Transport and Logistics

The World Bank predicts that global expenditure on logistics services will total around USD 14 trillion by 2020, and Dubai, linking East and West and with easy access to some of the world’s fastest-growing markets, has positioned itself as a leading international logistics hub.

Leading international hub continues to develop state-of-the-art logistics services

Dubai World Central

The emirate’s new Dubai World Central (DWC) project, a planned residential, commercial and logistics development that will be the world’s first truly integrated logistics platform, demonstrates that Dubai has targeted logistics as one of its key growth sectors. The new development, budgeted at around AED 120 billion, will cover 55 sq. miles and will contain Aviation City, serving the fast-growing regional aviation sector, and Dubai Logistics City, positioned as an ideal base for logistics enterprises. Aviation City will contain the largest aviation repair, overhaul and maintenance center in the world.

As Sheikh Ahmed bin Saeed Al Maktoum, Chairman DWC and Emirates Airlines Group and President of the Dubai Civil Aviation Department (DCA), says, “This project reflects the emirate’s strategic vision of transforming the region into a global hub for trade and commerce.” DWC will bring together all transport modes, logistics and value-added services, including manufacturing and assembly, in a single bonded, free-zone environment. It offers easy access to the new Al Maktoum International Airport at Jebel Ali, the world’s biggest international airport, and to Jebel Ali’s state-of-the-art port.

Massive infrastructure investments

Dubai has made massive investments in infrastructure over the past few years, with the new airport at Jebel Ali the latest in a series of mega-projects that have given Dubai some of the best transport infrastructure on the planet.

Dubai’s port at Jebel Ali has been expanded significantly, and the new USD 1.5 billion Terminal 2 that opened this year brought the port’s total handling capacity up to 11 million twenty-foot equivalent units (TEUs) per year. Additional expansion will increase this total by another 5 million TEUs in 2008, and DP World (formerly Dubai Ports Authority) has announced that it aims to boost the port’s capacity to 80 million TEUs by 2030, depending on demand. DP World has transformed itself into global port-management player, handling around 46.5 million TEUs per year at ports from the Caribbean to Asia.

Dubai Civil Aviation Department

“We are seeing more and more American companies coming to Dubai.”

Sheikh Ahmed Bin Saeed Al Maktoum, brother of the ruler of Dubai, has proved instrumental in the growth of Dubai’s logistics, transport, aviation and related industries. He explains, “Dubai does not have an oil-based economy, so we are focusing on services, tourism and aviation, and for all these it is important for us to establish Dubai as a strong logistics hub. We are seeing more and more American companies coming to Dubai to take advantage of everything our emirate can offer.”

In 2000, the DCA completed a USD 540 million expansion program at Dubai International Airport to increase the airport’s capacity to 22 million passengers per year, and it is nearing completion of a USD 4.1 billion project to up capacity to 70 million passengers and three million tons of cargo per year; this project is set for completion in 2008.

DCA overseeing new airport, aviation and logistics projects

In addition, DCA, under Sheikh Ahmed’s direction, is overseeing the development of the DWC project, including the new international airport that will be the world’s biggest passenger and cargo aviation hub when it is completed in 2012. The new airport will be able to handle over 120 million passengers and 12 million tons of cargo per year, and will be able to accommodate new-generation aircraft like the A380 super-jumbo. DCA is also developing Aviation City within DWC that will include the world’s biggest center for aircraft repairs, maintenance and overhaul.

As Dubai continues to add to its attractions for investors and partners, the emirate’s leaders welcome more ties with Americans. “Dubai and the United States have many links, in real estate, tourism, technology and business. Emirates Airlines is helping to bring the two countries closer together. We fly three times daily to New York, and as of December 2 this year, we will offer flights to and from Houston. We plan to offer new destinations in the United States soon,” Sheikh Ahmed says.

GAC

“We are trying to create smart solutions for what is to come.”

The GAC Group, a leading provider of shipping, marine and logistics services worldwide, is known for its innovative strategies. Founded in 1956 as Gulf Agency Company, GAC, as the company is now known, has more than 280 offices in 50 countries serving more than 1,000 locations. GAC employs more than 8,000 people, and has often been the first company in its sector to enter emerging markets, including Central Asia where the group now has a strong presence serving offshore oil operations in the Caspian Sea.

Defining GAC’s competitive edge, Lars Säfverström, Group President, says that GAC’s strength is its ability to call on its proven expertise to provide specialized services. For example, in 2003 GAC launched GAC Marine Logistics to provide logistics and supply chain management services for marine spare parts and supplies to ship owners, managers and charterers all over the world. “We are a service-minded organization in the maritime industry,” Säfverström says.

Dubai ideal base for international operations

Säfverström was responsible for shifting the group’s corporate headquarters from Athens to Dubai in 2002. As he puts it, “We felt Dubai was the right place to be for an international company aiming to expand globally, and the Middle East is our home market. We believe in the Middle East, and we have faith in the government of Dubai.” He adds that Dubai and GAC share a commitment to long-term strategies, transparency and best practices.

The United Arab Emirates’ logistics sector is experiencing significant growth, including growing demand for cutting-edge information-technology systems. GAC is responding by continuously upgrading its facilities and services and by expanding its operations. The company has secured up to 3.33 million sq. feet of land for expansion in Dubai Logistics City which complements its current 1.67 million sq. feet Logistics Park in the Jebel Ali Free Zone. “We are trying to create smart solutions for what is to come,” Säfverström says.

GAC has also developed an online university for its personnel to ensure that they can meet the highest-quality standards. The innovative GAC Corporate Academy will give GAC employees worldwide the chance to enhance their skills and fast-track their careers through taking courses online. The program may eventually be open to non-employees looking for high-quality training in shipping, logistics and maritime services. “We believe in people, and we allow and empower our people to take on a challenge and run with it,” Säfverström says.

Partnerships with American companies

GAC welcomes more partnerships with American companies. GAC provides shipping and logistics services for Chevron worldwide and partners with 3M, Johnson & Johnson, BP Americas and UPS. With 21 offices in the United States, GAC already handles a major share of the United States’ liquid natural gas imports.

Like the United Arab Emirates, GAC has developed ambitious strategic goals and has already proved it can accomplish them. Its next five-year plan, set to begin next year, is called “Vision Y- Global Values” and is aimed at making sure that all the group’s offices worldwide share the same values towards consistency in service standards, globalization, ethics and integrity while also understanding diversity in local markets.

To potential American partners, Säfverström concludes, “In Dubai as in other markets, we provide a unique offering, geared toward the local situation but with understanding of the global marketplace.”