Chairman’s Message

2021 was indeed a tumultuous year. Most of the world was in lockdown for almost half the year while facing the highest freight rates in addition to the tightest space crunch in history. Despite the turmoil brought on as the aftermath of the pandemic’s first 2 waves, CSS Group ended the year on a triumphant note. We achieved some significant milestones that I wish to remind you about. One of which was the Art Logistics service coming into full force, offering logistical support to the burgeoning demand for fine art movements across the region and beyond. And then the following were other achievements that 2021 brought with it.

Strategy Meet at Georgia

At our Annual Strategy Meet that took place in the gorgeous country of Georgia this time around, once again we raised the bar for ourselves with respect to our strategy for the coming year. To start with, we launched two new concepts at the meeting. The first being, the new vertical called eLogix that will provide e-commerce fulfillment services. The second exciting launch is the CSS Mascots, who will be the face of our company. You will make a close acquaintance with Charles the Truck, Wilbur the Plane, Ferdie the Ship, and Pack Packs on the pages of this magazine.

ELogix for E-Fulfilment

The growth-spurt in e-commerce activities that we saw, was no surprise with people conducting most of their shopping from the comfort of their homes rather than stepping out in the past 2 years. The UAE retail e-commerce market itself reached $3.9bn in 2020, a 53 year-on-year increase. In 2022, the forecasted value of e-commerce sales in the UAE is pegged at around $27 billion. In addition to this, with high social media penetration in the GCC region, the e-commerce market has certainly witnessed an extremely rapid growth. And with this growth, and the growing need for e-commerce fulfillment services, coupled with our expertise and experience in deliveries, we agreed this was the perfect footing to launch eLogix – our new vertical that will enable us to provide fulfillment services to our clients.

Going the Distance, Together

Remembering a particular African proverb, “If you want to go fast, go alone. If you want to go far, go together,” I would like to pay particular respects to our customers, partners and bankers for their continued trust and support, for it is because of them that we are able to envision what our bountiful future would look like. Without the support from our vendors, there is neither any way that we would enjoy our current success nor be able to plan for our future. Surely the same goes for the clients who have become family and whose trust we value so greatly. It is these relationships that we have always held so dear and who have helped us succeed, truly.

What Money Can’t Buy

While money can buy you most things, one of the key elements that money cannot buy is Experience, which is most vital when it comes to sustaining oneself when up against ‘The Impossible’. We have surely seen some of the toughest times in the last 2 years, but it is at times like these that the ones with formidable experience are the ones who clearly and calmly would show us a way out, for us to come winning at the other end. And I am proud to say that we have some of the best amongst the CSS family who repeatedly serve as guiding lights at any unforeseen situation, by way of providing solutions or improvisational skills that would only come with the experience they have garnered.

And with that, I would like to thank every member of the CSS family for their dedication and hard work over last year. It is your efforts that helped us surmount the challenges in 2021. Let us continue to work together towards the common goal of taking CSS to greater heights.

We are wishing you all a very Happy New Year!

CSS MANAGEMENT TEAMS MEET AT GEORGIA FOR THE STRATEGY MEETING 2021

After a gap of 3 years of conducting our annual meeting abroad and having it locally instead, the CSS Strategy Meet 2021 was held from 15th to 17th November at the Lopota Hotel & Resort, just a few minutes from the heart of the Kakheti region. Surrounded by breathtakingly beautiful Caucasus mountains, Lopota Lake Resort is located in the Kakheti region of Eastern Georgia, within 2 hours drive from the capital, Tbilisi. The vast enclosed property includes outdoor and indoor swimming pools, sauna, steam room and jacuzzi, fitness center, Lopota Forest Spa, Château Buera, Georgian and international restaurants, outdoor bungalows and bars, basketball and volleyball courts, mini-golf course, fishing area, stable and horse-riding area and other facilities for entertainment and leisure.

Presentations by Key Members of the Management Team

The meeting was attended by the management teams from all the global offices of CSS Group. The 2-day meet lined up several presentations by key management team members. On the first day, all the branches and NVOCC verticals presented their budgets and strategies for the year 2022.

Ms. Sasikala spoke at length about CSS’s new venture and forayed into e-commerce fulfillment services. She also represented the marketing division.

Day 1 concluded with the Chairman setting the target and the vision for the year ahead.

Day 2 dawned bright and clear and started with Mr. Roshmon’s presentation about the Freight Forwarding division and his colleagues who presented the Sales division, Ocean Freight wing, and the 3PL Logistics division. The meeting also revealed our growth with our network partners, projects division, Relocation division, and the HR and Finance department.

Day 2’s activities concluded with an astounding address by the Chairman, T.S Kaladharan.

Discussions, Debates, and Team Building Activities

The activities also included

  1. Case studies;
  2. Team building activities;
  3. An overall review of the current year’s strategy; and
  4. Setting the Key Performance Indexes and plan for the year ahead

 

Every department’s activities were analyzed and discussed in detail with the highlight on achievements and focused examination of the challenges faced in the year. The teams also carefully scrutinized how these challenges can be overcome for the year ahead.

The meeting also discussed CSS’s fantastic performance in the year gone by, despite the pandemic that turned the business world upside down.

LANDMARK CAR SHIPMENT BY AIR FROM DUBAI TO KOCHI

Adding another feather to its cap, CSS successfully moved yet another highend luxury sports car, the Lamborghini Huracán, from Dubai to Kochi by Air. Another grand feat about this movement is that it is the first time a car is shipped from Dubai to Kochi by air. The shipment was completed on 18th October 2021, with CSS providing door-to-door delivery, including return to Dubai.

This private car belongs to a Dubaibased businessman from Tirur in Kerala’s Malappuram district. The car shipment was passed under documents called “ATA Carnet” and would have to be returned to Dubai after the stipulated time of six months, at which point, CSS will undertake the return of the vehicle from Kochi to Dubai.

Carnet

The ATA Carnet is an international customs document used for the temporary duty/tax-free export or import of goods under international conventions. It is effectively a passport for a commodity in the countries that subscribe to the relevant conventions without paying the duty or value-added taxes on the goods.

Automobile Logistics – A CSS Forte

CSS proved its expertise and flair in Automobile Logistics with this recent air shipment of the Lamborghini Huracán. CSS’s Automobile Logistics wing offers effective and environmentally friendly loading and shipment of all types of vehicles. Bitto Babu, Business Development Manager at CSS, emphasized CSS’s competence and proficiency in handling Automobile Logistics, “We achieved a milestone with the air transfer of the Lamborghini Huracán. Our offices in Dubai and Kochi worked in tandem in coordinating with customs officials, and we were able to deliver the car to its owner on the very same day.”

Today, CSS is a reliable and trusted partner for automobile movement and logistics. CSS Automotive Logistics provides a wide range of services, including:

  1. Specialized racking of vehicles
  2. Carnet for vehicles
  3. Auto-racking for loading multiple vehicles in containers
  4. Experience in handling luxury & sports cars
  5. Large storage facilities
  6. Technical services on request
  7. In-house documentation and clearance facilities
  8. Door-to-door services offered.

