlier. Net profit at now that those seasonal demand MOL surged 43.1 percent year-over- factors have run their course. On the revenue front, NYK recorded year to 19 billion yen. a 19.9 percent year-over-year decline

Abu Dhabi Ports Net Profit Jumps 77% During H1

Abu Dhabi Ports, the master developer, Building on the infrastructure of this time last year. operator and manager of the ports and Abu Dhabi to keep abreast with Khalifa Industrial Zone in the Emirate, its economic growth, Abu Dhabi The area has now leased 14.5 million has seen a 77% jump in net profit and Ports successfully completed the square meters of land, 1.9 million 20% revenue growth during H1. implementation of the Terminal square meters of which is leased in Operating System (TOS) in Zayed and the trade and logistics zone. There has The successful first half of 2016 was Musaffah Ports. also been a 17% year-on-year increase due to major growth across general in the number of investors from 2011, and bulk cargo, container volumes The RoRo offering saw new levels of with a value exceeding AED 22 billion. and Roll-on/Roll-off (RoRo) traffic. productivity with a record average of 206 cars handled per hour in April Ten facilities in logistics, warehousing, Since January 2016, Abu Dhabi Ports 2016 alone, an important boost for the food, printing and packaging, has witnessed 77% jump in net profit automotive industry in the UAE and aluminium, workshops, repairs and and 20% revenue growth while the region, demonstrating the growth mixed use are already operational. the EBITDA margin exceeded 40%, of Abu Dhabi as a logistics hub for this reflecting a 15% increase compared to industry. “These results demonstrate the crucial H1 2015 figures. role that Abu Dhabi Ports plays as the During the first half of 2016, Abu UAE’s regional and increasingly global Bolstered by rapid growth in polymer Dhabi Ports enjoyed an increase in maritime trade hub, especially for exports and transhipment activity RoRo volumes of 4% compared with those seeking to access the US $7.8 across the Gulf, 699,776 TEUs were the same period in 2015, with 58,000 trillion Middle East, Africa and South handled in the first six months of 2016, vehicles passing through the ports so Asian region,” said capt. Mohamed up from 629,941 TEUs in the same far in 2016. The amount of new land Juma Al Shamisi, CEO of Abu Dhabi period of 2015. leased in Khalifa Industrial Zone is over Ports. 1.5 million square metres, 50% up on 18 LOGISYM MAGAZINE FEBRUARY 2017 | LOGISTICS NEWS

GWC among Growth Leaders in Qatar with 11% Growth in Net Profits

GWC (Q.P.S.C.), Qatar’s leading logistics The company also saw developments In addition to its contributions to the provider, concluded 2016 with one of in its various current facilities, with the country’s logistical infrastructure, the healthiest growth rates in the State completion of the Phase V expansion GWC has participated in a number of of Qatar, achieving an increase of 11% in the Logistics Village Qatar (LVQ) initiatives to improve Qatar’s social in net profits with QAR 205.7 million, adding 45,000 square meters of storage wellbeing. During Ramadan, the as compared with QAR 185.2 million capabilities within the one million company participated for the third year in 2015. The company has maintained square meter fully-integrated logistics in a row as the logistics partner for The its growth by increasing its operational hub, in addition to new accommodation Youth Company’s Ramadan charity efficiency, improving its profit margins, and recreational facilities. GWC also initiative, “7assanat Olympics”, packing and actively seeking new revenue added 64,000 square meters of fully- and distributing thousands of Iftar and streams, drawing in gross revenues of integrated, specialized Hazmat logistics Garangou boxes. The company also QAR 849.5 million at the end of 2016, solutions to its Ras Laffan Industrial City participated for the fourth year in a representing 8% increase from QAR hub in the West Side Support Area at the blood drive, organized in collaboration 787.9 million in 2015. The company’s beginning of 2016. with the Hamad Medical Corporation, assets continued to develop, with total collecting over 52 units of blood. For assets reaching QAR 3.741 billion by the The company’s departments also the National Day initiatives, GWC end of December 2016, compared with made significant developments in participated in two events, “Henna QAR 2.981 billion at the end of December their respective fields. GWC Contract Ahalha” at the Katara Cultural Village, 2015, representing a 26% growth. Logistics expanded on a number of organized by Embrace Doha, and the their contracts, completing the roll-out “Associated Activities of the Qatar “Every effort has been taken to ensure of several programs it had begun for National Day 2016” in partnership with that the company serves the best needs clients in the health, retail and telecom Lekhwiya. of the state of Qatar as it diversifies sectors. GWC Forwarding held on to its from oil dependency to a diversified position as the No. 1 freight forwarder The company’s successes in 2016, and sustainable economy,” stated GWC in the State of Qatar, and enhanced both financial and operational, earned Chairman Sheikh Abdulla bin Fahad value for its clients’ projects by offering widespread industry acclaim and bin Jassem bin Jabor Al Thani. “It is new products that reduce turnaround recognition, earning GWC the Frost and through this lens that we find, in the time for many shipments. GWC Records Sullivan award for “Leading Domestic current climate, a wealth of opportunity maintained its 100% client retention Logistics Service Provider of the Year to develop, innovate and prosper, record while adding clients among 2016”; the SCATA award for “Leading thereby recompensing our stakeholder’s ministries, government authorities and Logistics Manager of the Year”; the investment and trust in us, and our financial institutions. Meanwhile, GWC Employer Branding Institute award for pursuit of the Qatar National Vision Relocations, Fine Art, and Transport “GCC Best Employer Brand Award for 2030,” expanded on the types of services 2016”; and the Enterprise Agility Award they offer while making significant for “Logistics Innovation”. GWC has moved forward on its various contributions to the company’s development initiatives in 2016, with its revenues. Considering the breadth of the resources poured into the completion company’s success, and to reward the of the GWC Bu Sulba Warehousing Beyond Qatar, GWC’s Dubai operation trust the shareholders have placed in Park, with preparations for launch of is contributing to the growth of the GWC, the company’s Board of Directors operation set for the first quarter of Company in extending its reach to has recommended that a 16% dividend 2017. The 517,375 square meter facility the UAE market and beyond. This be distributed to the shareholders, is equipped to handle the varying progression has led to the acquisition which was presented for discussion demands of the small and medium of two warehousing properties which and approval during the company’s enterprise (SME), demonstrating will meet local demand and help Assembly General Meeting held last flexibility in design and service needed better coordinate GWC’s international January 30th, 2016. to accommodate the diverse industries distribution operations. it will serve. LOGISYM MAGAZINE FEBRUARY 2017 | LOGISTICS NEWS 19

FedEx Boss Says US President's Decision to Quit TPP 'Unfortunate'

The founder and chief executive of world, 80 per cent of the purchasing but trade doesn't happen just FedEx Fred Smith has criticised the power," he said. bilaterally. It happens multilaterally." US president's decision to withdraw "I think the decision to pull out of from the Trans Pacific-Partnership TPP is unfortunate because the real US president Donald Trump signed (TPP) by saying that being cut off from beneficiary of that is China and China an executive order a few days ago trade would be like "trying to breath has been very mercantilist, very to withdraw from the Trans-Pacific without oxygen." protectionist. They've engaged in Partnership (TPP). The move by Trump industrial policy to the disadvantage has been described as largely symbolic Speaking on the Fox Business of American and European countries. given that it had yet to be ratified by Network, Mr Smith said the decision to congress. This was far from certain pull out of the TPP was "unfortunate." "But the real opportunity is to get given the strength of opposition to He reasoned that "trade is what made China to take down their barriers the deal in the country because of America great" and added that the for American goods because the concerns that it could have a negative decision would actually benefit China, countries we have a free trade impact on US manufacturing and job the London's Air Cargo News reported. agreement with, which are 20, we losses by making foreign goods less actually have a surplus which seems to expensive. "About 27 per cent of [the] entire [US] be what President Trump is focusing economy is related to trade 95 per on the most. Mr Smith has long been an advocate of cent of the world's consumers aren't in "The problem with having a free trade, free trade and has previously spoken the US, they're elsewhere around the a bilateral agreement, it's wonderful of the perils of protectionism.

GAC Partners with Hemas to Develop Logistics Facilities in Sri Lanka

ambient and temperature-controlled facilities. The distribution centre’s operation will run on an integrated IT platform that encompasses warehouse management, distribution management and yard management capabilities with barcode and RFID enabled infrastructure.

