lighthouse - September 2020

CHAIRMAN’S MESSAGE

Time and again, Mother Nature has proved how unpredictable she can be. Now, it seems as if she needs to create a furor to catch our attention. We have indeed hearkened to her cry with high-level discussions on how to adopt sustainable practices to pacify her anger. But let’s be honest, have we done anything? Is it enough to stem the cauldron of her rage that seems to brim over now and then? Let’s ask ourselves, “What has changed?”.

I remember penning my thoughts some years back on how at CSS, we have decided to adapt to changes in the industry and its practices, quickly. If we do not, we stand in danger of being left behind in the race towards fulfilling our vision. This is the thought that ran through my mind when I read a tweet from Prakash Iyer, the noted author/motivational speaker. He speaks about the Choluteca Bridge in Honduras and how this is now become a bridge to nowhere. What struck me was how he drew a metaphor for the changing course of today’s world. Change in all forms, be it our thought patterns or our actions, is never a one-time happening neither is it permanent. I believe that change should be like the problem itself, always fluid.

That is precisely how the logistics industry functions. Many changes are happening in the way business is conducted, be it the frequent updating of INCO terms, or classifications, inclusions/exclusions in-laws, using green fuels, and so forth. The list is long, and if we are not fleet-footed enough to understand the nuances of these changes and accept them, then for sure, we will be left behind.

The unique facet of our industry is that problems keep evolving daily. I believe that innovations only trigger a change. What we need to change is our thought process to adapt quickly to what has been triggered.

Let me assure you, at CSS, our thoughts are in sync with the times. We are always thinking to achieve our vision by triggering the changes with innovations that is tune with the evolving global scenario. Our adaptability helps us provide extraordinary service with seamless solutions fully adapted to address our customers ’ changing needs and requirements.

I will leave you with the words from the Greek philosopher, Heraclitus of Ephesus, who stated, the only permanent thing is change. Change is inevitable, and our ability to adapt to that change often defines our success.

CSS BAHRAIN AND OMAN AT THE HELM OF NVOCC ACTIVITIES IN THE REGION

CSS is one of the leading players in the NVOCC market in the MENA region. With NVOCC activities centered around the CSS headquarters in Dubai, we have established a strong base in Bahrain and Oman.

What is an NVOCC?

A Non-Vessel Operating Common Carrier (NVOCC) is an ocean carrier that transports goods under its own House Bill of Lading, or equivalent documentation, without operating ocean transportation vessels. NVOCC leases space from another ocean carrier, or Vessel Operating Common Carrier (VOCC), that they sell to their customers.
In layman’s terms, an NVOCC can be described as a shipper to carriers and a carrier to shippers. While NVOCCs do not usually own their own warehouses, many own their own containers and often operate as a freight forwarder as well.

CSS as a Non-Vessel Operating Common Carrier (NVOCC)

Rated among as one of the top customers by major shipping lines operating in the region, CSS’s repute allows us to offer our customers the best rates in the industry along with the guarantee of space on the major ocean liners for regular movement of consolidated shipments.
CSS offers both licensed and bonded NVOCC services through its extensive global network. Representing reputed freight companies and agents, CSS provides gateways to major ports worldwide. This allows us to provide our clients with highly cost-effective shipments and faster delivery routes. With the operational base in Dubai, we can deliver to the most remote and challenging regions. Our strategic network spans across the continents of Asia, Africa, and Europe, which allows us to connect businesses across multiple locations.

The CSS NVOCC Edge

The NVOCC service offered by CSS has LCL services to an impressive 1,650+ destinations with plans to add more in the offing. Representing many NVOs globally, we have scheduled weekly arrivals & departures on reputed carriers. With a dedicated sales and customer service team, we assure our clients of unstinting support throughout the shipment process.
With an incredible track record of handling shipments across a broad range of industry verticals from fuel and energy, heavy machinery, automobiles, perishables, hospitality, and more, we can efficiently handle client shipment challenges, regardless of size, content, port of origin, or destination.

NVOCC Capabilities at CSS BAHRAIN

Founded in 2019, Console Shipping Services W.L.L Bahrain is the subsidiary of the CSS group in the island nation of Bahrain. A neutral NVOCC with its service offerings in the areas of Air & Sea Freight, Land Transport & Projects, Console Shipping Services W.L.L Bahrain is a preferred partner with strategic relationships with leading carriers. Our NVOCC service portfolio in CSS Bahrain includes:
Ø Direct Console Service from Spain to Bahrain (special console)
Ø Destuffing at APM Terminals at Bahrain port with cargo being ready for delivery within the next day of arrival
Ø 9 days free time from ETA Bahrain and very nominal storage tariff even after the free time
Ø Assurance of 24×7 customer service with the uncompromising quality of service

NVOCC at CSS Muscat

Operating in Muscat, Oman, for more than 20 years, CSS Oman boasts of an outstanding network of partners around the world. Offering cutting edge services in every segment of its service portfolio, CSS Oman’s NVOCC division enjoys a strong market position with its specialized services.

