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Bi-monthly publication of CSS Group

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Lighthouse
  • Call +971 4 883 1303
  • Mail info@cssdubai.com
  • Menu
    • Home
    • About
    • Services
      • Global Freight forwarding
      • Ocean Freight Management
      • Supply Chain Management
      • Land Transportation Management
      • Industrial Packing, Crating & Lashing
      • Air Freight Management
      • Projects Oil & Energy
      • Exhibition Event Logistics
      • Automobile Logistics
      • Art Logistics
      • Non Vessel Operating Common Carrier (NVOCC)
      • Hospitality & Hotel Logistics
      • Multi-modal Operations
      • Container Freight Station (CFS)
      • Yacht & Marine Logistics
      • E-commerce Fulfillment
    • Locations
      • Dubai
      • Abu Dhabi
      • Sharjah
      • Ras Al Khaimah
      • Bahrain
      • Oman
      • Qatar
      • Saudi Arabia
      • India
      • Sri Lanka
    • Careers
    • Track & Trace
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      • Customer / Agent
      • Employee – Portal
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      • CSS India Login
    • More+
      • Lighthouse
      • Sailing Schedule
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    • Contact Us
  • Login
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  • TRACK & TRACE
  • LIGHTHOUSE

Chairman’s Message

We have set sail into 2022, and we brace ourselves for challenging yet exciting opportunities that will come our way. Covid-19 and its evolving variants will remain a central variable as we steer through. It is reasonable to predict that the longer the pandemic lasts, longer will be disruptions in ocean supply chains, and freight rates will continue to stay exceptionally high.

Keys to Success in 2022

We can already foresee supply chain issues, port congestions, driver issues, product shortages, and inflation. While the direct impacts of the pandemic may ease in the next quarter, we must prepare ourselves for the secondary effects. The global responses to these secondary effects of the pandemic may exert long-term impacts on supply chain functioning. Mitigating risks and responding with speed would determine our success.

At the CSS Group, we have consistently overcome challenges and are well equipped to face them. With our cumulative experience and varied skill sets, I am confident we are positioned to reach our vision for 2022.

Pandemic and The Growth of E-Commerce

We have set ourselves to exploring and providing new services in new sectors, expanding our foothold in new domains. Our foray into e-commerce is one of the many ways we seize the opportunities this pandemic has created. Pre-pandemic, the ecommerce sector reached a value of $22 billion by 2020. The coronavirus pandemic was a defining event, forcing businesses to rethink brick and mortar commerce. As many companies shut shop, ecommerce buoyed several others. By the end of 2023, the ecommerce market is expected to touch $62 billion in UAE.

UAE’s Strategic Weekend Shift

The UAE’s shift in its weekend classification to Saturday and Sunday from January 1st has aligned the United Arab Emirates with global markets. This move will positively impact businesses with increased ease in making deals and trade with clients overseas. More foreign investments, property transactions and liquidity at the local stock markets, with higher consumer spending, will boost UAE-based businesses across various sectors.

At CSS, this is a stepping stone to better productivity. We will be able to serve our international clients more efficiently and keep our UAE operations aligned with the rest of our offices across the globe. Historically, since UAE began its trading week on Sunday, a holiday for international markets, the interest in local markets and liquidity was low. However, we are set to see trading volumes are likely to go up once trading hours become more aligned with International business days. This is a welcome move and reinforces the innovative and progressive leadership within the UAE as they continue to roll out pioneering strategies within the region.

Bill Gates, the American software mogul, and philanthropist, said, “Success today requires the agility and drive to rethink, reinvigorate, react and reinvent constantly.”

At CSS, agility and drive should be the force of momentum as we move into newer sectors and embrace the opportunities that come our way. I commend each of you to be champions of speed and innovation, energizing us to conquer greater heights.

CSS BAHRAIN A STORY OF CONQUERING THE ODDS

Established in 2019, CSS Bahrain has come a long way. When operations started in early 2019, the team at Bahrain saw just two months of operations in full swing before the pandemic, and subsequent lockdowns and restrictions hit them.

The Island Nation of Bahrain – A Strategic Location

The Kingdom of Bahrain is geographically positioned as an ideal hub to expand and strengthen transportation and logistics foothold in the GCC and the world. Bahrain offers convenient access to the GCC market by air, road, or sea with advanced and interconnected transport infrastructure. The GCC’s largest economy, Saudi Arabia, is also merely a half-hour drive away from the famed King Fahd Causeway. The country also services a business-friendly environment backed by a skilled local workforce, competitive operating costs, and ease in customs clearance times.

Bahrain is also expected to develop its infrastructure with an investment of nearly $32 billion and further expand and connect its transportation network both locally and internationally.

CSS Bahrain – A Neutral NVOCC

CSS Bahrain works as a neutral NVOCC with its service offerings in Air & Sea Freight, Land Transport, and Projects. CSS Bahrain was established to become a preferred partner, maintaining excellent relationships with leading carriers ensuring competitive rates and services to its valued clients. CSS Bahrain offers turnkey project forwarding solutions to worldwide destinations, with hands-on management and a team of highly experienced project professionals. The team customizes our services according to the specific requirements of individual projects and client requirements.