Photo: Courtesy of GAC.com The container yard is expected to be operational by early June 2017 and the GAC Sri Lanka has partnered with Muthurajawela Industrial Zone in the distribution centre by February 2018. Hemas Transportation to develop a western part of Sri Lanka. 6,000 TEUs container yard, distribution centre and 15-acre warehouse. The distribution centre will consist Development will take place in of 22,000 pallet positions with both 20 LOGISYM MAGAZINE FEBRUARY 2017 | LOGISTICS NEWS

Toll’s New Boss Prioritises Growth Amid Pressure

Reflecting on his recent appointment retirement in December 2016, ending to Managing Director of Australia’s an eight-year run with the transport largest transport company, the Toll and logistics giant. Group, Michael Byrne has pledged to improve the company’s bottom line in According to AFR’s Jenny Liggins, 2017. Byrne and the new Toll Chairman, John Mullen, are under pressure to Photo: Michael Byrne, Managing Director of Toll Group Following the retirement of his turn around the trucking and logistics predecessor, Brian Kruger, the former group as profits tumble following months to September to US$68 million, Chief Executive of Coates Hire and its US$6.5 billion acquisition by while operating income slid by eight Linfox told the Australian Financial Japan Post in 2015.Japan Post Co, per cent to US$3.9 billion. According Review (AFR) that he was “looking which is owned by financial services to research company, IBISWorld, Toll forward to working with Toll's conglomerate Japan Post Holdings, has a 9.6 per cent market share of the customers to understand how we can reported in November that earnings national road freight industry, while improve our business and continue before interest and taxation in its rival Linfox boasts a 4.8 per cent share, to evolve”. Byrne officially took over international logistics business – followed by the K&S Group with a 1.1 as Toll’s head man at the start of the the division formed to hold the Toll per cent share. New Year after Kruger announced his businesses – fell 56 per cent in the six

customers with faster distribution in 2020 project. “Our new facility in DIP is RSA the local markets. in close proximity to the Expo 2020 site making it a favoured location to begin Logistics The warehouse will add to RSA operations in view of the projected Logistics’ existing contract logistics increase in economic growth resulting capability and complements from the mega event,” he said. “It Launches established facilities in Dubai South also reinforces our commitment to and Jebal Ali. The facility, which bridging gaps in the market based the Dubai spreads across 2500 sqm with a total market’s and our customers’ needs.” capacity of 2500 pallets, is designed Investment to store general cargo and handle a The facility is strategically located diverse range of product categories to take advantage of the modern including fast moving consumer transport infrastructure, with easy Park goods (FMCG) and beauty products. access to both Jebel Ali port and Al Maktoum International Airport. Warehouse It will offer an extensive range of value added services such as distribution, Moreover, the facility is very close to RSA Logistics, a leading Dubai- cross documentation, and ecommerce Sheikh Mohammed Bin Zayed road based third party logistics (3PL) to meet diverse customer requirements and Emirates road which connects to provider, recently announced that with international standards. the industrial and commercial areas it has expanded its operations to of Al Quoz in less than 20 mins and Dubai Investments Park (DIP) with a Abhishek Ajay Shah, co-founder and covers Dubai and Sharjah in less than new warehousing facility. The new managing director- RSA logistics said 45 mins each. warehouse is strategically located the expansion was due in part to within the DIP complex to serve anticipated demand from the Expo LOGISYM MAGAZINE FEBRUARY 2017 | LOGISTICS NEWS 21

Dubai Trade Recognises Strategic and LogisticsTHE DIGITAL PartnersSUPPLY CHAIN: Five Technologies To Watch

Photo: Group photo of the appreciated oragnisations

Dubai Trade, the single window for shipping companies, and others Facebook, Alibaba, and Airbnb are cross-border trade and smart trading providing information on ship and great examples of organisations that solutions and a DP World company, port traffic. have thought ahead of need and recently recognised strategic and we strive to continue serving our media partners during its first The ceremony, was inaugurated by H.E. customers in much the same way, appreciation ceremony. Ahmed Mahboob, Director of Dubai adopting smart systems to provide Customs who said: “We are working innovative solutions.” The ceremony was part of Dubai Trade’s hard to ensure our leaders’ vision for strategy to support partnerships Dubai to become the smartest city Dubai Trade provides its services between the public and private sectors globally becomes reality. Dubai Trade exclusively through its online and to encourage trade relations in has been at the forefront of this effort portal that covers the trade and Dubai. It was attended by H.E. Ahmed since its establishment and today logistics industry. All services are Mahboob Musabih, Director of Dubai provides 820 services through its also available via smart applications, Customs, Mohammed Hamdan Al electronic portal, used by more than allowing customers easy access to Zaabi, Director of Trade Promotion and 113,000 users leading to 50,000 daily their full range of services, anytime Investment at the Ministry of Economy, transactions. This is down to those and anywhere. Dubai Trade also Eng. Mahmood Al Bastaki, CEO of who maintain the portal and the enables organisations to connect and Dubai Trade, along with organisations support of our partners who chose to integrate with its advanced systems, that have contributed to Dubai Trade’s use the services.” Mr. Mahboob pointed including the secured e-payment success, including government and out that Dubai Trade is continually gateway ‘Rosoom’ and the e-insurance financial organisations, private sector improving its support services, such as platform ‘Tradeshield’. companies and the media. the introduction of the newly launched Land Transportation Management Dubai Trade plans to expand the scope Dubai Trade honored organisations and Warehouse Booking Systems. of its strategic partnership to include that provide smart services to their the business and trade sectors as well customers and those who have Eng. Al Bastaki, CEO of Dubai Trade as retail outlets in the private sector. integrated their services with its underlined the importance of It works to enhance smart trade in smart electronic systems, such as the technology, he said: “The power and Dubai, and supports Dubai’s vision to secured electronic payment gateway reach of large global corporations lies become the smartest city in the world. “Rosoom”. Other attendees included in their use of modern technology cargo insurers, storage businesses, and the way they adapt to change. 22 LOGISYM MAGAZINE FEBRUARY 2017 | SUPPLY CHAIN NEWS

Toyota Ends Australian Manufacturing Leaving 2,500 Unemployed

More than 2,500 people have been left rich manufacturing history which know when they'll be leaving the without jobs after Toyota announced spans over 50 years," Buttner told the plant, so for many of them in a very it would close its manufacturing plant Australian Broadcasting Corporation bad circumstance, it is a positive," the in Melbourne's west in Australia. (ABC) on Wednesday. AMWU's Dave Smith told the ABC.

Toyota said its total staff in Victoria "Our employees are committed to "There's going to be so many people would drop from around 4,000 to 1,300 producing vehicles of the highest coming onto the jobs market at the people when it stops manufacturing quality as we work towards our goal of same time. and moves its workforce to the CBD. last car equals best global car." "The company has put in a support In a statement, the company said The Australian Manufacturing Workers' program... But at the end of the day it would stop building the Aurion Union (AMWU) said the announcement you can provide all the training in the model in August, Camry Hybrids in actually came as relief for a lot of staff world, but there's got to be jobs there September and Camry petrol models after years of uncertainty though to go to." in October. Dave Buttner, president they would struggle to compete with of Toyota Australia, said employees the 40,000 people employed by the Toyota will join Ford and Holden would be supported to prepare for the broader industry. in shutting down its Australian future. manufacturing in recent years. "They can now get on with their lives "We remain extremely proud of our and organize around a date, they

SMART Will Return to Sydney in 2017

Outside of the conference sessions delegates will have more opportunities to learn and network with site visits, the Supply Chain Industry Dinner & Awards, as well as the SMART Expo 2017.

