Innovation and efficiency to spur GCC logistics growth

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In the tenth in a series of interviews ahead of Seatrade Maritime Logistics Middle East, Sudesh Chaturvedi, Secretary General, NAFL, Dubai, UAE, updated to Seatrade Maritime News on developments in the industry.

“The Gulf Cooperation Council (GCC) countries have been investing heavily in expanding their logistics infrastructure in recent years. These countries, which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, are strategically located between Europe and Asia, making them important hubs for global trade,” Chaturvedi said.

“To broaden logistics infrastructure in the GCC, these countries are implementing various initiatives such as developing new ports, airports, and rail networks, as well as investing in technology and automation to improve efficiency and reduce costs. Additionally, they are also establishing free zones, offering tax incentives and other benefits to attract more companies to set up their operations in the region.”

He identified the innovative approaches of four regional ports as standing out. The UAE's Khalifa Port has signed long-term agreements with MSC, Cosco and CMA CGM to manage their terminals. Saudi Arabia's King Abdulaziz Port in Dammam is a major container port and is being expanded to increase its capacity.

“Oman's Duqm Port is strategically located outside the Strait of Hormuz and is being developed as a major transhipment hub. Qatar's Hamad Port is another of the largest ports in the Middle East and is being developed as a hub for trade with Asia and Africa,” he said.

Other major recent and upcoming logistics infrastructure projects in the GCC included DP World’s BoxBay concept at Jebel Ali’s Terminal 4, the UAE’s Etihad and Hyperloop rail projects, he said.

“‘Build it and they will come’ still remains conceptually embedded in many of the world class projects. Nevertheless, there is a fair realisation that infrastructure alone is not enough to attract the logistics business to the regions. As such, there has been a significant move amongst several GCC countries to offer competitive incentives, such as tax breaks, simplified regulations, and streamlined customs procedures, to encourage companies to set up their operations in the region. They are simultaneously working on improving the quality and reliability of infrastructure, as well as the availability of skilled labour which undoubtedly remain the key factors in attracting businesses to the region,” he said.

Dedicated to promoting the interests of the freight and logistics industry, the NAFL was founded in 1992. It was mandated by the Government of Dubai to respond to the need to bring together the increasing number of freight and logistics service providers in the UAE, Chaturvedi said.

“Since its inception, NAFL has been actively involved in various activities aimed at improving the industry and advancing the interests of its members. From a total of 24 members at the time of its inception, NAFL has now grown to a current roster of 350-plus members,” he said.

Shortly after its establishment, in March 1992, NAFL became the first and only national association from an Arabian Gulf country to join the International Federation of Freight Forwarders Associations (FIATA) and continues to represent FIATA in the UAE.

“One of the key activities of NAFL is advocacy. The organization works to promote policies and regulations that are favorable to the freight and logistics industry. NAFL advocates for improved infrastructure, fair trade policies, and streamlined regulatory processes to ensure the efficient movement of goods,” he said.

NAFL also provides networking opportunities for its members. The organization hosts conferences and other events that bring together industry professionals from across the country. These events provide opportunities for members to network, share information, and form partnerships. Another important NAFL activity is education and training.

“The shared vision of NAFL's membership is to promote the growth and success of the freight and logistics industry in the UAE and beyond. NAFL members are committed to improving industry efficiency, safety, and sustainability. They share a common goal of promoting policies and practices that support the movement of goods in a way that is beneficial for both businesses and consumers,” he said.

Both the UAE and Saudi Arabia have been investing heavily in logistics infrastructure in recent years.

“Dubai has long been a major logistics hub for the region, and the UAE has continued to expand its logistics capabilities with investments in ports, airports, and free trade zones. Saudi Arabia has also been investing heavily in logistics infrastructure, with the goal of becoming a major global logistics hub and reducing its dependence on oil exports,” he said.

“Competition between the two countries in the logistics industry is not necessarily a bad thing, as it can drive innovation, improve efficiency, and lead to better services for businesses and consumers. However, it is important that competition remains fair and ensures that their logistics industries are sustainable and environmentally responsible.”

The recent entry of Maersk Air Cargo and CMA CGM Air Cargo into the market is evidence that air freight is also important to the seaborne freight industry. Qatar Airways and Emirates have been the strongest-performing airlines in the world by cargo-tonne-kilometres of late, likely evidence that they operate from a ‘geostrategic cross-roads,’ but Chaturvedi also attributes their performance to other factors.

“The geographic location of Qatar Airways and Emirates certainly provides them with some advantages in terms of their ability to connect different regions of the world, but there are other factors that have contributed to their success in the cargo market as well,” he said.

“One is the significant investment that both airlines have made in their cargo operations, including the acquisition of large fleets of cargo planes and the development of advanced cargo handling facilities. Both airlines have also implemented efficient cargo management systems to help streamline operations and improve customer service.”

In addition, he believes Qatar Airways and Emirates have both focused on building strong partnerships with other airlines, enabling them to offer a wider range of destinations and services to their customers. This has helped to attract more business and grow their cargo operations over time.

“Overall, while their geographic location is certainly a factor, it is not the only reason for the success of Qatar Airways and Emirates in the cargo market. Their investments in infrastructure, technology, and partnerships have also been critical to their strong performance,” he said.

“It is part of the NAFL mandate to work closely with all industry stakeholders in promoting efficiency, safety, and sustainability values. Seatrade Maritime Logistics Middle East has been a market leader in our industry and so NAFL is keen to collaborate.”

Sudesh Chaturvedi, Secretary General, NAFL, Dubai, UAE, is speaking at Seatrade Maritime Logistics Middle East, on May 16-18, 2023, in Dubai.

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