Overcoming the Pitfalls of the Pandemic

The unanticipated lockdown led to stringent restrictions in direct visits to customers for more than a year. However, the team at Bahrain, captained by Mr. Amal Hareendran, Branch Manager, and competently supported by Mr. Udheesh Uthaman, Business Development Manager, and Mr. Bhanu Nazeer, Team Leader – Customer Service & Operations along with the commitment of entire team members in front office & back office helped to assuage these troubled times. They were quick to adopt the newest technologies available to provide the best service to customers while ensuring minimal disruptions in the supply chain due to the pandemic.

During and post the pandemic, the precarious nature of the market required a high level of commitment, diligence, and perseverance by the team, compared to pre-Covid times. The pandemic affected the staff and saw its impact on various stakeholders. There were delays in the vessel and port operations, a highly imbalanced logistics supply, and unpredictable space and equipment constraints.

Many of these operational snags called for manual intervention to ensure smooth execution and delivery. Today, Team Bahrain can proudly say that they have managed to achieve customer service at the highest level. Mr. Amal Hareendran was elated as he spoke about his team’s commitment, “We were able to raise CSS Bahrain once again in the market, upholding the goodwill and highest service levels we had built up over the years.”

The CSS Bahrain leadership team emphasized that they were not rushing in the due course. Nevertheless, have steadily accelerated CSS’s growth and market share. CSS Bahrain now holds a different name for the highest quality in customer service catering to multidimensional logistics.

Better, Stronger, and Ready to Conquer

The year 2021 has been a very good year for CSS Bahrain, having done exceedingly well in servicing customer logistics requirements in the high quality of service possible despite the challenges rocking the shipping industry. While the challenges continue to persist, CSS Bahrain, as they say, is a call away to provide the best possible solutions for the customers 24/7.

Today, having completed more than two years of operations after relaunching with new branding, CSS Bahrain is stronger than ever. Feedback from the market and customers reaffirm that the team has successfully weathered a difficult season. Surmounting multiple challenges thrown by the pandemic, CSS Bahrain has exceeded customer expectations and blazoned the tenets of the CSS brand.

The Way Forward

The new year has set the team at CSS Bahrain focused on scaling new heights. In 2022, Bahrain would aim to start maximizing Direct LCL service to Bahrain, aspiring to become the NVOCC leader in the market within the next two years by providing excellent service, better rates & faster transit to the LCL customers already commencing services from Spain, Nhava Sheva (India), Italy. The team also plans to start Direct Services from other destinations in Europe and China shortly.

The team also plans to start Direct Services from other destinations in Europe and China shortly. CSS Bahrain has also become one of the market leaders for LCL Exports from Bahrain, where they service every week via Jebel Ali to several destinations. CSS Bahrain office plans to expand further and build its team by the first Quarter of 2022. The mission is to expand and serve a larger pool of customers in Bahrain in an even better manner offering customized logistics solutions.

Looking back, CSS Bahrain has marched on resolutely amidst some demanding times. We commend the team and the staff for their spirited endeavor and wish them the very best as they continue to move forward.

CSS DELHI CREATES HISTORY WITH RECORD TEUS

CSS Delhi made history by closing the highest number of TEUS in import containers. A first time for CSS Delhi and the New Delhi consolidator fraternity, the Delhi team reached the milestone of 274 TUES in import consolidation.

Mr. Rajeev Kumar, took over as Sr. General Manager CSS North India Operations a year ago and achieving this milestone is a feather added.

He is ably supported by Mr. Prabhakar (Import Head), Mr. Praveen Gusain (BDM), along with able Overseas Sales coordinator team, Mr. Atul Jaiswal, Mr. Anil, Mr. Harikesh, and Mr. Roshan.

The Delhi office was star ted fourteen years ago and has experienced competition prevalent to the geographical location. The Delhi office caters to import and export, with a thrust on import business. Maintaining loyalty amongst consignees has been an uphill task. The market is vulnerable to new entrants offering lower rates, thwarting growth and market share.

Mr. Rajeev Kumar said, “We’ve been among the top consolidators for quite some time, and now we have become an established brand name in the Delhi market. The team created history by recording the highest ever Import TEUs for any consolidator in the Delhi market.”

Mr. Rajeev would like to recognize the efforts of Mr. Sumeet who handles debit notes and reconciliations, and also other members who functions tirelessly.

Special applauds for Mr. Chandan and the CS Team, Accounts Team, Mr. Sudeep and his team.

A truly remarkable feat, CSS Delhi has proved its potential and can proudly affirm its march to scaling a greater peak.

RESPECT IN THE WORKPLACE!

“Respect is a feeling when you treat someone well for their qualities or character traits, but respect can also be a manifestation of dignity towards people.”

Respect should be the norm in the workplace, regardless of personal feelings. Team and managers should respect each other as it creates a decent work environment, which increases productivity. It is an essential element in every workplace as it helps the team to work hard as their efforts are appreciated. Team members will not necessarily love or admire the personalities of their leaders or colleagues, but they still need to respect their work to achieve their goals and be professional.

            By: Abhilash Nair
       Global CEO of ISS Relocation
Employees value diverse types of respect:
  •  Respect should be shared equally with all team members.
  • Respect is ensured by courtesy and creating a space where each member of the group is valuable.
  • Well-earned respect or professional achievement lies in recognizing individual employees for quality tasks performed.
  • The manager can highlight employees who have exceeded expectations.
  • It is a confirmation that each employee has unique strengths and talents.
  • The respect earned meets each person’s need to be judged for superior performance.