Today, CSS Oman NVOCC offers the following services:
Ø Shanghai/Ningbo: Direct console to Sohar
Ø Rotterdam: Direct console to Sohar
Ø Mumbai: Direct console to Sohar
Ø Regular weekly consoles from Jebel Ali to Sohar
Ø Direct LCL consoles to Jebel Ali Ex USA, Europe, Far-east, Ind-Subcontinent
Ø Weekly connectivity vessel from Jebel Ali to Sohar port
Ø Direct LCL consoles ex Rotterdam/Nhava Sheva/Shanghai to Sohar port
Ø Speedy de-stuffing of LCL containers at Sohar CFS, within 48 hours
Ø LCL Cargo track and trace for convenience
Ø Direct LCL export consoles from Sohar to Hamad port, Transit time: 38hrs

DUBAI CYBER INDEX LAUNCHED

Dubai launched the “Dubai Cyber Index” in July 2020. Developed by the Dubai Electronic Security Center (DESC), this initiative aims to support the efforts of the Dubai Government to ensure the highest cybersecurity standards, thereby paving the way for a safe cyberspace. The first initiative of its kind in the world was launched by the Crown Prince of Dubai and Chairman of the Executive Council of Dubai – Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum.
This initiative highlights Dubai leadership’s keenness to launch projects and initiatives that enhance the Emirate’s position as a global leader in innovation, safety, and security, intending to position it as an international role model for cybersecurity. It aims to create a strong foundation for a free, safe, and resilient online world for both individual users and organizations as well as keen on promoting healthy competition among government entities in the field of cybersecurity, encouraging excellence and in the process driving rapid technological progress and digital transformation.
Major General Talal Humaid Belhoul Al Falasi, Chairman of the Dubai Electronic Center, says, “Dubai continues to reinforce its leadership in the digital and cyber sector by consolidating the efforts of all government and private institutions and individuals to provide secure cyberspace. It also seeks to make Dubai the most electronically secure city in the world. The Index will measure the progress and readiness of the government entities to assess cyber risks and deter threats”.

Aim of the Index

The Dubai Cyber Security Strategy launched in 2017, ensures high security commensurate with the technological advancements and transformations and preparedness to deal with challenges and risks that crop up during such a massive transformation. “The Dubai Cyber Index will further raise the security and safety standards of Dubai’s electronic infrastructure. This is particularly important as the world we live in is characterized by a constantly evolving communication technology landscape and is increasingly dependent on advanced technologies such as Artificial Intelligence, the Internet of Things, and Big Data. It is critical to creating a robust supportive framework to ensure the security and safety of information systems,” said Al Falasi.

The DESC monitors government entities to ensure compliance with its Information Security requirements and effective and secure communication networks and information systems, thus setting up the highest benchmark of cybersecurity in the Emirate. They are also well versed in supporting entities in setting up specialized security operation centers and utilizing advanced Artificial Intelligence technologies and Big Data analysis to anticipate potential cyber threats.

C.H. ROBINSON ANNOUNCES ALLIANCE WITH MICROSOFT

TO DIGITALLY TRANSFORM THE SUPPLY CHAIN OF THE FUTURE

Collaboration will integrate C.H. Robinson’s Navisphere® and Microsoft Azure cloud technologies to make real-time visibility possible in supply chains and accelerate innovation in transportation

C.H. Robinson and Microsoft Corp. announced they are joining forces to digitally transform supply chains of the future by combining the power of C.H. Robinson’s Navisphere,® Microsoft Azure and Azure IoT to meet the changing demands of evolving global supply chains. Through this alliance, the companies aim to enable real-time visibility for C.H. Robinson customers.

“The pace of change we’re seeing in the supply-chain industry today is unparalleled. Being able to quickly scale and adapt our technology is what helps give our customers a competitive advantage,” said Chris O’Brien, chief commercial officer, C.H. Robinson. “As we continue to invest and enhance our technology built by and for supply-chain experts, we look to partner with other best-in-class companies that bring the most value to our customers. Through Microsoft’s Azure cloud platform, we gain more scalability, premier data security and increased application speed, which benefit our customers and carriers around the world.”

Through this collaboration, Navisphere — C.H. Robinson’splatform — will now leverage Azure IoT Central to integrate IoT device monitoring that measures factors such as temperature, shock, tilt, humidity, light and pressure in shipments to give customers an even more detailed level of intelligence about goods as they move through the supply chain. Together, C.H. Robinson and Microsoft work with many of the Fortune 250 companies, which means this alliance makes it even easier to scale and develop new solutions to provide the world’s largest shippers with greater supply-chain efficiency, real-time insights and visibility.

“We are committed to providing customers with a trusted, easy-to-use platform so they can build seamless, smart and secure solutions regardless of where they are on their IoT journey,” said Sam George, corporate vice president, Azure IoT, Microsoft. “We’re thrilled to collaborate with C.H. Robinson as it transforms the supply-chain industry by leveraging our Microsoft Azure and Azure IoT solutions.”

