middle east transport and logistics 2010 - bussanbud€¦ · no part of this publication may be...

Middle East Transport and Logistics 2010

A comprehensive analysis and in-depth examination of the

Middle East air, sea, road and rail markets and profiles of

the leading players

December 2009

Report Code: TIMETL0912


© Dec 2009 Transport Intelligence Ltd

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Contents Page

About Transport Intelligence.................................................................................................................2

Contents Page ........................................................................................................................................3

List of Tables and Figures.....................................................................................................................9

1.0 Introduction ...........................................................................................................................12

2.0 Freight transportation sectors.............................................................................................13

2.1 Sea Freight..............................................................................................................................13 2.2 Air Transport ...........................................................................................................................16 2.3 Rail Transport..........................................................................................................................17

2.3.1 Rail network overview ........................................................................................................18 2.3.2 United Arab Emirates Railway ...........................................................................................19 2.3.3 The Saudi Landbridge........................................................................................................19

2.4 Road Transport .......................................................................................................................20 2.4.1 Case Study: TNT’s Middle East Road Network (MERN)...................................................21 2.4.2 Middle East Road Transport: Overview .............................................................................23 2.4.3 Major Regional Road Transport Corridors.........................................................................24 2.4.4 Jordan road corridor...........................................................................................................25 2.4.5 Syrian road corridor ...........................................................................................................26 2.4.6 Saudi Arabia road corridor .................................................................................................27 2.4.7 Lebanon road corridor........................................................................................................27 2.4.8 Egypt road corridor ............................................................................................................27 2.4.9 Qatar road corridor.............................................................................................................28

3.0 Regional trade and political groupings ..............................................................................29

3.1.1 League of Arab States .......................................................................................................29 3.1.2 Council of Arab Economic Unity (CAEU)...........................................................................30 3.1.3 The Agadir Agreement.......................................................................................................31 3.1.4 Greater Arab Free Trade Area (GAFTA) ...........................................................................31 3.1.5 Europe-Mediterranean Free Trade Area (EU-MEFTA)......................................................32 3.1.6 Middle East Free Trade Area (MEFTA) .............................................................................32 3.1.7 Gulf Co-operation Council..................................................................................................33 3.1.8 Maghreb Union...................................................................................................................34

3.2 Economic Analysis ..................................................................................................................35 3.3 Trade.......................................................................................................................................37

3.3.1 Share of Merchandise Export Trade by Region.................................................................37 3.3.2 Share of Merchandise Import Trade by Region.................................................................38 3.3.3 Export Value of Merchandise Product Groups ..................................................................39 3.3.4 Import Value of Merchandise Product Groups...................................................................40 3.3.5 Leading Merchandise Exporters ........................................................................................41



3.3.6 Leading Merchandise Importers ........................................................................................42

4.0 Middle East – Logistics Markets - Size & Forecasts .........................................................43

4.1 Contract Logistics....................................................................................................................43 4.1.1 Temperature controlled......................................................................................................44 4.1.2 Construction Logistics........................................................................................................44 4.1.3 Oil logistics .........................................................................................................................45 4.1.4 Automotive spare parts ......................................................................................................47 4.1.5 Middle East - Contract Logistics Market Size ....................................................................48 4.1.6 Middle East - Contract Logistics Market Forecast .............................................................49

4.2 Freight Forwarding ..................................................................................................................50 4.2.1 Middle East - Freight Forwarding Market Size...................................................................52 4.2.2 Middle East - Freight Forwarding Market Forecast............................................................53 4.2.3 Middle East – Air Freight Forwarding Market Size ............................................................54 4.2.4 Middle East – Air Freight Forwarding Market Forecast .....................................................55 4.2.5 Middle East – Sea Freight Forwarding Market Size ..........................................................56 4.2.6 Middle East – Sea Freight Forwarding Market Forecast ...................................................57

4.3 Express parcels.......................................................................................................................58 4.3.1 Overview ............................................................................................................................58 4.3.2 Profile: DHL Express..........................................................................................................60 4.3.3 Profile: FedEx Middle East.................................................................................................63 4.3.4 Profile: UPS........................................................................................................................65 4.3.5 Express Market Size & Forecast........................................................................................66 4.3.6 Interview with Aramex CEO...............................................................................................67

5.0 Bahrain...................................................................................................................................69

5.1 Economy .................................................................................................................................69 5.2 Trade.......................................................................................................................................69 5.3 Transport Infrastructure...........................................................................................................72

5.3.1 Road Network ....................................................................................................................75 5.3.2 Ports...................................................................................................................................76 5.3.3 Airports...............................................................................................................................77

5.4 Bahrain - Logistics Market.......................................................................................................78 5.4.1 Overview ............................................................................................................................78 5.4.2 Bahrain - Logistics Companies ..........................................................................................79

6.0 Egypt ......................................................................................................................................81

6.1 Economy .................................................................................................................................81 6.2 Trade.......................................................................................................................................81 6.3 Transport Infrastructure...........................................................................................................84

6.3.1 Road Network ....................................................................................................................86 6.3.2 Rail .....................................................................................................................................87 6.3.3 Ports...................................................................................................................................88 6.3.4 Airports...............................................................................................................................89



6.3.5 Inland Waterways ..............................................................................................................92 6.4 Egypt - Logistics Market..........................................................................................................95

6.4.1 Overview ............................................................................................................................95 6.4.2 Egypt - Logistics Companies .............................................................................................96

7.0 Iran....................................................................................................................................... 101

7.1 Economy .............................................................................................................................. 101 7.2 Trade.................................................................................................................................... 101 7.3 Transport Infrastructure........................................................................................................ 104

7.3.1 Road Network ................................................................................................................. 106 7.3.2 Railway Network ............................................................................................................. 107 7.3.3 Airports............................................................................................................................ 107 7.3.4 Ports................................................................................................................................ 108

7.4 Iran’s Logistics Market ......................................................................................................... 109 7.4.1 Overview ......................................................................................................................... 109 7.4.2 Iran - Logistics Companies ............................................................................................. 110

8.0 Iraq....................................................................................................................................... 111



8.4 Iraq’s Logistics Market ......................................................................................................... 117 8.4.1 Overview ......................................................................................................................... 117 8.4.2 Iraq - Logistics Companies ............................................................................................. 118

9.0 Jordan ................................................................................................................................. 120



9.4 Jordan’s Logistics Market..................................................................................................... 127 9.4.1 Overview ......................................................................................................................... 127 9.4.2 Jordan - Logistics Companies......................................................................................... 127

10.0 Kuwait.................................................................................................................................. 129

10.1 Economy .............................................................................................................................. 129 10.2 Trade.................................................................................................................................... 129



10.3 Transport Infrastructure........................................................................................................ 132 10.3.1 Road Network ................................................................................................................. 133 10.3.2 Airports............................................................................................................................ 133 10.3.3 Ports................................................................................................................................ 134

10.4 Kuwait’s Logistics Market..................................................................................................... 135 10.4.1 Overview ......................................................................................................................... 135 10.4.2 Kuwait - Logistics Companies......................................................................................... 135

11.0 Lebanon .............................................................................................................................. 137



11.4 Lebanon’s Logistics Market ................................................................................................. 143 11.4.1 Overview ......................................................................................................................... 143 11.4.2 Lebanon - Logistics Companies...................................................................................... 143

12.0 Oman ................................................................................................................................... 145


12.3.1 Road Network ................................................................................................................. 150 12.3.2 Airports............................................................................................................................ 150 12.3.3 Ports................................................................................................................................ 150

12.4 Oman’s Logistics Market...................................................................................................... 152 12.4.1 Overview ......................................................................................................................... 152 12.4.2 Oman – Logistics Companies ......................................................................................... 152

13.0 Qatar .................................................................................................................................... 154



13.4 Qatar’s Logistics Market....................................................................................................... 163 13.4.1 Overview ......................................................................................................................... 163 13.4.2 Qatar - Logistics Companies........................................................................................... 163

14.0 Saudi Arabia ....................................................................................................................... 167





14.4 Saudi Arabia’s Logistics Market........................................................................................... 179 14.4.1 Overview ......................................................................................................................... 179 14.4.2 Saudi Arabia - Logistics Companies............................................................................... 180

15.0 Syria..................................................................................................................................... 184



15.4 Syria’s Logistics Market ....................................................................................................... 191 15.4.1 Overview ......................................................................................................................... 191 15.4.2 Syria - Logistics Companies ........................................................................................... 192

16.0 UAE...................................................................................................................................... 194

16.1 Economy .............................................................................................................................. 194 16.2 Trade.................................................................................................................................... 194

16.2.2 Free Trade Zones ........................................................................................................... 197 16.3 Transport Infrastructure........................................................................................................ 200


16.4 UAE’s Logistics Market ........................................................................................................ 208 16.4.1 Overview ......................................................................................................................... 208 16.4.2 UAE - Logistics Companies ............................................................................................ 209

Appendix 1: Logistics Provider Profiles ......................................................................................... 222

17.0 Egypt ................................................................................................................................... 222

17.1 3 A Logistics & Projects ....................................................................................................... 222 17.2 Egytrans ............................................................................................................................... 223

17.2.1 Finances.......................................................................................................................... 223 17.2.2 Operations....................................................................................................................... 224

17.3 El Wafaa Transport .............................................................................................................. 225



17.4 Mesco................................................................................................................................... 225 17.5 Nosco ................................................................................................................................... 227

18.0 Iraq....................................................................................................................................... 228

18.1 Middle East Shipping Services Ltd (MSS) ........................................................................... 228

19.0 Jordan ................................................................................................................................. 229

19.1 T. Gargour & Fils.................................................................................................................. 229

20.0 Kuwait.................................................................................................................................. 230

20.1 Agility.................................................................................................................................... 230 20.1.1 Finances.......................................................................................................................... 230 20.1.2 Operations....................................................................................................................... 236 20.1.3 Strategy........................................................................................................................... 237

20.2 Risco .................................................................................................................................... 239

21.0 United Arab Emirates......................................................................................................... 241

21.1 Ahmadah RAK International Logistics Services L.L.C......................................................... 241 21.2 Al-Futtaim Group.................................................................................................................. 243

21.2.1 Al_Futtaim Logistics........................................................................................................ 243 21.3 Aramex................................................................................................................................. 246

21.3.1 Finances.......................................................................................................................... 246 21.3.2 Operations....................................................................................................................... 250 21.3.3 Strategy........................................................................................................................... 251

21.4 DP World.............................................................................................................................. 253 21.4.1 Finances.......................................................................................................................... 253 21.4.2 Operations....................................................................................................................... 256 21.4.3 Strategy........................................................................................................................... 258

21.5 Empost ................................................................................................................................. 259 21.6 GAC...................................................................................................................................... 260

21.6.1 Operations....................................................................................................................... 260 21.6.2 Strategy........................................................................................................................... 261

21.7 Global Cargo System........................................................................................................... 263 21.8 Global Shipping & Logistics (GSL)....................................................................................... 264 21.9 Gulftainer Co. Ltd ................................................................................................................. 265

21.9.1 Operations....................................................................................................................... 265 21.9.2 Strategy........................................................................................................................... 266

21.10 RHS logistics................................................................................................................... 268

Contact Transport Intelligence ........................................................................................................ 269



List of Tables and Figures

About Transport Intelligence.................................................................................................................2

Contents Page ........................................................................................................................................3

List of Tables and Figures.....................................................................................................................9

1.0 Introduction ...........................................................................................................................12

2.0 Freight transportation sectors.............................................................................................13

Middle East Transport & Logistics Markets: Top 10 Middle East Ports [mTeu]................................13 Top 10 Middle East Ports ..................................................................................................................15 Table: Top Ten Cargo airports in Middle East ..................................................................................16 Top Ten Cargo airports in Middle East .............................................................................................17 Nine New Main Axes for Creation of Middle East Rail Network........................................................18 Saudi Arabia: potential new rail links ................................................................................................20 TNT: Middle East Route Network......................................................................................................21 TNT: Iran Route Network ..................................................................................................................23

3.0 Regional trade and political groupings ..............................................................................29

League of Arab States.......................................................................................................................29 Current Members and Observers of the Arab League......................................................................30 Greater Arab Free Trade Area (GAFTA)...........................................................................................31 GDP Figures by Country ...................................................................................................................35 Middle East Logistics 2009: Share of Merchandise Export Trade by Region [US$bn].....................37 Middle East Logistics 2009: Share of Merchandise Import Trade by Region [US$bn] .....................38 Middle East Logistics 2009: Export Value of Merchandise Product Groups [US$bn].......................39 Middle East Logistics 2009: Import Value of Merchandise Product Groups [US$bn].......................40 Middle East Logistics 2009: Leading Merchandise Exporters [US$bn] ............................................41 Middle East Logistics 2009: Leading Merchandise Importers [US$bn] ............................................42