Our facilities are available in Dubai, Abu Dhabi, Sharjah, Bahrain, and Oman, with an exceptionally strong worldwide network. The CSS Group team fully manages the end-to-end operations, which enables seamless and smooth shipments without any delays or roadblocks.

ANNOUNCING THE LAUNCH OF CSS ELOGIX

CSS is proud to introduce a new service vertical called CSS eLogix. Focused on e-commerce fulfillment services, CSS eLogix aims to provide seamless e-commerce logistics services to our clients. Our reliable, flexible, and scalable solutions with super-quick and accurate order fulfillment, CSS eLogix will be helmed by Britto Satheesh, who takes charge of the entire operations of the e-commerce fulfillment vertical.

An online shop can have all the bells and whistles with a fantastic user experience, a vibrant social media presence, and great Instagram ads, however, if the online venture does not have the right fulfillment strategy in place, it might be a failed venture in no time.

CSS eLogix offers a resilient and cost-effective supply chain for all types of e-commerce ventures, from online marketplaces and small-scale online retailers to medium and large enterprises across a broad spectrum of industry verticals. We have developed, implemented, and integrated the best technologies, systems, and processes to create world-class warehousing and fulfillment solutions.

CSS eLogix’s focus is to enable e-commerce outfits and brands to focus their attention on their marketing and sales efforts, while we look after every aspect of storage, fulfillment, and delivery at the operational end.

Our Key Differentiators

  1. Pick & Pack: We provide picking, packing and shipping of your orders with speed and accuracy.
  2. Economical: Our fulfillment services will help you cut costs by minimizing shipping timelines and costs.
  3. Advanced Software: Our software allows for real-time updates on your inventory across fulfillment centers and marketplace platforms.
  4. Returns Management: We help you manage your returns for hassle-free operations.
  5. Customer Support: On-demand customer support is provided by dedicated team managers.
  6. Reliability: You can rest assured that your customer will receive the order within the stipulated time after clicking on the “Buy Now” button.

We had a Q & A session with Britto Satheesh to understand how CSS eLogix intends to roll out the e-commerce fulfilment services.

Why should an e-commerce venture choose CSS eLogix for their fulfilment?

Digitization has been on the charts for most companies in markets across all geographical boundaries. The whole world has been slowly and steadily marching towards e-commerce trading and digitized trading – ‘slowly’ being the operative word. That was until COVID-19 came upon us. With pandemic-induced lockdowns enforced almost in every corner of the globe, digitization of trading and online markets gained momentum like never before. COVID-19 and global lockdown scenarios have inevitably changed the way we look at retail experiences.

More specifically, it has changed the way we shop. It has changed the consumer experience and expectations entirely. While we have seen a portion of the population return to the physical shops as restrictions on movement have eased, it is anticipated that the pre-COVID numbers may never return. This is especially the case in the UAE, where the retail sector relies heavily on the presence of tourists.

Due to various restrictions, including social distancing and other health and safety measures, combined with the increase of retailers and service providers moving their offering online (to some degree at least, if not in its entirety) means that the stage is firmly set for e-commerce to grow in the coming months and years.

When e-commerce activity flourishes, the need for e-commerce fulfillment is inevitably necessary. For the last 26 years, CSS has primarily focused on growing its verticals in the logistics industry to expand and re-affirm its services in the Middle East and Asia. And with the expression, “strike when the iron is hot”, we believe the time has come to move into the e-commerce capabilities space. This sector is still evolving and has not reached its full potential in the Middle East. CSS eLogix came into an e-commerce company as we delved into the online trading industry. With the sole purpose of enabling our clients to deliver their goods better, our service will help in reducing costs and enhancing efficiency.

Is CSS eLogix an e-commerce or an e-commerce fulfillment company?

Good question! This can confuse even the seasoned professional in the logistics industry. CSS eLogix is an e-commerce fulfillment company. Unlike other e-commerce companies and marketplaces like Amazon, Noon, Shopify, etc. we do not sell any products through our website. Our services are warehouse management, inventory management, and last-mile delivery management. These three service offerings form the three crucial pillars. We understand that these pillars are critical to the functioning of e-commerce f u l f i l l m e n t centers. To put it simply, the moment when a customer clicks on the “Buy” option either from Shopify or any other online platforms, the orders are then executed through our portal. We get the order, execute the pick and pack, and ensure the items are delivered in a timely manner to the customer.

Does CSS eLogix want to sell products through their website?

Yes, that is the long-term plan. But for now, we would like to concentrate solely on e-commerce fulfillment.

What are the attributes that set CSS eLogix apart from the other players in the field?

The e-commerce market in Dubai lies largely untapped, and this can be pegged at an astounding 75%. This big portion of untapped potential can directly result from having fewer fulfillment companies, unlike the western world. However, post-Covid, there is a surge in need for fulfillment companies. Backed by CSS’s logistics experience and prowess, along with its exceptional track record that spans more than 25 years, we intend to instill a similar spirit into our venture, eLogix.

Our #1 USP would be to deliver the products to customers within 2 hours from when they click to purchase. We also work on real-time inventory. Suppose one of our clients has their products on different platforms and a customer decides to purchase an item from any of those platforms. In this case, the inventory for that item on other platforms will be updated automatically. Therefore, this gives our clients a time-efficient way to manage inventory on a real time basis.

I realize that you have a very interesting slogan and, above all, a catchy mascot to go with your vision. What is the message that the brand wants to convey?

The Middle East has always been the hub for developmental strategies and plans. New infrastructure and the best soughtafter technologies are developing at a pace that no other country can match. So, it was perfect for CSS eLogix company slogan to be based on “time” and how it can be managed. My dad often says, “Time waits for no one.” We thought that this saying echoes our brand values. It conveys the importance of fulfillment service that we can offer our customers. To do this, we needed to create a mascot that revolved around the concept of time, and that’s how Ti:Me (pronounced as Timmy) came into being. We want Ti:Me to be the face of our company, and when anyone thinks of e-commerce fulfillment, Ti:Me should be the first thing they think of.

What is your vision?

We want customers to enjoy their online purchases, and above all, we want to enhance their experience when it comes to trusting companies in delivering their goods safely and professionally. Our services should exemplify excellence, trust, and above all, safety and security for anyone who wishes to choose us to be their partners. We want to remove all the hassles a customer may have to face during an online purchase. We want the customer to sit back and relax while we deliver their goods with our professional and expert services. It could be just apparel or accessories or gifts for their loved ones. Whatever the product, we want our customers to think of Ti:Me and engage with us in putting a smile on their faces when they receive their package on time and without any hassles. We aspire to establish ourselves as the number one fulfillment company across UAE and Middle East, thus setting the standards for excellence.

Shall we make an acquaintance with our new friends?

First, we are introducing Charles the Truck. Charles the Truck specializes in road freight, named after the famous American actor, Charles Bronson who has often donned the role as a tough policeman fighting against the bad guys. He loves long road trips and enjoys sightseeing.