The new collaboration builds on C.H. Robinson and Microsoft’s already rich history of working together. Navisphere Microsoft’s global supply chain, giving the company real-time visibility into inventory, at rest or in motion anywhere in the world. In addition, in collaboration with Microsoft, C.H. Robinson built Navisphere Vision, a global real-time visibility product that leverages Azure IoT solutions, machine learning and predictive analytics to assess potential disruptions across supply chains.

Through C.H. Robinson’s TMC division and Navisphere Vision, Microsoft is driving innovations in its own supply chain to provide more predictability and proactive decision-making to its various business groups.

“The supply chain of the future is smarter, less volatile and can be navigated with a new level of visibility thanks to the power of this relationship. Through this collaboration, our customers receive a greater competitive edge, as well as industry-leading insights and expertise,” said Jordan Kass, president of Managed Services at C.H. Robinson.

In addition to C.H. Robinson’s innovation on Azure, the company is also leveraging Dynamics 365 and Power BI to streamline its customer relationship management (CRM) platform, supporting C.H. Robinson’s commitment to customer centricity from small business to the world’s largest shippers. As part of its relationship with Microsoft, C.H. Robinson will integrate its real-time pricing, execution and transportation management tools into Dynamics 365, making these digitally-driven logistics capabilities available to Microsoft customers.

About C.H. Robinson
C.H. Robinson solves logistics problems for companies across the globe and across industries, from the simple to the most complex. With nearly $20 billion in freight under management and 18 million shipments annually, we are one of the world’s largest logistics platforms. Our global suite of services accelerates trade to seamlessly deliver the products and goods that drive the world’s economy. With the combination of our multimodal transportation management system and expertise, we use our information advantage to deliver smarter solutions for our more than 119,000 customers and 78,000 contract carriers. Our technology is built by and for supply chain experts to bring faster, more meaningful improvements to our customers’ businesses. As a responsible global citizen, we are also proud to contribute millions of dollars to support causes that matter to our company, our Foundation and our employees. For more information, visit us at www.chrobinson.com (Nasdaq: CHRW).

About Microsoft
Microsoft (Nasdaq “MSFT” @microsoft) enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organization on the planet to achieve more.

PROJECT- ROUTE 2020

A part of the leadership’s vision to promote the UAE’s sustainable development, “Route 2020 Project” is a part of Roads and Transport Authority’s (RTA) master plan to provide integrated multi-modal mass transit systems comprising metros, tram, buses, and marine transport.

Focused on building a globally benchmarked infrastructure and services, it aims to meet UAE’s aspirations themed “Towards the Next 50 Years”. Inaugurated by H.H Sheikh Mohammed Bin Rashid Al Maktoum, Vice President, Prime Minister, and Ruler of Dubai by unveiling an artwork inspired by the phrase “I believe in God” written in Arabic and taken from His Highness poem “The Beginning of the Fifty”, the ceremony was attended by H.H Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum, Crown Prince of Dubai, H.H Sheikh Maktoum Bin Mohammed Bin Rashid Al Maktoum, Deputy Ruler of Dubai, H.H Sheikh Ahmed Bin Saeed Al Maktoum, President of the Dubai Civil Aviation Authority and CEO and Chairman of the Emirates Group, H.H Sheikh Ahmed Bin Mohammed Bin Rashid Al Maktoum, Chairman of Dubai Media Council.

“The UAE has exceptional goals and ambitions. Today we are moving with confidence, determination, and a clear vision to attain the highest levels of excellence in various fields. Our objective is to provide people with everything that ensures their well-being, stability, and happiness and establishes a prosperous future for the coming generations. The world is entering a phase that brings unprecedented challenges that some may not be prepared to deal with. However, we have a strategy designed to tide over unforeseen challenges and create a positive future. Our nation is equipped with the plans, competencies, and expertise needed to navigate these challenging global circumstances. We can overcome all obstacles while sustaining our progress and generating new opportunities,” said Sheikh Mohammed.

The AED11 billion Route 2020 project links seven stations and is a 15 km extension of the Dubai Metro Red Line from Jebel Ali Station to Expo 2020 Station and is scheduled to open to the public in September this year.

The brainchild of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Dubai Metro, and Route 2020 reflects His Highness’ belief that the superior Metro infrastructure system serves as the backbone of transit systems connecting the key areas of Dubai.

Route 2020 has 46,000 riders per hour in both directions (23,000 riders per hour per direction). RTA’s studies expect the number of riders using Route 2020 to reach 125,000 per day in 2021, and 275,000 riders per day by 2030.

The Expo 2020 Station is expected to record about 35,000 Expo visitors during weekdays and increase to 47,000 during weekends. This number accounts for 29% of the total expected number of daily visitors of the Expo”, explained Al Tayer. The new project aims at creating a vital future link between several Dubai communities and serves as a symbol of sustainability, progress, and innovation for present and future generations.