4.0 Middle East – Logistics Markets - Size & Forecasts .........................................................43

Middle East Contract Logistics Market Size & Growth [€m]..............................................................48 Middle East Contract Logistics Market Size Forecast 2012 [€m]......................................................49 Major Forwarders Locations in the Middle East ................................................................................51 Middle East: Freight Forwarding Market Size & Growth [€m] ...........................................................52 Middle East: Freight Forwarding Market Forecast 2012 [€m] ...........................................................53 Middle East: Air Freight Forwarding Market Size & Growth [€m]......................................................54 Middle East: Air Freight Forwarding Market Forecast 2012 [€m]......................................................55 Middle East: Sea Freight Forwarding Market Size & Growth [€m]....................................................56 Middle East: Sea Freight Forwarding Market Forecast 2012 [€m]....................................................57 DHL Middle East Network .................................................................................................................60 Global Express: Middle East Market Size 2008 & Forecast 2009 & 2012 [€m]................................66



Global Express: Middle East International & Domestic Market Size % to Total [€m] .......................67

5.0 Bahrain...................................................................................................................................69

Bahrain Transport Infrastructure Map ...............................................................................................74 Bahrain Transport Infrastructure .......................................................................................................75

6.0 Egypt ......................................................................................................................................81

Egypt Transport Infrastructure Map ..................................................................................................85 Egypt Transport Infrastructure...........................................................................................................86 Trans African Highway Network........................................................................................................87 Suez Canal ........................................................................................................................................93 The Suez Canal.................................................................................................................................93 Distance Savings...............................................................................................................................94 Suez Canal versus The Cape of Good Hope....................................................................................94

7.0 Iran....................................................................................................................................... 101

Iran Transport Infrastructure Map................................................................................................... 105 Iran Transport Infrastructure........................................................................................................... 106

8.0 Iraq....................................................................................................................................... 111

Iraq Transport Infrastructure Map................................................................................................... 114 Iraq Transport Infrastructure........................................................................................................... 115

9.0 Jordan ................................................................................................................................. 120

Geographic Area (sq km) ............................................................................................................... 120 Jordan Transport Infrastructure Map.............................................................................................. 124 Jordan Transport Infrastructure...................................................................................................... 125

10.0 Kuwait.................................................................................................................................. 129

Kuwait Transport Infrastructure Map.............................................................................................. 132 Kuwait Transport Infrastructure...................................................................................................... 133

11.0 Lebanon .............................................................................................................................. 137

Lebanon Transport Infrastructure Map........................................................................................... 140 Lebanon Transport Infrastructure................................................................................................... 141

12.0 Oman ................................................................................................................................... 145

Oman Transport Infrastructure Map............................................................................................... 149 Oman Transport Infrastructure....................................................................................................... 149

13.0 Qatar .................................................................................................................................... 154

Qatar Transport Infrastructure Map................................................................................................ 157 Qatar Transport Infrastructure........................................................................................................ 158



14.0 Saudi Arabia ....................................................................................................................... 167

Saudi Arabia Transport Infrastructure Map .................................................................................... 171 Saudi Arabia Transport Infrastructure ............................................................................................ 172 Planned Extensions to the Saudi Arabian Rail Network ................................................................ 174

15.0 Syria..................................................................................................................................... 184

Syria Transport Infrastructure Map ................................................................................................ 188 Syria Transport Infrastructure......................................................................................................... 189 Syria: Strategic Location ................................................................................................................ 192

16.0 UAE...................................................................................................................................... 194

UAE Transport Infrastructure ......................................................................................................... 201

Appendix 1: Logistics Provider Profiles ......................................................................................... 222

17.0 Egypt ................................................................................................................................... 222

Egytrans Finances: Total [EGPm].................................................................................................. 223 Project Activities (2008) freight tons............................................................................................... 224

18.0 Iraq....................................................................................................................................... 228

19.0 Jordan ................................................................................................................................. 229

20.0 Kuwait.................................................................................................................................. 230

Agility Finances: Total [KWDm]...................................................................................................... 232 Agility Finances: Revenue by Reporting Segments % to Total [KWDm] ....................................... 233 Agility Finances: Revenue by Business Segment % to Total [KWDm].......................................... 235 Agility Finances: Revenue by Geographic Location % to Total [KWDm]....................................... 235 Agility Global Network .................................................................................................................... 236

21.0 United Arab Emirates......................................................................................................... 241

Aramex Finances: Total [AEDm].................................................................................................... 248 Aramex Finances: Revenue by Business Segment % to Total [AEDm] ........................................ 249 Aramex Finances: Revenue by Geographic Location % to Total [AEDm]..................................... 250 DP World Finances: Total [US$m] ................................................................................................. 255 DP World Finances: Revenue By Geographical Location % to Total [US$m] ............................... 256 Port Locations................................................................................................................................. 257

Contact Transport Intelligence ........................................................................................................ 269



1.0 Introduction In late 2009 news broke of what was an effective default on the debts of Dubai World, the state backed investment vehicle of the Dubai government. Up to this point it had seemed as if the Middle East had been largely immune from the global downturn which had proved so deleterious for the rest of the world. Oil and gas revenues over the previous years had filled the coffers of the resource-rich region, and although the oil price had fallen temporarily, there seemed no need for concern.

Indeed this argument still holds good, if Dubai’s problems can be contained. Dubai lacks the energy resources of its neighbours, such as Abu Dhabi, and instead has built its economy on tourism, construction and logistics. Of these, the global industries of tourism and real estate proved vulnerable to global weakness. However, whilst Dubai is struggling, other oil and gas rich GCC states are continuing to invest in their infrastructure.

What the Dubai crisis does prove is that it is impossible to look upon the region as in any way homogenous – there is a considerable disparity between neighbouring countries in terms of GDP per head. Impoverished and war torn nations, such as Iraq and Lebanon, are located next to those displaying conspicuous levels of wealth.

From a logistics point of view, efforts are being made to create cohesive cross-regional air and road networks. However attempting to integrate such a diverse range of economies is very challenging. Efforts at a governmental level are being made, especially in the GCC countries, to create a Single Market, in the mould of the European Union. However progress is slow for political reasons.

As in many parts of the developing world, logistics infrastructure in the Middle East is predominantly focused on ports and air freight due to the paucity of road and rail infrastructure. It also has the advantage of the Suez Canal, meaning that it has become a natural hub for sea freight. Its geographical location, triangulated by Europe, the Indian sub-continent and Africa, has meant that it is growing in importance as an air hub.

Consequently, Dubai and Abu Dhabi in particular have transformed themselves into major international logistics hubs, not just for the Middle East but also for much of the eastern hemisphere. Jebel Ali is the world's sixth largest container port by throughput and Dubai is attempting to position itself as a logistics hub for distribution between China, India and Europe.

Driven on by the development of a vast infrastructure, the GCC states have been described as the fulfilment of the notion, "build it and they will come". Despite the problems which Dubai is facing at the moment, there is no doubt that long term fundamentals are good and logistics companies are investing heavily in the market. A number of global and regional logistics providers with major operations in the Middle East, such as GAC Logistics (part of the diverse Gulf Agency Company group), Aramex, Agility, TNT, DHL and others, see major opportunities, and have announced major expansion plans, both within the region and in other parts of the world, particularly Asia.



2.0 Freight transportation sectors

2.1 Sea Freight

The ports system in the Middle East region is dominated by the UAE, which accounts for around 50% of throughput. The bulk of these are trans-shipped from Asia Pacific destinations for onward distribution to Europe and North America.

Source: Transport Intelligence

Middle East Transport & Logistics Markets: Top 10 Middle East Ports [mTeu]

2008 Dubai, UAE 11.80 (+10.8%)

Jeddah, Saudi Arabia 3.33 (+8.4%)

Port Said, Egypt 3.26 (+14.7%)

Salalah, Oman 3.07 (+16.3%)

Sharjah, UAE 2.50 (+15.1%)

Bandar Abbas, Iran 2.00 (+16.1%)

Dammam, Saudi Arabia 1.25 (+14.7%)

Damietta, Egypt 1.24 (+23.8%)

Beirut, Lebanon 0.95 (-0.03%)

Aqaba, Jordan 0.59 (+42%)




With the global downturn, the historically buoyant sea freight volumes to and from the major logistics hub both in the Middle East region have come under threat. China in particular is a major market for Dubai's imports and exports, and this has fuelled the growing Middle East–Asia trade.

The biggest port operator in the region, DP World, has been badly affected, although not to the same extent as shipping lines. Its half year results 2009 saw container through–put fall by 1.3m TEU to 12.3m on a year–on–year basis. The falls in volumes experienced by DP World appear quite modest bearing in mind the collapse in trade seen on certain key trades. This seems to be due to DP World's market posture, with heavy exposure to the Gulf and other emerging markets and relatively under–weight in trans–pacific trades.

DP World's big investments in Dubai performed reasonably well with a 7% fall in containers comparing favourably with the rest of Europe.

In early 2009 the annual capacity at Dubai's extensive Jebel Ali container terminal was increased by 5m TEUs, up to 14m TEUs per year.

Located strategically between Europe and the Far East, UAE ports have been the preferred choice of location for a wide range of multinational companies. As the commercial and maritime centre of the Middle East region, UAE has been very proactive in recognising its strengths in the global market. The country has embarked on a programme of attracting investments into its free trade zones, particularly a wide range of manufacturing and service activities.

UAE now dominates the regional shipping industry with 61.3% of import activity and 103 berths for all types of cargoes and ships. Most of the maritime activity is now centred in two ports – Port Rashid and Jebel Ali, the largest man-made ports in the world. Jebel Ali primarily handles bulk cargo and industrial materials that are used in the Jebel Ali Industrial Zone. The port of Mina Zayed has emerged to be third-largest liquid bulk port in the UAE with 21 berths (12.5 percent of import activity), handling most of the UAE's own crude oil exports.

Sharjah is yet another major maritime hub in the region and is being developed as a maritime industrial city. It plans to set up a full-fledged maritime city in the Hamriya Free Zone for the exclusive use of shipbuilding and related maritime businesses. Details of this Maritime City that will cover one million square metres with facilities for dry docking, shipbuilding, ship design, warehousing and support services are still being worked out. Khor Fakkan Container Terminal (KCT), located closer to UAE’s eastern coast, is a dedicated container port. A modern road connects it with the commercial and industrial markets on the UAE's Gulf coast. KCT is the only natural deepwater port in the region.

The Port of Fujairah is also a leading multi-purpose port in the Middle East and is the third largest bunkering centre in the world after Rotterdam and Singapore.

Abu Dhabi is also pursuing a new ports strategy with the setting up of the Abu Dhabi Ports Company and Abu Dhabi Terminals Company which will centre on serving the new Khalifa Port & Industrial Zone, eventually Port Zayed operations will be transferred to the



new Khalifa Port. Abu Dhabi is seeking to diversify and drive economic growth by empowering the private sector to operate in the Khalifa Free Trade Zone.

Top 10 Middle East Ports




2.2 Air Transport

The Middle East has suffered the economic slowdown less than most other parts of the world in 2008. In the first ten months of the 2009 air cargo output in the region was down just 0.5% in terms of freight tonne kms. This compared with a fall of 15% in Asia Pacific and 19% in Europe. In the full year 2008, air cargo output grew by 6.3%.

Below is a guide to the top 10 Middle East Cargo hubs for 2008. The data is provided by GACA and Airports Council International.

Table: Top Ten Cargo airports in Middle East

1 Dubai International Airport (UAE)

2. Doha International Airport (Qatar)

3: Bahrain International Airport

4. Sharjah International Airport (UAE)

5. Abu Dhabi International Airport (UAE)

6. King Khalid International Airport – Riyadh (Saudi Arabia)

7. King Abdulaziz International Airport – Jeddah (Saudi Arabia)

8. Kuwait International Airport

9. Queen Alia International Airport (Jordan)

10. Beirut International Airport (Lebanon)

Source: ACI

A new airport, due for completion in 2010, will eventually dwarf Dubai International. Al Maktoum International Airport is located in Dubai World Central, an integrated logistics, residential and commercial centre 40km from the existing Dubai Airport, to which it will be linked by an express railway. The cargo centre will have an annual cargo capacity of 12 million tons. DWC-Al Maktoum International will be ten times larger than Dubai International Airport and Dubai Cargo Village combined.