Once you understand why respect is important, it becomes even more important. You will begin to understand why your colleagues are responding in certain situations and take steps to create a more positive work environment with everyone involved. When people feel respected, they show respect for others.

Some of the benefits of respect in the workplace are:
  •  Respect Reduces Stress – Reducing stress is especially important for employees’ health in the workplace. Stress-free employees feel more comfortable sharing ideas and working with colleagues to achieve their goals. Increased respect and reduced stress have mental and physical effects on workers’ health.
  • Respect Increases Productivity and Collaboration – Respect helps employees think innovatively and work hard as they know their ideas will be appreciated. Such workplaces become opportunities to learn from each other, where both employees and managers develop their skills. Once your employees start collaborating, crosstraining and informal learning can be done across all areas of your company.
  • Employee Satisfaction – Employees can be happy with their work and leave feeling proud of what they have done at the end of the day. This sense of satisfaction from employees can benefit employers overall. Satisfied employees usually want to stay with companies that value them and seek ways to advance or develop their careers. Happy employees are more likely to apply for internal promotions and lead their teams with the same respect and care they value. Lower employee turnover reduces revenue and time spent on training and onboarding.
How to Create a Respectful Environment in the Workplace?
  •  Do not Gossip at the workplace: If the news is not confirmed, it is inappropriate to provoke discussion of the topic based on rumors. This harmless act can cause worrisome psychological damage to a person, so avoid doing that.
  • Do not use Profanity: Even if the intention is good, do not use harsh language or verbally insult someone for any purpose.
  • Greet People at Workplace: This is another civilized behavior in workplaces. Even if a person is the busiest person in the world, they will still find time to respond to someone who is greeting with the same empathy. Do not ignore people’s greetings; walking past them without even smiling seems extremely rude.
  • Count an Employee Contribution: Appreciating employees’ contribution means that they are performing well, and giving due recognition to the employees’ efforts encourages them to work hard. When employees are attributed, their motivation is increased, and if their challenging work is not appreciated or attributed, they will be disheartened and become less productive.
  • Do Not Discriminate Against People: Creating prejudices against a person based on their race, gender, age, intelligence, and appearance should not be promoted at the workplace.
  • Do not be Insensitive to Employee Needs: Try to effectively address the feelings and needs of others, such as giving a colleague sick leave or giving maternity leave to someone. This makes employees happy and satisfied with their workplace.
  • Distraction During Work: Avoid talking on the phone during a meeting. Not greeting team members and managers are all activities that affect everyone and create a disturbance in the workplace.
  • Strong Communication Practice: Do not ignore employees’ phone calls and emails & do not disclose the contents of confidential emails to people outside the organization.
  • Defend Employees: Defend your employees and defend them before company management when necessary. If certain mistakes were made in your department, in a conversation with the company’s director, in no case shift the blame on employees, but speak on behalf of the entire department. Some department heads often try to shield themselves personally and blame a particular employee. If you strive to create a strong and friendly team, learn how to intercede with the leadership and solve the problem individually.

The Effects of Lack of Respect at the Workplace – Conversely, a lack of respect can do real damage. Eighty percent of employees who are not respected in the workplace spend considerable time thinking about poor managerial attitudes, and 48% deliberately reduce their performance. Also, disrespect is often spread among colleagues and transferred to clients. In all but the most toxic workplaces, fostering a respectful atmosphere in an organization does not require an HR policy review or other formal changes. Instead, there is a need to constantly search for different methods by which respect can become an important part of the workplace.

Disrespect leads directly to a serious loss of productivity, as a huge amount of time is spent on conflicts or trying to resolve them. Rude behavior, inappropriate tone, inappropriate activities such as being late for appointments, sending rude and unwanted emails to colleagues, gossiping, manipulating clients and colleagues with misinformation, and wasting time surfing the internet, instead of work. Also, it can escalate into illegal dismissal or harassment lawsuits.

Ignorance at the Workplace – When employees ignore their colleagues or opinions, those who are not respected tend to be defensive, making it difficult for them to trust someone at work. In such an atmosphere, everyone feels a little hostile, which indirectly affects their productivity and performance at the workplace. When managers ignore their employees or deny their opinions, they become unproductive as they constantly ignore to appreciate their challenging work. According to the Department of Public Human Resources Management of the US National Institutes of Health, effective teams are the foundation of business success, but disrespect from colleagues makes teamwork impossible. People are moving from command consciousness to self-preservation. Rudeness is also insidious because it is difficult to justify. This does not sound like overt verbal abuse or violence, but it leads to a lack of cooperation, open hostility, and mistrust between colleagues.

Impact of a Respectful Work Environment on Business Goals:
  •  Respectful employees work effectively and produce better and unique ideas that increase an organization’s market share and revenue.
  • Respect helps build strong teamwork, which is necessary for generating profit.
  • A strong and positive relationship with clients is necessary as it helps increase revenue, and a respectful work environment helps employees work effectively to achieve maximum client satisfaction.
  • A respectful work environment helps employees share their ideas and concepts without fear, and such interactive workplaces can easily stand out in a competitive market.
  • Reducing politics in the workplace will also help increase the productivity of teams.
  • Respect for the workplace will help improve communication between colleagues, improve teamwork, and reduce stress as the workplace is peaceful.