MOHAMMED AL TUWAIJRI NOMINATED AS DIRECTOR GENERAL AT WTO

Saudi Arabia’s former minister for Economy and Planning, Mohammed Al Tuwaijri, has been nominated for the position of Director General at the World Trade Organisation (WTO). Mohammed Al Tuwaijri had been the head of risk management at Saudi British Bank before becoming the Managing Director and CEO of JP Morgan Saudi Arabia, after which he moved on to serve as the Group Managing Director, Deputy Chairman, and CEO of HSBC Bank Middle East and North Africa.

He was the kingdom’s minister of economy and planning from 2016, before being relieved in March. As a minister, Al Tuwaijri oversaw sweeping changes the economy initiated as part of Vision 2030, which has set a target of raising the private sector’s contribution to the GDP of 65 percent from its current 40 percent.

In an interview with Al Arabiya at this year’s World Economic Forum in Davos, Al Tuwaijri stressed the importance of the non-oil sector in securing growth. The race is on to lead the World Trade Organization out of the worst crisis that it has faced in its 25 years of existence. “We care to increase the local content and provide jobs when looking into the economic growth, and this is one of the main objectives of Vision 2030, from the privatization program to the industry program,” he stated.

Responsibilities endowed

The newly appointed leader will be entrusted with the task of rebuilding the trust and credibility of the organization, rebooting its deadlocked negotiating agenda, and restoring its paralyzed dispute settlement system keeping in mind the worldwide recession, the pandemic strike, the US-China battle for trade supremacy, an American election season, and also against Brexit’s threats to add instability in the economic relationship between the UK and the European Union.

DR. JINAN AL OMRAN AS DIRECTOR OF SUPPLY AND LOGISTICS

Saudi Arabia has yet another feather in its cap. Dr. Jinan Al Omran was appointed as the Director of Supply and Logistics in Prince Sultan Military Medical City, becoming the first woman appointed to head logistics in this sector.

Dr. Jinan stated that the state has helped women assume responsibilities in areas like construction and, therefore, stress their intention to work in the Supply and Logistics Department to achieve leadership aspirations. Dr. Jinan also pointed out the long term and short-term plans to improve the supply chain of medicines, medical and surgical materials, and non-medical materials in transportation, storage, packaging, distribution, and all logistical services to ensure the supply chain localization and focus on digital transformation. She further emphasized that these goals can be achieved only with team spirit, development of all skills, and strengthening mechanism for developing the performance of management that I aspire to be the perfect model among the catering and logistics departments in all sectors.

Logistics – the backbone of global trade

The growth of logistics services in Saudi Arabia and the Middle East is one of the most developed areas and accounts for up to 40%, making it sure that the logistics industry is the backbone of global trade. Employing 15% and 20% of the workforce in developed countries, this sector plays a vital role in the Vision 2030 strategy.

Dr. Jinan Al Omran has also hailed the appointing women leaders in catering, supply chains, and logistics services. It is a very promising venture that accommodates diligent and ambitious talents from among men and women without any exception.

She further added, “The aspirations of the Saudi citizen have no limits. We, as women, are part of the ambitious nation. We have a passion to work together, to keep pace with aspirations to achieve the best”.

FROM ‘FREEZER FARMS’ TO JETS, LOGISTICS OPERATORS

PREPARE FOR A COVID-19 VACCINE

Logistics providers are building giant cold-storage facilities, or “freezer farms,” and lining up equipment and transportation capacity as they gear up for the rapid delivery of millions of doses of potential coronavirus vaccines worldwide.

Drugmakers have been racing to build supply chains for their coronavirus vaccine candidates, finding manufacturing sites, and ordering specialized production equipment. As some drugs advance to final-stage clinical trials, logistics providers are making preparations to deliver them securely.

The distribution operation—taking drugs from far-flung manufacturing sites to medical teams via warehouses, cargo terminals, airports, and final storage points, all in a matter of days—promises to be a logistics high-wire act with risks at every stage. Breakdowns in refrigeration equipment, transportation delays, broken packaging, or other mishaps could leave many thousands of doses useless.

Drugmakers with vaccines in final-stage clinical trials expect their products to require strict temperature controls. Moderna Inc. said it expects its vaccine to require minus 20 degrees Celsius storage. Pfizer Inc. said the vaccine it is developing with German partner BioNTech SE will probably have to be stored at minus 70 degrees Celsius, plus or minus 10 degrees. AstraZeneca PLC said it expects the vaccine to develop with University of Oxford researchers to require refrigeration, but declined to give details.

Logistics operators have been expanding their refrigeration and freezing capabilities in recent years, particularly as the health-care industry has grown, and pharmaceutical transport has become a more significant business.

ADNOC L&S AND WANHUA CHEMICAL GROUP FORM SHIPPING JOINT VENTURE

ADNOC Logistics & Services (ADNOC L&S), the shipping and maritime logistics subsidiary of the Abu Dhabi National Oil Company (ADNOC), has announced the formation of a new strategic joint venture (JV) with Wanhua Chemical Group (Wanhua).

The new company named AW Shipping Limited is incorporated in Abu Dhabi Global Market (ADGM) in the United Arab Emirates (UAE).