UAE is not the only country to invest heavily in its airport infrastructure. A new airport is being built in Doha (New Doha International Airport – NDIA) and Bahrain is being extended (due for completion 2010).

The largest indigenous air cargo carrier in the region is Emirates, although it is now being challenged by three or four other state backed rivals. These include:

• Gulf Air Cargo, owned by Kingdom of Bahrain and the Sultanate of Oman (50:50)

• Etihad, owned by Abu Dhabi (formerly held share in Gulf)

• Qatar Airways

In addition to the local players, all the major European airlines have strength in the region including Lufthansa and British Airways.



Top Ten Cargo airports in Middle East


2.3 Rail Transport

The Middle East region could emerge as one of the world’s leading trans-continental railroad systems in the world. Despite many potential opportunities, the railroad systems in the Middle East have been so far limited to few countries including Iran, Egypt, Syria and Jordan. However, the region is witnessing renewed interest in railways with countries such as Saudi Arabia, United Arab Emirates (UAE), Iran looking to scale up railroad systems with several multi-billion dollar projects, including for national, intra-regional and trans-continental connectivity for passenger and cargo movement.



2.3.1 Rail network overview

All Arab countries are now modernising their lines to the standard gauge, except in Sudan and Tunisia. Most lines are single track and very few electrified. The density is also very low compared to advanced countries. The diversity of track gauges further makes through movement of traffic, especially freight, difficult.

A study undertaken by the Arab Railway Union (ARU) on linking various Arab railways and subsequently adopted by the Council of Arab Transportation Ministers, highlights the importance of new railway projects in the Middle East.

Nine New Main Axes for Creation of Middle East Rail Network

1700 km connecting Syria with Iraq and Mediterranean Sea with Arab Gulf

1860 km connecting Iraq and Oman via Kuwait and Saudi Arabia

2560 km connecting Saudi Arabia and Jordan

1700 km connecting Syria and Saudi Arabia via Jordan

4000 km connecting Oman and Saudi Arabia via Yemen

2300 km connecting Egypt and Sudan

6200 km connecting Egypt and Mauritania via Libya, Tunisia, Algeria and Morocco.

3000 km connecting Algeria and Mauritania.

1500 km connecting Somalia and Djibouti and on to Yemen via Red Sea by ferry

Source: Arab Railway Union

The challenges in development of railways in the Middle East mainly centre on the following areas:

• Lack of government action, especially among those countries which have historically had limited or no railway networks and which lack strong economic incentive for investing in railways.

• The government emphasis on road and highway projects have, to an extent, led to neglect of rail, especially as the latter entails additional investments in rolling stock.

• Need for massive upfront capital investment. The huge interest payments on investments constitute a major budget difficulty.

• Difficulty of obtaining private financing for projects with slow rates of return. The World Bank has not financed railway projects in Arab countries but has instead contributed to highway construction, explaining why Arab governments focus on road development.

• Through-traffic problems due to specification/gauge differences. This also weakens the profitability of railways.

However a Middle East rail network, linking all major capitals across the region, could eventually become a reality. Plans for a high-speed inter-Gulf railway, linking all six Gulf



Co-operation Council states have already been proposed and Transport ministers of the Gulf Co-operation Council (GCC) states have approved a detailed feasibility study for the establishment of this multi-billion-dollar railway network. Saudi Arabia has been entrusted the responsibility for preparing a detailed technical study on GCC railway network connecting all six countries.

The preliminary study proposes construction of two lines, the first being 1,970 km long and stretching from Kuwait to Saudi Arabia, Bahrain and through a bridge to Qatar, and from there to the UAE and Oman. The second line would be 1,984-km long, running from Kuwait to Saudi Arabia and the UAE and ending in Oman. Connecting points will be in Bahrain and Qatar. This total network will comprise of 10 arteries and stretch from the Syrian/Turkish border in the north down to Aden (Yemen) and Salalah (Oman) in the south via Iraq and the UAE. A parallel line would run through Jordan and Saudi Arabia down to Yemen. A westward line would run across North Africa, linking in with the various national rail networks in the region, before terminating in Mauritania on the Atlantic. The plan is to link up the region’s highly fragmented rail networks, which includes separate systems in Syria, Iraq, Jordan and Saudi Arabia. The existing networks are under-developed though, as well as being sparsely utilised.

2.3.2 United Arab Emirates Railway

This proposed freight railway network extending between 700 and 1000 km in length will connect all seven of the emirates. The main trunk route will be Sharjah-Dubai-Abu Dhabi. The Emirates Rail project also potentially links up with a number of other rail projects across the region, which form the Arabian railway network.

In 2009 plans for this railway had progressed when Etihad (Union) Railways announced that the railway would comprise around 1100 km of track and would have an initial budget of AED 25-30 billion.

The railway will connect Ghuwaifat on the Saudi Arabian border with towns on the borders of Oman. The railway will be paid for by a combination of public and private money.

2.3.3 The Saudi Landbridge

Saudi Arabia is planning a rail $5bn project linking the East and the West of the country, known as the Saudi Landbridge railway. The freight expansion involves the construction of a new line from Eastern Province starting at Jubail Industrial City, passing through Dammam and Riyadh Dry Port on to the Jeddah Islamic Port. The Landbridge will be primarily a freight line for containers and general cargo.

When financing of the project from a private consortium fell through in 2009, the Saudi government decided to finance the Landbridge project itself, packaging parts to put up for tender.



The Landbridge project, with an estimated cost of about SR4.875 billion (about $1.3bn) is expected to transform the existing rail network into a world-class freight and passenger rail link across the country, moving large quantities of cargo over long distances at competitive rates. The freight route expansion would integrate new lines from the Jeddah Islamic Port, King Abdul Aziz Port in Dammam, and the Riyadh Dry Port. Both the passenger and freight routes of the Landbridge would entail the opening of over 1,000 km of new railway track.

The project involves construction of 950 km new tracks between Riyadh and Jeddah and another 115-km line between Dammam and Jubail as well as upgrading of the existing rail link between Riyadh and Dammam.

Saudi Arabia: potential new rail links

Source: Saudi Railways Organisation

2.4 Road Transport

Road freight in the Middle East region is increasingly important, as infrastructure improves and the regulatory framework develops. It is believed that the number of licensed trucks on the roads between 2001 and 2007 almost doubled. This has meant that congestion in some areas is a major problem, as is the issue of overloaded vehicles which causes damage to roads as well as having safety implications.

The use of technology is also at a very early stage, meaning that efficiencies in the industry are low. Despite this the major global players, as well as national leaders, are building networks which span the region.

TNT Express has been at the forefront of extending and developing its road network in the Middle East. It reaches across the region and now includes the GCC countries, Lebanon, Jordan, Syria and Yemen. DHL has also developed a road network, connected to its European services.



2.4.1 Case Study: TNT’s Middle East Road Network (MERN)

TNT Express is among one of the most expansive express players in the Middle East seeking to establish market leadership in ground based, rather than air express, distribution. In addition to air express services, it operates a Middle East Road Network (MERN), which offers Door to Door, Day Definite service throughout the region with its 'Day Definite' service guaranteeing customers the exact number of delivery days.

MERN also includes full track and trace technology, door-to-door delivery, one price for imports and exports, 24/7 customer service as well as GPS tracking. It covers 10 destinations including Dubai, Jebel Ali, Abu Dhabi, Doha, Bahrain, Kuwait, Dhahran, Riyadh, Jeddah and Muscat.

It has been steadily growing its vertical markets business by focusing on key Middle East sectors including oil and gas, telecoms, I.T, electronics, banking and retail. It claims it is able to achieve a day definite service through its knowledge and experience of all the preferred routes at specific times of the day and night. It also has relationships with authorities at border points and a good understanding of import-export regulations throughout the region. United Arab Emirates (UAE) to Kuwait has a transit time of two working days and UAE to Jeddah, three.

TNT: Middle East Route Network

Source: TNT

By 2009 TNT Express said the company had seen growth "ahead of management expectations", much of it due to outbound business from the UAE to Saudi Arabia, Qatar and Kuwait, without giving specific figures.

MERN - UAE

Much of TNT's regional strength comes from the UAE which acts as a shipping, storage and redistribution hub for major corporate clients, including Daimler and Volvo. TNT Express in the UAE was recently awarded a two year contract worth over AED6m per year by Volvo Middle East to provide express road and air distribution across the region.



TNT has invested more than Dh10m in the United Arab Emirates to expand the network and increase its geographical presence. The company has been building a Dh4m warehousing and distribution facility in Dubai Airport Free Zone in addition to its Middle East road network hub in the south of Jebel Ali Free Zone. TNT's planned expansion was expected to increase its UAE workforce by 20%. TNT has also been establishing new facilities in Abu Dhabi and Al Ain with investment commitment totalling Dh3m. A new 1,000 sq m road express operations centre at Al Mina Port, an office in Mussafah and a walk-in express high street facility in Al Ain are among the facilities that are part of the expansion plan. In 2006 TNT opened new road hubs in the United Arab Emirates, Bahrain and in 2007 in Saudi Arabia, as well as an additional trucking facility in Kuwait, further strengthening the MERN.

MERN - Bahrain

TNT's strategy in Bahrain has been to increase infrastructure investment with plans to target a 40% increase in business. TNT's immediate plan was to invest in an additional 1,500 sq m of warehousing and office space to accommodate growth, both in its Middle East Road Network and the anticipated increase in business out of Bahrain.

MERN - Saudi Arabia

In Saudi Arabia, TNT/SAB Express, TNT's JV, has undergone major expansion. The company has opened a new warehouse and office in Dhahran. Although TNT entered the Saudi Arabia market relatively late, the operator has still managed to find opportunities in the country.

“Since TNT enjoys a smaller market share, we can offer a more personal and engaging service to our customers,” explains TNT. “We operate a number of depots and warehouses in the three provinces and have more than 50 retail access points across the Kingdom to support the requirement of customers.”

MERN - Iran

In 2005 TNT Express launched the Middle East's first UAE-Iran road express as part of the consolidation of its ground distribution networks in the region. The thrice-weekly Sharjah-Bandar Abbas route was part of the company's plan to double its Middle East Road Network (MERN) revenues during the following three years. Iran is a top 10 destination for TNT UAE and currently represents around 5% of total revenue.

It expects its Iranian business to at least double in the future. The new road express route will include a door-to-door service. The 12-hour journey to the southern Iran port city of Bandar Abbas will run every 3 days. Air freight is very expensive compared to the road haulage, which is around 40% cheaper with a transit time of an additional two to three days.



TNT: Iran Route Network

Source: TNT

Lebanon

In 2008 TNT extended its Middle East Road Network (MERN) into Lebanon, through a partnership with Net Holding.

Lebanon is key to the Levant region development as it is strategically placed as both a European gateway and a natural extension to the Middle East Road Network.

Through this partnership TNT now offers a range of services to customers in Lebanon, including 9:00 Express, 12:00 Express, Global Express, Economy Express, Receiver Pays, Airfreight services and Road Haulage.

2.4.2 Middle East Road Transport: Overview

With its vast land area, harsh terrain, extremes of climate and low density of population, the construction and maintenance of an adequate modern transport networks has always been difficult and challenging task in the Middle East.

The road transportation sector has grown rapidly in Arab countries due to the relatively fast development of the road networks as well as the underdevelopment of other surface transport modes such as the railways. A combination of factors such as rapid population growth, increasing consumer demand for products and surplus incomes owing to high oil prices further means that there has been a strong market for the road transport sector. At the same time, many parts of this region (countries like Iraq, Lebanon, Yemen, etc) are re-emerging after long periods of war and political isolation. These countries want not only the consumer products but also are eager to diversify their economy in the non-oil sector and for rapid reconstruction of assets lost during periods of war. In addition large scale investment, emerging political stability and open economic policies have turned the Arabian Gulf into the logistical hub for large scale trans-continental trade.

The road transport industry in the Middle East is, as in many other parts of developing world, fragmented with many trucking companies. Few companies have been able to build scale and size into their operations.



The major drawbacks of the industry consist in overcoming following challenges:

• inefficient trucking and transport services

• low outbound export volume leading to long shipping times and the need for costly inventory accumulation

• inefficient customs authorities and procedures

• low and inconsistent product quality,

• an underdeveloped transport intermediary sector

• inefficient cross-border transit procedures

There are a few large government owned trucking companies that are engaged in cross-border movement of goods, such as between Jordan and Syria but domestic trucking companies have struggled in scaling up their business models to fully capture the emerging market opportunities or improve the quality of services. There has however, been a marked consolidation trend in this industry, with entry of large overseas players into road express services. Conventional players who have been able to consolidate their positions now enjoy a competitive advantage, as it is harder for new entrants to penetrate the market and build an effective operational and terminal network.

