Dubai redesigns its logistics sector with an eye on future

The ongoing pandemic disrupted supply chains, worldwide, and exposed the weak links in the logistics sector. Many countries are still trying to come to terms with the supply chain challenges posed by the pandemic in an effort to placate anxious consumers; some of them even advocating localisation as an antidote. Dubai, however, is trying to convert new challenges into fresh opportunities by investing in futuristic technologies.

“Virus was there, is there and will be there but what matters is how we use digital platforms. It means things will continue but there has to be a new way. This year has been the best year because people are looking at new ways to do business,” says executive director of commodities and financial services at Dubai Multi Commodities Centre (DMCC) Sanjeev Dutta.

It is true that unlike many other countries, Dubai or the UAE did not experience large-scale shortages of essential goods due to Covid-induced supply chain disruptions. What helped them weather the crisis was a mixture of good foresight, swift action and the significant investments in multimodal facilities and infrastructure made over decades. However, a recent report (Life After Covid-19: Logistics) co-authored by Dubai Future Foundation (DFF) – Dubai’s custodian of digital transformation - cautions that stable and efficient supply chains are not to be taken for granted.

Managing director, Dubai Industrial City, Saud Abu Al-Shawareb says businesses in Dubai are moving to employ new technologies that are environment-friendly, adding: “These add huge value, reduce operational cost and wastage and help reach the customer a very high quality product.” Dubai which geographically covers world’s two-thirds of the population by air within 8 hours will continue to be one of the leading logistics hubs in the world, Al-Shawareb asserts.

Business analysts hail Dubai’s E-commerce trade zone which ensures ease of doing business and efficient streamlined operations. Dubai with its strong fundamentals, according to them, has managed to connect demand and supply wherever there is an opportunity. “And, now for Covid, the good coincidence for us has been that it is full of opportunities and we never had a dull moment,” avers Sanjeev Dutta.

According to him, the first 6 months of the current year witnessed registration of over 800 companies besides announcements pertaining to new projects and expansion of existing projects. “I think we are very bullish in terms of what times hold ahead for us,” says Sanjeev Dutta. The resilience of Dubai’s logistics sector, for instance, reflects in efficient shipping of a box of tea from an African country, packing it and sending it back faster than they could do it there.

With 60 per cent market share Dubai handles over 50 million kilograms of tea from 26 countries including India. Its agri products trade with India is also expanding. It is evident Dubai is striving to position itself as a re-export hub in the region as part of its food security strategy. But, to make the strategy succeed, infusing newer technologies and preparing its logistics sector future-ready are a prerequisite. “The pandemic has certainly reaffirmed the role of technology and innovation and we are focused on investing in these solutions,” Sanjeev Dutta concurs.

Agriota – an e-platform that bridges the gap between farmer and consumer and helps them discover the right price – launched by DMCC in August is one such innovative solution. It was one of the 10 projects shortlisted during Prime Minister Narendra Modi’s visit to the UAE. Meanwhile, chief commercial officer, DP World, Abdulla bin Damithan too articulates the opinion that digitization and innovation are the key words and they are especially so in pandemic-like situations.

“Just to give an example, e-commerce grew fast during Covid and witnessed an unprecedented increase in the business,” he reveals. At DP World, 99 per cent transactions are done digitally and the organization has transitioned into a paperless trade ecosystem. “We do not pass any paper anymore and that is history,” Damithan says. DP World continues to invest in new ideas and launch of DP World Cargospeed in partnership with Virgin Hyperloop is a case in pointer and a vision for the future of cargo transportation. The technology, Damithan says, will completely disrupt the way cargo is moved in terms of speed and cost.

“We are also investing in Boxbay. This is another disruptive technology that enables significant gains in handling speed, energy efficiency and major reduction in operating costs,” says Damithan. DP World worked 24x7 during the pandemic even while many countries stopped operations, due to its futuristic investments in emerging technologies. Reliability and predictability being the key words in supply chain, Damithan believes Dubai’s logistics sector is set to go places in the post-Covid world.

World Health Organisation says public health events have been steadily rising across the world during the last four decades. This being so, the challenge of future logistics sector would lie in meeting consumer demand with least interruption to supply chains and physical contact. It is in this context DFF foresees a greater role for 3D printing, Unmanned Ground Vehicles (UGVs), Unmanned Aerial Vehicles (UAVs), the Internet of Things (IoT), augmented reality, exoskeletons and companion robots in the days to come.

As Dubai’s logistics sector braces up to an exciting journey, the one positive fall out of the current pandemic has been that it exacerbated the problems, exposed the deficiencies in the existing supply chain system and prompted the stakeholders to come up with creative solutions.

Disclaimer: This article is a part of featured content series on Business in Dubai