Now we have Wilbur the Plane. Wilbur The Plane specializes in air shipping and takes his name from Wilbur Wright, one of the Wright Brothers. He is famous for inventing, building, and flying the world’s the first successful motor-operated airplane, the Wright Flyer. Wilbur sure does love traveling.

And Ferdie the Ship is named after Portuguese explorer Ferdinand Magellan. He is famous for discovering the interoceanic passage between the Atlantic and Pacific oceans, now known as the Magellan Strait. Our Ferdie is into overseas cargo shipping, and he loves to explore the high seas and play with whales in the open oceans.

Last but not least, it is Pack Packs. Now, Pack Pack’s language does not make sense to us, but it resembles the sound of a packed object within it. Pack Packs represent the boxes and packaging that is an integral part of the logistics industry, without which nothing can happen in cargo movement.

So, why are we going to have these mascots?

A Mascot, also known as a spokescharacter, works as an excellent branding tool that can increase our company’s recognition and service offerings. Our mascots will help us connect with our target audience as they help them better identify, remember, and understand our company and products and generate interest and increase exposure.

Unlike spokespeople who will age, mascots are ageless brand representatives that help our audience develop a closer relationship with CSS and our service offerings. Good mascots are memorable with an innate ability to work their way into the public consciousness. They will become an instantly recognizable symbol of the CSS service offerings. We sure know that our mascots will be well-loved by one and all.

So, let us have a chit-chat with our new friends and get to know them better as they become the face of CSS from here on out,

CSS CELEBRATES THE 50TH YEAR OF THE FOUNDING OF THE UNITED ARAB EMIRATES

Marking a momentous milestone on Dec 2nd, 2021, the nation of UAE completed her 50th year of unifying as a federation.

UAE is home to CSS Group, having set down our roots over 25 years ago in the sands of this ancient land. And to commemorate, CSS celebrated the UAE National Day with great aplomb. with both men and women staff adorning the national costumes, and all of CSS premises was festooned with colors of the national flag.

UNESCO announces World Futures Day

UNESCO (United Nations Educational, Scientific and Cultural Organization) has unanimously approved the UAE’s National Day as an World Futures Day. World Future’s Day, which will take place on this date every year, is an invitation to the world’s countries to embrace the future and develop their capabilities in the fields of foresight, readiness, and proactive policy-making to ensure sustainable development for the future generations.

The visionary leadership of the nation has achieved exceptional growth in the past 50 years. From a community of Bedouin tribes engaged in pearl diving, UAE has become a role model of what can be achieved within a short span of five decades. Today, the nation of UAE is a forerunner in charting national growth stories. The founding fathers had the largeness of vision to imagine and create the future by anticipating economic, industrial, and social change with its high readiness in future sectors. The UAE continues to deliver proactive policies and projects to embrace future trends and opportunities in all fields that affect daily life.

50th National Day Celebrations

The National Day was celebrated with much fanfare and grandiose celebrations at the Hatta enclave, a historically significant connecting point for tribal communities and caravans. UAE’s leaders came together in the majestic natural landscape of Hatta to mark the country’s 50th National Day. His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice- President and Prime Minister of the UAE and Ruler of Dubai, Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, and several other rulers, deputy rulers, and crown princes were in attendance.

The story of UAE’s progress since the country’s union unraveled before the leaders’ eyes in a stunning visual drama that paid tribute to the nation’s founding fathers.

The jubilee celebrations were marked with dazzling fireworks, festivities, and entertainment programs as the nation turned 50 years old. Several private sector companies also made the celebrations an occasion to remember along with the public sector.

CSS TEAM SPIRIT ON DISPLAY AT THE ANNUAL CHRISTMAS AND NEW YEAR PARTY 2021

 

Yes, 2021 has been an uphill drive, as is with almost every organisation worldwide. But as always, CSS has managed to ride the wave and this year as well. We have worked together to overcome the hurdles, and we have managed to emerge triumphant against all the odds that were lined up against us.

And with such a rollercoaster of a year, the closure of it brings good cheer! And surely what better time to get together and celebrate our victories with our yearend Christmas & New Year Party. As always, the CSS office premises and the warehouse were bedecked with festive decorations echoing the season’s spirit.

Keeping with the CSS Group tradition, the kick-off of the jolly season was with ensuring our offices were adorned with the festive feel, followed by quick games & entertainment through the week and the finale being our popular Potluck with everyone participating with much harmony and merriment.

It was a day of great camaraderie, displaying the hearty team spirit of our CSS family. The party buzz was evident in the air, and it was indeed a much-needed break from the day-to-day grind.

Another part of CSS’s year-end tradition is honouring & celebrating our warehouse team by presenting each of them with Christmas gifts at a gettogether catered specially for them. Every year, there is special attention given to this particular event with the rest of the organisation pitching in to help, for it is a known fact that this warehouse family is the primary reason for the success of CSS Group’s ever-growing & renowned consolidation operations.

At CSS, we lay great emphasis on celebration. We believe that as we come together, our bonds become stronger. And to state

very clearly, the hard work and team spirit displayed by each member of the CSS Family has made us what we are today. So let’s look ahead with positivity, to a new year that is filled with good health, good fortune and joy. May the year ahead cause all of us to forge ahead and scale new heights of success while overcoming any difficulties that we might encounter with confidence, conviction and finesse.

CSS STAFF TAKES PART IN THE DUBAI RUN 2021

 

On Friday the 26th of November 2021 Dubai’s Sheikh Zayed Road became a giant running track for the annual Dubai Run 2021. CSS Group also participated and was represented by Alan Ramesh (Marketing Assistant) and Babu Krishna Pillai (Documentation Messenger).

With a total of 146,000+ participants the highway saw a sea of human beings in action mode. Dubai’s arterial road attracted people from all walks of life cutting across age barriers as they came in unison to celebrate Dubai’s spirit of enthusiasm and community.

His Highness Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum, the Crown Prince of Dubai, being a fitness enthusiast himself, championed this challenge passionately. He was at the starting line, that had the backdrop of the Museum of the Future. Sheikh Hamdan posted a video on Instagram stories of himself at the run with a simple one-line motivational message: “Let’s do it.”

Sheikh Hamdan has been the force behind the Dubai Fitness Challenge – a month long fitness initiative to promote a healthier and fitter Dubai. As a part of the Driveway Fitness Challenge, UAE citizens, residents, and visitors are invited to partake in 30 minutes of exercise every day for 30 days, and the Dubai Run has been one of the main events within it. He expressed his exhilaration about the event, “Running alongside 146,000 people who completed the Dubai Run today, I was moved by the strength of our community and seeing what we can achieve when we work together. By turning out in such numbers, we have shown the world that this is one of the greatest cities to live in, work in and visit; a city with an unassailable spirit and ability to achieve.”

While families, amateurs, and those out for a day of fun generally did the 5km run/walk, some of the world’s top athletes ran alongside recreational runners and aspiring running champions in the 10km stretch. They included a team of elite Kenyan runners who have been participating in several DFC events and activities.

It was indeed a run to remember as the route took them past the iconic landmarks of Dubai like the Museum of the Future, Emirates Towers, Downtown Dubai, and Burj Khalifa.

