How Saudi Arabia’s $18bn logistics industry is reaching out to the rest of the world | Arab News

2022-06-19 00:35:21 By : Ms. FT TENT

RIYADH: Transport is a key factor in Saudi Arabia’s economic growth, whether by land, air, or sea, an important part of government policy is based on the logistics of moving goods and people.

The Kingdom’s Ministry of Transport has committed to huge changes in the logistics industry to support its Vision 2030 program of social and economic reform. An important pillar for the transition to an economy that is less reliant on oil is transforming the country into a logistics hub that connects the rest of the world with the Gulf Cooperation Council region.

The logistics industry in Saudi Arabia is valued at $18 billion and is ranked as one of the most attractive emerging markets in the GCC, according to a report by warehousing and transport firm Saudi Bulk Transport.

Logistics revenue in the Kingdom is expected to grow at a compound annual growth rate of 6.7 percent between 2020 and 2025, in line with the government’s strategy to develop the sector, according to a report by data firm Ken Research. 

Much of this growth is overseen by Saudi Arabian government’s Transport General Authority, which is responsible for rail, sea, and land transport development.

“The Transport General Authority is ever-evolving and has introduced more forward-looking regulations to the land transportation space in Saudi Arabia,” Amit Agarwal, chief financial officer at regional transport firm TruKKer, told ArabNews. 

The business runs an overland freight network across eight countries in the Middle East and Central Asia with a fleet of over 40,000 thousand trucks.

Agarwal points out that Saudi Arabia is the “largest market” in the GCC region, adding that the Kingdom is a “key factor” in the company’s global expansion plans.

According to the Kingdom’s Ministry of Finance, an estimated $15 billion was invested in infrastructure and transportation projects across the nation last year. Saudi Arabia’s maritime performance ranks fourth out of 30 countries in cargo and vessel handling in terms of tanker loading speed, according to a 2021 report by the UN Conference on Trade and Development.

Trella, a tech-based logistics firm that connects carriers with shippers and currently operates in four countries including Saudi Arabia, says that the Kingdom is using the latest systems to boost its logistics infrastructure.

Trella founder Omar Hagrass told ArabNews: “Trella is extremely optimistic and committed to the future of the Kingdom, the economy is diversifying and seeking to use the very latest technologies.” 

The Kingdom has also begun to open up the market by allowing international companies to partner with local players to boost private sector operations, such as Saudi Logistics Services’ agreement with UK firm Classic Automotive Relocation Services last October. The deal sees the Jeddah-based business provide logistics support for all of the British firm’s car shipments that pass through the Kingdom’s main air, land and seaports, including Riyadh, Jeddah, Dammam and Madinah.

Observers also expect new technologies to be adopted as the Kingdom moves to upgrade its supply chain, with radio frequency tracking systems and drone technology set to play a strong role in the nation’s transport network.

DUBAI: Six years after the Dubai Roads and Transportation Authority laid the roadmap for driverless vehicles by 2030, smart mobility has swept the landscape with intelligent concepts that are changing the region’s social infrastructure. 

The move has already spurred sustainable cities into high gear with smart transportation such as autonomous shuttles, e-bikes and e-buggies set to own the roads. 

An excellent example of a fully-integrated residential project is Sharjah Sustainable City. This eco-friendly concept is powering a net-zero energy community with energy-efficient villas that promise to offer sustainable living at no extra cost.

Developed by Sharjah Investment and Development Authority in partnership with Diamond Developers, the sustainable city will host the best green technology, including solar-powered smart homes, bio-domes for vertical farming, electric vehicle chargers, driverless shuttles and a biogas plant.

“The UAE is the first country in the Gulf Cooperation Council to commit to net-zero by 2050; all growth and development must align with that commitment, which means we have to do our bit,” Karim El-Jisr, chief sustainability officer, SSC, told Arab News. 

Comparing smart mobility to a pyramid, El-Jisr explained that the bottom constituted soft mobility, including people who walked or cycled to commute. The SSC master plan covered this aspect by building roads with no zebra crossings. 