This strategic JV agreement further strengthens the collaboration between ADNOC and Chinese companies and builds on the deep-rooted bilateral relations between China and the UAE. The JV underscores ADNOC’s focus on value-creating deals and will support the delivery of its 2030 smart growth strategy.

AW Shipping Limited (AW Shipping) will own and operate a fleet of huge gas carriers (VLGCs) and modern product tankers. The company will be responsible for transporting LPG cargoes and other petroleum products, sourced from the ADNOC Group and global suppliers to Wanhua Group’s manufacturing bases in China and around the world. To deliver maximum fleet efficiency, the company may also pursue other market opportunities.

H.E. Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO, said: “We are very pleased to establish this strategic joint venture with Wanhua Chemical Group. This creative win-win partnership strengthens our growing relationship and will deliver greater value and efficiency for both our organizations.”

Mr. Liao Zengtai, Chairman of Wanhua Chemical Group, said: “We are very glad that joint venture has been established with the concerted efforts of both parties. The new company will strengthen the strategic cooperation between ADNOC and Wanhua and will also ensure the stable supply of LPG cargoes and other petroleum products for Wanhua system. More importantly, the cooperation will make contribution to the “One Belt, One Road” project.”

ADNOC L&S was formed in late 2016 from three ADNOC subsidiaries, ADNATCO, IRSHAD, and ESNAAD. The integration created synergies between shipping, marine services, offshore logistics, and onshore logistics to create the largest integrated shipping and maritime logistics company in the GCC. ADNOC L&S provides safe, reliable, and cost-competitive maritime and logistic solutions to ADNOC Group companies and more than 100 global customers.

Wanhua Group is one of the world’s leading producers for methylene diphenyl diisocyanate (MDI). It is a key ingredient in the manufacture of high-performance adhesives, and synthetic fibers go into a wide range of industries.

UAE’S FIRST “E- DELIVERY ORDER” INTRODUCED BY DUBAI TRADE

The “Electronic Delivery Order” has been introduced by Dubai Trade, DP World’s single window platform for cross border trade. This sophisticated new technological tool will allow supply chain stakeholders to handle complex import processes with the click of a mouse.

Beneficial in COVID Times

The E-Delivery Order is tailored to support trade, logistics, and supply chain players from the pandemic’s operational disruptions. With the new highly digitized process in place, shipping agents, freight forwarders, and Beneficial Cargo Owners (BCO’s) can avoid over the counter operations that require physical visits.

The company has successfully processed more than 17,000 transactions for 1400+ customers and aims to keep growing and adding to this number. Few of the global customers who have availed of Dubai Trade’s services include shipping agents Ocean Network Express, Peninsula Shipping, Hapag Lloyd Middle East, Gulf Agency Company (GAC), and top freight forwarders Globelink West Star Shipping Kuehne+Nagel and Freight Systems DWC. The E-Delivery Order promises and delivers a cost-effective, efficient, and time-saving mechanism on the Dubai Trade Portal to users from the safety of their homes.

Mohammed Al Muallem, the CEO and Managing Director, DP World, UAE Region, said, “Adapting to new technological innovations in the trade and logistics industry has become imperative in these days of global uncertainties created by the COVID-19 pandemic.”

Dubai Trade’s “E-Delivery Order” minimizes cargo clearance turnaround time, increases competitiveness, eliminates paperwork, creates greater visibility in cargo flow, thus liberating the UAE’s trading community from the inefficiencies of manual intervention and related costs.

Hussain Alblooshi, Chief Operating Officer of Dubai Trade, added, “We have always been pro-active when it comes to innovation for companies using the Dubai Trade e-platform and aim to provide unparalleled trade solutions in the UAE. We are proud to introduce a country-first Electronic Delivery Order in the UAE’s trade ecosystem. This automation will make the existing manual process redundant and reduce the operational costs while helping the company adopt sustainable delivery processes. Our customers will be happy to know that the new system eliminates 80% of paperwork and physical visits and cuts turnaround time by a similar count. Additionally, customers will experience seamless automated payment collections and reconciliations, lower overhead costs, and costs related to operating counters.”

Throughout history, Dubai Trade has been known for its best-in-class e-services and its ability to integrate various trade and logistics service providers in Dubai under a single window. Indeed the “E-Delivery Order” marks a step forward in digitizing the management of logistics to increase the resilience of the trade and logistics sector, which has been classified as an essential service by the UAE government.

TENTATIVE SIGNS OF RECOVERY IN THE UAE

IN THE MONTH OF JUNE

For the first time since March 2020, the private sector activity recorded improvements in June. This has been due to ease in restrictions that had been initially imposed due to the COVID-19 pandemic. Though there has been a tentative rise in work orders, a reduced workforce is being done due to the pandemic. According to the latest Purchasing Manager Index (PMI) issued by the research firm-IHS, Markit, “Confidence about the business outlook continued to improve, reaching the highest since March.”

Hopeful signs with June scores

David Owen, an economist with the IHS Markit, has stated, “The latest survey data offered hopeful signs for the Dubai non-oil private sector.”