The first run took place in 2019 and followed in 2020 as well. Last year, it was reorganized on different routes due to social distancing during the pandemic. The Dubai Fitness Challenge 2022 will be held from 28th October to 26th November

TEAM BUILDING IN A HIDDEN CAVE

As most of us know, these days in Dubai, there’s no dearth of fun activities available to engage in – from places to visit, to restaurants to dine at, to the famous nightlife we have here. And most of us can claim to have “been there, done that.”

But a few weeks ago, some of us were privileged enough to add yet another fun experience to our Dubai diaries. (Well, “fun” for some, “torture” for a select few….and “fun torture” for most of us.)

I am referring to the exhilarating team-building activity that was organized at the TEPfactor Dubai, an indoor adventure playground. While the interiors were this fascinating cave-like structure, this activity center was unassumingly located at Dubai’s fancy Jumeirah Beach Residence. Also “unassuming” were we, when most of us had very little idea about what to expect (which was part of the fun) – “was it team-games,” “was it brain teasers,” “were we physically fit enough” etc. were all the questions in our collective minds.

And guess what? It was all of the above, and then some. Mentally, some puzzles needed us to think outside the box (almost literally!), and physically we discovered muscles in our bodies that may have only been used 15 years ago, if that!

But all in all, with “teamwork” being the name of the game(s), and while kudos went to ALL of the 11 teams that took this grueling but supremely fun time quite competitively, there was only one winner. The “Grey Falcons,” who used a very tight strategy to overcome literal obstacles, pulled their teammates up (literally) and worked together to come out winning with stiff competition from the contending teams right on their tail.

So despite the physical and mental exhaustion, all of us were thoroughly uplifted in spirit with this experience and surely cannot wait to go back again.

FREE ZONES – UAE’S SUCCESSFUL DIVERSIFICATION STRATEGY

UAE is home to 45 free zones across the country, notably the highest globally, with ten more under construction. Defining a large part of the country’s private sector growth, these zones attract marketing, trade, and investment opportunities that accelerate the growth and success of the country’s finance, IT, logistics, trading, and media industries.

As of February 2021, more than 60,600 companies are registered in the country’s free zones, invariably accounting for eight percent of the total number of companies registered in the UAE. The government’s targeted efforts have helped the country achieve the position to become the most favorable business destination globally in recent years. Incentives for start-ups, entrepreneurs, and freelancers include reduced registration fees, visa extensions, and capital finance.

The free zones include prominent pillars of the private sectors related to trade, industry, energy and renewable energy, media and communications, metals and commodities, finance, healthcare, and IT.

JAFZA and DMCC – The Path Breakers

Dubai is now home to 30 free zones, including giants like JAFZA and Dubai Multi Commodities Centre (DMCC). UAE’s first free zone -the Jebel Ali Free Zone Authority (JAFZA) caters to over 7500 companies and accounts for 28 percent of Dubai’s GDP. Another feather in its cap is that JAFZA is the largest free zone in the world. That which started as a central pillar of economic diversification, JAFZA is today the blueprint for establishing several other free zones across the GCC. The DMCC is the largest and fastest-growing free zone in the UAE, which marks the country’s appeal for its budding multicultural international entrepreneurs.

Dubai is right now identified as a de facto-free zone hub.

Benefits of Being Under The Free Zone Umbrella

So what exactly is the lure of being under the free zone?

Largely defined by flexible policies surrounding foreign ownership, labor regulations, taxes, etc., the other benefits are:

  1. Foreign entities under the free zone enjoy 100 percent ownership circumventing foreign ownership policies with ease.
  2. Attraction of global talent to UAE as there are no adverse regulations to foreign labor.
  3. Apart from being exempt from taxes and fees like custom duties, the companies are allowed 100 percent capital and profit repatriation.

In short, the free zones bring over job opportunities, competitive salaries, a solid knowledge base, and an overall level of excellence.

Ancillary Services

Free Zone authorities extend ancillary services for legal, medical, labor, and immigration. The free zones also provide freelance permits to international branch office licenses from shared desk space on annual contracts to industrial warehouse leasing for 25 years. Simply put, everything is designed to attract and help investors build a business, grow trade and investment and facilitate the transfer of skills, knowledge, and technology.

Success in Times of the Pandemic

While industries worldwide were fighting to survive the pandemic, the free zones in the UAE stepped up their efforts to strengthen the business climate by launching several initiatives. This helped the government pick up the broken pieces of the economy in the form of health crisis and dip in oil prices. This was achieved largely due to the economic policy tools that was in place by the UAE government. For example, the Umm Al Quwain Free Trade Zone started the business LYTE packages that help prospective investors continue with their business set up plans with a neat 50 percent off. Also, acquiring licenses was done in just days compared to the earlier timeframe of ‘months’. Some free zones in the UAE introduced online services for investors, while others recorded an increased number of new registrations and business expansions, with technologyfocused sectors seeing higher traction.

Foreign Policy Objectives

As part of the agreement between UAE and Israel to normalize friendly relations, many of the newly formalized commercial links came to fruition among Gulf Free Zones. Dubai uses its flagship commercial entities to cement ties with its Israeli counterparts. In September, DP World formerly known as Dubai Ports Authority, and several government entities signed agreements with Israel-based Dover Tower Group to assess port and free zone development opportunities in Israel and establish a direct shipping route between Eilat port and the UAE port of Jebel Ali.

Encouragement for Developing Clusters

Free zones will continue to encourage the development of clusters, enhancing the UAE as a hub that encourages broader build-out of specialized infrastructure and develops sectors that are key to the economy while also facilitating job creation. Noting that free zones have become an integral part of the diversification plans of each Emirate, there is likely to be divergence in the development trajectories of such business hubs. The Israel Diamond Exchange and the Dubai Diamond Exchange, which is part of DMCC, agreed to enhance cooperation in the diamond trade.

Free zones are more likely to support the development of technology-based strategic industries and offer global investors attractive growth propositions. As the country continues to build on strategic focus industries, flexibility and multipurpose utility will be the key traits of successful free zones in the UAE.

GLOBAL FREIGHT MARKET INSIGHTS

Insights into the current market dynamics helps us to stay informed, assists with decision-making and helps in potentially mitigating risk, therefore avoiding disruptions to our supply chain.

The logistics sector was hit the hardest by the COVID-19 outbreak in 2020. With the lockdown in many countries and a major focus on the production of essential products, the volumes of air and ocean freight had fallen significantly in 2020. Vaccine hesitation and ongoing transmission, regional resurgence and variants and also difficulties with social distancing in ports, warehouses, and terminals led to major disruptions.

Apart from this there has been issues of high labour cost. These labour constraints also arose because of surging consumer demand, which could not be backed because of labour shortage.

Many manufacturing facilities left incompetent to face increasing demand for goods, lead to limited supplies and thereby higher prices.

There have also been major operational changes with regard to export screening requirements, consolidation and ground handling agents.

Ocean carrier consolidation has thelowest inventory levels since 1990s. Many airports around the world have been impacted by congestion too.