“There would be no need to cross zebra lines or intersect with vehicles to reach any of the 1,250 villas in SSC. The residents and visitors could connect to those villas on foot,” said El-Jisr.

The next pyramid level involved shared mobility, using electric buggies and concierge services.

“The concierge team would manage buggies, which residents can book over their smartphones. The concierge team can increase the numbers based on future demand,” he added. 

The topmost level of the pyramid featured electric vehicles, and SSC will encourage people to switch from gasoline to electric cars.

“We will provide charging stations throughout the development. It will be the highest density of charging points in any project across the GCC,” said El-Jisr, adding that there will be 80 charging points in the community.

The sustainable city is also studying the autonomous shuttle trials in Dubai to determine if they should implement them.

The story doesn’t end there. Last December, UAE-based sustainable transport company ION broke all barriers to mobility by launching the UAE’s first autonomous shuttle service along the Ajman Corniche.

The autonomous shuttle uses a public road between the Fairmont Hotel and the Coral Beach Hotel on the Ajman Corniche. ION is a joint venture between Bee’ah, the Middle East’s sustainability pioneer, and Sharjah-based Crescent Enterprises.

“In addition to deep learning technologies, the autonomous shuttle is equipped with 3D vision, automatic routing, navigation, IoT sensors for optimal safety, and motion sensors to open and close doors,” Nasir Al-Shamsi, director of sustainable mobility at Bee’ah, told Arab News. 

By receiving data from traffic lights and traffic signals, the autonomous shuttle detects the surroundings of the shuttle and sends an alert whenever it approaches a pedestrian crossing. 

Along with wheelchair accessibility, the shuttle has an emission-free design and can seat 15 passengers simultaneously.

Al-Shamsi said that about half of Dubai’s population does not own vehicles and relies heavily on public transportation, adding that autonomous vehicles are safer than human-driven ones since a driver could make a mistake that causes an accident.

“More than 90 percent of accidents in the UAE are caused by human error. If you translate that 90 percent, these are equivalent to billions of UAE dirhams. This loss by itself weakens the economy,” he said.

According to Al-Shamsi, the company is also toying with the idea of launching drone delivery solutions beyond the visual line of sight, which could lead to goods delivered between buildings. 

The company is currently testing the system and will soon launch the first trial in cooperation with the Sharjah Civil Aviation Department.

Bee’ah is looking into ways to incorporate micro-mobility through electric bikes and scooters.

Dubai-based Careem Bike is poised to become the world’s largest pedal-assisted docked bike-share scheme by deploying 175 stations next month.

The company initially introduced 800 e-bikes and 80 stations across the city under a 15-year partnership with Dubai’s Road and Transportation Authority.

“We just exceeded 2 million trips and about 10 million kilometers in the distance traveled, displacing about 450 cars in the city in terms of CO2 emissions,” Sami Amin, senior director of operations, Careem Bike, told Arab News, while adding that the company plans to expand to 3,500 bikes and 350 stations. 

Like most cities in this region, Dubai is car-centric, and the roads are not designed for cyclists. However, RTA is keen on transforming the area into the most cycle-friendly city in the world. 

With a clear focus on sustainable mobility, the company is exploring autonomous vehicles, delivery robots, and other electrified vehicles. “Driving sustainability is our core strategy,” said Amin.

Through sustainable cities, reducing cars, and implementing micro-mobility, communities will be more livable by decreasing the cost of transportation, making them accessible, and reducing the carbon footprint and general pollution. Smart mobility is all about communities.

RIYADH: Any goods delivery company will have a sinking feeling at the thought of short-term storage, with most warehouse operators insisting on minimum volumes and contracts of at least a few months.

Logexa, an online logistics platform launched by Husam Sendi and his co-founders in September 2021, turned the problem on its head. 

The company was born when the problem interfered with Sendi’s first shot at entrepreneurship.