The IHS Markit numbers show the immediate beneficiaries to be the construction sector, wholesale, and retail sectors for the first time since March as they have shown significant “activity growth.” These sectors have benefitted from the ease of restrictions, while the travel and tourism industry did not show a positive note.

Another significant point that cannot be missed is that though more orders keep coming in, severely hit firm had laid off staff due to the pressure to lower costs. Since March, the drop in employment has been sharp and broadly in line with the average. This led to a record low in April, thereby showing that the business expectations were much weaker than before the onset of the COVID-19 pandemic.

Owen reaffirmed, “Firms direly need a boost to cash flow, as many have been left struggling with low revenues and high-cost burdens in June.”

Comparatively, June’s 50 scores showed significant improvement on May’s 46 reading. A score below 50 signifies an economy and business activity in contraction mode.

COVID-19 RESHAPING THE WORLD OF LOGISTICS

With an increasingly interconnected global economy, the impact of the pandemic is widespread. With the overall decline in economic activity, even large corporates are beginning to feel the heat. The governments’ wide range of containment measures has resulted in the shutdown of manufacturing and labor disruption through enforced isolations, travel bans, and border controls.

The pandemic made organizations rethink ways to reposition the supply chain to be more resilient in future threats and disruption.

The key areas are:

1. Safeguarding employees: Employee’s physical and mental wellbeing is to be taken care of. Exercise best in practice corporate social responsibility (CSR) for employee stability. A backup plan should be in place to help affected staff, including increased automation, remote working arrangements, and other flexible resourcing in response to constraints.

2. Assessing supplier risk: A response team needs to be created to facilitate an open and consistent flow of accurate information between key stakeholders, maintain stakeholder confidence, and also to focus on supply chain assessment and risk management. The response team should be able to use alternative modes of transportation and conduct trade-offs according to the needs, cost, service, and risk scenario analysis. Regularly reviewing contracts with key customers and suppliers helps understand the liability involved in the event of the supply shortage. Maintaining a value chain assessment of other risk factors involved helps to understand the reasons for escalating costs.

3. Managing working capital and business plans: It is important to revise cash flow, working capital management, and inventory to predict demand and supply conditions. Review organization-wide sales and operations planning and integrated business strategies to ensure tactical and strategic business planning gets synchronized amongst all business functions. Businesses with data-rich environments can harness procurement, operations, and research and development (R & D) using advanced simulations to identify optimum performance trade-offs.

4. Micro supply chains: The existing model of supply chains is such that the reduction of costs has led to the creation of large, integrated, global networks that gain profit through outsourcing manufacturing to emerging economies backed by long term contracts. However, the pandemic and the increasing trade tensions are encouraging organizations to question the best operating model. At this point, they need to consider the benefit of shifting their present operating model towards micro supply chains.

5. Collaborative supplier relationship: The pandemic simulated environment can be used as a platform with time and investment to build a foundation of trust and transparency that leads to a collaborative relationship with critical suppliers. A shared vision of goals, motivations, and partnerships develops organizational resilience.

DIVERSIFIED SUPPLY CHAIN-QATAR’S ANSWER DURING THE PANDEMIC

The global supply chain system had already been a victim of the rising tide of economic nationalism and protectionism. The COVID-19 pandemic only added to the stress on the already suffering economy.

Speaking at the opening of the digital roundtable “Qatar at the Crossroads of the World” organized by The Business Year (TBY), H E Ahmad Al Sayed, Minister of State and Chairman of QFZA stated, “Qatar and the Qatar Free Zones Authority (QFZA) had a head start in dealing with the coronavirus crisis due to the country’s experience, and has greatly benefited from its diversified supply chain.”

He further added, “Cost-efficiency can no longer be the only guiding principle of the supply chain. And the world must now ensure that supply chains deliver value for money and have resilience built-in that they are resistant to their future disruption, so the global economy can keep moving.”

The need to accept the added complications by building resilience in the supply chain and maintaining the customers’ operational efficiency is the need for the hour.

The roundtable also featured many experts like the international trade leaders from the United Nations on Trade and Development and World Economic Forum and representatives from the Pharmaceutical, Food, and Beverages, and Logistics sector.

Al Sayed also emphasized that Qatar and QFZA had already diversified the supply chain to ensure the world and Qatar remain connected. For this, they have a tried and tested system that proved its worth during the pandemic. He pointed out the various opportunities available at QFZA included new infrastructures with tailor-made solutions, support for the Qatar 2020 Legacy Project, and the opportunity to partner with top Qatari companies like Qatar Airways and Qatar Petroleum.

As the pandemic leads to disruption and shift in the existing business models, it is ideal for increasing reliance on technology and innovation. This would only help accelerate Qatar’s diversification efforts, said Lim Meng Hui, CEO of QFZA.