To celebrate Smart Conference’s return SMART will return to Sydney in 2017, increased supply chain efficiency, to Sydney, it will be held at the world- and bring a world-class line-up of with Samsung, Kathmandu, Roy class International Convention Centre expert speakers for the two-day event. Hill, Woolworths and McGraw Hill (ICC). With its new fully integrated Smart Conference is the only supply Education all presenting their insights. facilities, world class cuisine and chain and logistics conference that’s Sessions will be centered on the key spectacular views, ICC Sydney is the brought to you ‘by industry – for themes of supply chain strategy, perfect venue for Smart 2017. industry’. transport and logistics, operations management, procurement and Registrations are now open at Over two days, delegates will hear 30 purchasing, systems and technology, www.smartconference.com.au real-world case studies from leading and leadership and development. organisations on how they have 23 LOGISYM MAGAZINE DECEMBER 2016 / JANUARY 2017 | THE DIGITAL SUPPLYLOGISYM CHAIN: MAGAZINE FIVE TECHNOLOGIESJANUARY 2016 | AIRTO WATCH NEWS 23 24 LOGISYM MAGAZINE FEBRUARY 2017 | SUPPLY CHAIN NEWS

said: “The UAE is accelerating its efforts designed to reduce waste and energy Unilever to boost the industrial sector and consumption, in line with the Unilever make it a valuable contributor to the Sustainable Living Plan via which the Plant national economy, turning the ‘Made company aims to decouple its growth in UAE’ label into a mark of quality from its environmental impact, while and global excellence. We can achieve increasing their positive social impact. Launched this through successful partnerships with international manufacturers, and In addition to supply chain efficiency, at Dubai stimulating investments in industry.” the advanced technology will enable automatic quality control, scanning Industrial “Our country has become a destination at a rate of 350 bottles per minute, of choice for the industrial sector, as it while also ensuring the highest safety provides modern infrastructure, an standards integral to and embedded Park investment friendly environment and in all equipment designs. a world-class legislative framework for The region’s largest personal care businesses seeking to become global In addition, 25 percent of the energy products manufacturing plant has trail blazers,” he added. required to run the plant will come been launched in Dubai Industrial Park from solar power, and 80 percent of by consumer goods giant Unilever. Spanning 100,000 square meters, this waste water will be repurposed and plant is the largest in the region, and reused for agricultural and cleaning The company will mark products is set to deliver the highest output purposes. manufactured at the factory with a of 100,000 tons per annum of liquid ‘Made in UAE’ label and will export 80 beauty and personal care products a Highlighting the importance of the percent of them to Europe and MENA year (approximately 500 million units). GCC and UAE markets for Unilever, region. The brands manufactured include Polman said: “Choosing the UAE was a Dove, Fair & Lovely, Lifebuoy, Vaseline, strategic decision. It is a trade corridor The official opening ceremony, of the Clear, TRESemmé, and Sunsilk. that connects the East and West, with AED 1 billion facility, took place in important growth potential and world the presence of His Highness Sheikh The facility utilizes state-of-the-art class infrastructure. Our new factory is Ahmed bin Saeed, chairman of Dubai technology, which combined with a testament to that – as the UAE’s largest Civil Aviation Authority and chairman modular design, ensures shorter, faster private solar park, it reflects a shared of Emirates Group. and highly responsive production vision of driving resilient, sustainable lines that are highly flexible to match growth, underpinned by innovation”. Sheikh Ahmed bin Saeed Al Maktoum, market demand. The facility is also

Asahi Beverages, comprising some storage and retrieval system (ASRS) will Asahi to of Australia and New Zealand’s most include six new Dematic RapidStore successful beverage businesses Storage Retrieval Machines (SRM) Build a including Schweppes Australia, Asahi with Dematic’s latest ‘free roaming’ Premium Beverages, Independent Automover satellite carts. Liquor and The Better Drinks Co., has High-bay awarded Dematic a contract to build a The system will also feature Skate high-bay warehouse. Auto-loading Truck Docks, an Warehouse extensive pallet conveyor system, The warehouse in Heathwood, stretch wrapper, automatic barcode in Queensland Queensland, will consist of satellite labelling, and a full-case picking area. storage containing six aisles of six- deep satellite ColbyRack, capable of The new warehouse is due for storing 28,000 pallets. The automated completion by the end of May 2018. LOGISYM MAGAZINE FEBRUARY 2017 | SUPPLY CHAIN NEWS 25

Crown Launches Updated Heavy-Duty FC 5200 Electric Counterbalance Forklift

The most efficient heavy-duty improvements to the motor-controller profile cowl, narrow steering column counterbalance forklift for warehouse interface and the battery cut-off, and exceptional visibility through the and manufacturing applications to furthering FC 5200’s economical mast. come from Crown Equipment has battery use. Crown’s e-GEN™ braking Crown’s Intrinsic Stability System™ been launched across the South East benefits runtimes, while reducing uses integrated sensors and controllers Asian region. the need for maintenance compared to constantly monitor and control key to traditional friction brakes, further forklift functions and movements Helping the company deliver a more improving the cost of ownership. to enhance stability and safety. This extensive counterbalance forklift line- combines with a strong, durable frame up for a wide range of warehousing On-demand power steering means and power train to handle the most requirements, the Crown FC 5200 that power is only used when the demanding loads, giving operators an Series provides the expected strength, steering wheel is turned, avoiding added level of confidence. stability and manoeuvrability from energy loss. Fingertip-control a brand renowned for producing hydraulics operate on a similar Marketing Manager Southeast Asia, equipment that stands up to the task. basis while providing streamlined Crown Equipment, David Sultana said ergonomics. the FC 5200 Series’ pre-emptive focus Proprietary Crown-built AC drive on efficiency has resulted in a future- motors are central to the Crown The FC 5200 helps operators get proof forklift that will remain ahead of FC 5200 Series’ efficiency while more done in less time, using faster the game for a long time. supporting loads ranging from 1800 to acceleration, travel and lift speeds, to 3000 kilograms. These combine with move up to 10 per cent more per shift. “It’s safe to say that the forklift industry Its dual drive motors and steering axle is likely to face increased pressure to

Photo: Crown Equipment has launched its most efficient heavy-duty counterbalance geometry allow for a smaller turning provide more efficient products, just as forklift for warehouse and manufacturing applications, the FC 5200, which benefits from radius so operators can handle heavy the automotive industry has,” Sultana Crown-built AC drive motors and other efficient technologies. loads in tight spaces without causing said. “That’s why we’ve produced our extra tyre wear. latest products with an emphasis on driveline efficiency and are offering The tighter turning radius of the state of the art technology to achieve forklift enables the truck to be used it. in the same space as a conventional four-wheel forklift, while also allowing “The FC 5200 was also built with a room for a larger battery that provides focus on efficiency in all functions and 15 per cent more runtime per battery movements, favouring the operator charge. When the performance of the and helping to maintain a comfortable, forklift is set to “optimise efficiency”, an safe working environment. additional 25 per cent of runtime can be realised, resulting in a combined “Crown has always built its equipment 40 percent more runtime per battery for durability and longevity and the charge. FC 5200 provides optimum strength and manoeuvrability for heavy-duty FC 5200 positions the operator for use in applications such as dock work, productivity with ideal ergonomics, stacking in racks and feeding assembly all-around visibility and ample lines,” he said. workspace. Enhanced visibility results from the cab-forward design, low- 26 LOGISYM MAGAZINE FEBRUARY 2017 | E-COMMERCE AND TECHNOLOGY NEWS

Flipkart Set to Roll-out ‘Low-Cost’ Delivery System Made up of Kirana Stores, Tech Parks

India's largest online retailer Flipkart is to their doorstep by the store owner 800,000 parcels a day. set to implement a low-cost delivery depending on the convenience. This channel across major cities this year. model has helped Flipkart improve The cost of logistics at Flipkart is 30% The company, which had piloted a its last mile connectivity at a far lesser lesser than the competition as it uses low-cost delivery model in select cities cost, sources said. a mix of different delivery models last year, is now gearing up to scale it such as its own logistics arm and third up over 50 cities in an effort to reduce This way Flipkart can get a large party logistics firms. Flipkart also uses its logistics cost and bring down number of parcels delivered by one third party logistics firms like Bluedart, pressure on its delivery network. or two kirana stores at a nominal Delhivery and Ecom Express. commission as against paying salaries The new delivery model, once to a large workforce or delivery boys. Although Flipkart did not reveal its implemented, will constitute about cost of logistics, the typical cost of 20% of its total deliveries on daily Typically, delivery boys are paid a delivering a half kilo packet is pegged basis, Flipkart sources said. salary of R9,500 to R12,000 depending at R45 to R55, analysts tracking the on their level of experience. Flipkart's sector said. The alternative delivery channel delivery team, irrespective of whether comprises of kirana stores, large they work directly or through third "We have tested the alternative apartment complexes and tech parks, party agents, get all benefits including delivery mechanism across 30 cities where Flipkart is looking to appoint incentives just as regular employees. in India last year. The experience we last-mile delivery agents so as to have gained from this pilot has given meet customer demands quickly. For Currently, Flipkart's logistics arm Ekart us very good result and helped us cut example, Flipkart will deliver packets ships around 500,000 packets per down our logistics cost significantly. at a kirana store, which will in turn be day including the third party logistics We are now doubling the number of either picked up by customers on their companies. During the festival season, cities in 2017," Flipkart sources said. own at a convenient time or delivered the number goes up to as high as