The supply/demand equation in the “less than truck load” (LTL) industry has been tightening and some market players have been able to capitalise on their operating leverage through better usage of previously unutilised networks, resulting in better performances. However, the main risk lies in these LTLs maintaining defensive pricing strategies against aggressive inroads adopted by large integrators seeking to increase their express offerings.

2.4.3 Major Regional Road Transport Corridors

At present, there are seven main “port-to-hinterland” road corridors used for moving commercial cargos in the region.

• Jordan corridor using the Port of Aqaba as point of origin extends through to the Karama/Trebil border

• Syrian corridor is served by its own ports as well as Lebanese ports

• Iraq's road corridors connect to ports of Umm Qasr and Umm Zubayr on the Arabian Gulf

• Turkish corridor uses several Mediterranean ports as well as the overland route from Europe and Black Sea trade through the port of Samsun

• Kuwait, with Shuwaikh Port and Shuaiba Port

• Iran is connected through Bandar Khomeini

• Saudi Arabia's Ar'ar border crossing point.

Traffic through Iran into Iraq is negligible with Saudi Arabia emerging as an entry point. Most trade from Saudi Arabia passes through Kuwait, as evidenced by the large number of Saudi transit trucks in Kuwait.



2.4.4 Jordan road corridor

Jordan’s trucking industry primarily transports goods to and from Aqaba as well as transit goods to neighbouring Arab countries, especially Syria. During the 1980s, transit goods represented a major portion of freight traffic, but with the Gulf War and competition from other ports in the region, the trucking industry experienced a downturn. Since then the industry has deteriorated and is currently characterised by the following features:

• Oversupply in the market along with stagnant demand has led to the decrease in rates. Jordan’s total truck fleet reached 13,000 trucks, while the market demand does not exceed 5,000 trucks.

• Transport rates set by the Ministry have been decreasing over the past couple of years but the rates have not yet reached a level that allow Jordanian trucks to compete with neighbouring countries.

• Ninety percent of trucks are 20 years or older and need to be replaced. But the industry is in poor financial condition and does not have the capability to modernise.

The trucking industry in the trans-Jordan region (covering Lebanon, Iraq and Syria) are dominated by three companies, two of which are state-owned on a joint basis between Jordan government and Syria while the third is a government-run cartel.

These comprise:

1. Jordan-Syria Land Transport Company, owned by the Jordanian and Syrian governments operates with a fleet of 392 trucks and 700 drivers. The company transports goods between Port of Aqaba and various locations in Jordan, phosphate from mines to Aqaba, and transit goods from Syria and Lebanon.

2. Iraqi-Jordanian Road Transport Company, established jointly in 1980 by the Jordanian and Iraqi governments for the purpose of transporting oil from Iraq to Jordan moves transit cargo from Aqaba to Baghdad and phosphate from mines to the Port of Aqaba. The company has a fleet of 300 trucks operated by about 500 drivers.

3. Unified Company Land Transport Company is a cartel that owns no trucks but which was established by government for the purpose of organising private sector trucking by assigning loads for trucks operating in the Aqaba and Zarqa Free Zones. As to the private operators, the largest company is Odeh Naber Transportation Company with a fleet of 350 trucks and 450 employees.

Further development of road transport system in the region requires concerted government actions to address:

• defining a national and regional transport policy

• overhauling the regulatory regime for the trucking sector

• export promotion measures that will boost hinterland cargo demand and further enable expansion of networks



• increasing inter-modal as well as internal competition reducing the role of public monopolies

• reorienting the customs authorities towards trade facilitation and developing cross-border transit procedures

• improving the quality of transport services such as unit cost of goods carriage, transit time and optimisation of network assets.

2.4.5 Syrian road corridor

The Syrian-Iraq corridor has proved to be one of the most effective routes. Distances from its main ports to most key destinations in Iraq are generally less than that of its main competitor, Jordan. The fact that all ports utilised by this corridor are situated on the Mediterranean, with easy access from Europe and do not need to transit the Suez Canal, further makes it attractive. The two main ports on this corridor are Tartous and Lattakia but the Lebanese ports also provide significant load capacity. Cargoes enter Iraq through the main border crossing points of Tanf/Al-Waleed, near the Jordanian border, and Yarouberiyah, further north. Tanf/Al-Waleed is the most important of these two; with many shipments now destined for Northern Iraq. However, Yarouberiyah is also assuming more importance. Average daily traffic passing through these two border points is estimated at about 400 to 500 trucks. The majority of the cargoes are food, both from the international humanitarian community, and from Iraq's own imports purchased directly from Syria and from other international suppliers.

However, the existing capacity of the corridor to handle much greater volumes is limited as local trucking capacity appears to be almost fully utilised. With the quick transit of goods and relatively low trucking costs, a modest increase in volumes is possible but the corridor may not be able to cope effectively with a much greater demand. The market for land transport of cargoes to Iraq along the Syrian corridor is shared roughly evenly between the Syrian and the Iraqi trucking industries. Syrian trucks also provide a major part of the trucking capacity of Lebanon, so the Lebanese economy and cargoes originating from or passing through it to Iraq, play a large role in the utilisation of the Syrian trucking fleet. Used trucks are not allowed to be imported into Syria for domestic use. There has however, been little fleet renewal over the past six to seven years with low freight rates and stagnation in the economy and volumes.

Syria allows the highest payload in the region at 44 to 45 tonnes per truck, so most Syrian trucks are built to the highest capacity allowed by the chassis and tractor. For grain and break-bulk cargo, it is common to use a truck-trailer combination where the load is evenly distributed; containers are usually transported on a semi-trailer.

The fleet is owned by owner drivers as well as a number of smaller transport companies and given this industry structure, the movement of goods is controlled by forwarders who hire vehicles for specific jobs. In other countries, with a larger proportion of the fleet owned by transport companies, clients tend to go directly to the transport companies. The Jordanian Government has removed several important fiscal exemptions that had been earlier extended to Iraqi trucks crossing into Jordan to collect cargoes for Iraq. These



exemptions - in place since 2003 -- are believed to have greatly facilitated the carrying capacity of the Jordan corridor. At the same time, Jordanian truckers continue to be reluctant to service Iraq because of the security risk. This twin-effect of fewer Iraqi trucks and few Jordanian trucks greatly reduced the cargo capacity into Iraq, forcing the delay of many shipments. This is particularly important given the prominent role played by the Jordanian port of Aqaba in supplying goods to Iraq.

2.4.6 Saudi Arabia road corridor

Saudi Arabian corridor uses the Ar'ar crossing point between Iraq and Saudi Arabia. Cargo may be sourced from within Saudi Arabia itself, or the Kingdom's Red Sea or Arabian Gulf ports. It is used only for fuels cargoes and seems to close periodically with changes in the security situation. The corridor is a useful alternative in the case of severe congestion in other corridors or deterioration in the security situation. However, distances involved are much greater than the Syrian and Jordanian corridors and the Saudi process is more cumbersome. From major Red Sea ports to Baghdad is about 2000 km, from Arabian Gulf ports, it is about 1500 km compared to about 950 km from Tartous in Syria and 1182 km from Aqaba.

2.4.7 Lebanon road corridor

The Lebanese road transport system forms a vital crossroads between East and West. The road network traversing Lebanon includes international highways, which form part of major land routes connecting Europe with the Arab countries and the East. There are also national highways, paved secondary roads, and unpaved roads.

In 2006, Israeli bombardment of Lebanon’s transport infrastructure, in an attempt to prevent the supply of the Hezbollah group, resulted in severe damage to main arterial roads and bridges.

2.4.8 Egypt road corridor

At present, Egypt possesses a fairly sophisticated network of highways and paved roads network of some 44,000 km compared to about 15,300 km in 1981. There is great potential for private investors to improve the quality and coverage of the roads and bridges throughout the country. The government has already invited the private sector to invest heavily in the transportation sector, especially the development of various toll roads. The Cairo-Alexandria desert toll-road was widened and doubled by the private sector during the early eighties. Egypt’s highways and inter-city roads accommodate 85% of domestic freight and 60% of passenger movements.

A network of roads has been constructed to link Sinai to the Nile valley. In addition, Upper Egypt & Lower Egypt were connected through three vertical axial roads parallel to the Nile, joined to the Nile valley at Assiut, Luxor and Toshka. The Nile valley is also joined to the Red Sea Coast through seven transversal roads. Ten bridges were constructed to connect the road network across the Nile at Beni Suef, Minya, Dessouk, Benha,



Mansoura, Faraskour, Luxor, Assiut, Sherbeen and Meet Ghamr. A bridge over the Suez Canal with a total length of 9.5 km is now under construction to connect Egypt to Palestine, Jordan and Israel. Two similar road extensions were constructed in the south to connect Egypt to Sudan, and in the west connecting Egypt to countries of North Africa.

2.4.9 Qatar road corridor

Qatar has embarked on a five-year plan to implement major road infrastructure development projects, with an overall budget allocation amounting to a massive QR 25billion. A road authority established to oversee development is working on an ambitious strategy; the plan covers 32 roads, 19 building and 6 waste-disposal facility development projects. Road projects account for the largest share (total allocation QR13b) in the five-year plan, which includes: construction of new roads, repair and renovation of existing roads, and the addition of bridges and tunnels.

Local companies have been encouraged, where necessary, to form a joint venture with one another, or with a partner with greater experience and financial capabilities, in order to bid for large public contracts. Qatar and the UAE are also jointly discussing an agreement on setting up a joint company to oversee the implementation and running of the planned causeway due to be established between the two countries to boost co-operation and serve bilateral interests.



3.0 Regional trade and political groupings The Middle East region can be categorised into two distinct groups. The first— Egypt, Iran, Iraq, Jordan, Lebanon, Syria, West Bank and Gaza and Yemen— has per capita incomes that range from $2,335 (Yemen) to about $13,374 (Lebanon). A second group of relatively high-income countries (per capita incomes above $20,000) includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.

However within the region there are a number of other groupings, associations and alliances, the main ones are outlined below. For the purposes of this report Israel is not categorised as part of the Middle Eastern logistics market. There are three main reasons for this. Firstly the market bears no resemblance to any other in the region. Secondly due to political and historical reasons the country has little integration with its neighbouring countries. Thirdly, many express and logistics companies categorise the country separately. The exception to this is in the market sizing data (express, logistics, freight forwarding) where Israel is included.

3.1.1 League of Arab States

League of Arab States

Source: Arab League

The Arab League, officially called the League of Arab States is a regional organisation of Arab states in Southwest Asia, and North and Northeast Africa. It was formed in Cairo on March 22, 1945 with six members: Egypt, Iraq, Transjordan (renamed Jordan after 1946), Lebanon, Saudi Arabia, and Syria. Yemen joined as a member on May 5, 1945. The Arab League currently has 22 members.

The aims of the league in 1945 were to strengthen and coordinate the political, cultural, economic, and social programmes of its members, and to mediate disputes among them or between them and third parties.



The current members and observers of the Arab League are listed below:

Current Members and Observers of the Arab League

Algeria Palestine

Bahrain Qatar

Comoros Saudi Arabia

Djibouti Somalia

Egypt Sudan

Iraq Syria

Jordan Tunisia

Kuwait United Arab Emirates

Lebanon Yemen

Libya Eritrea (Observer since 2003)

Mauritania Brazil (Observer since 2003)

Morocco Venezuela (Observer since 2006)

Oman India (Observer since 2007)

Source: Arab League

3.1.2 Council of Arab Economic Unity (CAEU)

The Council of Arab Economic Unity (CAEU) was established by Egypt, Iraq, Jordan, Kuwait, Libya, Mauritania, Palestine, Somalia, Sudan, Tunisia, Syria, United Arab Emirates and Yemen on 3 June 1957. It became effective 30 May 1964, with the ultimate goal of achieving complete economic unity among its member states.

Its objectives include:

• To formulate regulations, legislations, and tariffs, aiming at the creation of a unified Arab custom area.

• To co-ordinate foreign trade policies with a view to ensuring the co-ordination of the region's economy vis-à-vis world economy.

• To co-ordinate economic development and formulate programmes for the attainment of joint Arab development project.

• To co-ordinate policies related to agriculture, industry, and internal trade.

