Logistics key gainer as Expo 2020 awards thousands of contracts

Business Bureau, Gulf Today

With less than 19 months left for the inauguration of the Expo 2020, its organisers have further speed up the pace of allocating contracts to thousands of local and foreign firms to ensure timely preparation of the event, which is set to be the largest of its kind in the Arab World.

The groundwork for the 173-day milestone Dubai exhibition – which expects to welcome 25 million visitors and more than 200 international participants from 190 countries – have already spurred business opportunities for various sectors with logistics being one of the prime gainers, say experts.

So far Expo 2020 Dubai has awarded 56 per cent of contracts to small and medium-sized enterprises. Meanwhile, more than 26,000 companies from 150 countries have recently applied to be involved in the event.

“When foreign companies get contracts in the UAE, they need professional support of logistics specialists with wide local and international network to move their set up and equipment to the Gulf country. Contractors of Expo 2020, which is extraordinarily big in magnitude, therefore rely on reputable and experienced logistics players to become their strategic and operational partners. After all, freight forwarders do much more than moving containers. We guide organisers, contractors and exhibitors throughout different customs procedures, time frames and operational complexities,” said Shailesh Dash, Chairman of Dubai-based Gulf Pinnacle Logistics. Rodney Viegas, CEO of AbdulMuhsen Shipping LLC (AMS) and So Safe Logistics LLC (SSL), two portfolio companies owned by GPL, said, “Thanks to the increased momentum of Expo 2020 preparations, the logistics sector in the UAE – which according to the 2019 Agility Emerging Markets Logistics Index ranks first in the region and third globally – is witnessing a business boom, when other sectors are observing slow growth.”

“Expo 2020 is expected to drive the logistics and supply chain segment even further and cement the UAE’s position as a global leader in logistics. With our strong global agent network, we are equipped to provide end-to-end logistics solutions to fulfil the client’s comprehensive list of logistics requirements on time,” he added.

Meanwhile, Dharmesh Rustagi, Head of Logistics Operations at AMS and SSL, highlighted, “The throughput of non-containerised cargo Jebel Ali Port has been experiencing a steady upward movement with demand being driven by Expo 2020. The fact that AMS and SSL collectively operate a land area of more than 46,000 sq. meters and a built-up warehouse area of more than 18,000 sq. meters in the Jebel Ali Free Zone provides us with an advantage to be the go-to logistics provider for contractors during the largest exhibition of its kind in the Arab World.”

Established in 1991, AMS handles the entire gamut of Logistics services, which involve consolidation, warehousing, transportation and shipping. Gulf Pinnacle Logistics had acquired a 75 per cent equity stake in AMS in 2014. AMS handles the highest number of LCL (less than container load) console containers in the Jebel Ali Free Zone.

“Thus, GPL and its portfolio companies are ready to deal with the expected increase in demand for breakbulk and project cargo handling services in the run-up to Expo 2020 Dubai,” said Dash of Gulf Pinnacle Logistics.

Meanwhile, the total value of the UAE’s Logistics and Distribution sectors have grown to Dhs76.78 billion in 2017 and represent about 5.4 per cent of the Dh1.42 trillion economy, according to the Annual Economic Report 2018, published by the UAE Ministry of Economy. These two sectors are growing at 7.9 percent per annum.

They are expected to drive the growth of the UAE economy till 2023, according to another report by Dubai Chamber of Commerce and Industry. “Real GDP of the UAE’s non-oil sector is projected grow at an average rate of 4.1 per cent between 2019 and 2023, compared to 2.8 per cent growth recorded in the 2014-2018 period. Momentum behind the UAE’s GDP growth over the next 5 years will likely be led by the country’s transport and logistics sector which is set to record GDP growth of 7.9 per cent,” Dubai Chamber said in its report.

The growth in the UAE’s Distribution and Logistics sectors will be driven by online sale and e-commerce sector, a top industry official says.

“More and more consumers are currently shifting towards online purchase – due to wider choice, price competitiveness and the convenience of home delivery. As a result, the Distribution and Logistics business is also moving towards the digital space,” Shahzad Ahmed, Chairman and Chief Executive Officer of Blue Ocean Global Group, says. “Over the last few years, we have seen our online distribution jump many folds and currently represent about 20 percent overall distribution business. This growth is phenomenal and will change the logistics, distribution, wholesale and retail businesses.”

Despite challenging economic conditions in different parts of the world, the Blue Ocean Global Group companies are penetrating deeper into the market with international brands and helping them to grow in the UAE as well as across 40 countries.

Blue Ocean Global with a network of about 250 resellers and 300 retailers has recently been appointed by NEC Corporation as its Master Distributor for SMB communications solutions in the UAE.