Foxconn Electronics has signed a also supports iOS, MacOS, Windows Foxconn cooperation agreement with Robo and Linux, according to Robo 3D. 3D, under which Foxconn will produce the Robo R2 3D printers for Robo 3D, The Robo R2 will be available at Ties Up with according to a Chinese-language US$1,300 per unit, according to a TechNews report. Chinese-language Economic Daily Robo 3D to News (EDN) report, citing documents Initial production will reach 10,000 from Robo 3D. Produce 3D units a year with the first batch of the Robo R2 3D printers to hit the market Printers in March, said the report. The Robo R2 can be operated through the Wi-Fi network of users' mobile devices, using Robo app. The Robo R2 LOGISYM MAGAZINE FEBRUARY 2017 | E-COMMERCE AND TECHNOLOGY NEWS 27

Wal-Mart to Scrap its Amazon Prime Rival; The ShippingPass Service

Wal-Mart Stores Inc. is abandoning its that you are able to get free two-day Wal-Mart started offering ShippingPass effort to create a rival to Amazon.com shipping...without a membership," Wal- in the spring of 2015, first as a free three- Inc.'s membership program. Mart's e-commerce chief Marc Lore said day shipping membership program for Monday on a call with reporters. "This $50 per year. Last year, Wal-Mart made The service, called ShippingPass, was day and age, two-day shipping is just it a two-day window and cut a dollar off introduced almost two years ago and table stakes." the annual fee. offered free two-day shipping for customers that paid the $49 annual Wal-Mart plans to refund ShippingPass Wal-Mart used ShippingPass to test membership fee. Instead, Wal-Mart will members the cost of the membership. and ramp up its logistics and online offer free shipping on more items it sells warehouse network on an easier to online and lower the minimum purchase Wal-Mart has spent billions boosting manage, limited number of shoppers, required for free shipping on all orders e-commerce sales and speeding says a person familiar with the strategy. to $35, from $50. up deliveries of online orders. Last September, Wal-Mart bought Mr. Lore's Now Wal-Mart is able to ship millions of Wal-Mart declined to say how many company Jet.com Inc. for $3.3 billion, products to any house in the U.S. in two people had signed up for ShippingPass, placing him at the head of e-commerce days, Mr. Lore said. which was similar to Amazon's $99 operations. Prime program. The Walmart.com products that will Since then, it has also shuffled the automatically qualify for free shipping Under the change, Wal-Mart plans to leadership ranks of its e-commerce will include everyday purchases such as offer free two-day shipping on about operations in California, and last week shelf-stable food, household cleaning 2 million products on Walmart.com. it laid off about 200 e-commerce supplies and diapers, he said. While The site sells about 30 million items, employees there as part of broader those staples aren't big moneymakers mostly from third-party sellers. "We corporate job cuts. for most e-commerce players, they can are hoping to build loyalty on the fact help attract shoppers who buy them frequently.

has increased the number of stores it "Breakfast as we know it is changing in Fonterra's sells into from 1400 to 1700 in recent China," said Chester Cao, vice-president months and boosted the presence of its of brands for greater China. products on e-commerce platforms. Chinese "As incomes rise and the middle class The co-operative has also launched a grows, we are seeing greater demand Makeover mobile app campaign inviting users to for Western-style breakfast items such as share their favourite breakfast recipes butter, cheese and cream. Fonterra is riding a wave of demand using dairy ingredients. More than 8000 in China for dairy products to use in recipes were shared during December The co-operative has hired celebrity Western foods, including breakfasts. and January by shoppers who bought chefs such Michelin star holder Steven Anchor products. Liu to stage cooking events. The dairy giant said data from China About 70 per cent of the recipes were Customs showed that imports for butter, Western-style dishes such as breakfast The campaign also included digital cream and cheese all rose in the first 11 paninis and omelettes, while 30 per advertising and activation with China- months of last year compared with the cent were Chinese- inspired dishes based food delivery app Eleme, which year prior, with cream up 57 per cent, such as sweet potato cream soup, toast generated 89 million impressions cheese up 31 per cent and butter up rolls with peanuts, and cheese and egg among app users. 21 per cent. To meet demand, Fonterra breakfast cups. 28 LOGISYM MAGAZINE FEBRUARY 2017 | THE FORCES BEHIND ONE OF THE WORLD’S FASTEST GROWING PORTS

The Forces Behind One of the World’s Fastest Growing Ports

Innovation is in the DNA of SOHAR region’s challenger brand,” says Mark Port and Freezone. The mega- Geilenkirchen, CEO at SOHAR Port. “All development has been pushing the over the world, people in our industry boundaries of maritime logistics are sitting up and taking notice of since it was first established and has what we’re doing here. Investments found new ways of doing business, at SOHAR reached a staggering US$25 making its tenants’ operations more billion last year, which is more than efficient and convenient along the GDP of some smaller European the way. “Today, SOHAR is one of countries.” With this kind of clout, the world’s fastest growing port SOHAR is able to use its position to and free zone developments and enhance innovation in Oman and the is really establishing itself as the wider region.

Mark Geilenkirchen CEO SOHAR Port and Freezone LOGISYM MAGAZINE FEBRUARY 2017 | THE FORCES BEHIND ONE OF THE WORLD’S FASTEST GROWING PORTS 29

At the end of 2016, as part of ongoing expansion amid strong growth in throughput for the second half of the year, SOHAR Port and Freezone closed contracts with some significant “ new tenants, whose identity is due Moving forward, we to be announced soon. The tenants will be looking to have agreed to lease a substantial create more synergies new area as an integral part of a land between our Port reclamation project at the Port. The reclamation project is part of the and Freezone and SOHAR 2040 Masterplan, currently especially developing under finalisation, and will give a the Freezone as a hub substantial boost to the port’s ability for innovation to support the Sultanate’s aims to increase its diversification efforts.

‘SOHAR Port South’, as the newly reclaimed area will officially be called once completed, will allow the port to expand its portfolio of companies and add more business to drive growth As well as continued organic growth, Zone, the region’s first dedicated agro within the Omani economy. CEO SOHAR will be focusing on two terminal.” Earlier this month, Sohar Mark Geilenkirchen added: “SOHAR main areas moving forward: food Flour Mills announced that they are will build on the Port of Rotterdam’s and logistics. Mark Geilenkirchen moving ahead with construction of extensive experience with similar explains: “The port was originally a new 500 tons a day milling facility projects, like the massive Maasvlakte based around three industrial clusters: in the Food Zone. The new mill is a 2 land reclamation in the Netherlands, logistics, metals and petrochemicals. joint venture between the UAE’s Essa to achieve the best results during We recently added food as our fourth Al Ghurair Investments and Aytab construction.” pillar with the launch of SOHAR Food Investments of Oman and is due for completion by the end of 2017. Built on the site of the old container terminal B at SOHAR, the new Food Zone also As well as continued includes firm plans for a sugar mill and the infrastructure for downstream food processing, packaging and organic growth, logistics industries.

This new expansion phase at SOHAR SOHAR will be is expected to generate a further US$8 billion worth of investment over the next five years. “There are focusing on two main certainly some external factors that are currently influencing growth: the general level of global economic areas moving forward: uncertainty and historically low oil prices that are affecting all the GCC food and logistics. economies. However, those same low oil prices are acting as a catalyst to spur on economic diversification across the region,” says Mark Geilenkirchen. 30 LOGISYM MAGAZINE FEBRUARY 2017 | THE FORCES BEHIND ONE OF THE WORLD’S FASTEST GROWING PORTS