• To co-ordinate financial and monetary policies with the aim of achieving monetary unity.

• To co-ordinate legislations for taxes and duties.

• To formulate unified regulations for transport and transit in the contracting countries.

• To draft common legislations on labour and social security.



3.1.3 The Agadir Agreement

The Agadir Agreement for the Establishment of a Free Trade Zone between the Arabic Mediterranean Nations was signed in Rabat, Morocco on 25 February 2004. The agreement aimed at establishing a free trade area between Jordan, Tunisia, Egypt and Morocco and it was seen as a possible first step in the establishment of the Euro-Mediterranean free trade area as envisaged in the Barcelona Process. All members of the Agadir Agreement have since joined the Greater Arab Free Trade Area, effectively superseding the agreement.

3.1.4 Greater Arab Free Trade Area (GAFTA)

As of 1 January 2005, the Greater Arab Free Trade Area (also referred to as GAFTA and more recently PAFTA, the Pan Arab Free Trade Area) came into existence. GAFTA is a pact made by the Arab League to achieve a complete Arab economic bloc that can compete internationally. GAFTA is relatively similar to ASEAN in that the 17 Arab League members agreed on decreasing the customs on local production and to make an Arab Free Zone for exports and imports between members.

Greater Arab Free Trade Area (GAFTA)

Source: GAFTA

The Project was adopted in the Arab League Summit of Amman in 1997, with 17 Arab League members signing the pact, and in 2005, Algeria was accepted into the GAFTA to reach 18 Arab members, from the Original 22 Arab League members. GAFTA is supervised and run by the Arab Economic Council in the Arab League and has high income, large population and area as well as significant available resources.



Since 1 January 2005, all industrial and agricultural products can access GAFTA members' markets duty-free. A transitional system of Rules of Origin is in place and products that contain at least 40% Arab component can access members' markets duty-free.

The members participate in 96% of the total internal Arab trade.

3.1.5 Europe-Mediterranean Free Trade Area (EU-MEFTA)

The Europe-Mediterranean Free Trade Area (EU-MEFTA) is based on the Barcelona Process and European Neighbourhood Policy (ENP). The Barcelona Process, developed after the Barcelona Conference in successive annual meetings, is a set of goals designed to lead to a free trade area in the Middle East by 2010.

It is envisioned that an FTA with Rules of Origin with Pan-Euro-Mediterranean accumulation will be created. It will cover the EU, the EFTA, the EU customs unions with third states (Turkey, Andorra, San Marino), the EU candidate states, the partners of the Barcelona Process and possibly at a later stage all of the European Neighbourhood Policy partners.

The Agadir Agreement of 2004 (FTA between Jordan, Tunisia, Morocco, Egypt) was seen as its first building block. Further steps are envisioned into the ENP Action plans negotiated between the European Union and the partner states on the southern shores of the Mediterranean Sea.

The initial aim is to create a matrix of Free Trade Agreements between each of the partners and the others. Then a single free trade area is to be formed, including the European Union.

3.1.6 Middle East Free Trade Area (MEFTA)

The U.S. MEFTA initiative started in 2003 with the purpose of creating a U.S. Middle East Free Trade Area by 2013.

The U.S. objective with this initiative has been to gradually increase trade and investment in the Middle East, and to assist the Middle East countries in implementing domestic reforms, instituting the rule of law, protecting private property rights (including intellectual property), and creating a foundation for openness, economic growth, and prosperity.

Among the stated objectives are:

• Actively supporting WTO membership of countries in the Middle East and Maghreb

• Expanding the Generalised System of Preferences (GSPs) that currently provides duty-free entry to the U.S. market for some 3,500 products from 140 developing economies



• Negotiating Trade and Investment Framework Agreements (TIFAs) that establish a framework for expanding trade and resolving outstanding disputes

• Negotiating Bilateral Investment Treaties (BITs) with interested countries by obligating governments to treat foreign investors fairly and offering legal protection equal to domestic investors

• Negotiating comprehensive Free Trade Agreements (FTAs) with willing countries that demonstrate a commitment to economic openness and reform

• Helping to target more than $1bn of annual U.S funding and spur partnerships with private organisations and businesses that support trade and development

3.1.7 Gulf Co-operation Council

The Cooperation Council for the Arab States of the Gulf (CCASG also known as the Gulf Cooperation Council (GCC) is a trade bloc involving the six Arab states of the Persian Gulf with many economic and social objectives.

Created on May 25, 1981 the Council comprises the Persian Gulf states of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. The unified economic agreement between the countries of the Gulf Cooperation Council was signed on November 11, 1981 in Riyadh. These countries are often referred to as The GCC States.

Not all of the countries neighbouring the Persian Gulf are members of the council. Iran and Iraq are currently excluded although both nations have a coastline on the Persian Gulf. The associate membership of Iraq in certain GCC-related institutions was discontinued after the invasion of Kuwait. The GCC States have announced that they support the Document of The International Compact with Iraq that was adopted at Sharm El-Sheikh on 4-5 May 2007. It calls for regional economic integration with the neighbouring states but there is no prospect of Iraqi accession to the GCC.

Yemen is in negotiations for GCC membership, and hopes to join by 2016. There is, however, strong resistance to full Yemeni membership amongst most GCC states, due to the country's poverty, large population, and different system of government.

A GCC common market was launched on January 1, 2008. The common market grants national treatment to all GCC firms and citizens in any other GCC country, and in doing so removes all barriers to cross country investment and services trade. A customs union was declared in 2003, but practical implementation has lagged behind. Indeed, shortly afterwards, Bahrain concluded a separate Free Trade Agreement with the USA, in effect cutting through the GCC's agreement, and causing much friction.

The GCC members and Yemen are also members of the Greater Arab Free Trade Area (GAFTA). However, this is unlikely to significantly affect the agenda of the GCC as it has a more aggressive timetable than GAFTA and is seeking greater integration.

This area has some of the fastest growing economies in the world, mostly due to a boom in oil and natural gas revenues coupled with a building and investment boom backed by



decades of saved petroleum revenues. In an effort to build a tax base and economic foundation before the reserves run out, the UAE's investment arms, including Abu Dhabi Investment Authority, retain over $900bn in assets. Other regional funds also have several hundred billion dollars.

The region is also an emerging hotspot for events such as the 2006 Asian Games in Doha, Qatar. Doha also submitted an application for the 2016 Summer Olympic Games, although this bid was unsuccessful.

3.1.8 Maghreb Union

The Maghreb Union is a Pan-Arab trade agreement aiming for economic and political unity in North Africa.

The idea for an economic union of the Maghreb began with the independence of Tunisia and Morocco in 1956. It was not until thirty years later, though, that five Maghreb states - Algeria, Libya, Mauritania, Morocco, and Tunisia - met for the first Maghreb summit. The following year, in 1989, the agreement was formally signed by all member nations. According to the Constitutive Act, its aim is to guarantee cooperation “with similar regional institutions... [to] take part in the enrichment of the international dialogue...[to] reinforce the independence of the member states and ...[to] safeguard...their assets....”,

Strategic relevance of the region is based on the fact that, collectively, it boasts large phosphate, oil, and gas reserves and it is a transit centre to southern Europe. The success of the Union would, therefore be economically important.



3.2 Economic Analysis

GDP Figures by Country

Country GDP (PPP) US$m GDP (PPP) US$ per capita

Arab League 2,340,427 6,844

Saudi Arabia 564,561 23,243

Egypt 403,961 5,491

Algeria 224,748 6,533 United Arab Emirates 167,296 37,293 Kuwait 130,113 39,306 Morocco 138,250 4,433

Iraq 102,300 3,600

Syria 87,091 4,488 Sudan 80,706 2,172 Tunisia 76,999 7,473 Qatar 75,224 80,870 Libya 74,752 12,277 Oman 61,607 23,967 Yemen 52,050 2,335

Lebanon 51,474 13,374 Jordan 27,986 4,886 Bahrain 24,499 32,064 Mauritania 5,818 1,800

Somalia 5,575 600 Palestine 5,034 1,100 Djibouti 1,738 2,271 Comoros 719 1,125

Source: IMF 2007/World Factbook various dates

In a report published in early 2009 at the World Economic Forum on the Middle East the IMF considered that it was not yet through the worst of the economic crisis because non-performing loans (NPL) were likely to rise and the full impact of declines in tourism and remittances had yet to impact on the region.

The prediction by the IMF was that the level of NPLs would increase in the second half of the year.

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It said that although most banks in the region were relatively well-capitalised and could expect support from their shareholders if needed the focus should still remain as to what was happening in the banking sector.

The advice given to countries in the region during the year was to keep a close eye on the financial sector and be ready to come in proactively if needed, especially if the level of NPLs rose.

The feeling expressed at the forum suggested that there was “some way to go” before the region would enjoy a sustainable recovery, even though some green shoots were emerging, including a degree of stabilisation of market sentiment.

States least impacted by real estate and stock market corrections were likely to bounce back more rapidly and that Dubai which had been hit particularly hard by the downturn – had reacted constructively to the crisis, but still faced challenges with its debt obligations and with its real estate sector. This has since been proved to be the case.

In May IMF slashed its growth forecast for the six oil-rich Gulf Co-operation Council countries by more than half to 1.3% for 2009. In spite of believing the region is better placed than most to weather the global economic crisis, the fund forecast that Saudi Arabia, the Arab world’s largest economy, would contract 0.9%, the United Arab Emirates 0.6% and Kuwait 1.1%.

The IMF was advising countries to continue to spend though the downturn and push ahead with structural reforms needed to generate jobs for the region’s growing youthful population.



3.3 Trade

3.3.1 Share of Merchandise Export Trade by Region

Middle East's largest trading partner in terms of export value is Asia with over 52% share. This total includes exports of oil which dominate the region's output.

Source: World Trade Organisation (latest figures available)

Tables refer to "Merchandise" defined as Manufactures, Oil & gas, agriculture.

Middle East Logistics 2009: Share of Merchandise Export Trade by Region [US$bn]

2004 2005 2006 2007

Asia 197.17 278.55 351.82 397.30

Europe 66.38 89.63 95.87 108.30

Middle East 40.02 60.47 75.58 93.37

North America 51.12 63.43 72.37 83.93

Africa 13.90 19.87 24.34 27.53

Commonwealth of Independent States (CIS) 3.03 3.28 4.31 4.76

South & Central America 3.07 3.69 4.28 4.36

Others 26.77 23.12 33.68 40.34




3.3.2 Share of Merchandise Import Trade by Region

The profile of import origins is very different from that of export destinations, with some 32% (43% in 2004) of imports by value coming from Europe, whilst a further 31% (31% in 2004)comes from Asia.



Middle East Logistics 2009: Share of Merchandise Import Trade by Region [US$bn]

2004 2005 2006 2007

North America 25.30 34.12 42.02 50.08

South & Central America 5.25 6.40 7.86 9.10

Europe 105.07 122.81 129.34 152.92

Asia 75.15 90.37 111.57 150.44

Africa 3.90 5.59 9.34 10.53

Middle East 40.02 60.47 75.58 93.37

CIS 9.30 10.11 11.78 16.24




3.3.3 Export Value of Merchandise Product Groups

In 2007 the value of 'manufactures' (those goods of most relevance to express and logistics companies) exported from the Middle East was $159bn ($86bn in 2004), compared with Fuels and Mining Products which accounted for $565bn ($291bn in 2004).

In terms of proportion of export value, Fuel and Mining products account for just over 74% (75% in 2004) of the total Middle East export value. Manufactures account for just 21% (22%in 2004).

This is surprising given the efforts of all the Middle East countries to diversify away from oil but is likely to be in direct proportion to the relative cost of oil relative to 2004.



Middle East Logistics 2009: Export Value of Merchandise Product Groups [US$bn]

2004 2005 2006 2007

Agricultural Products 9.00 13.10 15.98 19.18

Fuels and Mining Products 291.00 400.50 502.72 565.40

Manufactures 86.00 118.84 135.14 159.27

Others 4.00 9.60 8.41 16.04




3.3.4 Import Value of Merchandise Product Groups

The figures are reversed for imports. Fuel & Mining imports to the Middle East region account for just over 11% (6% in 2004), as might be expected, and Manufactures make up approaching 76% (80% in 2004) of the value of total imports.



Middle East Logistics 2009: Import Value of Merchandise Product Groups [US$bn]

2004 2005 2006 2007

Agricultural Products 27.97 32.73 37.71 49.31

Fuels and Mining Products 15.62 34.43 45.88 53.76

Manufactures 202.10 252.59 290.36 365.45

Others 6.30 10.13 13.54 14.15




3.3.5 Leading Merchandise Exporters

In terms of overall merchandise, Saudi Arabia is the largest exporter in the region, followed by the UAE and Iran.