Hence the Free Zones are now focusing on creating partnerships with non-oil sector companies. He further added, “We continue to study this development, and we hope to develop new policies and strategies. Post COVID-19, emerging technologies, and advanced industries sectors are expected to grow even more. We have already identified these as strategic areas for QFZA, and we will continue to identify innovative companies in these areas, such as IoT, electric vehicles, and more”.

Hui added that the QFZA plans to expand to new areas such as logistics, e-commerce, regional distribution, and small-scale production in certain value chains.

Ayse Valentin, CEO of TBY, who was present during the webinar, stressed the role of Free zones in attracting direct foreign investment to develop a balanced, diversified economy.

She also stated that global trade is currently facing a harsh period due to the COVID-19 pandemic and rising protectionism by the governments.

7 KEY AREAS TO BOOST INDIA’S EASE OF DOING BUSINESS RANKINGS BY THE CII

The exorbitant logistics cost has always been the bane while doing business. Confederation of Indian Industry (CII), the industry body has highlighted this as a deterrent in India’s mission to be a self-reliant nation.

Mr. Chandrjit Banerjee, Director General, CII said, “While many policies have been announced for a facilitative investment climate, effective translation into ground-level outcomes will help investor perceptions and further boost confidence. We believe that taking the ease of doing business route can unlock huge potential when the world is seeking new investment opportunities”.

The premier industry body also stated, “India’s high logistics costs impact its competitiveness. This will require medium-term action such as increasing the share of railways and waterways in transport, improving first mile and last-mile connectivity and reducing port dwell time. Cross subsidization of freight should be rationalized.”

More outcome-oriented action on Ease of Doing Business (EODB) is the route to India’s mission of self-reliance and should be the way forward. Sustaining this reform momentum can drive in new investments, including overseas investment.

If strong measures are taken up in the following seven areas, it can pave the way for the reduction of cost and time, making the Indian industry competitive.

1. Single Window System
Effective implementation of an online Single Window system is needed for strengthening EODB.

2. Regular Monitoring
Single interface, regular monitoring by the Chief Secretary of a state, and time-bound approvals are to be implemented in all states.

3. Compliance
Compliances for labor regulations need to be speeded up at lower costs for which a quick and low-cost trade facilitation mechanism should be in force. For example, the states can follow the example of Uttar Pradesh by exempting the industry from specific labor laws for three years.

4. Digital Reforms
Digital reforms like virtual court proceedings, e-filing, and work from home could help speed up the court deliberations and the challenges faced while enforcing contracts due to insufficient commercial courts and infrastructure.

5. Inspections
Computerized risk-based inspections, synchronized joint inspections, and differentiated inspection requirements for low-risk industries reduce the inspection burden on companies.

6. Exemptions
The CII has also suggested that the MSME sector be exempted from approvals and inspections for three years under state laws while following all rules.

7. Self-Certification
For those MSMEs with a good track record, a self-certification route can help for renewals and approvals.

The latest World Bank report reveals that India’s ranking has significantly improved from 142nd to 63rd. This leap of 79 positions is due to the series of reforms across various areas introduced by the Central and State

PEAK PERFORMANCE – QATARI PORTS MARK 100% INCREASE IN CARGO

The COVID-19 outbreak has not affected the strong performance of the maritime sector. Qatari Ports exhibited excellent all-round performance in the first quarter, showing a 100 percent increase in cargo handling this year.

Compared to last year, the ports – Hamad Port, Ruwais Port, and Doha Port registered a 102 percent increase in general cargo handling during the first six months. The first six months witnessed 1,509 ships being docked at Hamad Port, Doha Port, and Ruwais Port, marking it the busiest period in Qatar’s maritime sector. During the first six months this year, the ports took in 727,716 tonnes of general cargo, while in 2019, the figures stood at 360,644 tonnes.

According to the official twitter account of Mwani Qatar, 32,799 vehicle units and 305,504 livestock were handled during this period. During the first half of the year 2019, the port received 673,399 containers. This indicates a 2 percent increase this year. This year the ports handled 110,398 tonnes of building materials in the first quarter, which stood at 37 percent growth compared to 2019.

The measures taken by the port authorities, along with the Ministry of Public Health were way ahead as the pandemic started in China. This is one reason why the maritime sector has significantly managed to remain safe in these turbulent times. These measures covered the installation of thermal cameras and container sanitization, necessitating the submission of COVID-19 disclosures and IMO accredited medical declaration by ship agents and educating the workforce on necessary means to limit the spread of the virus. the workforce on compulsory means to limit the spread of the virus.

CORONA VIRUS: INVOCATION OF FORCE MAJEURE CLAUSE

TO AVOID LIABILITY FOR NON PERFORMANCE OF OBLIGATIONS UNDER THE CONTRACT

The outbreak of Corona Virus in China, for the last few months, has affected the lives of numerous people which also resulted in the loss of their life, that the World Health Organisation (WHO), on January 2020, declared that the outbreak of this Corona Virus constituted a “Public Health Emergency of International Concern.” The term “Public Health Emergency of International Concern” (otherwise termed as PHEIC) is defined under the International Health Regulations, 2005 as an “extraordinary event which is determined, as provided in these regulations – (1) to constitute a public health risk to other States through the International spread of disease; (2) to potentially require a coordinated international response.