“The whole Middle East is moving from Zone as an ideas factory. Working in an economic base powered by oil and close cooperation with the Port of gas exports to one that is fuelled by Rotterdam, it will try to find innovative “ knowledge, and this diversification is ways to solve tomorrow’s logistical In SOHAR we always say driving investment with an upside for problems. “Together with private ‘It all starts here’ our business in SOHAR,” he says. sector companies, international and that has never been research institutes and some of more true than now: “Moving forward, we will be looking the world’s top universities, we are to create more synergies between seeking solutions across a broad range 2017 promises to be our our Port and Freezone and especially of issues that affect our shipping, most exciting year ever. developing the Freezone as a hub logistics and industrial hub at SOHAR for innovation,” says Geilenkirchen. Port and Freezone,” says Geilenkirchen. Mark Geilenkirchen This will include a scheme that aims CEO to create better use of resources “From innovative ways to track SOHAR Port and Freezone between the Port and Freezone’s containers and their loads moving existing tenants and those looking to between our Port and Freezone; further enhance the already excellent setup business. “For example, where through the use of 3D metal printing connectivity between the two areas. one company produces steam as a to create high quality industrial In the near future, there are likely to waste product, another may actually parts onsite; to the world’s first be a number of new options available need steam for its own industrial self-sustaining Freezone logistics for the transportation of incoming processes. By improving the level of cluster, at SOHAR we firmly believe feedstock from the Port to the Freezone connectedness between our tenants’ that everything is possible.” SOHAR as well as outgoing finished products businesses we can help them grow Innovation Zone will particularly focus from the Freezone to the Port. We are more efficiently with more synergies, on sustainability, and will operate also looking to open a fully bonded and a very positive environmental as the world’s first self-sustaining road corridor soon, to optimise trade upside for all of us.” Freezone cluster. It will not be and facilitate the swift movement of connected to the national power grid, goods, avoiding unnecessary customs Ports don’t look very smart seen from instead getting all its electricity needs paperwork for our tenants. outside the fence, but over the past from renewable sources, while all ten years there has been a revolution waste will be recycled. The Innovation For instance, as the Food Zone takes in the way that they work. Behind Zone is not a hypothetical, futuristic off in the Port we are expecting a rapid the scenes, there has been huge concept, however. It will use proven influx of regional and international investment and innovation. Dutch- and trustworthy techniques brought food companies to set-up downstream born, but with broad global business together in one integrated system for food processing and food logistics experience, the new SOHAR CEO the first time, to demonstrate the full businesses in the Freezone, and we knows that the focus of port operators potential of Oman’s technology sector. want to facilitate the ease of doing is changing across the globe. Instead business for them, as well as for all our of being really good at doing just The original plans for SOHAR Freezone other businesses. one particular thing, today it’s more foresaw an industrial complex of 4,500 important that they become really hectares adjacent to SOHAR Port and All of these efforts are helping to good at learning how to do new things the first-phase development of 500 increase efficiency, making the - and doing that faster and better than hectares is now practically leased out port smarter through innovation. ever before. “Right now, that’s our while, in many cases, the industries Mark Geilenkirchen summed up the focus at SOHAR, and ensuring that we are already fully operational. The sentiment as the Omani hub settles have the management structures in technical teams at SOHAR are now down to another year of continued place to deliver against that,” explains busily planning the zone’s expansion growth: “In SOHAR we always say ‘It Geilenkirchen. into phase-two. all starts here’ and that has never been more true than now: 2017 promises to SOHAR Innovation Zone is central Mark Geilenkirchen continued: “As be our most exciting year ever.” to this effort. The Port and Freezone both the Port and Freezone continue wants to operate the Innovation to grow, we are looking at new ways to 31 LOGISYM MAGAZINE FEBRUARY 2017 | AIR FREIGHT IN 2017 LOGISYM MAGAZINE JANUARY 2016 | AIR NEWS 31 32 LOGISYM MAGAZINE JANUARYFEBRUARY 2016 2017 | | AIR THREE-LEVELS NEWS OF PARTNERSHIPS IN DYADIC SUPPLY CHAINS

Three-Levels of Partnerships in Dyadic Supply Chains

Supply chain management is a vital environment. On the other hand, Partnership is a resource-sensitive part of business that leads firms partners investing in partnership and effort-driven practice that needs to systematically coordinate the advances their supply chain with a mutual trust, commitment and flow of products, information and competitive advantage. Firms like continuous communication. When finances to meet end-consumers’ Unilever, Kraft, Tesco, Sainsbury’s, executives and senior managers aim demand. Managing the supply chain Kimberly Clark and Whirlpool are at building collaboration with partner in today’s fast-paced environment is only some of the firms that gained firms, the foremost consideration a challenging effort due to increased successful competitive advantage should be the manifestation of competition, fragile economic from partnerships. Wal-Mart and Sara corporate goals and objectives. Then, conditions, and continuously evolving Lee Branded Apparel partnership it should be determined whether these consumer behaviours. led to increased sales by 45% and goals and objectives are compatible Long lead-times, limited visibility at market share by 10%, while Nabisco with partner’s goals and objectives. the upstream and downstream levels, and Wegmans partnership led to with demand uncertainties are only sales growth by 32% and inventory When manufacturing firms aim to some of the barriers that supply firms reduction by 18% (source: Ireland and improve production with minimum strive to cope with in today’s business Bruce, 2000). production and inventory costs, LOGISYM MAGAZINE FEBRUARY 2017 | THREE-LEVELS OF PARTNERSHIPS IN DYADIC SUPPLY CHAINS 33

information types and frequency of sharing resources as well as smart Key Performance Indicators (KPIs) to measure collaboration performance are vital for continuous improvement of relations.

Organisations can get benefit from three different types of partnership. Depending on the infrastructure and functionality of firms, they should aim at building correct partnership level. But, how to decide which partnership is the best for your organization? To Figure 1. Level of Partnership answer this question, I do recommend the following five criteria; distributors focus on higher service speed, consistency in operations, and levels at the downstream level, with flexibility to handle customer service minimum cost of inventory and requests. logistics operations. On the other hand, retailers aim at minimising 2. Mid-level partnership is the level of inventory costs whilst maximising collaboration practice where partners availability on shelves and of course are not necessarily to define mutual sales. It is critical for supply firms goals and objectives, but rather to to leverage on tangible benefits of involve their process planning through partnerships. Understanding the high level engagement of senior- mutual goals and objectives are about management. Since the focus of each trade-offs between cost of supply party is to achieve their mid-level Figure 2. Partnership Level Decision Criteria chain and service performance. goals and objectives (e.g. sales target, Since partnership is a matter of inventory levels, fulfilment rate, etc.), collaboration, I would categorise it partners need to monitor performance HOW CAN ORGANISATIONS as operational-, mid-, and strategic- at the customer and supply level. IDENTIFY WHEN TO TRIGGER INTO level partnership. Although strategic decisions are made PARTNERSHIP ENGAGEMENT separately, efficient communication, LEVELS? 1. Operational-level partnership sharing of resources and planning 1. Business Share (%) focuses on improving operational are essential whilst committing to efficiency and effectiveness between collaborative benefits. supply firms. Whilst improved efficiency leads to minimise the 3. Strategic-level partnership is the usage of resources, effectiveness in level of collaboration practice that partnership is more about improved involves complex demand, supply and ability to deliver goods and services at sales planning. This requires a more the acceptable level of end-consumers. sophisticated relationship built on a This partnership needs exchange high level of trust, understanding and of information for better visibility flexibility. Commitment and support on demand and supply operations, of top-management are mandatory We first need to identify the partners/ made separately by parties. Whilst in order to integrate partners’ goals company that give a significant the intervention of top- and senior- within a single business plan. I call this contribution to your organisation – management is minimal, improving a Partnership Book to achieve long- main case being that provide revenue supply chain performance is a primary term but mutual goals and objectives. or gross profit. A level of at least goal, which is expected to be delivery Clear definitions of responsibilities, 34 LOGISYM MAGAZINE FEBRUARY 2017 | THREE-LEVELS OF PARTNERSHIPS IN DYADIC SUPPLY CHAINS

20% of revenue or gross profit, be finished goods or raw materials at the 4. Manpower candidates to develop strategic-level. upstream level also play a vital role The mod level partnership would on the operational capacity, thus on targeting functional dependencies, time alignment for order placement, which should be about 30% of impact. shipment and replenishment of The operating level partnerships finished goods will help partner could account for 50 targeting more firms to find the best way of meeting on transactional efficiencies. Updating demand. this partnership mapping periodically is crucial to strengthen the decision 3. Information Technology (IT) that will be made to invest in correct partnership level. Collaboration needs willingness, time and continuous effort put into 2. Operational Capacity the practice. It calls for highly skillful, knowledgeable and also flexible employees and leaders to contribute to the collaboration. Having limited manpower is likely to limit number of collaborations conducted with partner firms.