Shut down of manufacturing facilities and ports, to container shortages and labor issues, to rising costs and the ongoing pandemic, it has been the opposite of smooth sailing.

Air Freight Update

With completion of the China International Import Expo, Shanghai will see a boost in capacity. In most of East Asia, the capacity is stretched and rates are high and was expected to continue through November.

In India, cargo demand (both inbound and outbound) is outstripping capacity resulting in extended transit time and higher rates. A travel ban was lifted on November 8 but the impact on capacity is yet to be determined. Due to the various challenges faced in ocean freight, there are heightened levels of ocean-to-air conversion cargo, particularly in south India.

Transatlantic demand has been increasing in recent weeks. Easing of travel restrictions into the United States started early November, but short-term capacity increases are unlikely until seats on existing flights are filled.

In Frankfurt and Amsterdam, imports and exports has been affected due to Terminal congestion as a result of labour challenges.

There is a lot of constraint in southbound cargo from North America to South America. Freighter operators are already using their full fleets. As COVID-19 restrictions remain in place, limited additional passenger flights are entering the market and spot markets continue to trend up. This has resulted in the U.S air import terminals being congested.

However, some of these extreme delays have been eased since summer, with gradual improvement on labour.

Air Freight Capacity and Demand

With the reduction in passenger flights since the start of the pandemic, the air freight capacity has seen a -12% decline. Flights arrive in waves versus daily pattern of passenger flights pre- COVID-19 and this creates a large influx at one time and overwhelms warehouses, which are further constrained by labor shortages. Even the increase in freighter activity cannot cover this gap.

As on the demand front, inventory levels as percentage of sales are at a historic low. The disruption in global supply chain has lead to surge in demand. However, this all-time high demand has lead to ocean reliant cargo switching to air.

Challenges and Solutions

There are innumerable challenges at hand at Airport terminals and warehouses. These challenges can be tackled by proactive conversation, weekly guidance, increased notifications on terminal dwell times and adding alternative vendors, warehouses, and trucking options. Also re-directing freight to airlines or airports, which are less, impacted and leveraging truckload capabilities at origin and/or destination can ease the situations.

Air Freight Market Outlook

There are many strong future growth indicators. A steady increase in export order has been predicted. The rebound in jet fuel, during peak season is a positive trend. Terminal congestion variability and capacity at a premium is to be the order of the day.

Ocean Freight Update

In Northern America, there has been consistent improvement with regard to availability of vessel space. U.S. East Coast ports to Europe, and the Canada gateway for U.S., Midwest cargo to Europe through Montreal and Halifax ports have seen improved activity. Port of Los Angeles/Long Beach terminals, such as TTI, are taking steps to relieve congestion by extending their gate hours.

There are continued rail delays from the U.S. Midwest to both U.S. East Coast ports and to Canada. However, some railways such as the Burlington Northern Santa Fe (BNSF) are offering weekend gates to try and improve fluidity.

Nevertheless, congestion in the United States continues. Most terminals are congested at 80-90% utilization. The average dwell to berth is around 13-16 days, at LAX/LGB, 77 ships were at anchor or in the drift area and port wide there are chassis shortage.

As of now European ports of Hamburg, Rotterdam and UK port congestions issues still persist. There is increase in Europe port omissions. At UK ports, the surcharges are applied to ocean carriers.

In Australia, in the wake of resolution with MUA, delays at Australia are 7-9 days. On the Asia-Europe trade lane, space is expected to be extremely tight as high demand persists.

As a result of COVID-19 safety protocols, Suez Canal blockage, and Yantian port closures has created vessel bunching, berthing delays, and reduced yard capacity. Demand continues to increase; carriers must use blank/void sailings to mediate the congestion.

Oceans rate trends in US East and West Coast peaked in August-September 2021 and dipped. But trends are showing improvement. Schedule adjustments improved congestion briefly.

Key Factors to Consider

In order to navigate in today’s ocean market, forecast need to be made prior to 6-8 weeks minimum. There need to be flexibility in all facets of shipment-routing, carriers/services, modes, equipment and pricing. Also there should be prioritization, keeping variability in SKUs and/or parts. The success in the sector will depend on consistency and smoothing of volumes week to week.

 

FIFA WORLD CUP! “GETTING YOU IN THE GAME” FORUM: INDUSTRY EXPERT LOGISTICS LINE-UP REVEALED

As one can imagine, Logistics is critical to an event as large and complex as the FIFA World Cup. And it is no wonder that Logistics industry giants, GWC Logistics, was awarded the honour of Qatar’s Official Host Nation Logistics Provider for the FIFA World Cup 2022.

GWC Logistics was established in 2004 and has become a key player in the region’s logistics and supply chain sector. The company offers end-to-end logistics and supply chain solutions to many FMCG, Oil & Gas, Fine Art, Pharmaceuticals industries, to name a few. GWC also provides consulting, record management, and local and international relocation services.

On 16 November 2021, GWC revealed its panel of top industry experts for a virtual forum called ‘Getting You in the Game’.

FIFA’s Head of Event Logistics, Jose Dhooma, said in his keynote speech, “There has never been a more appropriate moment to discuss the role of logistics in the delivery of mega-events. This year, we have seen the critical role of logistics in the world’s economy, and now, with almost a year to the FIFA World Cup Qatar 2022, this forum is bringing together panels of experts to discuss and bring you further into the game of delivering logistics for mega-events.”

The forum featured two panels and two workshops. The first panel focusing on mega-event logistics featured Kirsten de Bruijn, Senior Vice President Cargo Sales, and Network Planning at Qatar Airways. Mark Novack, HC Event Logistics Assistant-Director at the Supreme Committee for Delivery & Legacy. Christopher Nelson, Operations Manager, Middle East Region inKObator, at The Coca-Cola Company and Mathew Phelps, General Manager at GWC. The discussions show-cased “what it takes to create a winning formula to turn visions of events’ enormity into a reality”.

The second panel included Afraa Al Noaimi, Executive Director at Josoor Institute. Laila Al Jefairi, Vice President of Business Development at Qatar Financial Centre, Bader Al-Madhadi, Investment Promotion Lead at Qatar Free Zone Authority, Lauri Becquart, Head of Retail & Private Holdings at Google Cloud and Hamdan Merchant, Senior Director, Innovation, IT & BPI at GWC. The panel analyzed the role of digitalization in the Middle East region and identified the impact of investments in making it an increasingly attractive place for largescale events.

Both panels were moderated by Al Jazeera English’s Senior Presenter Emily Angwin.

Two workshops followed the panels:

1. GWC’s large-scale planning to execute FIFA World Cup Qatar 2022, led by Syed Maaz, Chief Business Development Officer at GWC

2. The legacy of sustainability that the World Cup will leave behind led by Meshal AL Shamari, Director at Qatar Green Building Council.