Give respect and get respect!

CSS CONDUCTS AN IN-HOUSE CRICKET TOURNAMENT

On 8th January, CSS rolled out a series of cricket tournaments for our employees. The matches were held at the Vision Cricket Center, Hatta Road in Dubai.

Most of the matches were played as limited over a series of 8 overs. A truly exciting event for CSS, the tournament was a breath of fresh air for the employees after the pandemic-induced restrictions and lockdowns of the past two years.

There were four promising teams with striking names representing various departments of the CSS family. The teams are:

The teams were:

1. CSS DXB Royal Strikers

2. JAFZA Super Giants

3. CKL Panthers

4. ISS Mission Squad

The most awaited final and the losers finals of the CSS in-house cricket tournament were held on 20th February 2022. JAFZA Super Giants and ISS Mission Squad won two matches of the six league matches. While both CSS DXB Royal Strikers and CKL Panthers won one match.

Scintillating Finals

The grand finale was slated to be played between ISS Mission Squad and JAFZA Super Giants and losers finals between CKL Panthers and CSS DXB Royal Strikers. The grand final was a limited ten-over match. It kickstarted at 2.52 pm, with the JAFZA Super Giants winning the toss and choosing to field. The ISS Mission squad’s batting department was on fire. Yaseem Baleem’s 42 runs from just 17 balls and his five massive sixes put ISS on its winning path. He was well assisted by Anoop, who took 23 runs from 14 balls. ISS Mission squad put up an impressive 112 /7 after ten overs. Vipin Ashok of JAFZA was their star bowler with three wickets in his kitty.

With a massive total on the board by the ISS batsmen, the bowler had to match the score! The ISS’s bowlers were as proficient as their batsmen. Balraj and Sanil took 4 and 3 wickets, respectively. Added to this, Balraj’s tight bowling, with an economy of 4.50 per over, won him the “Player of the Match.” ISS Mission squad restricted JAFZA to 67/9 after ten overs. Muhammed Rowmahs (JAFZA Super Giants) put up a total run tally of 15 runs from 6 balls but could not see his team through!

ISS Mission Squad was indeed on a “mission” that won them the Grand finale by 45 runs.

The Losers Finals

The losers finals took place between CSS DXB Royal Strikers and CKL Panthers. Both teams showed good batting, bowling, and fielding skills. CSS DXB Royal Striker, who won the toss, elected to field. Nadeer and Gopan of CKL performed well in the batting and bowling departments. Outstanding bowling by Shibu and Sadaqat (CSS DXB) combined with fielding performance by the team restricted CKL Panthers to 71/4 in 8 overs. But it was the batting prowess of CSS DXB Strikers that outshined. Harshith Haridas Harish and Mohammed Aksan put 68 runs on the board.CSS DXB Strikers achieved 72 runs in 5.4 overs with just the loss of 2 wickets. Harshith Haridas Harish was the match player for his 38 runs of 19 balls. CSS DXB Striker took third place in the series with an eight-wicket victory.

The tournament’s best batsman was awarded to Muhammed Rowmahs of JAFZA Super Giants with a total run tally of 139 runs in 3 matches played. He held an impressive average of 69.5 runs. His highest run-scorer for the tournament was 64. Indeed, an asset in the batting department. The bowler of the tournament was Yaqoob. His total wicket haul was eight wickets in 4 matches placed. His economy rate was about 5.50 runs—a brilliant bowler for the ISS Mission squad. The fielder of the tournament was Krishna, with a total of six dismissals. He was the most agile and athletic player in the tournament in team CSS DXB Royal Strikers.

The tournament’s most valuable player was Yaqoob (ISS Mission Squad), showing exemplary skill in all three departments -batting, bowling, and fielding!

The league matches before the Grande Finals were played on 8th February. The highlights of these matches are as below:

Stellar Show by ISS Mission Squad

The series kicked off with CSS DXB Royal Strikers and ISS Mission Squad matches. Team ISS Mission Squad won the toss and opted to field.CSS DXB scored 56/6. By the end of 4.1 overs, ISS achieved this target and lost only one wicket. ISS mission won the match by nine wickets. Balraj of ISS Mission was declared the match player because of his excellent performance in both batting and bowling departments with 26 runs and two wickets.

JAFZA Super Giants Puts A “Giant” Performance

In the match between JAFZA Super Giants and CKL Panthers, team CKL who won the toss elected to field. JAFZA Super Giants put up a “giant” score of 137 in 8 overs. CKL Panthers managed only 72 for 5 wickets by the end of 8 overs. JAFZA Super Giants won the match by 65 runs. Hafiz Shezad was adjudged the man of the match.

A Tight Contest Between Royal Strikers and The Panthers

In the match between CSS DXB Royal Strikers versus CKL Panthers, CKL opted to field after winning the toss. In 8 overs, the Strikers had 66 runs with six wickets down. CSS DXB team could not restrict CKL from achieving 70/5 in 6.3 overs. CKL Panthers won the match by five wickets. Sreerag was the player in this match.