Particularly, strategic-level Today’s business is built upon IT and partnerships need good personal calls for different IT tools and systems sources to establish the frame of for accurate, on-time and relevant partnership and to lead complex The present marketing environment information exchange between processes for win-win relations. is fast-paced and purely demand- partner firms. The sources of demand, Therefore, a significant requisite is driven. Partners have to be responsive supply and production planning are to appoint correct leaders to the against any fluctuations and volatility the information that flows among partnership development process. on demand. This is because, the partner firms. The more accurate Today’s leaders are responsible from partner firm’s production and and timely information exchanged, articulating a vision, motivating distribution capacity undertake a key the better planning executed for people to act and focusing on problem role on the implementation of correct collaboration. Insufficient IT is a solving. Partnership development level of partnership. Success rate of limiting factor for the strategically rather seeks leaders who can safeguard operational capacity is recommended aligned companies. the process, facilitate constructive to be evaluated based on Pareto interaction and are capable of dealing principle, which will show the 20% Partners’ agreement on the with high levels of frustration. of products leading the 80% of information types and the conditions business or sales. If the partner firm’s of sharing information will be one of Leadership in a collaborative operational capacity meet the 80% of the factors of deciding the level of environment is completely different sales on time with full fill rate, there is partnership. from hierarchical position. The leaders a great potential to collaborate at the in collaboration embrace the positive strategic-level. Each side will have to make the change despite of complexity. They adequate investments to ensure that are open to all viewpoints, focus Managing capacity saturation will their capabilities to the partnership on consensus-building, and are be vitally important to partnerships. can be sustained. Reluctance or passionately optimistic. Instead of Each side should work on the way of inadequate levels will put the aiming at individual recognition justifying the resource commitment partnership in jeopardy. Continuous and unilateral acquisition, sharing through the investment required review and engagement in such areas knowledge, power and credit is for either mid-level or operational- will be crucial. priority for collaborative leaders. They level partnership. Lead-time of motivate partnership teams to excel, LOGISYM MAGAZINE FEBRUARY 2017 | THREE-LEVELS OF PARTNERSHIPS IN DYADIC SUPPLY CHAINS 35

and to develop a keen understanding with their collaborative teams that are Despite all the hard work in setting up of key benefits in partnership. responsible for execution of the vision any type of partnership level, it also into sustainable goals and objectives. has an important intangible that good Building strategic-level partnership A framework of goals, the objectives leaders recognise. It is a way to grow calls for leaders who lead productive and required investment extended and accelerate the maturity of the and goal-oriented meetings. They over time, is the foremost duty of the people in their organisations. Beyond, use each opportunity for sustainable Chief-Level people. all the other strategic benefits, the exchange of perspective, with Strategic-level partnership involves visible improvements in their long- ensuring full contribution of team complexity and sophistication reaching predictability through better members. These leaders are the ones whilst higher degree of trust and planning and risk management due to that strategically put the unified commitment is mandatory from both joint forces, commitment to and trust vision of firms to the practice with a parties. The continuous pursuit of built in the partnership. great harmony of resolving conflicts progress is necessary by Chief-Level and disagreements. Leader and people. Their regular involvement References: Ireland, R. and Bruce, R. (2000) 'CPFR: Only manpower is a significant factor for with collaborative teams will also the Beginning of Collaboration', Supply chain not only deciding the correct level streamline the sense of rationale for management review, 4(4), pp. 80-88. of partnership, but also ensuring the investment required for partnership. longevity of partnership. IN SUMMARY, PARTNERSHIPS 5. Chief-Level Vision IS THE WAY TO GO BUT NEED CAREFUL CONSIDERATIONS.

The key focus of developing partnership, is to gain a competitive advantage in today’s challenging and Dr. Can Eksoz competitive business environment. Demand & Supply Planning Team Leader Although investment at different Transmed Overseas, UAE levels seems requisite, the return on investment over the period of time Dr. Can Eksoz is Demand & is worthwhile. Operational-level Supply Planning Team Leader partnership is a good option that at Transmed Overseas, UAE. aim at improving delivery speed, He holds his PhD Forecasting One of the distinguishing features for having consistency in operations and & (Food) Supply Chain strategic alignment is to combine the handling customer needs resiliently. Management from Brunel long-term objectives of partner firms Whilst mid-level partnerships University London, UK; MSc in a single plan. This requires a clear need more engagement of senior- Manufacturing Systems and unified vision of top-management. management to make them work Engineering from Warwick Both parties’ CEOs’ or GMs’ continuous effectively. The successful deliverables University, Coventry, UK; and support to their collaborative teams expected are growth in sales, savings BSc Industrial Engineering are vital on the success. The benefits from inventory costs and better from Eastern Mediterranean of strategic-level partnership do not service levels. University, Famagusta, Cyprus. appear in the short-run, but rather His (research) and area of manifest in the long-term. Chief-Level Strategic-level partnerships are expertise involve (Food) people’s vision shared with their teams the most complicated and time- Supply Chain & Operations and openness to investment are vital. consuming agreements for all parties. Management, Logistics, However these should yield the Forecasting, Collaboration Lack of vision by top-management is higher long-term benefits as they (CPFR, VMI and S&OP) and the most limiting factor of strategic- cover a deeper engagement touching Inventory Management. level partnership. Once the thinking sometimes the fundamentals of an and strategy is aligned, the Chief- organisation’s structure, tools and Level team should share this vision enablers. 36 LOGISYM MAGAZINE JANUARYFEBRUARY 2016 2017 | | AIR2017 NEWS TOTAL LOGISTICS REPORT RELEASED

2017 Total Logistics Report Released Logistics Executive Group announces the release of the Total Logistics 2017 Report, by partner Transport Intelligence (Ti).

This report offers a concise, easy to industry – from both the ‘demand’ (i.e. understand view of the industry. manufacturing and retailing) and the The Report examines the In addition, for the first time, Ti has ‘supply’ (i.e. logistics provider) side dynamics of each logistics sized the total logistics market and is perspective. In addition to the roles segment. Key elements offering a breakdown of the industry of the contract logistics and freight of the report including by logistics market, as well as forecasts forwarding sectors, it also examines to 2020. the dynamics of the express parcels, some highlights by David container shipping, air cargo, road Buckby, Economist at Ti, Ti’s CEO, Professor John Manners- freight and intermodal industries. including the following: Bell explained, “The global logistics industry is vast, both in terms of Whilst global macro-trends are • The logistics industry has market size and the huge numbers highly important to the long term undergone a transformation of people employed in the sector. It is future of these sectors, conversely in terms of the major logistics therefore surprising that its role in the it is the structure and competitive service providers which have development of the global economy is nature of these sectors which has come to dominate the market. generally overlooked.” a ‘bottom up’ influence on supply • Ti’s new report examines chain management and hence the dynamics of each logistics According to Manners-Bell, “Without global economies. For example, segment that have caused the the inexpensive and reliable transport hyper-fragmentation and price industry to transform. of freight, manufacturers would not competition in the European road • For the first time, this report be able to tap into the cheap labour freight industry has been a key input includes Ti’s unique total logistics resources based in remote locations into the formulation of manufacturers’ market sizing, segmentation throughout the world. Nor would and retailers’ centralised distribution by logistics market from top to retailers be able to provide ever- strategies. bottom, and forecast growth to increasing levels of service to their 2020. customers, ensuring shelves are Manners-Bell continued, “What is • Major developments, such always stocked whilst inventory is kept clear is that after a turbulent period as the ‘Internet of Things’, to a minimum”. of transformation, there is no sign ‘autonomous vehicles’ and ‘3D that change in the logistics industry printing’ are all assessed in detail. This report examines all the pressures is slowing down. A powerful mix which have led to the emergence of demand and supply side factors of today’s vibrant global logistics means that further re-structuring is LOGISYM MAGAZINE FEBRUARY 2017 | 2017 TOTAL LOGISTICS REPORT RELEASED 37

This report offers a concise, easy to Markets Logistics Index 2017 report, uncertainly around this baseline understand view of the industry. due to be released later this month, figure. The World Bank asserts there is In addition, for the first time, Ti has which features a composite index that a 50% chance that actual growth will sized the total logistics market and is ranks emerging markets based on be between 2.0% and 3.2%. offering a breakdown of the industry their logistic industry prospects. Index by logistics market, as well as forecasts scores and rankings of several major • Political uncertainty (largely to 2020. commodity exporters have suffered associated with Brexit and Donald while importers have been far more Trump) has been identified as a key Ti’s CEO, Professor John Manners- resilient.* risk which could curtail growth in Bell explained, “The global logistics 2017. industry is vast, both in terms of market size and the huge numbers • On the other hand, possible of people employed in the sector. It is * Many of the forward-looking issues that fiscal stimulus, especially in the US, therefore surprising that its role in the the World Bank’s Global Economic Prospects represents a substantial upside risk to development of the global economy is report addresses are also questions that the outlook. generally overlooked.” have been asked of over 800 supply chain and logistics executives in the upcoming • Rising oil prices are expected to Agility Emerging Markets Logistics Index According to Manners-Bell, “Without help boost three leading commodity 2017 survey. For example: How will the inexpensive and reliable transport exporters – Brazil, Russia and Nigeria economic growth in emerging markets fare of freight, manufacturers would not – from recession in 2017. However in 2017? What do you think will be the most be able to tap into the cheap labour significant drivers of the global economy metals and agriculture commodity resources based in remote locations in 2017? How concerned are you about prices overall are expected to remain throughout the world. Nor would growing protectionism and moves away more or less flat to 2019. retailers be able to provide ever- from free trade? increasing levels of service to their • World trade volume growth was customers, ensuring shelves are just 2.5% in 2016. It is expected to always stocked whilst inventory is kept increase to 3.6% in 2017. Although new trade restrictions reached a post- GDP GROWTH IN EMERGING MARKETS crisis high in 2016, encouragingly, most emerging markets “still have a large untapped potential to move up the value chain, by shifting to more complex and higher domestic value- added products”.