After graduating from Oregon State University with a degree in supply chain logistics, he cut his teeth in the same sector as a supply chain manager, first with FMCG distributor Unilever and then with Ohio-based industrial packaging firm Greif International.

With that hands-on experience, Sendi launched his first startup in 2013, focusing on repackaging promotional retail items, such as a free bowl with a packet of noodles. His biggest client was his ex-employer Unilever, and that contract folded up when Unilever cut back its operations due to fallout from Brexit.

Sendi then moved into consultancy for transportation companies and, from there, expanded to storage services and solutions for his previous co-packaging clients. However, the business hit the wall when red beetles infected his warehouse.

“I thought that was the end of my business and career,” said Sendi.

But never one to say die, he continued to serve his remaining clients through his network of warehousing affiliates. That, in turn, gave him the idea to concentrate on storage solutions. However, he was wary of dedicating resources to warehouse space or human resources, both of which can pile up crippling overheads when a business goes south.

“But in 2019, I heard about digital transformation,” Sendi said. “I talked to a few people and explored the idea of digitalizing the current manual warehousing process. How about a program that accepts orders, collects payment and diverts orders to the warehouse?”

His idea quickly gained the recognition of prominent startup accelerators: first King Abdulaziz University, with a prize of SR10,000 ($2,665) and then the Taqadam program of King Abdullah University of Science and Technology, with a grant of SR525,000.

Sendi’s fledgling startup was bolstered by the addition of Husam Sabano, an old Unilever colleague with an academic background in industrial and systems engineering, and Khalid Nagadi, who had a doctorate in industrial engineering and over a decade’s experience in process management. Both of them came on board as co-founders.

Thus Logexa was born in March 2021, with Sendi as CEO, Sabano as CTO and Khalid Nagadi as COO. 

In fact, the COVID-19 pandemic turned out to be a blessing in disguise. Because everybody was confined to their homes, the company avoided the typical startup costs of hiring office-based staff.

“I would say we were lucky that we did not have to mobilize. We were all stuck at home, and all the work was online,” he said.

Sendi invested the KAUST grant into tech development and branding. The company was based on a simple premise: aggregating pallet spaces via tie-ups with warehouse operators, whereby it can offer temporary storage solutions to any entity that needs it — a business model known as third-party logistics.

“We decided to outsource the entire operation, so we have zero assets,” explained Sendi.

Logexa is an on-demand logistics platform. Many warehousing providers have a problem filling their spaces. But they don’t want to deal with small and medium enterprises that involve too much follow-up and chasing invoices.

“Many SMEs do not have access to proper warehousing because they lack the volume. Nor are they good at negotiating rates. Even if they do so, they will be committed to long-term contracts, which is very costly.

“We serve people based on their needs — people with overflow challenges, small volumes, or small businesses who cannot negotiate deals but require storage solutions at a high standard — through our online platform. It’s a win-win for the warehouse operators and our clients,” he said.

Logexa is now active in Jeddah, Dammam, Riyadh, Khamis Mushait, Qassim and Rabigh, registering a steady growth of 30 percent month over month, starting with 24 pallet positions to over 2,700 today.

“We measure our performance on three aspects: number of pallets we store, revenue and the number of customers,” added Sendi.

The company achieved $40,000 in revenue in March, $30,000 in April and $100,000 in May. In terms of clients, they started with four and now have 75.

The company aims to further expand in terms of services, branching out into transport and last-mile delivery, and geographically, with plans to launch in Egypt, Turkey and South Africa, among other territories.

The company’s rapid progress, coupled with its robust business model, has attracted significant investment. Their first funding round, in September 2021, brought in $300,000 from Riyadh’s Seedra Ventures, with a further soft commitment of $1.3 million from an undisclosed source in a second round that will be closing in June.

Sendi sees Saudi Arabia’s current business climate as ideal for further expansion.

“Logexa enables both SMEs and large companies to have access to quick and flexible solutions,” he said. “Saudi wants to become the logistics hub of the world, and we have a digital solution that will help customers adapt while adding great value to Vision 2030.”

