MENA: A region of stable growth

  • Share on Facebook
  • Share on Twitter
  • Share on Linkedin
  • Share on Pinterest
  • Share on Blogger

The Middle-East and North Africa region has a crucial role to play in the air cargo industry today. It may not enjoy the same growth figures as other regions, yet the future remains bright.

MENA is strongly characterised by its oil-rich reserves and other exports such as perishables and textiles, providing immense opportunities for the logistics and transport sector. A July 2014 report by World Bank states that the economic growth inEgypt and Tunisia has started to rebound after slowing in the previous year. The official data as of June showed that the Egyptian economy grew by 2.5percent in the third quarter of fiscal year 2014 during the January-March period, similar to the growthrate achieved in the same period of last year, but up from 1.2 percent average growth duringthe first half of FY2014. GDP growth in Tunisia increased in the first quarter of 2014 after as lowdown in the last two quarters of 2013. Emirates SkyCargo, increased its cargo capacity to Tunis and Abidjan this year with the introduction of a weekly freighter service with a Boeing 777 Freighter aircraft on the Dubai-Abidjan-Tunis-Dubai route. “Africa is a key growth region for Emirates SkyCargo and the additional capacity and frequency of a scheduled freighter service will create new opportunities for businesses in Tunisia and Cote D’Ivoire wanting to tap into new markets in the Emirates network, particularly the Middle East, Asia and the Far East, as well as for customers in our network wanting to increase their trade with the two countries,” said Nabil Sultan, Emirates Divisional Senior Vice President, Cargo in a press statement. Last year, DHL expanded its Middle East network with flights to Lebanon and Qatar and also unveiled plans to grow its presence in Morocco. Its express division is in the process of completion of a USD177 million two-year investment in new facilities in Egypt, Saudi Arabia and UAE. Focused on the largest markets in a growing region, DHL’s investment creates three new facilities and gateways in Saudi Arabia, a new Country Office in Cairo, and launches its biggest ground operations facility in the region in Dubai. Nour Suliman, CEO, Middle East and North Africa, DHL Express, said “The Middle East and North Africa and its trading links are growing in importance in the global logistics industry with strong growth projections for the next few years. Our plan is to be right at the center of that growth to serve our customers. As the world’s leading logistics provider, it is important for us to support and help build international trade routes. Our investment of USD177 million in bigger and more efficient operational gateways in major markets such as Egypt, Saudi Arabia and the UAE shows that we are committed to our pioneering role.” In Saudi Arabia, over USD95 million has been invested to create three new gateways -Damman, Riyadh and Jeddah – all linked to all major DHL Express distribution hubs around the world including DHL’s regional hub in Bahrain. In the UAE, DHL is investing USD27 million in three facilities including Meydan Dubai which is DHL’s largest ground operations facility in the Middle East and North Africa. The new facility will increase speed of service, ensure earlier deliveries, late pick-ups and set new industry benchmarks in Dubai’s express market. The Dubai Hub is being revamped to use the area vacated by head office resulting in a doubling of the service center capacity. In addition, the gateway and service center in Abu Dhabi is being relocated to the new Logistics Park at Abu Dhabi Airport Business City to provide warehouse space of 2,880sqm. Automotive In Morocco, logistics provider GEFCO has been developing automotive logistics since 2007, by creating two storage sites which can house 10,000 vehicles. In Algeria, it  manages an automotive logistics site near Mostaganem, where 6,000 vehicles are stored. This year Gefco has opened a subsidiary in Algeria, which deals with customs operations, international transports, the management of the logistics site, and the distribution of automobiles. The company is now in plans to build a 10,000 sq mt logistics warehouse to manage the distribution of spare parts for one of our most important automotive clients. Oil and gas Meanwhile, opportunities are rife for the energy sector. “The development of industry beyond the oil and gas sector into broader industrial sectors would increase trade, which with air and ocean port development, would work hand-in-hand to make this area more efficient and effective,” says John Vogt, vice president, Global Logistics, Halliburton. According to the Logistics Performance Index 2014, which measures the infrastructure and the import/export efficiency, the highest ranked country is Egypt, with a score of 2.97 out of 5.0 and a ranking of 60th in the world for opportunities in this sector. However, a key issue is inadequate infrastructure to carry out logistics operations. “There is limited land transport possible along the coast of the Mediterranean. The ports do not all have the most modern container and cargo handling equipment, which makes offloading of vessels more time consuming,” says Vogt.  An important aspect of this region is that it is operated with feeder vessels generally where goods are offloaded and then reloaded onto smaller vessels plying along the coastal ports. “This adds to the time and effort of tracking and tracing the equipment to end destination,” says Vogt.  For Halliburton, air and ocean both are essential to its business. “High value tools must move by air into and out of the region, while lower value consumables and large equipment economically demand ocean carriage. Much of this is done via trans-shipment ports or airports, which can make the movement more time consuming, costly and complex,” says Vogt. Vogt also adds that processes for customs in the North Africa region are cumbersome. Processes often take time leading to delays. “General customs processes can be sped up to make investment in the country more attractive. This shows an opportunity for the area to develop the infrastructure and processes for import and export to enhance all industry, as well as the oil and gas sector,” suggests Vogt. In the MENA region, logistics companies will continue looking beyond traditional hubs to increase their footprint. At the same time foreign investments are also an upswing that will help the region to further strengthen its logistics and transport potential. 

  • Share on Facebook
  • Share on Twitter
  • Share on Linkedin
  • Share on Pinterest
  • Share on Blogger