Dubai Logistics City... a practical vision and strategy

What is keeping Malta from adding value to its existing logistical resources, such as the Freeport terminals, Medserv Ltd., Oil Bunkering and their synergies by creating a logistics hub for the Mediterranean region?

Through a decade of experience going around different European countries, the Middle East and Gulf region and South East Asian countries I had various opportunities to notice and evaluate different visions and strategies which eventually became reality thanks to people with excellent vision and leadership skills.

The question is: What makes a country strategic, competitive and target-oriented?

Any strategic, competitive and target-oriented country needs a combination of different factors such as: strong financial resources, excellent leaders, a good location/position, available resources, quality and trained human resources etc...

These arguments are all valid and make sense but in the case of Malta, do we have these qualities to make us strategic, competitive and target-oriented?

Location and position is not an issue because our location is strategic. I believe the vision is there but we lack the implementation of the right strategy by the right people. Results are far away from being reached at the time when we should be competing with our neighbourhood countries in the region.

Another element is our human resources. Do we have:

• The right people in the right places?

• Taking the right decisions at the right time?

• Taking into consideration the cost and service elements?

My answer is no! Most of the decisions are either taken late, wrongly or not even taken at all.

What is keeping the country from adopting the right strategy (movement of people and goods) and implementing it in the right way at the right time at the right cost with the right people?

The logistics industry has been outpacing economic growth in most European and East-Asian countries for the past decade. To quote a few statistics:

It represents eight per cent of the country's GDP in both European and East-Asian regions. In Singapore the logistics industry's growth rate is 11 per cent compared to the domestic GDP growth of six per cent. The worldwide logistics growth last year was above 10 per cent vs. global GDP growth of four per cent.

A strong contributor to the growth of the logistics industry is the trend of global sourcing resulting from the decision taken by many companies to source or produce in low-wage countries like China, India, and Eastern Europe.

As a result, logistics costs account for an increasing proportion of the overall cost of goods sold. For example, logistics-related costs can account for up to 30 per cent of the cost of goods sold. Being proficient in operational processes and meeting shortened customer lead times has become vital not only at company level but also at country level.

Malta needs to constantly explore new and innovative concepts to use supply-chain strategy as an edge against region competitors, thus turning the local supply-chain into a company's strategic asset.

What has made Dubai an icon to attract foreign business and a role model in the region as a logistics hub?

Dubai's pre-eminence as an international trading and economic centre is due to its rapidly maturing, non-oil dependent economy and a forward thinking government committed to liberal, free market, business-friendly policies.

Already the regional centre for re-export, retail, leisure, aviation, IT and banking, Dubai has more than 60 per cent of the entire Middle East's imports moving through its borders. With a logistics market growing at a rate of 20 per cent annually, Dubai is now driving even further growth through the creation of the most comprehensive facility of its kind anywhere in the world - the Dubai Logistics City (DLC).

DLC is destined to become another of Dubai's outstanding commercial landmarks. This unique platform supports the Emirates' market leading position as a logistics hub for the wider Middle East and beyond. It caters for a market of more than two billion potential customers from southeast Europe, the CIS, Indian sub-continent, Middle East and Africa.

This pioneering platform for all thriving 21st century logistics companies serves the growing needs of multi-national companies involved in a range of different fields, such as high-tech and electronics; spare parts and after-sales; healthcare and life sciences; consumer goods and fashion; and relief aid and NGOs.

Dubai's innovative vision has finally turned the concept of multi-modal transportation and integrated logistics into reality and tailored it to meet the needs of a growing global marketplace.

A total logistics solution

Since DLC will be serving a wide cross-section of industry sectors and service providers, it will create a diverse and uniquely focused tenant mix such as

• leading global and regional manufacturers and trading companies;

• a broad spectrum of logistics service providers, including airlines, integrators with dedicated regional sorting centres, regional and global freight forwarders and third party logistics operations; and

• multi-national companies involved in high-tech, spare parts, healthcare and life sciences, consumer goods and related industries, relief aid and NGOs, as well as a wide range of value added services.

Since we have successfully managed to attract SmartCity to Malta, I believe that there are other opportunities calling us to take the right decisions at the right time with the right people and with the cost and service model in place.

We have the right place, therefore I think it is time to have the right strategy and take the right decisions.

Alex Borg, MCIPS (Stam), MIM, MILT UK, a trainer and consultant in Logistics and Supply Chain Management, is also the managing director of SSM Group Ltd (www.ssmgroup.org), a training and consultancy firm specialising in logistics and supply chain management. SSM Group Ltd is also the local representative of the Chartered Institute of Logistics and Transport (CILT) - UK.