Middle East Logistics 2009: Leading Merchandise Exporters [US$bn]

2004 2005 2006 2007

Saudi Arabia 126.00 180.71 211.31 234.20

United Arab Emirates 91.00 117.29 145.59 173.00

Iran, Islamic Rep. of 41.70 56.25 77.01 86.00

Kuwait 28.60 44.87 55.71 62.38

Israel 38.62 42.77 46.79 54.07

Qatar 18.68 25.76 34.05 42.00

Iraq 17.81 23.70 31.75 41.60

Oman 13.34 18.69 21.59 24.72

Bahrain 7.56 10.24 12.20 13.63

Syrian Arab Republic 7.38 8.71 10.92 11.70




3.3.6 Leading Merchandise Importers

The largest importer in the region is the UAE followed by Saudi Arabia and Iran. Iraq is also one of the largest importers in the region, no doubt as a result of the re-construction efforts presently on-going.



Middle East Logistics 2009: Leading Merchandise Importers [US$bn]

2004 2005 2006 2007

United Arab Emirates 72.08 84.65 100.06 132.00

Saudi Arabia 47.38 59.46 69.80 90.22

Israel 42.86 47.14 50.33 59.04

Iran, Islamic Rep. of 31.98 40.04 40.77 46.00

Iraq 21.30 23.53 27.00 32.00

Kuwait 12.63 15.80 15.96 23.64

Qatar 6.01 10.06 16.44 22.01

Oman 8.80 8.97 11.04 16.10

Syrian Arab Republic 8.41 10.86 11.49 14.50

Jordan 8.18 10.50 11.55 13.51




4.0 Middle East – Logistics Markets - Size & Forecasts

4.1 Contract Logistics

The UAE is the main location for distribution hubs serving the wider region, largely due to its geographical location and the ease in which international companies can do business in the country. This is helped by the large number of Free Trade Zones, such as the Jebel Ali Port Free Zone (JAFZA), which allow manufacturers tax breaks and full repatriation of profits. CEVA for example believes it will increase its presence in JAFZA by a further 65,000 square metres in 2010, taking its total space in the zone to approximately 110,000 square metres.

Logistics companies are largely focused on sectors such as:

• Oil and gas

• Industrial

• Automotive and tyres

• Retail and fashion

• Temperature controlled

• Technology

• Hospitality

• Construction

The rapid pace of growth in the Middle Eastern region is acting as a driver for the growth of the value added logistics market, which includes a range of specialised activities such as cold chains, warehousing and distribution services serving a number of sectors.

While the contract logistics market in the region has some large ‘home grown’ regional players (such as Agility, Aramex, GAC Logistics, Al Futtaim Logistics), the competition is intensifying with a number of new players and overseas companies including DHL Exel Supply Chain, Hellmann Worldwide, Panalpina, Kuehne + Nagel, Schenker penetrating the market.

A recent contract announced by GAC Logistics with Al Futtaim Retail − which holds the Marks & Spencer franchise − to manage the international retail brand's warehousing and distribution needs is a good example of several trends in the market.

The contract covers the entire Gulf Co-Operation Council (GCC) bloc (with the exception of Saudi Arabia). Under the arrangement, GAC manages Marks & Spencer's distribution centre in Dubai and handles delivery to the global retailer's nine stores across five GCC countries, namely the United Arab Emirates, Kuwait, Oman, Qatar and Bahrain.



As part of its solution it also manages specific orders from each store which are processed in line with daily sales, prepared, and delivered by the following day. GAC supports Marks & Spencer with consultancy on store loading bay design and store stock rooms, sale pricing, shop fitting assembly, in-store merchandising and even in-store staff assistance during sales periods. GAC is investing US$3.6m in a specialised hanging garment system to support the future growth requirements of M&S.

This contract highlights the growing sophistication of the logistics industry, at least within the GCC region, and its ability to serve multiple markets. It also shows that logistics companies are willing to invest heavily in new technology to support blue chip clients.

4.1.1 Temperature controlled

The Middle East temperature controlled logistics market can be roughly divided into two parts: transit and intra-regional. Due to its geographic location, the region has become important in the global trade of perishable goods, with the airlines leading the way. Emirates airline has been at the forefront of this market and almost 20% of its tonnage involves the movement of temperature sensitive goods. Of this about half is perishable goods, with the remainder being products such as pharmaceuticals. All require ‘cool chain tracking’ to ensure quality standards are maintained throughout.

Flowers are becoming an increasingly important sector and already account for about 10% of Emirates’ temperature sensitive volumes. The hospitality industry in key destinations throughout the region is a driving force behind the growth of volumes.

The main express companies have also been key players in the growth of the sector. In July 2005, DHL announced the launch of a temperature controlled express delivery service in Saudi Arabia, opening up new possibilities for moving sensitive goods such as medical products. The service combines express distribution with guaranteed security and validated temperature controlled packaging, transport and distribution. The service has been designed to ensure the transport of products in an ambient, cooled or deep frozen state for as much as 120 hours. The system uses dry ice to freeze goods and this facility is added onto its supply chain management and hospital pharmacy services. A range of cooling mediums are available to meet industry-specific temperature requirements of 2º to 8°C or below -20°C.

4.1.2 Construction Logistics

The immense size and number of the projects throughout the Middle East has meant that there is a high potential for massive supply chain waste in terms of excess inventory.

As with many other markets throughout the world ‘construction logistics’ has recently become a major initiative as building companies attempt to cut costs in the face of rising prices for materials.

In addition to reducing the amount of construction materials in the supply chain, some of which (such as fixtures and fittings) can be very expensive, construction logistics also



attempts to regulate the flow of vehicles onto the site to minimise congestion. Efficient supply chain management processes are all the more important due to the often global nature of inbound goods flows.

This has led many construction companies to invest heavily on expensive information technology solutions, either Transport Management Systems or Warehouse Management Systems.

As a complement to these solutions, technology such as RFID tagging is also being introduced, to enable more effective tracking of shipments.

Dubai-based logistics company Global Shipping & Logistics is one company to focus on the sector. Its services, which are typical of the companies in the market, include:

• Preparation and condition of heavy construction equipment

• Special handling

• Storage

• Transportation to construction / end user sites

• Construction site stores management

• Material tracking

• Uplifts

4.1.3 Oil logistics

In general, service companies (including logistics) for the oil and gas industry are benefiting from continued investment by oil companies in the upgrade of infrastructure. In this respect the industry is ‘catching up’ with years of under investment due to low oil prices.

The range of services provided to the industry by logistics providers is wide. These companies provide drilling sites with construction materials, spare parts, fuel and food and handle the warehousing required for pipelines. During exploration the need for consumables and supplies is regular and demanding, often in remote areas or offshore.

Upstream there are rigs, platforms and subsea equipment. Downstream there are modular installations, columns, pressure vessels and racks. Single pieces can range from hundreds to thousands of tonnes and often require the skills of project forwarders.

Logistics providers are involved in supplying or managing global heavy-lift resources (both carriers and specialist brokers) as well as the local port and coastal authorities.

Many heavy-lift items and oversize pieces are destined for remote worksites, with geographic or physical limitations and a need for detailed planning and consulting at design stage.



Other services include:

• Supply Boat Services

• Managing delivery, loading and dispatch of supply boats.

• Agency and port management for supply boats, seismic contractors, coastal and offshore subcontractor vessels, rigs and drill-ships.

• Operation of dedicated oil and gas supply bases.

• Chartering and husbandry.

• Support services to contractors, construction engineers and oil and gas principals.

• Hire of cranes and forklift trucks.

• Transportation, crew movement.

• Personal effects movement.

• Travel agency.

In addition some companies, such as Panalpina, provide agency services for drilling and production facilities as well as organising crew replacements.

The global flow of goods involved in supplying the Middle East oil industry favour freight forwarders. Panalpina, Kuehne + Nagel and SDV Oilfield are three of the most notable European forwarders involved.

An example of such a typical oil logistics contract involved Agility and EQUATE Petrochemical Company. Agility was awarded a project logistics contract for the utilities and infrastructure phase of the Olefins II Ethylene and Derivatives Complex in Shuaiba, Kuwait.

Under the terms of the contract, Agility provided freight forwarding, customs clearance, and transportation services for a wide range of construction materials, including pipes, valves, pressure vessels, cooling systems and other related items. Shipments originated from suppliers globally and were expected to reach 80,000 freight tons.

Another recent example involves a five-year plus contract between DHL Exel, Bahwan CyberTek (BCT) and Petroleum Development Oman LLC (PDO). As PDO's logistics provider, Bahwan Exel is responsible for managing all logistics operations, cargo handling and suppliers on behalf of the customer.

These services range from the distribution of catering supplies to moving complete oil drilling rigs. Some 60% of transport expenditure relates to rig movements, with an average of over one rig move every day. Other cargo transported includes pipes, equipment, food, water and crude diesel. There are typically around 50,000 similar movements a year.



4.1.4 Automotive spare parts

The spare parts market in the Middle East is increasingly important. Two locations are favoured by vehicle manufacturers as being key to the distribution of spare parts throughout the region: Dubai Logistics City and the Jebel Ali Free Zone, both in the UAE.

An example of this is Mitsubishi which operates a 13,000 sq m, 56,000 SKU facilities in the Jebel Ali Free Zone using TNT to distribute parts across 20 countries (including Africa). The company employs a road based solution for markets in the Middle East and air and sea for those further a field. The location of logistics facilities in the region has substantially cut the amount of inventory which distributors hold themselves as stocks can be replenished in a day rather then the three weeks which it would have taken formerly. The Mitsubishi facility is mostly supplied by sea with some emergency parts being flown in by air from Japan. Inventory management is controlled from Japan. Growth rates in the region are expected to remain at around 10% putting pressure on capacity.

TNT is able to provide next day service for Mitsubishi throughout the region and next day + 1 elsewhere. For less urgent deliveries Mitsubishi uses TNT’s less than truckload service on an every other day basis.

DaimlerChrysler also has its Regional Logistics Centre located in the Jebel Ali Free Zone serving seven country markets, including Saudi Arabia and Kuwait. The 23,500 sq m facility handles around 65,000 SKUs and is managed by Caterpillar Logistics Services. It aims to satisfy its dealer customers’ VOR (vehicle off road) requirements within 24 hours although the company admits that this results in high inventory costs as well as high scrapping rates.

Another manufacturer with Parts Distribution Centres located in Jebel Ali is General Motors. It has gone on record as stating that its Middle Eastern operation has the longest supply chain of any region with lead times of 45-60 days. Lack of capacity on inbound vessels is often a problem. Along with its sales of vehicles, GM has seen strong growth in parts distribution. The manufacturer started out with an 11,000 sq m facility handling 30,000 SKUs. It extended this by a further 12,000 sq m in mid-2006, encompassing 60,000 SKUs. It has also moved from weekly to daily stock orders.

However, there are numerous challenges to building an efficient aftermarket supply chain, including customs issues and lengthy lead times that result in high levels of inventory. The former is important in a region which comprises more than twenty individual countries and although there is a desire to harmonise procedures, logistics managers still complain of bottlenecks caused by complicated customs procedures, staff shortages and few crossing points.



4.1.5 Middle East - Contract Logistics Market Size

The Middle East has not been entirely immune to the global economic slowdown, although its growth is still very high compared to other regions. Logistics suppliers, manufacturers, retailers and governments have continued to invest in the industry, although this investment has fallen in line with oil prices and tourism. The full effects of the slump in consumer and construction spend (related to the hotel industry and capital gas and oil projects) will be felt in 2009 and 2010. Volumes being transhipped at the region's hub ports have also been impacted.


Middle East Contract Logistics Market Size & Growth [€m]

2005 2006 2007 2008

Middle East 1,441 1,723 1,956 2,140

Growth Rate % 19.60 13.50 9.50




4.1.6 Middle East - Contract Logistics Market Forecast

Following strong growth in 2008, many economies in the region are due to contract in 2009. For example United Arab Emirates' GDP grew by 7% in 2008, but is forecast to fall by 1.4% in 2009. However after this, the prospect for stronger growth is good. Many oil rich countries are able to invest in substantial stimulus packages, which will involve major construction projects. With the recovery of the global economy, the region will benefit from an increase in oil and gas prices as well as air and sea freight volumes.