JAFZA Super Giants’ Winning Streak

Post lunch, the matches resumed, JAFZA Super Giants played against ISS Mission Squad. ISS Mission Squad won the toss, and they elected to field. They scored 100/6 at the end of 8 overs. JAFZA limited ISS scoring to 72/5 in 8 overs. JAFZA Super Giants won this match by 28 runs. ISS Mission Squad Hafiz Shakoor with 22 runs and Yaqoob’s impressive haul of 5 wickets could not see ISS Mission through. The player of the match was Muhammed Rowmahs of JAFZA Super Giants.

ISS Mission’s Smashing Win

By around 4 pm, another match was played between ISS Mission Squad and CKL Panthers. CKL Panthers again won the toss and were ready to field. This was a highscoring match, with ISS Mission scoring a big score of 123/2 in the eight overs, but team CKL Panthers scored only 106/7 after eight overs. Vishnu of ISS Mission was adjudged as the player of the match.

Consistency Wins the Game for Royal Strikers

The final match was played between JAFZA Super Giants versus CSS DXB Royal Strikers. However, this was six over match. JAFZA Super Giants, who won the toss, elected to bat. JAFZA Super Giants scored 78/3 in the six overs. But it was CSS DXB Royal Strikers’ consistent batting and bowling performance that won them the match at 79/3 in 5.4 overs. Bitto was named the player of the game. Indeed, that was a nail-biting finish to the last of the matches.

Team sport is a powerful fuel for bonding and inculcates discipline and teamwork. At CSS, we believe that these types of team sports will boost employee engagement and help in de-stressing work pressure.

THE PANDEMIC – A BOON FOR SHIPPING COMPANIES AND A BANE FOR SMES

The year 2022 does not indicate any likelihood of a sudden decline in ocean shipping rates. This means another year of booming profits for global cargo carriers. However, small businesses and consumers are paying the price. They are forced to pay sky-rocketing freight costs as cargo giants mint profits. The market shows the nature of a spot market where the price of a 40-foot container to the U.S. from Asia stood at $20,000 last year, inclusive of surcharges and premiums, which had initially been at $2,000 a few years ago.

Unlike the big giants like Walmart Inc. and Ikea, who can tackle the high rates, the small exporters and importers cannot easily pass through these costs or weather long periods of stretched cash flows. Amruth Raj, the managing director of Green Gardens, a vegetable processor, says, “Small and medium-sized enterprises are being badly affected. They exploit our desperation.”

The future spells 200% higher elevated prices as tight container capacity and port congestion have maxed up chances for long-term rates in contracts. Achil Yame, Cameroon National Shippers Council, stressed that this inequality is heavy on the African countries. “If nothing is done to reverse the trend, the risk in terms of inflation and food security can grow very, very high.”

Windfall Leading to Inflation

The British International Freight Association is one of the latest who has called on the U.K. government to investigate the “distorted market conditions” in the global container shipping market arena. The surging shipping transportation cost has been responsible for stoking inflation and clouding the recovery.

The Kansas City Fed economist Nicholas Sly has researched and found that a 15% increase in shipping cost leads to a 0.10 percentage point increase in core inflation after a year. He stated that shipping rates are currently a persistent challenge. “These types of shocks tend to last for 12 to 18 months.”

Twenty-five years ago, 20 companies controlled half of the global capacity. Today, it has come down to 10 container lines that contain nearly 85% of the capacity for shipping goods by sea. These lines are based in Asia and Europe, the more familiar ones being Maersk, MSC, France’s CMA CGM SA, and China’s Cosco Shipping Holdings Co. Nine of them operate under vessel sharing agreements called “alliances” though being competitors. These alliances allow them to coordinate schedules and share ship space.

Rising Freight Rates

The pandemic showcased how the carriers drove the market with a bullish frenzy by holding the economy and then ramping it with crazy rates. The contract rates on ocean freight locked in high shipping costs into 2023. A Pennsylvania-based importer MCS Industries Inc., filed complaints against MSC and Cosco, stating that they have been “Operating in tandem to exploit the Covid-19 disruption to profiteer at the expense of U.S. consumers.”

James Hookham, Global Shippers Forum Director, states, “We believe this market needs some investigation to make sure those customers are not being abused. This market is not working to the benefit of everybody.” Mario Cordero, former chairman of the FMC and Executive director at the Port of Long Beach, said it’s a “confluence of factors” that have led to the tangling of the global supply chain in the wake of the pandemic. He states that “I’m not suggesting we’re over this.”

During the first lockdown in March 2020, the Chinese and American economies reopened. Government stimulus payments began flowing, bringing consumer demand for goods such as exercise bikes and home-office desks. By the third quarter of 2021, world trade in goods hit a record $5.6 trillion and was on pace for an equally solid number in the year’s final three months.

Demand Driven by Shortages

The sudden demand disrupted the supply chains as most U.S. ports couldn’t process imports fast enough, trucking companies fell short on drivers, and warehouses ran out of space. Because of port congestion, fully loaded ships stayed put on California beaches for weeks. Suddenly everything halted.

In November 2021, the White House called on the Federal Maritime Commission (FMC) to “use all of the tools at its disposal to ensure free and fair competition.” Since then, the FMC has increased carrier alliances’ monitoring to better track trends and spot potential illegal behavior, such as artificially limiting supply or not competing on prices. The agency’s chairman, Daniel Maffei, says that there are little regulators can do to rein in more widespread potential under current U.S. law. “The fact is that it is very, very difficult, if not impossible, for the FMC to challenge these alliances for violating competition requirements,” said Maffei, noting that he has no evidence that they currently are. “We don’t have the practical tools necessary to challenge it.”