As the said virus continues to spread across China and under the PHEIC declaration by WHO, many International Companies, including the governments, have started to impose business/travel restrictions on their citizens to travel until the current situation stabilizes. Many Governments have also announced the suspension of new visas to those who hold PRC Passports and have also banned entry to those citizens who have visited China in the last couple of weeks. These restrictions have put all the business entities both in China as well as other Countries in a problematic state since China is the second largest economic power and this unexpected outbreak of Corona Virus and its consequences have largely restricted the Individuals to stay at home to avoid spreading of the virus

that has directly / indirectly affected the performance of obligations by the Companies who are bound by various contracts with National /International entities. As the outbreak of the Corona Virus continues, it is likely that the trading business to and from China will continue to be affected, not only because the unavailability of the International / Domestic transport facilities but also because the factory workers have been asked to stay at home to avoid the widespread of the virus. Many companies who had been engaged in business with the Chinese Companies are forced to stop production because they struggle to obtain the required raw materials from China.

In fear of failure to perform contractual obligations that might make them accountable towards the other Party to the Contract, many Companies in and outside China have already commenced looking into the possibility to invoke the Force Majeure Clause in their Contracts / Agreements.

Most of the business contracts include the Force Majeure Clause so that the Parties can either suspend, limit or even terminate their performance of obligations imposed on them under the Contract if any Force Majeure events like any natural Disaster, War, Strike, Act of God occurs unexpectedly, which lawfully excuses their non-performance and/or delay in performance of their obligation under the Contract. However, this Clause is often included with insufficient thought being given as to whether they are appropriate for the Contract or not.

Usually, to invoke the Force Majeure Clause, the Party to the Contract must consider:
a. The performance obligation of the Party invoking the Force Majeure Clause under the Contract;
b. The impact of the Force Majeure Event on their ability to perform the obligations;
c. Whether there are any steps the Parties can take to mitigate or minimize the impact of the Force Majeure event on their obligations, including considering alternative methods performing their obligations under the Contract;
d. Whether the Force Majeure event falls within the scope of the Force Majeure clause of the Contract and whether it can and should be invoked and;
e. If so, what are the requirements, in particular the notice requirement that must be complied with.

In short, the Force Majeure Clause should hold all the Parties safe from any liability for Non-performance, following the Force Majeure Event. Further, the Party invoking the Force Majeure Clause in its Contract must be able to convince that there are no alternative means for performing its obligations or that the Party has taken all reasonable steps to avoid the Clause’s operation. As such whether the Force Majeure Clause in the Contract includes the outbreak of Corona virus and the hindrances due to its outbreak shall depend on the wording of the Clause, steps were taken by the Party who wish to invoke the force majeure Clause to avoid the maximum hindrances, and whether the outbreak constitutes a foreseeable incident.

Many criticizers have suggested that if the parties have entered into a contract with a Force Majeure Clause after the SARS outbreak, it may have been foreseeable that a similar virus could occur again. Then the parties may not be entitled to any relief.

Also, a problem arises when a Contract does not mention a Force Majeure Clause. It is also to be noted that the English Common Law does not imply the Principle of Force Majeure, unless it is specifically mentioned in the Contract itself. However, even where there is no Force Majeure Clause in the Contract, it does not mean that there are no grounds to excuse the performance. The parties whose Contracts do not explicitly contain a Force Majeure Clause, but is governed by the English Law, may opt to invoke the Doctrine of Frustration, which means that if a contract becomes impossible to perform through no fault of either Party, the Contract may be automatically terminated. However, the conditions to prove the existence of Doctrine of Frustration is severe than that included in the Principle of Force Majeure and these conditions shall include –
a. The terms and Condition of the Contract;
b. The factual background to the Contract;
c. The Parties’ knowledge and expectation about the risk when entering into the Contract;
d. The Parties’ calculations as to the ability to perform the Contract in the circumstances which are said to have frustrated the Contract.

In addition to the above-mentioned points of differentiation, the Principle of Force Majeure allows the Parties to suspend the performance of the obligation instead of the complete termination; the Doctrine of Frustration permanently put an end to the obligations between the Parties except for those obligations that had been earned before such termination.

In any case, whether the Party’s obligation under a Contract is hindered due to the widespread of Corona Virus or for any other unforeseen reason, the Party invoking the Force Majeure Clause shall rely on such facts which would help them to prove that they have been prevented or hindered from performing the Contract as a result of such unforeseen Force Majeure Event. In other words, there must be a causal connection between the Force Majeure event and the inability to perform the obligation under the Contract. Further, the companies may, in the future, also opt to include the term “Epidemic” and “Pandemic” in the Force Majeure Clause.

Furthermore, since the World Health Organisation has also declared this outbreak of Corona Virus as the “Public Health Emergency,” the Courts shall also take into consideration WHO’s declaration while deciding on any case against any Company that has invoked the Force Majeure Clause in this scenario.