Middle East Contract Logistics Market Size Forecast 2012 [€m]

2008 2012

Middle East 2,140 2,936

CAGR % 8.20




4.2 Freight Forwarding

The Middle Eastern freight forwarding market is largely focused around the Gulf where the majority of sea container throughput is based, as well as the largest air cargo hubs. The oil and gas sector in the GCC states provides a large niche for the freight forwarders providing service parts logistics, as well as project forwarding. As discussed above the temperature controlled market is also becoming more important, given the air cargo carriers development of specialised handling facilities.

Although the main players have a significant presence throughout the region, use of agents is widespread in the more challenging markets. Whilst companies will typically have their own operations in the more commerce friendly countries, such as the UAE, Bahrain, Oman and Kuwait, most operate through local companies in Iran and Syria.

Local agents obviously have the advantage of knowing the market particularly well, including local rules and regulations. In some cases outright ownership by a foreign company is outlawed.

Unsurprisingly few global forwarders are based in Iraq. Instead they use several gateways to supply the country, such as through Jordan, Kuwait, Turkey or Lebanon. Air or sea freight is usually shipped onwards from one of these locations into Iraq by road.

Sea-air forwarding is also important. In this model consignments are shipped by sea from the Asia Pacific region, transhipped in the Middle East and flown to the final destination in Europe or North America. This has the benefit of improving considerably on transit times whilst reducing costs by up to 50%.

The UAE, and especially Dubai, is the main hub for sea-air shipping. The ports and airports in the country are highly efficient and are served by a multitude of shipping and airlines, providing for flexibility and frequency. They serve mainland China, Hong Kong, India and South East Asia for inbound shipments and Europe, Africa and CIS countries as well as the US. Sharjah is also an important sea-air hub.



Major Forwarders Locations in the Middle East




4.2.1 Middle East - Freight Forwarding Market Size

Although the Middle Eastern freight forwarding market saw lower levels of growth in 2008 than in the previous four years, it was still the world's best performing region. The market saw double digit growth of 10.6%, reflecting the oil price boom in the first half of the year, and the underlying growth in consumer markets in the region. In addition, governments in the region have worked hard to develop the transport infrastructure which will increase the Middle East's importance as a major hub.


Middle East: Freight Forwarding Market Size & Growth [€m]

2003 2004 2005 2006 2007 2008

Middle East 1,856 2,402 3,134 3,886 5,015 5,548

Growth Rate % 29.40 30.50 23.90 29.00 10.60




4.2.2 Middle East - Freight Forwarding Market Forecast

Ti believes that the long term prospects for forwarders in the region are the best in the world. Although overall growth will be considerably lower than in earlier years, it is still forecast to be in the high single digits - 8.5% – between 2008 and 2012.


Middle East: Freight Forwarding Market Forecast 2012 [€m]

2008 2012

Middle East 5,548 7,699

CAGR % 8.50




4.2.3 Middle East – Air Freight Forwarding Market Size


Middle East: Air Freight Forwarding Market Size & Growth [€m]

2006 2007 2008

Air Freight 1,604 2,010 2,173

Growth Rate % 25.30 8.10




4.2.4 Middle East – Air Freight Forwarding Market Forecast


Middle East: Air Freight Forwarding Market Forecast 2012 [€m]

2008 2012

Air Freight 2,173 2,792

CAGR % 6.50




4.2.5 Middle East – Sea Freight Forwarding Market Size


Middle East: Sea Freight Forwarding Market Size & Growth [€m]

2006 2007 2008

Sea Freight 2,282 3,005 3,375

Growth Rate % 31.70 12.30




4.2.6 Middle East – Sea Freight Forwarding Market Forecast


Middle East: Sea Freight Forwarding Market Forecast 2012 [€m]

2008 2012

Sea Freight 3,375 4,907

CAGR % 9.80




4.3 Express parcels

4.3.1 Overview

The rapid pace of economic development in the Middle East region is providing a major impetus for the development of the express delivery industry and other time-definite cargo services.

The express market varies greatly in terms of size and turnover across the different countries in the region, reflecting the large imbalances in the regional economic growth process. Thus, while some countries such as UAE, Bahrain, Qatar, Oman, Kuwait, Saudi Arabia and Lebanon have witnessed faster growth and attracted considerable overseas interest, other Middle Eastern countries including Syria, Jordan, Iran and Yemen, though potentially large markets in the long-term, can still be considered to be emerging express markets, with a greater role still accorded to domestic players in these countries.

Despite major regional variances, the express services market as a whole in the Middle East region is expected to see a growth of 7% up to 2012. The diversified economic growth visible across some of the countries in the region is resulting in steadily growing trade volumes and increases in the movement of physical volumes of goods - both in respect of imports and exports. There has been growth in the transhipment trade volumes, which have always dominated in the past, as well as more importantly in intra-regional economic growth. This is increasingly adding to the movement of people and products within the region resulting in greater demand for a wide range of services.

Obviously the crisis in Dubai (December 2009) will have a major impact on the prospects for the industry across the GCC countries.

Although historically express companies entered the region to provide mainly international air express services, two, namely DHL and TNT, have established pan-Middle Eastern express road networks. Local player GAC Logistics has followed.

The GCC Common Market, which came into effect in 2007, will mean that border delays in the countries involved will be removed. This will make road very much more competitive, especially as air and sea consignments can be hindered by up to a week at ports and airports due to inefficient customs authorities.

The express industry growth is supported by the following trends and developments:

• The rapid growth of the air transportation industry in the Middle East region which has seen the establishment of several new national airlines. The overall growth of air fleets will provide belly-lift capacity and provide closely-knit regional networks and connectivity.

• The policy of strengthening the domestic national economy, through attracting overseas investments into the free trade zones (FTZs) is resulting in strong growth in the demand for a wide range of express and time-definite delivery services.



• Various national governments have the objective of seeing the region emerge to be a global logistics hub and are investing heavily in the creation of necessary infrastructure – be it transportation by different modes, warehousing and distribution parks, infrastructure assets such as airports, seaports, road networks, railway lines etc.

• Customs clearance across the region is gradually being made more efficient. This is likely to stimulate growth of the express sector further as businesses can adapt their supply chains to take advantage of more consistent and faster transit times.

• Border crossings, however, are still a major issue. High levels of congestion means that some borders can take hours to cross and there is often “off load” and inspection at some crossings (especially of goods for third party countries).

• Customs Regulations are not yet standardised between countries and Bonded or Custom sealed vehicles are often required.

• Many local business groups and public conglomerates that have long been leading operators in the region (such as Aramex, GAC, Dubai Port World) are expanding their global foot prints and have acquired a number of assets to further grow their market reach across the world, including the developed markets in Europe and North America.

• Express companies are increasing the range of products in the market place. These range from a pre 9am or pre noon delivery service and next day express, to second day delivery and express freight for heavyweight shipments.

• In addition to the range of products being offered, express companies are also increasing the level of quality. DHL became the first company to offer guaranteed delivery service levels for all its time definite products.

• Road services are increasingly playing a major role in the development of the market. Express trucking networks are springing up across the region as companies such as DHL and TNT augment their air express business.

• Alongside the traditional express products, the greatest growth potential is offered by Import Express as the Middle East region is primarily an inbound market.

• Successful express operations require good local knowledge. Experienced managers are aware of preferred routes at specific times of the day and night. Relationships with authorities at border points and a good understanding of import-export regulations throughout the region are also essential.

• Domestic express needs are increasing as a result of industrial mass production and the increasing demand for reliable services.

• Other issues which have operational consequences include: Security, Communication black spots and Bribery/Corruption.



4.3.2 Profile: DHL Express

DHL's Middle East airline is based at Bahrain International Airport and serves a wide variety of Middle East destinations including Afghanistan and Iraq, using a variety of regional aircraft. It also had its own road distribution network with Gulf Wide distribution.

In 2008 DHL Express had another year of double-digit volume growth in the business unit which includes its Middle East operations. The United Arab Emirates developed into a strong growth market along with other emerging markets in this region, particularly Saudi Arabia, Turkey, Ukraine and Kazakhstan.

DHL Express continued to expand its service in 2008, including day-definite road transport in the Middle East region. This allowed the company to acquire new contracts in the automotive sector and the consumer goods industry.

In the EEMEA region, revenues for 2008 increased by 15.2% to €1,176m from €1,021m in 2007. Once again, the company achieved the highest growth rates in all of its product lines in the Middle East and Russia.

DHL Middle East Network

Source: DHL

In 2007 DHL invested $1.2bn to boost its network for export shipments from the Middle East to the United States. As part of the investment, the company modernised and expanded three ‘super-hubs’ and six major gateways, resulting in 60% increases in ground handling capacity, reduced transit times and same day clearance of 99% of import shipments.

UAE

DHL Express began its UAE operations in Sharjah in 1976. DHL was the first international express company to open an office in UAE. It was also the first to offer an



airside facility and operate its own aircraft network. DHL also has an Express Logistics Centre (ELC) in the region providing predominantly for spare parts.

In 2007 DHL started plans to expand its operations at Dubai World Central by more than 300,000 sq m. The expanded facilities would build upon the existing 85,000 sq m in the Jebel Ali Free Zone, operated by Danzas AEI Emirates. The group's logistics entity announced two additional signing agreements. The first was on 30,000 sq m at the new Cargo Village Jebel Ali Airport forwarding area with an option for a further 15,000 sq m. Secondly; it secured an additional 155,000 sq m in the Dubai Logistics City's specialised contract logistics area with an option for another 78,000 sq m.

DHL Express outlined plans to further invest in an air integrator hub facility on a 50,000 sq m plot at the new World Central Airport in Jebel Ali.

By 2006 there had been investment in Abu Dhabi of AED7m over a three year period which had enabled development of their facilities at the International airport and an express centre in Al Muhairy Mall plus the upgrading of its vehicle fleet.

Earlier that year DHL UAE, announced the launch of its new campaign, Import Express. The Import Express product allows customers to select their import shipments, which can be ordered and transported from an overseas destination with shipping costs paid for in the UAE in local currency.

Clients include: Golf Shop Direct, Dunkin' Donuts, Paris Gallery, Net Tours, Net Holidays, Grand Cinemas, Encounter Zone, Compu Me, Oasis Water, The Arabian Ranches and The Jebel Ali Group of Hotels, that join existing partners; Deira City Centre, Abu Dhabi Mall, Arabian Adventures, Damas Jewellery, Wild Wadi and Qatar Airways.

Iraq

In 2008 DHL teamed up with the global relief and development agency Mercy Corps to send $9.6m worth of pharmaceuticals and medical supplies to southern Iraq. The emergency supplies were distributed to hospitals in Iraqi cities that were short on resources and near the frontlines of recent fighting. Mercy Corps expected that the shipment would help 140,000 people get improved medical care.

DHL Express in Asia, Europe and the Middle East worked in tandem to contribute expenses and handle the cross-border transport of the shipment from the Netherlands to Kuwait. From Kuwait, where the shipment arrived at the end of April, Mercy Corps delivered the supplies into Iraq by the first week of May.

The shipment was distributed to hospitals in Kut, Diwaniyah, Basra and Amarah that were treating large numbers of wounded and victims of trauma, as well as patients with infections and water-borne diseases. The shipment included antibacterial drugs, medicines to fight infections and parasites, anaesthetics and diuretics, as well as gauze, surgical blades, examination gloves, needles and syringes.

In 2006 DHL's involvement in Iraq had been important in its reconstruction efforts. It was one of the first express and logistics companies to operate in Iraq following the lifting of



economic sanctions. Its air express services were offered through DHL Express, and heavy freight and logistics through DHL Global Forwarding. Up to six daily direct flights from Bahrain to Baghdad were being serviced by a combination of Airbus A-300, Antonov AN-12 and Boeing 727, dependent on the daily volume. On average, more than 100 flights per month were being flown into Iraq.

Trucking services have been expanded to and within Iraq, with 40ft trucks flowing daily from the Middle East through Kuwait to service the southern part of Iraq such as Basra, Talil and Umm Qasr. In addition, a Baghdad-based cargo aircraft has been assigned by DHL to operate exclusively within the Iraqi territory and services the areas from Baghdad to Kirkuk, Mosul, Talil and back to Baghdad three times a week.

Jordan

At the end of 2008 DHL Express opened a JOD2.6m (US$3.7m) hub at Amman in Jordan.

The hub and transit point services all DHL's road activity from the GCC (Gulf Co-operation Council) through to the Levant, North Africa and Europe.

The DHL hub is spread across 4,000 sq m, and handles 740,000 kilos every month. The company said that it had the capacity to double this within 18 months.