Last year a bipartisan bill was passed in the U.S. aimed to reform U.S. shipping laws. It would give the FMC greater authority, prohibit carriers from discriminating against American cargo, and give businesses more power to challenge carrier fees. The European Commission is “closely monitoring the container shipping industry and is aware that there have been large price increases,” the commission said in a statement. Lori Fullmer, vice president of logistics and carrier management at BassTech International, says she’s had shipments rejected multiple times, “In some cases, there was no getting space on a ship,” she said.

The Sri Lankan Scenario – Slumping Capacity

Exporters of the apparel manufacturing industries in Sri Lanka are struggling to meet orders as carriers shift their vessels to lucrative routes connecting China to the U.S. and Europe, said Sean Van Dort with the Joint Apparel Association Forum Sri Lanka. “Yes, they have to make money, don’t get me wrong — but when you have ten times, twelve times, sixteen times higher freight rates — there’s something radically wrong,” he said.

ROAD LOGISTICS IN INDIA SET FOR COMPOUNDED GROWTH OF $330BN BY 2025

The recently released ‘Inter-City Logistics Market Study’ has estimated a buoyant growth in the road logistics market in India in the next five years. The report by RedSeer’s early-stage research arm, RedCore, assesses a compounded annual growth rate (CAGR) of 8 percent, taking the inter-city road logistics to spend from USD 209 billion in 2021 to USD 330 billion by 2025.

Inter-city Road Logistics

Today inter-city road logistics accounts for nearly 87% of the total road logistics spend. The study indicates that the swiftly growing e-commerce market and retail sales sector have fueled an upswing in road logistics. The on-demand/spot market currently accounts for nearly 63 percent of the total inter-city road logistics spend, and the contract market takes up the rest of the market share. On-demand/spot cargo transport caters to unfulfilled and urgent demands, such as freight associated with defense, agriculture, food, building material, FMCG, PSUs. Such clients usually engage in moving goods immediately and prompt settlements.

According to the RedCore study, metros bring in approximately USD 84 billion, nearly 40 percent of the total inter-city logistic market. Road logistics today make up for a sizeable 60 percent of the overall logistics spend, which accounts for nearly 14 percent of GDP in India. The research notes that the relation between logistics cost and GDP is a direct indicator of the business competitiveness of India concerning transport infrastructure, freight management, and ease of doing business.

Starts-up Rule the Roost

This sector that is ripe for the picking has seen an upsurge in the number of startups that are consciously addressing industry pain points and changing the rules of the game. Innovative business models have sprouted, disrupting the sector and delivering value throughout the operating cycle. From discovery and booking to value-added services and delivery, new businesses engage with consignors, freight carrier owners, and truck owners to take this massive economic opportunity.

According to the study, the basis of most of these new enterprises is leveraging technology to build an accessible marketplace connecting stakeholders. Startups are making the on-demand/spot freight market direct and easy to engage in, such as connecting truck owners with verified transporters with commission-free, instant bookings. Regulatory changes, and policy improvements such as Logistic Efficient Enhancement Program (LEEP), Digital India, and Make in India, among others, have also propelled growth in the sector, the study notes.

E-COMMERCE GROWTH PROPEL LOGISTICS AND WAREHOUSING DEMAND

The e-commerce sector will continue the unprecedented surge it witnessed in 2021. According to a JLL survey, this strong growth and increased express and parcel deliveries, third-party logistics, healthcare, life sciences, and construction and materials will generate significant demand for warehouse and distribution facilities.

The Certainty of Uncertainty

As the physical retail sector grapples with the new normal, consumers will continue to flock to online stores. A study conducted by First Insight and the Baker Retailing Center observed that 98% of retail executives surveyed expect supply chain challenges to continue to impact the retail sector throughout 2022. Today multiple variables affect the retail and logistics scenario.

Product shortages for critical components such as semiconductors and computer chips will affect m a n u f a c t u r e r s , d a m p e n i n g technological innovation. As businesses pass on increased operational costs to consumers, prices continue to be inflated. Further, labor shortages, regulatory implications, political embargos, travel restrictions will continue to jostle business plans.

Amidst this, customer expectations are still really high. Research by McKinsey & Company and RILA noted that more than 90% of consumers expect a 2 to 3 day delivery as the baseline, of which 30% of respondents expect same-day delivery. The retail sector had already embraced the digital shift. Nonetheless, the pandemic has propelled companies to revisit their speed, inventory stocking, and new technology. E-commerce has made the highest year-on-year growth globally, a standout performer in the logistics sector. The US, Europe, and China accounted for nearly 16%, 22%, and 30% of the total logistics and industrial leasing, respectively.

Last year, companies experienced a global shortage of transport capacity and delivery drivers. The companies that will outperform in 2022 will swiftly adopt new technologies and automation. The McKinsey report notes that the key imperative for retailers is to “become omnipotent on omnichannel”. Consumers will increasingly prefer retailers based on the end-to-end experience.