Main take-outs regarding the logistics industry are first, that unsurprisingly, the expectation of slightly higher economic growth in 2017 is good news, but don’t count in any way on the global economy to deliver a more favourable environment in 2017 than Source: World Bank in 2016, as more uncertainty surrounds these forecasts than in previous years. The struggles of commodity exporters’ LOOKING AHEAD, SOME OF Ditto for world trade growth. And overall economic growth are thought THE WORLD BANK’S KEY finally, it is quite possible that growth to have spilled over and negatively EXPECTATIONS FOR 2017 ARE: in global ‘supply chain complexity’ affected their logistics sectors. has slowed down significantly over • Global growth is projected to the last five years or so – not good This is apparent in the findings of rise from 2.3% in 2016 to 2.7% in news for logistics providers, especially the forthcoming Agility Emerging 2017. However there is substantial forwarders. 38 LOGISYM MAGAZINE FEBRUARY 2016 | 2017 TOTAL LOGISTICS REPORT RELEASED

MERGER AND FRAGMENTATION OF LOGISTICS FUNCTIONS

The Report outlines Consolidation & For the logistics industry’s take on The report offers readers valuable Fragmentation across the Logistics global economic prospects and to insight into the development and Industry as outlined in the above purchase a copy of the Full Report, prospects of this market. A key theme diagram. follow this link: examined throughout highlights www.logisticsexecutive.com/ e-commerce itself as the disrupter Although growth in supply chain product/total-logistics-2017/ to ‘traditional’ e-commerce logistics. complexity encompasses all manner Presented from multiple angles (global of considerations, one possible proxy and regional, fulfilment and last-mile, for it is growth in global value chains. TI HAS ALSO RELEASED 2017 and from retailers and LSPs) the report Global value chains measure the GLOBAL E-COMMERCE LOGISTICS offers comprehensive analysis on extent to which production processes REPORT. e-commerce logistics trends which are fragmented across countries – the The report includes an exploration could provoke further developments iPhone contains parts from at least into how e-commerce trends are and innovations within the industry. 10 different countries. It seems that disrupting ‘traditional’ e-commerce growth in fragmentation of production logistics as rapid growth sees To Purchase a copy of the 2017 Global has slowed significantly since 2010, businesses searching for a comfort e-commerce Logistics Full Report, and it does not appear that it will zone that they may never find and follow this link: pick up to rates seen in years past. logistical challenges still need to be www.logisticsexecutive.com/ The Report also provides an excellent overcome in last-mile and fulfilment product/global-e-commerce- insight into global Exports trends. operations logistics-2017/

GLOBAL EXPORTS

Kim Winter Global CEO Logistics Executive Group

Review by Kim Winter Global CEO Logistics is Executive Group. Inquiries to [email protected]

Source: World Bank, with data taken from Haugh et al. (2016) LOGISYM MAGAZINE FEBRUARY 2017 | DISRUPTIVE TECHNOLOGY – RUNNERS AND RIDERS 39

Disruptive Technology – Runners and Riders

In today’s challenging and dynamic business environment where the business model is constantly shifting followed by heightened uncertainty from a still weak global recovery and the impact of the new US president economic policy, many business leaders face a daunting question; What is the next disruptive technology and how do we tackle the disruptor? There are several different interpretations of disruptive technology but there is no singularity and standard definition as disruption doesn’t necessarily associate with a technology trend but involves business strategy across industry segments and markets. To simplify the above statement, any disruption is made up of three core components; process, technology, and people. Although the role of the technology is undeniable but a disruption involves a shift in mindset around the value of products, services, channels, and any aspect of business operations. 40 LOGISYM MAGAZINE FEBRUARY 2017 | DISRUPTIVE TECHNOLOGY – RUNNERS AND RIDERS

A disruptive technology (or disruptive necessary to explain the term Digital technology are two sides of the innovation) is an innovation that Transformation. IDC defines digital same coin. Digital transformation creates a new market and ecosystem transformation (DX) as the continuous supports innovations and makes that eventually disrupts an existing process by which enterprises adapt business operations more responsive business model and value chain, to or drive disruptive changes in their and effective by leveraging digitally- displacing established market leading processes, competencies and business connected products/services, assets, companies, products, and distribution model. DX enables enterprises to people, and trading partners. The key channels. Harvard Business School innovate new products and services by fact is that majority of business leaders professor Clayton M. Christensen in leveraging digital competencies. DX fail to establish a reasonable digital his best-selling book “The Innovator’s seamlessly integrates digital, physical, transformation strategy to disrupt Dilemma” separated new technology business and customer experiences the existing business model and stay into two categories: sustaining and while improving operational relevant. As cloud, mobile, social, and disruptive. Sustaining technology efficiencies and organizationalbig data/analytics becoming standard relies on incremental improvements performance. technologies embedded in every to an already established technology. industry, the next differentiator for A good example of sustaining Picture 1: any organization is to offer a unique technology is aviation industry where DX Five Key Dimensions product/service enabled by these airplane design and technology is technologies. Disruptive technology constantly being improved to enhance allows companies to redesign their efficiency and safety. Disruptive business model and move their technology lacks refinement, often enterprise to the next level, creating has performance problems new ways of operating and because it is new, appeals growing businesses. to a limited audience and may not yet have a proven Amazon is a good example practical application. of an enterprise that is For example, online using both disruptive and booking has changed the sustaining technology supply and demand in to run its business. commercial air travel and The organization uses disrupted the traditional disruptive technology travel agencies ecosystem. to create a new supply chain model by offering Apart from technology convenient shopping for its disruption, businesses customers to buy a favorite should also cope with political, product with the press of a button economic and environmental (dash button). On the other hand, disruptions. In this article, we Amazon using sustaining technology review the importance of disruptive to provide better, faster, more technology for the enterprise of the Source: IDC convenient shopping experience for future and how business leaders its physical grocery store enabling should take advantage of these DX involves enterprise-wide change customers to just grab and go opportunities. We also examine the six requiring innovation in at least one of (Amazon Go). disruptive technologies known by IDC the five key dimensions; organization as innovation accelerators and their transformation (workforce); omni- Disruptive technologies have impact on the business model and experience (customer); operating enormous potential to improve best practices. model (business model/process business processes, to drive higher changes); information (data); and productivity, to make workflows Disruptive Technology, an Opportunity leadership (senior executives). more efficient, and to speed up the Before we dive deeper into supply chain and transform the back- disruptive technology it will be Digital transformation and disruptive office operation. Forward-thinking LOGISYM MAGAZINE FEBRUARY 2017 | DISRUPTIVE TECHNOLOGY – RUNNERS AND RIDERS 41