BEIRUT: Lebanon’s economic collapse means that the Lebanese people are now responsible for sourcing their own electricity for most of the day, every day. Many of them are now turning to solar power — previously seen as a luxury — as a solution.

Lebanese citizens do, at least, have some experience with securing their own power: For the past 40 years, the country’s patchy electricity supply has meant that 24-hour power was almost impossible to come by, so the majority of Lebanese are familiar with having to use private generators to access electricity during the country’s frequent power cuts.

Plans on which billions of dollars were spent were largely ruined by political disputes and, despite the warnings of the international community, the Ministry of Energy took no action to rectify the situation.

According to Bassam Mawlawi, minister of interior in Lebanon’s caretaker government, the ministry had to pay $160,000 to secure electricity for the parliamentary elections that took place last month.

Lebanon has been regularly plunged into darkness recently because of skyrocketing fuel prices resulting from the increase in the dollar exchange rate. The situation was exacerbated when the Lebanese state began to remove fuel subsidies and international fuel prices rose because of the Russian-Ukrainian war. Along with an increase in network failures, infrastructure theft has only made things worse.

Considering Lebanon’s long history of power outages, it is perhaps surprising that many Lebanese are only now beginning to view solar power as an ideal solution to their energy issues.

Travel around Beirut, the surrounding mountains and the Bekaa valley, and you will now see solar panels on many rooftops and balconies — even though the internal security forces have repeatedly warned against setting up solar panels without an agreement between building residents, in an attempt to limit disputes.

But since solar energy allows people to be self-sufficient and spares them the costs of private generators — the fees for which can be prohibitively expensive since there is no real oversight of the industry — those warnings are falling on deaf ears.

Hassan, a resident in Beirut’s southern suburbs, said, “A private generator subscription of 10 amperes amounts to 9 million Lebanese pounds per month — a figure that only the affluent can afford.”

The output from solar panels varies, starting at five amperes for a one-off payment of between $2,000 and $2,500. The cost rises as the output increases and can reach around $5,000.

Hassan said that, thanks to solar power, he is now able to power his lighting, fridge, fan and washing machine. “However,” he added, “the air conditioner is now part of the home décor, unless the state provides us with half an hour of power.”

Many shops in Beirut are now selling solar-powered fans and lightbulbs for under $100. Ahmad, who owns a shop in Beirut’s Cornish El-Mazraa, said his stock of such items is usually sold within two days, “although the price of one fan reaches $80.”

“The sales volume exceeded all expectations,” he said. “This fan, once fully charged, works for about four hours at medium speed.”

Attorney Saleh Sleiman told Arab News that around 70 percent of the residents in his hometown — Bednayel, in Bekaa — now rely on solar energy. “Some people borrowed money to cover the cost of installing panels. Others used gold as collateral to secure a loan,” he said.

The Housing Bank has launched a ‘solar energy loan,’ ranging from 75 million to 200 million Lebanese pounds, which can be repaid over five years with an interest rate of five percent. Hezbollah has also provided people with loans through the US-sanctioned Al-Qard Al-Hasan Association.

Lebanese banks, however, have so far provided few initiatives to help people during the energy crisis.