Key Forecast for Logistics

This strategic cognizance will fuel demand for 3PL services. Outsourced third-party logistics (3PL) services will continue to grow, offering multiple location-based distribution facilities that provide more efficient order processing and fulfillment. Growth of micro warehouses in urban areas and operating more than one distribution facility will enable better management of order volumes, inventory and delivery times.

There will be a conscious move by branded goods manufacturers in fulfilling direct-to-consumer (D2C) orders. Directly marketing and selling to their consumers offer manufacturers better control over branding, quality, and customer experience.

Optimizing reverse logistics will also be a crucial factor. E-commerce companies must rapidly grasp managing the flow of goods coming back as efficiently as the goods going out. The cost-benefit analysis of the value of the goods returned against the operating costs incurred in return must be assessed.

Last-mile logistics will also become a make-or-break strategy in e-commerce logistics. This critical process involves the conclusion of the delivery to the customer. The overall delivery experience and customer satisfaction are highly dependent on the last mile service. There is considerable involvement by 3PLs to focus on “last mile as a service” (LMaaS). Companies offer affordable rates by managing transport routes and providing live delivery updates to customers. Technology and innovation have made much progress in addressing the customer experience in the last mile challenge. Companies now use light electric vans, eCargo bikes, autonomous vehicles, and drones.

Sustainability in logistics is another emerging trend as businesses increasingly look at this as a strategic imperative. According to a recent survey by McKinsey, consumers prefer brands that have actively adopted sustainable means in production and delivery. More than 70% of respondents were willing to pay a 5% premium for products of equivalent quality produced by more sustainable means. E-commerce companies that have endorsed sustainability as their strategy and adopted greener with more efficient delivery methods will see a significant advantage today.

Sustaining the Growth Story

According to the JLL survey, space constraint and sustainability emerged as the top two concerns amongst respondents as obstacles in sustaining the present growth in logistics demand. The limited supply of entitled land for logistics has had firms already delaying decisions. In several cities such as Toronto, New York, and Los Angeles, availability is lower than 3%. A similar concern echoed amongst 65% of respondents in Germany, China, the Netherlands, and Australia.

Secondly, adopting sustainable solutions that yield cost savings has to become the focus. An overwhelming majority (nearly 73%)  of the respondents rated improving energy efficiency as the highest priority globally. Presently, larger occupiers and developers with global and regional networks have adopted methods towards decarbonization. However, 90% of global respondents believe in investing in automation and robotics for improving supply chains to reduce carbon footprint. Technology will continue to play a significant role in transforming the logistics sector’s future.

Craig Meyer, President, Industrial, JLL said, “The number of unique active tenants has surged as companies rush to build up their e-fulfillment capacities and, despite a normalization of the market as the effects of the pandemic wind down, we expect to see this trend hold strong over the next three years.” E-commerce will continue to propel an enormous wave of industrial leasing globally in the next couple of years, increasing demand.

EMPLOYEES OF THE MONTH

  HAMEED ABDULLA – Messenger, Documentation, CSLC1 awarded by Giridhar Achyuthan, Group finance controller

 

NAUSHAD ALI – Cleaner, HSE, CSS HQ awarded by Joyel Netilas, Coordinator – HR

 

BIJU VIJAYAN – Forklift Operator, SCM Operations awarded by Sunil Kumar, Warehouse Incharge, SCM

 

RESOLVE SUPPLY CHAIN ISSUES WITH DRIVERLESS TRUCKS

Software developers are creating a significant breakthrough, working hand in hand with shipping companies. Software experts have come up with the concept of driverless trucks to meet the driver shortage woes faced by the shipping industry. With the onset of the COVID pandemic, shipping companies have been among the worst hit. Like JB Hunt Transport Services Inc., Uber Technologies Inc., and FedEx Corp., a few big-timers have been testing automated trucks. This new solution seems to be a long-term solution to an intractable labor problem.

Driverless Technology – Under Scrutiny

Sterling Anderson, a co-founder of Aurora Innovation Inc., responsible for testing driverless truck software with Uber Technologies logistics section, states, “Human drivers, by our nature, have to eat, sleep, and take breaks. What that leads to is enormous underutilization of these trucks and much slower movement of goods.”Tesla Inc. has introduced the Autopilot feature with a driver assistance system, which is the closest to autonomous passenger service but is constantly under scrutiny as safety advocates call the technology risk to motorists. Safety advocates warn that the technology is still unproven and has more chances for fatal crashes.

Advocates for Highway and Auto Safety Cathy Chase say, “What we see playing out on the roads with some cars claiming to have self-driving capabilities is giving people some pause. We should not be putting test products on the roads.”

Ariel Wolf, general counsel to the Self-Driving Coalition, spoke in favor of the new technology, “Autonomous trucks serve as an active partner to companies trying to address the truck driver shortage. He stresses, “It has to be safe, but we have to get these vehicles on the road as swiftly as possible”, adding that the trucker shortage is projected to keep growing, leading to price increases and delays.

Autonomous Trucks Can Be a Game-Changer

TuSimple Holdings recently completed the first fully autonomous semi-truck drive on open public roads, traveling 80 miles on public roads without a human driver from Tucson, Arizona, to Phoenix, Arizona. Alongside Waymo, the autonomous vehicle unit owned by Google p a r e n t A l p h a b e t Inc., also tried out autonomous tests of delivery vans with United Parcel Service Inc. with driverless rigs carrying freight.