The FIFA World Cup Qatar 2022 will take place from 21 November 2022 until 18 December 2022 in eight stadiums around Qatar – three of which are already fully operational, with two more scheduled for completion by the end of 2021. GWC has a logistical infrastructure covering more than three million square meters, including the region’s largest privately owned logistics hub, along with a team of dedicated and innovative specialists and state-of-the-art IT systems. GWC on board as a Regional Supporter and the Official Logistics Provider for the tournament will provide FIFA and its commercial affiliates with crucial support and expertise in logistics and supply chain management, which will ensure seamless efficient delivery of the competition.

“Logistics plays a significant role during sporting events to ensure the smooth and efficient delivery of complex, large-scale events, which involves executing a broad spectrum of logistics services in the lead-up, during, and after the final whistle. Moreover, the forum will bring attention to the hard work that goes into the FIFA World Cup Qatar 2022, turning it into a showcase for Qatar and the region,” said Group CEO at GWC, Ranjeev Menon.

35 MULTI-MODAL LOGISTICS PARKS TO COME UP UNDER BHARATMALA PROJECT: MINISTER NITIN GADKARI

Multi-Modal Logistics Parks (MMLPs) is a key policy initiative of the Government of India, led by Ministry of Road Transport and Highways (MoRTH) and the National Highways Authority of India (NHAI), to develop Multi-Modal Logistics Parks in huband- spoke model to improve the country’s freight & logistics sector.

35 multi-modal logistics parks will come up in the country under the Bharatmala project. The facilities envisaged in this MMLP are warehouses, cold storage, inter-modal transfers, handling facilities for container terminals, and bulk/break-bulk cargo terminals, among others. These Multi-Modal Logistics Parks (MMLPs) will help lower overall freight costs and time, cutting warehousing costs, reducing vehicular pollution and congestion, improving the tracking and traceability of consignments through infrastructural, procedural, and information technology interventions.

Among 35 strategic locations identified for the development of MMLPs across India by MoRTH, Nagpur is one of them. Nagpur, being centrally located in the country and well-connected through road and rail, provides location advantages to establish industries, warehouses and associated facilities to link to ports. The proposed project site to develop MMLP Nagpur is located at Sindhi in the Wardha district of Maharashtra and the total area of the project site is 345.54 acres with an estimated project cost of Rs 780 crore. Within the site, the MMLP is to be developed in an area of 230 acres, while the balance land might be used for industrial development based on demand. The land acquisition for the dry port has been already completed by JNPT (Jawaharlal Nehru Port/Nhava Sheva port), with an MoU (memorandum of understanding) for the MMLP at Sindhi, having been signed between JNPT and the NHLML (National Highways Logistics Management Ltd), a special purpose division of the NHAI. MMLP Nagpur at Sindhi will in turn make Nagpur and Wardha, the logistics capital of India. It will also boost opportunities for export and import for businesses in the region.

The Bharatmala project proposes to have four MMPLs in Maharashtra, including Jalna, Nasik, Solapur and Sangli. Similarly, an MoU has been signed for starting another MMLP in Chennai. MoRTH Joint Secretary (Logistics) Suman Prasad Singh said that out of around 35 MMLPs, work on one in the northeastern region has already been completed.

Union Road Transport and Highways Minister Nitin Gadkari has stated, “These MMLPs will give a big boost to our economy and exports.”

The statement also said around 10 million tonnes of cargo is estimated to be handled at the MMLP in the horizon year of 2051.

The ministry has in its pipeline a plan for an Expressway between Nagpur and Hyderabad as well. Keeping pace with India’s economic growth is the expansion of the country’s logistics sector. The government expects freight movement in the country to continue its growth trajectory.

SMART SHIP VS. DIGITAL TWIN – THE INEVITABLE CHANGE IN SHIPPING

The International Maritime Organisation (IMO) Strategic plan of 2018-2023 was one of the first steps taken by the IMO’s Maritime Safety Committee (MSC) to adapt to the advancement of technology in the Shipping sector. The strategic plan demonstrated the need to include and integrate the advancing technology within the Regulatory Framework. This included finding ways to balance the safety and security concerns of the parties and the advancing technology, mitigation of cost and environmental damages, etc. The advancing technology brought into the picture two alternatives for the shipping industry, i.e., Smart Ships and Digital Twins. Although both these alternatives may sound synonymous, in reality, they differ. Every shipping company must understand the difference to make the best choice possible for meeting its business needs.

SMART SHIP

Fuel consumption, energy efficiency, and carbon emissions are three of the most debated concerns in the shipping industry. These three problems are addressed once Smart Ships are brought into the picture. The Commercial-off-the-shelf (COTS) technologies being used in the ship, when coupled with the available Internet of Things (IoT) and Information and Communication Technology (ICT), brings to life a cloud-based monitoring system, which analyses the performance of the vessel and addresses the issue of optimization of fuel consumption levels, energy efficiency, and control or limits of the CO2 emissions for the entire life of the vessel.

The use of Artificial Intelligence (AI) and Machine Learning (ML) allows faster data processing methods, thereby avoiding human errors/accidents and helping in achieving greater autonomy. Stena Lines, a European Enterprise dealing with exports, was able to reduce crew and passenger accidents, improve fuel efficiency, and reduce the use of plastic on board with the help of AI and ML-based calculations.

The use of AI-based sensors onboard the vessel will allow tracking of the cargo throughout the journey via AI-based apps. This allows the evaluation of real-time data by all the parties involved in shipping the cargo. Other forms of real-time data might include information about vessel position, vessel speed, fuel and emission reports, wind speed, etc.; the huge volume of data being collected will also help determine future shipping operation and processing needs.

Other advantages include efficient reduction in vessel turnaround time, i.e., once ports receive data regarding vessel position and movement, AI can further analyze the time of arrival and departure. This not only helps the incoming vessel but also allows the port to efficiently manage and guide other vessels as well, thereby reducing the overall time for which a vessel stays at the port. `Remote sensing technology has simplified the means of off-shore management of vessels. With the ability to constantly monitor the operational efficiency of both old and new vessels, the incorporation of Smart Ships would enable IMO to achieve its Greenhouse Gas (GHG) strategy, which aims to reduce carbon emissions in the shipping industry by 40% by 2030.

DIGITAL TWIN

As the words suggest, a digital twin is the digital representation of a physical entity, i.e., the digital representation of the vessel and its machinery. It is a virtual environment wherein all the data and simulations that would have occurred during the vessel’s lifespan can be studied and analyzed in real-time. The technology allows analysis of billions of possible outcomes, design systems, fuel management techniques, simulator-based testing, virtual system integration, etc. It helps the shipping company analyze the best possible solution for efficient vessel management. This technology is not limited to providing real-time analysis and future forecasts regarding the vessel.

Shipping companies provide a wide range of services, and to have the upper hand, and it is important to understand the market trend and move accordingly. The Digital Twin analyzes past and present trade patterns and market transactions to provide future scenarios/possibilities, thereby aiding better operational and strategic decision-making. It also helps in strategic planning at ports. A Digital Twin model incorporates past and present port data and provides suggestive improvements in port design, its capacity, etc. It predicts an increase or decrease in future arrivals in the port, allowing the port managers to run simulations and identify necessary steps to accommodate the vessel efficiently. Connected Digital Twins enables all stakeholders to view and analyze the vessel during the voyage. Tests w.r.t future risks, structural reliability, etc. help the stakeholders to improve efficiency during the voyage by making suitable changes.

