Dubai Seeks Logistics Leadership

March 27th, 2015 - Dubai World Central targets regional dominance as freight hub.

The tiny emirate of Dubai is boldly moving to re-draw the transport and logistics map for a major part of the world. Its objective is to establish the small country as a giant hub of passenger and freight transport.

Central to that effort is the Dubai World Central (DWC) complex – a one-stop-shopping zone for companies transiting goods in and out of the Middle East, North Africa and South Asia (MENASA) region.

The DWC’s crossroads location is critical, especially to companies increasing imports to Africa.

Flows of products from Asia to Africa are expected to jump as companies fulfill spiking demands from African economies growing at a 5% annual clip. That expansion is expected to lift the number of middle class households from 85 million in 2008 to 130 million by 2020.

The DWC intends to exploit its position in the path of all that activity and transport to and from both regions.

The DWC project covers around 200 square kilometers. It encompasses the Jebel Ali Port – the largest between Rotterdam and Singapore – and the Al Maktoum International Airport. Those air and sea terminals are connected by a dedicated logistics road corridor, with a rail line to follow.

“The idea is to make Dubai the hub all freight goes through to reach final destinations in South Asia, the Middle East and Africa”

The area makes up a single bonded customs zone designed to make transfers from one mode of freight transport to the other faster and cheaper.

“The idea is to make Dubai the hub all freight goes through to reach final destinations in South Asia, the Middle East and Africa,” says Philippe Lortal, CEO of SDV’s Dubai-based Middle East operation, which took up residence in the massive DWC in February.

Eight areas group tenant companies in common operating activities in logistics, aviation, humanitarian, residential, commercial, leisure, exhibition and commercial interests. That clustering is designed to enhance efficiency and speed of movement of goods back into transport.

To that end, the DWC is organized around the Al Maktoum airport, which at term will operate five runways moving up to 12 million tonnes of cargo and 160 million passengers per year.

“Dubai is already the economic capital of the region with the largest container port,” Lortal adds. “The DWC will secure its position as the principal air/sea transit portal. In doing so it will allow SDV to offer customers considerable savings in transportation cost and time.”

The compact, integrated, fast-flowing concept of the DWC has already attracted 6,400 companies from Europe, the US and elsewhere with its geographical and organizational cost and speed advantages.

Lortal says Asian companies shipping to Africa via DWC will cut considerable time off the habitual 10 days of transport when routing via Europe, for example.

Given the traditional presence and bustling activity of the Bolloré group in the booming African freight market, setting up shop in the DWC was a natural choice for SDV.

The company has operated in Dubai since 2008, and moved into the DWC this year.

“In becoming the primary pivot point for transport to Africa, (the DWC) became an inevitable decision for us,” Lortal says. But its useful geographic location is only one reason why logistics companies like SDV are establishing operations in the DWC. Lortal also notes the integrated transport zone operates 365 day per year, using well-trained and competitively priced labor.

Dubai is also culturally and physically well connected to Africa. That linkage has lead SDV to enhance its tailored services to African buyers by introducing groupage and payment services at country of origin.

Those and other services offered by SDV to enhance the fast flow of goods from points of departure and final destinations will only deepen the efficiency allure of the DWC’s offer. Other advantages Dubai features are an absence of taxation, political stability, and a willingness to attract and welcome foreigners – an element absent in many countries in the region.

 “The DWC also has room to expand as volume and activity grow which is not something Singapore or Hong Kong can do,” Lortal adds.

All that means that as freight volume grows amid surging South Asia and African economic expansion, the DWC – and SDV’s activity in it – are set to attract similarly increasing interest of exporters.

Key Figures
  • 20%

    More fuel-efficient for the Boeing 787 and the Airbus A350

  • 70%

    of Urbanisation is expected by 2050

  • 27

    mega-cities are expected by 2050, with at least 10 million people, compared to 1...

  • +18,4%

    of growth for E-commerce retail market in Europe in 2015

  • 82%

    of goods are moved by road

  • 1 billion

    Population in Africa

  • 60%

    of Africa’s population will be urbanized by 2050

  • 7,5%

    of growth for Indian GDP in 2014

  • 4,9%

    of growth for African GDP in 2016

  • 6,1%

    of growth for East Asian GDP in 2015, the world’s fastest-growing region

  • 19 224 teus

    transported by the MSC Oscar, the largest container ship in the world

  • 396 m

    is the size of the MSC Oscar ship

  • 120 h

    is the Non-Stop Flight Record done by Solar Impulse

  • 4,5%

    of growth in 2015 for Global Airfreight demand