Aurora Innovation with Uber Freight connects shippers digitally and hauling loads between Dallas and Houston terminals. Anderson is positive and anticipates that a fully autonomous version of the software will be available by 2023. “The business benefit is huge.” While a human driver takes two to three days to move a cargo load from Los Angeles to Dallas, a self-driving truck could make the trip non-stop in 24 hours. “That’s a game-changer for the industry when they can move goods that quickly and efficiently,” he said.

Greg Regan, president of the AFLCIOs transportation trades department, says, “We would be naive to think we could stop technological advancement. That’s never been our goal. But we have to make sure it is implemented safely, and we have to make sure that we are also looking at the economic impact of deployment.”

SAUDI ARABIAN LOGISTICS MARKET ATTRACTS LARGE INVESTMENTS

The Kingdom of Saudi Arabia is all set to become the region’s leading logistics hub. With the Kingdom’s vision for 2030, to strengthen its local and foreign investments in the economy, global logistics giants like Maersk and Aramex have reportedly invested in the Kingdom of Saudi Arabia.

On November 1, the global container carrier AP Moller Maersk announced its investment of $136 million to build an integrated logistics park at the Jeddah Islamic Port. In the same month, Aramex, the Dubai-based multinational logistics, courier, and package delivery provider, inaugurated Aramex Go’s new shipping platform for Saudi entrepreneurs.

The Burgeoning Saudi Market

The Kingdom has been heavily investing in new ports, airports, and enhanced infrastructure to boost its logistics sector and shift from an oil-based economy by 2030.

The Jeddah Islamic Port is said to have an investment of over $132 million. Strategically located on the Red Sea, the Jeddah Islamic Port links the East and West. The port is also the largest in Saudi Arabia and the second largest in the GCC for volume and cargo handling capacity.

The Saudi market’s attraction lives in its robust recovery from the COVID-19 induced global recession. According to the International Monetary Fund (IMF), the Kingdom has a projected economic growth of 2.8% in 2021. This spurt in growth rate is largely driven by rising oil prices and investments from its sovereign wealth fund.

NEOM – The Futuristic City

Under the name of NEOM, a futuristic city, is all set to host multiple projects to leverage the Kingdom’s strategy to become a mega logistics hub.

In 2017, the Crown Prince of Saudi Arabia, Mohammed Bin Salman, announced the launch of NEOM’s industrial city. The futuristic city of NEOM is located in Tabuk Province, in the northwestern region of the Kingdom.

He has also announced the launch of Oxagon, the industrial city set to be the largest floating industrial complex globally. It will also have one of the world’s most technologically advanced logistics hub.

The hub is located near the Suez Canal on the Red Sea, extending Saudi’s footprint over 13% of the total global trade movement passing through the Red Sea.

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

KEY DISTINCTION BETWEEN SMART SHIPS AND DIGITAL TWINS

In layman’s language, a Smart Ship is a vessel embedded with a large number of sensors linked with AI and Big Data for the collection and analysis of all possible data about the vessel, at rest and during the voyage. Whereas a Digital Twin is a virtual copy of the vessel generated in an off-shore office for conducting simulations and obtaining real-time and future data of the vessel, thereby enabling the shipping company to choose the best course of action.

While a Smart Ship relies on various IoT-based sensors attached to the ship for monitoring and analyzing the vessel in real-time and does not focus on running algorithm-based simulations. The Digital Twins rely on the IoT-based sensors on the ship to create a virtual image of the vessel for the sole purpose of running simulations and providing future forecasts.

Smart Ships focus on AI-based real-time data sharing of the vessel, thereby allowing real-time analysis and optimization, whereas Digital Twins rely on past and present data to analyze and optimize the vessel’s working even before the voyage begins.

Smart Ships use big data analysis for real-time strategic decision-making for all the stakeholders. In contrast, Digital Twins use big data analysis to influence real-time and future decisions based on billions of possible circumstances.

Smart Ships are less expensive and less technologically advanced, specifically when it comes to making strategic decisions, compared to Digital Twins. On the other hand, Digital Twins are more expensive, technologically advanced, and offer accurate predictions based on the available data compared to Smart Ships.

WHAT DOES THE FUTURE HOLD?

With China Shipbuilding Industry Corporation (CSIC) launching the Unmanned Freighter Project and Japan launching the Smart Ship Application Platform Project, the world is moving towards making the dream of Smart Ships a reality. The European Union has initiated the Maritime Unmanned Navigation Through Intelligence in Networks (MUNIN) project to build and develop a fully unmanned automated vessel by 2035. Similarly, Rolls Royce led, Advanced Autonomous Waterborne Applications (AAWA), is set to achieve the goal of autonomous ships by 2035. Globally renowned companies, such as DNV-GL, INTENS, MPA Shipping, SINTEF etc., have dedicated time and resources to develop Digital Twin in the maritime industry.

The digital and technological revolution has largely led the maritime industry to focus on technology-based automation in the shipping industry. The world which has already seen self-driving vehicles and unmanned spacecraft will soon see unmanned artificially intelligent ships sailing in the open sea. A simulated environment created by Digital Twins coupled with Smart Ship technology is no doubt the future of a safe, efficient, and progressing Maritime Industry.

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MARCH/APRIL 2022

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