HAWTHORNE, California: SpaceX, the rocket ship company run by Tesla CEO Elon Musk, has fired several employees involved in an open letter that blasted the colorful billionaire for his behavior, according to media reports. The reports published Friday cited an email from Gwynne Shotwell, SpaceX’s president, saying the company had terminated employees who put together and circulated the letter. The letter writers denounced Musk for actions that they said are a “frequent source of distraction and embarrassment for us, particularly in recent weeks.” The New York Times was the first outlet to report the purge, based on information from three employees familiar with the situation. The employees were not named. It’s unclear how many SpaceX workers lost their jobs, but Shotwell left no doubt that the company believed they had crossed an unacceptable line. “The letter, solicitations and general process made employees feel uncomfortable, intimidated and bullied, and/or angry because the letter pressured them to sign onto something that did not reflect their views,” Shotwell wrote in her email, according to the Times . “”We have too much critical work to accomplish and no need for this kind of overreaching activism.” The firings occurred Thursday — the same day Musk addressed Twitter employees for the first time about his $44 billion deal to add that social media service to his business empire. The purchase is in limbo while Musk tries to determine whether Twitter has been concealing the number of fake accounts on its platform. As the Twitter drama unfolded, another report emerged t hat Musk had paid $250,000 to a flight attendant to quash a potential sexual harassment lawsuit against him. Musk denied the sexual harassment allegations, and Shotwell last month sent out an email to SpaceX employees saying she believe the accusations were false. In recent weeks, Musk has also crudely mocked the looks of Microsoft co-founder Bill Gates on Twitter and posted a poop emoji during an online discussion with Twitter CEO Parag Agrawal. The open letter from SpaceX employees criticizing Musk asserted that some of his tweets sent out to his 98 million followers cast the company in a poor light. “As our CEO and most prominent spokesperson, Elon is seen as the face of SpaceX — every tweet that Elon sends is a de facto public statement by the company,” the open letter said. “It is critical to make clear to our teams and to our potential talent pool that his messaging does not reflect our work, our mission, or our values.”

RIYADH: The Red Sea Development Co. is using a marine spatial planning simulation — utilizing software specially developed in Saudi Arabia — to assess the developmental impact and enhance biodiversity. Developed in partnership with King Abdullah University of Science and Technology, the technology plans, collects and analyzes oceanographic data that influences marine and terrestrial ecosystems and tracks net conservation benefits. “Marine spatial planning helps the company decide which island to develop and which is most important to protect by integrating expert opinion, ecological principles, and a software-based decision support tool,” Lina Eyouni, environmental physical science manager, TRSDC, told Arab News on the occasion of UN World Oceans Day on June 8.  

According to a TRSDC scientific paper titled “Reconciling Tourism Development and Conservation Outcomes Through Marine Spatial Planning for a Saudi Giga-Project in the Red Sea,” published in the scientific journal Frontiers in Marine Science, the company is developing comprehensive plans for enhancing coral reefs, which involves growing coral nurseries and breeding healthy corals. The master plan for the development conserves 58 percent of the site’s marine area, with the development footprint only 5 percent of the total area. The paper noted that the resulting conservation to development ratio of 10:1 was unprecedented in any documented coastal development plan.

• The company is developing comprehensive plans for enhancing coral reefs, which involves growing coral nurseries and breeding healthy corals.

• The master plan for the development conserves 58 percent of the site’s marine area, with the development footprint only 5 percent of the total area.

• The paper noted that the resulting conservation to development ratio of 10:1 was unprecedented in any documented coastal development plan.

“The MSP’s primary goal is to utilize the marine environment in a way that won’t harm the ecosystem by reconciling all activities and development elements assessed by the master plan with net positive conservation outcomes,” said Bandar Makhdom, environmental engagement manager, TRSDC. He added: “Through the MSP, activities generating positive and negative interactions were uncovered, as well as minor tactical adjustments to avoid negative synergies in the ecosystem.” To mark the UN World Oceans Day, the company participated in a workshop titled “The Role of Scientific Research and Cooperation with Relevant Authorities in Preserving the Environments of the Red Sea,” sponsored by Saudi Arabia’s Minister of Environment, Water and Agriculture Abdul Rahman Al-Fadhli.  

“The company is contributing to this year’s theme by building cross-multiple partnerships that will enable the company to achieve its goal of 30 percent net conservation benefit throughout the project,” said Eyouni. TRSDC is using adaptive ecosystem-based management for the environmental regulatory system, which will use observational data and associated modeling to provide scientific guidance for developing and protecting the ecosystem. “TRSDC destinations will be environmentally smart by utilizing the latest technology to enhance visitors’ experiences. Additionally, the data will be uploaded and stored into a smart environmental platform to support science-informed adaptive ecosystem-based management,” she added.