Apart from this, Digital Twins can also be used to deal with cyber-security threats. With the advancement of technology and smart ships using several IoT and AI-based tools, a huge amount of data is now available over the web and could be remotely accessed if proper measures are not taken for its protection. Creating a Digital Twin helps with supervision, maintenance, and control over such data. It analyses the data network over the web and provides strategic inputs to both external and internal cyber-security threats. It predicts real-time and future threats, thereby aiding in the identification of such threats at the early stages and elimination of the same, with minimum damage. It helps create simulations where various cyber threats could be analyzed and tested with practical solutions, thereby increasing preparedness for realtime cyber threats.

 

TRANSPORT LOGISTICS COMPANIES RIDING GROWTH WAVE AS COVID WANES

After a year and a half of COVID-19 pandemic hitting the world, rays of revival across many sectors can be seen. And India’s logistics companies seem to be riding on a wave of growth after the waning of the second wave.

Transport Corporation of India (TCI), one of India’s leading supply chain and integrated logistics players, expects its net profit to grow 30%-40% and its revenue to grow 20% in FY22. One of the world’s largest logistics players, DHL Express, recently opened an airside facility in Bengaluru airport. The gateway is said to handle 650,000 to 700,000 shipments a month. The cargo facility in Bengaluru is one of the biggest investments the company has made in India, said the India Managing Director. French logistics player FM Logistics has recorded a 58% growth in its India turnover in the first half of this fiscal year.

Companies are bullish and are investing in new infrastructure in spite of global supply chain constraints and fuel price hikes. According to Vineet Agrawal, managing director of TCI, increased freight rates in coastal shipping have helped increase revenue.

Despite supply chain businesses having been affected due to a global shortage of semiconductors and their impact on the automotive and white goods industry, automakers are optimistic about the situation, and production has started to improve from the last quarter. Automotive companies, which were hit the hardest, have assured an increase in production, with hope that the overall market can absorb the higher fuel prices. Furthermore, in India, as elsewhere, a spurt in demand in some segments such as e-commerce has kept companies confident.

The global pandemic led to a prolonged partial closure of ports worldwide, creating a glut of containers in some ports and an abject shortage in others and of course freight rates and container prices have shot through the roof. Companies like the TCI have said it will only spend half of their planned capital expenditure of INR200 crores due to the increase in costs of ships and containers. About 60% of its CAPEX was to buy new container ships and containers. According to a report by ING, the supply of new containers will only ease the pressure by 2023.

Needless to say, many companies saw a big dip in revenue a year earlier. However, things are looking up. Most prominent companies are making noticeable investments foreseeing this trend. The new airside facility in Bengaluru airport for DHL will save 12-24 hours in terms of transit time for DHL’s customers.

Consolidated revenue grew 38%, and net profit trebled in the July-September quarter. Agrawal, says, “The estimate we are giving the street is, of a 30%-40% increase in the bottom line and a 15%- 20% increase in topline.”

 

CONTINUED DISRUPTIONS IN THE GLOBAL FREIGHT MARKET

It is established fact that COViD-19 has clearly created a new pattern regardless of where we stand. Most industries today face the challenge of rebuilding and managing the recovery phases. As far as retail and logistics is concerned, the pandemic has introduced so many consumers to online shopping and has increased freight volumes. In the words of the economist Stephen Burks, “It dropped like a rock and came back like a rocket, but coming back has been uneven, and the demand patterns are not the same as what it was before the downturn. There have been all kinds of glitches in the supply chain as the final demand pattern has shifted and the supply chains are struggling to get back. Right now, in terms of demand for trucking in the US, it’s high. There is huge demand with supply constraints regarding trucks and drivers.”

Stressed Supply Chains

During the holiday season, retailers have most of their inventory stocked, but the major retailers have announced shortages this year. According to the American Trucking Associations, the latest trucking and logistics indexes have shown stressed, flashing red warning signs in maintaining supply chain lines. Stores like Costco and The Home Depot plan to lease out their cargo ships to get items to the US and Canada in an uninterrupted pattern.

The Association of Supply Chain Management Executive Vice President Douglas Kent spoke about the situation, “Transportation is riddled with disruptions. Whether it’s port capacity on the shipper side from China or the receiving side from the US, the shortage of truck drivers, and concerns about recruiting people into warehousing and transportation jobs, they continue to disrupt the industry. This is not very easy. It seems like every time we find a path out of disruption, and another path is created for us.”

The Southern California Coast, home to the nation’s biggest ports – Los Angeles and Long Beach is cited as the worst choke point in the supply chain. On 27th September 2021, 64 container ships with millions of dollars worth of toys, electronics, furniture, and other goods lay at anchorage waiting for an unloading berth.

As far as the White House Supply Chain Disruptions Taskforce is concerned, the Biden administration had appointed John Porcari to work as its port envoy whereby he announced the facilities for its 24/7 operations. The port of Los Angeles was getting ready to work 24/7, while Long Beach planned to increase operations and eventually move forward to a 24/7 supply chain. Both facilities are expected to work closely with the trucking industry to ensure operators understand how to take advantage of incentivized gate hours and expanded opportunities that will be created to move cargo during non-peak times.

The nation’s major ports have seen a peak in container volumes during the past year where, Los Angeles ports alone passed out 1 million containers a month. At the same time, the East coast ports like New York, Baltimore, Virginia, South Carolina, and the Port of Savannah have shown double-digit increases since the cargo surge last year. The Investment banking company Goldman Sachs cited supply chain issues responsible for its decline in the third-quarter economic growth forecast from 6.5% to 5.5%. Goldman Sachs economists also added, “Spending on dining, travel, and some other services is likely to decline in August, though we expect the drop to be modest and brief.” As the Economist, Rajeev Dhawan, Director of the Economic Forecasting Center at Georgia State University, states, “I think because of the virus, the state of the economy can change very quickly, and it is changing, and it’s downward. If you had asked me this question a month ago, I would have said it was moving upwards. Remember, this virus is leading this economic tango”.

According to revised estimates released by the Bureau of Economic Analysis in August, the real Gross Domestic Product (GDP) increased at an annual rate of 6.6% in Q2 2021. The supply chain mismatch between the surging imports and an over-exhausted transportation network are reasons for a slowdown of economic recovery.