leaders adopt disruptive technologies to security in response to supporting but have 5X the capability by 2018. to differentiate and transform their digital transformation, dynamic threat However, the transition to robotics organization from an industry survivor landscape, and increasing regulatory will have to be managed carefully as (companies applying minimum efforts trade pressures. It is a more predictive, job losses might occur, especially in toward DX) to an industry thrivers analytics-based approach that is professions that might find it hard (companies take advantage of DX to focused on protecting the data rather to be reallocated in the labor market gain competitive advantage). than the physical perimeter. (e.g., drivers, non-specialized medical staff, and legal aid staff). INNOVATION ACCELERATORS; Augmented and Virtual Reality IMPERATIVE DISRUPTIVE IDC defines Augmented Reality (AR) 3D Printing TECHNOLOGIES as purpose-built devices, worn on the According to IDC's definition, 3D head and over the eyes, which allow printers enable the creation of Internet of Things (IoT) the wearer to see their surroundings objects by layering materials (additive IDC defines IoT as a network of while being served data or feedback. manufacturing). 3D printing often networks of uniquely identifiable The device may overlay digital objects comes up in discussions linked to endpoints (or things) that in the real world, or simply generate custom design, prototyping and communicate without human actionable feedback in the form of a production, and various aftermarket interaction using IP connectivity. IoT heads-up display (HUD). In addition, services. IDC predicts by 2020, 3D is the most mature of the innovation Virtual Reality (VR) is a purpose-built printing transforms the market for accelerators. and IDC predicts that the device, worn on the head and over the prototypes, manufactured parts and worldwide IoT market will grow to $1.7 eyes, which completely obscures the packaging. The largest opportunity trillion in 2020 and the installed base wearer’s vision of the outside world, for 3D printing is in commercial of consumer IoT devices exceeds the creating an all-inclusive virtual reality. applications such as manufacturing, installed base of smartphones and IDC predicts that by 2020, over 60% of healthcare, and education. However, tablets combined by 2020. the market will be AR, and 75% of that there is a growing trend using 3D AR market will be commercial-based. printing in custom food manufacturing Cognitive Systems AR/VR benefits in retail, healthcare, and retail sector. IDC defines cognitive technologies and education are already evident, in as those that analyze, organize, particular, increased engagement and KEY TAKEAWAY access, and provide advisory services augmented user experience. based on a range of unstructured Adopting disruptive changes in an information. At the same time, Robotics established enterprise is not a casual cognitive can bring smaller, more Robotics is one of the core decision. There are risks and pitfalls, immediate enhancement to today's IT technologies that is enabling and above all, business leaders systems. Examples included improved significant change in manufacturing need to overhaul the organization’s recommendation engines to help through the factory of the future business model as most are not in advertise relevant products and initiatives. While traditionally used "flying condition" needed to for a services to potential customers, and in the automotive industry, there is safe disruptive journey. Business and improvements to natural language an increasing adoption of robotics IT leaders in traditional organizations extraction will help contact centers in other industries such as retail, considering adopting digital provide multilingual support to healthcare, logistics, agriculture, transformation strategy should also written inquiries around the world. services, education, and government. consider shifting from a process and IDC predicts the market for cognitive Robotics deployment is incremental, performance driven organization to solutions will exceed $40 billion in slowly delivering better business an innovation culture environment. 2020. outcomes, but only when tightly linked Innovation culture supports creative to Big Data analytics and cognitive thinking and disruptive efforts to Next-Gen Security systems technologies. IDC predicts extract economic and social value Next-gen security (NGS) is defined commercial robot shipments will from knowledge and to generate new as the recognition of the direct link increase 5X by 2020 and the average or improved products, services or between mastery of data and the ability selling price of an industrial robot processes. In addition, to be a disruptor to protect it. NGS is a new approach will be one-fifth of what it is today companies must focus on what IDC 42 LOGISYM MAGAZINE FEBRUARY 2017 | DISRUPTIVE TECHNOLOGY – RUNNERS AND RIDERS

refers to as the “three masteries”: Mastery of relationships (relevancy and reciprocity with customer), Mastery of Operations (automation and speed) and Mastery of information (monetizing information)

Mike Ghasemi I would like to leave you with some of Research Director, Retail Insights - Asia Pacific the questions that as a business leader IDC you should ask to ensure being on a disruptive route. Mike Ghasemi is the Research Director for IDC Retail Insights & Hospitality 1. What do I want to achieve from Asia Pacific, where he leads the definition, creation, and production of disruption? IDC market intelligence solutions for countries across the region. Before 2. What type of technology or joining IDC, Mike spent 15 years in the IT industry, with 10 years in retail innovation are most relevant? information technology software solutions. 3. What primary market are we going to disrupt? And how digital transformation able to support it?

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KNOWLEDGE FOR ALL. ENROLL NOW FOR INSTANT MEMBERSHIP Building a stronger, collaborate (Enjoy exclusive members-only benefits) industry of professionals. www.lscms.org LOGISYM MAGAZINE FEBRUARY 2017 | EVENTS 43

LogiSYM Dubai 2017

Our first LogiSYM event was held in the Jumeriah Creekside Hotel in Dubai on 24th and 25th January 2017.

With more than 200 registrants and the excellent line-up of speakers, presenters and delegates, the event received excellent reviews and was a resounding success given that it was our first foray into the Middle East.

The Conference Chairman - Mr Darryl Judd from Logistics Executive Group extended the appreciation and thanks of the LogiSYM team to our sponsors, delegates and organisers during the event. Without such a strong showing, LogiSYM would not be possible and we look forward to working with everyone concerned in using this a a springboard to bigger and better events in the weeks and months ahead. Eng. Mahmood Al Bastaki (Dubai Trade) Darryl Judd (Logistics Executive Group)

From left: Imran Shah (GulfCap Advisors) Mohsen From left: Gerard Seeber (Australian Trade Commission), Anthony Harris (RFIB Middle East), Glyn Hughes (IATA), John Ahmad (Dubai South), Andrew Fullerton (DCM Manners-Bell (Transport Intelligence) International) 44 LOGISYM MAGAZINE FEBRUARY 2017 | EVENTS

From left: Kim Winter (Logistics Executive Group), Raymon Krishnan (LSCMS), Darryl Judd (Logistics Executive Group)

Mark Geilenkirchen (SOHAR Port and Freezone) From left: Abhishek Shah (RSA Logistics) , Abhijit Devdhar (Centrum), Hasso Marggraff (Dow Chemical), Udit Arora (GPCA)

Flexigistic Team From left: Bala P (Logistics Executive Group), Tom Nauwelaerts (Momentum Logistics), Alan White (National Air Cargo), Mark Heald (Al Ghurair Foods)

From left: Walid Daniel (SPAN), Cristian Carstoiu (KPMG), Paolo Traisci (BGroup Asia LTD), Anna Fedeles (Australian Trade and Investment Commission)

Nadia Abdul Aziz (NAFL)

LogiSYM Team with student volunteers from Middlesex University Dubai and SP Jain School of Global Management LOGISYM MAGAZINE FEBRUARY 2017 | EVENTS 45

EVENTS

SUPPLY CHAIN FACT & FICTION: Tackling Today, Preparing for Tomorrow!

17 - 18 MAY 2017 | NUSS Kent Ridge Guild House

March 11TH WORLD CARGO THE 4TH MENA COLD CHAIN SYMPOSIUM FORUM March 14th - 15th , 2017 May 16th - 17th , 2017 LAST MILE FUFILMENT ASIA Abu Dhabi National Exhibition Centre Dubai, UAE March 2nd - 3rd, 2017 Abu Dhabi, UAE www.menacoldchain.com Singapore EXPO www.iata.org/events/wcs/ www.lmfasia.com Pages/index.aspx SUPPLY CHAIN INNOVATION SUMMIT 2017 CHINA FOCUS VCI FASHION & LUXURY MARITIME CYBER SECURITY May 25th - 26th , 2017 SUPPLY CHAIN LEADERS FOR MANAGERS th st Shanghai, China ROUND TABLE 2017 March 30 - 31 , 2017 www.scinno-cn.com March 3rd, 2017 Hong Kong Five Star Hotel, Hong Kong maritimecybersecuritytraining.com www.vcintegration.com/ June events/id_84 SMART CONFERENCE th th March 29 - 30 , 2017 CAREER PLANNING & HEAVY IRAN International Convention rd DEVELOPMENT March 3 , 2017 Centre, Sydney, Australia June 10th, 2017 The Hotel Espinas Palace www.smartconference.com.au/ Organised by CILT Hong Kong Tehran, Iran www.heavy.world/ May FACE SUMMIT October March 13th, 2017 Abu Dhabi National Exhibition LOGISYM SINGAPORE 2017 LOGISYM MALAYSIA 2017 Centre May 17th - 18th , 2017 October 2017 Abu Dhabi, UAE NUSS Kent Ridge Guild House, Kuala Lumpur, Malaysia www.iata.org/events/wcs/ Sinagpore www.logisym.com/events/ Pages/faces2017.aspx logisym.org/2017 logisym-malaysia-2017/ 46 LOGISYM MAGAZINE JANUARY 2016 | AIR NEWS