Warehouse Woes

Another issue faced is the warehouse capacity. Warehouse space is tight once the product is taken off the ships. National vacancy rates are less than 5%, and less than 2% near ports as shippers say they do not have enough space to store the goods. Kent points out two aspects here, “You have a tightening of warehouse capacity, but at the same point, are the goods that are in the warehouse the right ones? The consumer is going to pay the price for this amount of disruption. Who can ignore the fact that the consumers will pay when the supply chain is not working well?” Another concerning factor is the higher inflation at the retail level. Initially, a 20-foot container that cost $3500 to import from China to the US, post-Covid, cost more than $10000 for the same journey. Fed Chairman Jerome Powell had mentioned that the supply chain problems might fuel inflation longer than anticipated earlier. “Inflation is elevated and will likely remain so in the coming months before moderating,” Powell said.” As the economy continues to reopen and spend rebounds, we see upward pressure on prices, particularly due to supply bottlenecks in some sectors. These effects have been larger and longer-lasting than anticipated, but they will abate, and as they do, inflation is expected to drop back toward our longer-run 2% goal”. Kent said, “I hate to be the Grinch that stole Christmas, but I don’t think it’s going to line up the way we would like it. Most of the items consumed during the holiday period have a manufacturing location outside the US. If you look at the big exports, it’s computers, bicycles, accessories, toys, and the reality is this should be all clicking smoothly now, and a lot of those expectations are now being foiled. We see continued disruptions”

The Drewry World Container Index that provides weekly assessments of container freight rates has mentioned that the prices have increased for 19 consecutive weeks and are 351% higher than the last year.

DRONE DELIVERIES-AN ULTIMATE SOLUTION FOR TIME-CRITICAL SHIPMENTS

A Dublin, Ohio-based distributor, Cardinal Health is now seeing a way to alleviate delivery delays to pharmacies, restocking inventory, and volatile last-minute shipping prices by moving its first foray through drone deliveries. This decision comes when companies like United Parcel Service Inc., Merck & Co., Walmart Inc. have started using drones in the domestic shipment of medical products and supplies and is seen as a success story.

In collaboration with drone operator Zipline International Inc, the pilot program will start next year to speed up pills, inhalers, and other critical items to US pharmacies. Transport cost cut for time critical shipments is an added benefit of the program. The Aerial drones are expected to carry loads of up to four pounds about 10 miles from Kannapolis NC based distribution center, to local pharmacies in a short span of 15 to 30 minutes.

Cardinal Health’s senior vice president Pharmaceutical Operations, Josh Dylan, is hopeful that the new program would allow the company to bypass road obstacles including those caused by natural disasters and replenish high turnover items and also prove help in emergency situations in remote areas, including scenarios where the time of delivery is important for e.g. like delivering anti-venom for snake bites, etc. Mr. Dylan stressed that apart from speed and reliability being key factors for drone delivery, the program would allow the company to avoid fluctuations in prices for last-minute courier or helicopter deliveries.

The drone operator based in South San Francisco, California, Zipline International Inc has delivered medical supplies to remote parts of Africa, flown in blood and vaccines to outposts in Rwanda and Ghana, and the latest Corona vaccine developed by Pfizer Inc and BioNTech SE. Its latest deals include delivering merchandise for Walmart in Northwest Arkansas and delivering prescriptions and medical supplies for the hospital system Intermountain Healthcare in Salt Lake City.

Zipline’s drones are about six feet from head to tail, resembling miniature planes that travel 300 to 400 feet above the ground over terrains dropping packages with parachutes into landing zones about two parking spaces wide and can travel up to 100 miles round trip or 50 miles from the distribution center. A spokesperson mentioned that the company is still working out routes with aviation regulators. Eventually, the company aims to expand the program to more products and regions depending on FAA approvals.

DISRUPTIONS: KEY INDICATOR FOR SUPPLY-CHAIN OPS TO MEASURE RISKS

“Resilience and sustainability of supply chains is a matter that is engaging urgent attention of political and business leaders in all major economies,” according to Singapore-based business leader Girija Pande (Chairman of Apex Avalon Consulting).
As far as the Indian government is concerned, improving logistics, sourcing and procurement are major focus areas currently, where Third-Party Logistics is expected to grow at 8% CAGR (compound annual growth rate) during 2021-25.
And globally, these are the major supply chain trends:

Impact of a pandemic: The shock of COVID-19 will continue to be felt worldwide as organizations continue to recover from the initial impact on global supply chains. The unprecedented nature of COVID-19 has forced companies, and industries, to rethink and transform their supply chain models.
Impact of geopolitical rivalry playing out between China and the US: The supply chain industry is transforming by diversifying supply sources, going beyond China, who until now has been a clear choice for most as a manufacturing hub of the world.
Increasing impact of climate change: For many, the reality of our climate emergency was brought into sharp focus in 2020. For example, the worldwide financial sector understands that the investment risk of global warming is real, and even before the pandemic, they had started to adjust their behavior accordingly.
Environmental, Social, and Governance: The global push for overall sustainability is clearly enshrined under three popular ESG goals, that is, Environmental, Social, and Governance goals. Investors increasingly apply these non-financial factors as part of their analysis process these days to identify material risks and growth opportunities. These trends will force businesses to take a harder look at how companies organize themselves to source and procure their supplies, precisely and effectively, select suppliers who will survive this upcoming disruption to future proof their supply chain to become resilient and sustainable. This means that ESG frameworks have now gone beyond a simple tick-box exercise.

Currently, many global and regional companies tend to favor large, centralized procurement functions, which can be better monitored and provide businesses with cost efficiencies involved in company-wide purchasing. Many have regional procurement hubs that source from varied regional suppliers. They have built long-term relationships as a major concern in the industry was lowering costs while maintaining standards and reliability.

However, procurement and logistics will become very difficult to manage in the new world impacted by the scourge of geopolitics, pandemic, and sustainability. According to Mr. Pande, “Instead of just in time, very often it may become just in case!”

Specialized Procurement Vendors

He envisages that specialized companies or vendors that are solely tasked with successfully navigating such changing environments will emerge. These specialized entities will then handle procurement functions for many organizations using specialized skills, scalable processes and state-of-the-art tech platforms to improve transparency in procurement. The norm will soon be “See better, buy better!”

The tasks that these specialized procurement vendors will focus on will be four-fold:
1. They use their preferred bulk buying position to drive price-effectiveness across multiple companies.
2. Leverage a diversified supplier base.
3. Providing a digitalization platform as a service.
4. Embedding ESG framework as part of procurement services, i.e. Organizations must put ESG principles into practice when managing supply chain impact, adopting a ‘Procurement with Purpose’ approach to boosting resilience from profit and planetary perspectives.

Such specialized vendors are becoming more prominent. Chain IQ in Zurich a spinoff of UBS Bank, decided to outsource its procurement and sourcing functions by creating a neutral entity. Large IT/business process outsourcing (BPO) vendors such as IBM and Accenture have taken on this task in addition to their existing services, or, as in the case of Indian procurement vendors like GEP and WNS Holdings, tech-focused companies setup by procurement specialists. Indian tech giant WNS is among heavyweights with solutions in the global market. Many of these entities provide some or all the above tasks and many have, often, in-sourced procurement staff from customers in a BPO deal that benefit both.

India can use its seasoned IT service providers to provide tech-led procurement services to take up new and exciting roles. Moreover, as China moves out as a clear choice for most as only a manufacturing hub, it’s an opportunity for India and other countries as the next potential supply source.
Pande suggested, “It’s time for businesses to comprehensively relook at their supply chain operations to consider resultant risks arising from triple disruptions that lie ahead. The winners will be those that take heed and restructure early.”