DHL added that the hub was both improving the speed of delivery of inbound shipments into Jordan and providing additional security and safety for all goods transiting through Jordan to other destinations.

In 2008 the hub was processing an average of six 40ft trucks every day and was able to offer competitive transit times due to customs availability on site. The development of the hub commenced at the signing of an agreement between DHL and Jordan Civil Aviation Authority in November 2005. Queen Alia Airport is a major cargo hub in the region as well as for DHL's express operations. Coupled with this development DHL also launched two Express Service Centres, located in the Shmeisani and downtown areas of Jordan's capital city Amman. The new hub also widens the range of services offered by DHL to include delivery of time-based products, DHL Express Services.

Egypt

DHL Express has numerous branches in Egypt and its head office is located at Heliopolis, close to the airport, and it also has branches in Port Said, Alexandria, Damietta and Auga (on the border with Israel). This latter facility is to accommodate the protocol between the US, Egypt and Israel which dictates that Egypt exports to the US can enter the country paying lower import duty if 11.7% of the component parts are of Israeli origin.

Goods from Israel are shipped to the Egyptian manufacturing plant for inclusion and then exported to the US. The branch is to facilitate the clearance of the Israeli goods. The company also has a presence, via a sub-contractor, at Sokhna Port.



Qatar

DHL has expanded operations in Qatar by opening a fourth office in Doha as part of its planned QR10m investment in the country. DHL opened its first office in Qatar in 1979 with a total staff of five people.

Saudi Arabia

In 2008 DHL Express announced it was investing over SR100m (US$26.7m) in company infrastructure development across Saudi Arabia, a major part of which would involve the opening of 15 new branches.

The company, which had been operating in Saudi Arabia since 1976, said "significant investment" would touch all aspects of DHL's operations in that country and boost its total number of branches there to over 50.

Commenting on the announcement, DHL Express said the company was responding quickly to the growing numbers and needs of its customers, as well as the growth in the country's economy. The new branches would be rolled out in important population centres across the country.

4.3.3 Profile: FedEx Middle East

FedEx started services to the Middle East and opened offices in Dubai, the United Arab Emirates in 1989 at the same time it purchased Flying Tigers, an all-cargo carrier with strong links to Europe, Asia and Latin America. The introduction of Afghanistan and Iraq to the FedEx network in 2003 served to increase its coverage across the EMEA region and in 2004, FedEx added business support services to its portfolio in the United Arab Emirates through its acquisition of Kinko's.

FedEx Express extended its service networks to Libya and Algeria through its network of Global Service Participants (GSPs). In Algeria, FedEx Express services are provided by Falcon Express Inc, FedEx's Global Service Participant (GSP), who already handles FedEx’s local delivery services in Jordan, Lebanon, Qatar, Syria and Yemen. Falcon Express Inc. is a part of Falcon Aviation Group, which includes Falcon Express Cargo Airlines and Falcon Aviation services. Falcon Express Inc. is a privately held British Virgin Islands company with interests in providing logistics solutions including air, sea and land freight, warehousing and supply chain management and has been associated with FedEx for well over a decade.

Bahrain

In 2007 FedEx Express expanded its operations in Bahrain to support its growing business across the country by extending its facility at the Bahrain International Airport, which operated within the Global Logistical Services bonded area.



Five additional trucking routes were added to meet growing customer requirements across the region and improvements to the facility included a drop-off point for the FedEx World Service Centre.

Iraq

FedEx Express was one of the first to offer door-to-door pick up and delivery for shipments in and out of the cities of Baghdad, Basra and Mosul. Access to the FedEx Express international network also helps facilitate the transportation of humanitarian aid into the country, including working with Water Missions International and International Aid. FedEx Express services in Iraq are operated by Global Service Participant (GSP) Falcon Express Inc. The airline has experience operating in the Middle East and currently provides delivery services for FedEx Express in Jordan, Lebanon, Qatar, Syria and Yemen.

Kuwait

FedEx Express utilises National Aviation Service (NAS) to provide customs clearance services in Kuwait. As the NAS premises and FedEx operations are both close to the airport, shipments are processed more efficiently. FedEx also expanded its services in Kuwait with the opening of eleven FedEx Authorized Ship Centres (FASCs) and is planning to add more in the near future.

Libya

In Libya, FedEx has partnered with Al Zajel Express to provide support to FedEx International Priority Service (IP) and FedEx 10 kg and 25 kg Box services with standard door-to-door, time definite and customs clearance service support. Al Zaiel, under the GSP partnership deal, has already four offices in the major Libyan cities. These offices connect Libya with the rest of the world. Coupled with growth and investment in Kuwait and Bahrain, FedEx's new forays into Libya and Algeria reinforce its network in the Middle East and North Africa region.

UAE

In 2005 FedEx Express announced the arrival of its two MD-11 aircraft at Dubai International Airport. The new aircraft increased FedEx's capacity from Dubai to Europe and the United States and facilitated new direct flights operating five times a week from Dubai to northern India. The first of these flights travels eastbound and directly connect Dubai to more of India, linking the Middle East to the two largest economic and industrial cities in the country: New Delhi and Mumbai. The second flight travels westbound increasing the FedEx cargo capacity to Europe and the United States, providing heavy weight shippers greater access to its global network.

The flights connect customers in the Middle East to India, one of the fastest growing economies in the world and they help to enhance trade between the Middle East, Indian Sub-Continent, and Africa, as well as Europe and the United States, the largest trading



partners for countries in this region. With these services, FedEx operates 13 weekly flights from Dubai increasing its total air capacity by 1.5m pounds per week. FedEx also expanded its ground services in both the Middle East and India.

FedEx Express also opened its first World Service Centre (WSC) in Sharjah in March 2006 serving its customers in Sharjah and the Northern Emirates. The WSC offered customers a connection to the FedEx international network. With the addition of this FedEx World Service Centre in Sharjah, FedEx has a total of nine retail locations across the UAE with six centres located in Dubai and Jebel Ali, with two more in Abu Dhabi.

4.3.4 Profile: UPS

UPS undertakes most of its operations throughout the Middle East through agents or joint ventures. However the Middle East also forms an important way point for UPS's around-the-world service flights. UPS has presently air operations in Dubai to serve the growing trade route between Europe, Asia and the rest of the world. With operations across the region, UPS sees great potential for business in the Middle East and states that it is committed to a strategy of long-term investment in the area.

BAHRAIN JORDAN United Parcel Service (Bahrain) W.L.L. (JV of UPS & Mohammed Jalal & Sons Group)

International Tourist Travel Services (Authorized Service Contractor for UPS)

KUWAIT LEBANON Gulf Agency Company (Kuwait) LTD United Couriers S.A.R.L OMAN DOHA Falcon Air Services & Transport Co. LLC Gulf Agency Co. Qatar (W.L.L.) SAUDI ARABIA EIRAD Trading and Contracting Co. LTD SYRIA UAE Thebe Company (Authorised Service Contractor for UPS)

United Parcel Service (UAE) L.L.C. (A JV of UPS & Gulf Agency Co.)

Source: UPS

Oman

Falcon Air Services And Transport Company LLC (FASTCO) is the “Transportation Solutions” division of OHI. The company is the authorized service contractor of UPS in Oman.

Bahrain

UPS (Bahrain) is a joint venture with a local company, The Mohammed Jalal Group, a diversified conglomerate whose origins lie in trading.

Qatar

Gulf Agency Co. Qatar (W. L. L.) is the Authorized Service Contractor for UPS.



4.3.5 Express Market Size & Forecast

2009-2012

The oil and construction industries in Middle East have suffered over the past year due to the economic slowdown. However the express market as a whole still saw growth which Ti estimates to be 2.2% in 2009. More substantial growth is expected in the coming years: a CAGR of 7.1% between 2009 and 2012.


Global Express: Middle East Market Size 2008 & Forecast 2009 & 2012 [€m]

2008 2009 2012

Middle East 4,515 4,614 5,669

CAGR % 2.19 7.10





Global Express: Middle East International & Domestic Market Size % to Total [€m]

2008

International 1,051

Domestic 3,465


4.3.6 Interview with Aramex CEO

Aramex looks to expand in developing markets - September 2009

Despite the extreme economic conditions which have seen many of its competitors falter, Aramex, the Middle East-based logistics company, has just had its "best year ever", according to CEO Fadi Ghandour.

Ghandour assigned that exceptional performance to his company's asset-light business model, unique in the express industry, and its flexible cost structure which allows it to exploit excess capacity. At the same time, Aramex has been able to benefit from volumes which have stood up well in its home market.

What this has meant is that the company is very well positioned to benefit from the upturn when it eventually arrives. And Ghandour certainly has plans to leverage that strong position with an aggressive expansion strategy focussed on developing countries, although in contrast with many of his competitors his goals will be achieved on a largely organic basis.



In particular, the company is targeting Africa, Central Asia (the 'Stans') and South East Asia. It is also establishing a presence in China, which Ghandour believes will dovetail with Aramex's development in Africa, given China's on-going investment strategy in that continent.

The performance of the company over the last year has allowed it to operate a 'no lay offs' policy which has meant that it has retained a strong employee base. That has not only been good for morale, especially in a market which has experienced high degrees of uncertainty, but it will also mean that good people are in place to exploit future opportunities. Ghandour said that this policy had allowed his company to be more aggressive in sales strategy and to win market share.

Ghandour is confident that Aramex's home market of the Middle East, and specifically the Gulf Co-operation Council countries (GCC), will see continued growth. Despite problems in the real estate market, development of logistics infrastructure will continue, largely unaffected. Dubai in particular will continue to benefit from its role as a regional hub. In addition, Ghandour believes there will be a huge demand for outsourcing in the region, with companies being forced to look at making efficiencies and turning to logistics operators for support. His company's portfolio of express, freight forwarding and logistics, he believes, will make it well positioned to exploit this trend.

Looking ahead, Ghandour believes that his biggest challenge will be to maintain the margins Aramex has been able to achieve. His expansion plans depend on finding the right people to drive forward his organic growth plans, although he says that in this market there are plenty around. Being able to build infrastructure in the tough times will mean that Aramex will have first mover advantage when the economy eventually picks up.

Although there are many bigger players on the world stage than Aramex, few have a more tightly defined development strategy. Being focused on the robust Middle East region has given it a strong platform for future growth, but Ghandour realises that the advantages it enjoys over its competitors are most evident in the developing world. Not least of all, his company is used to working in challenging countries and regions which many competitors view as high risk and unstable. As the balance of economic power shifts ever so slightly towards the developing world, Aramex will be well placed to take advantage.

See also Company Profile of Aramex Section 21.3



5.0 Bahrain

The Kingdom of Bahrain is a small archipelago in the Persian Gulf, east of Saudi Arabia. The country has a coastline of 161 km and its terrain is mostly low desert plains.

5.1 Economy

Annual Data 2008

Population (m) 1.1

GDP (US$ bn; market exchange rate) 18.5 (est)

GDP (US$ bn; purchasing power parity) 26.8 (est)

GDP per head(US$; market exchange rate) 16,438 (est)

GDP per head(US$; purchasing power parity) 23,783 (est)

Exchange rate: US$ 0.38

Real GDP growth 6.8%

Inflation 3.5%

Source: The Economist

5.2 Trade

Although Bahrain is fairly open to foreign investment and boasts a reasonably good business environment, the country remains, despite its small size, relatively protected from international competition through tariffs. The low share of duty-free imports and the reluctance to engage in multilateral trade rules coupled with low reliance on export markets points to the low priority of trade by the authorities.

In particular, opening up the country to imports would provide significant benefits; the increased competition would make the economy more productive, thereby reducing reliance on primary resources and boosting growth rates.



Source: The World Factbook

Note: Figures for 2007 are estimates.

Main Exports




Main Imports


Leading Export Markets


In 2007 the European Union (27) represented 2.4% of total Bahraini exports.



Leading Import Markets


In 2007 the European Union (27) represented 11.4% of total Bahraini imports.

5.3 Transport Infrastructure

Bahrain has a transport infrastructure that effectively combines the multiple modes of air, sea and land.

Bahrain enjoys the benefits of a major international airport, short sea links throughout the Gulf and direct connections to the road networks of the Arabian Peninsula. The island is advantageously positioned to serve the transportation and logistical demands of the Gulf region.

The various air, land, sea and combination options offer a varied choice that enables shippers to put together the most efficient and cost-effective transportation modes for the needs of their cargo. Freight from around the world can be flown into Bahrain for trucking to Saudi Arabia, (via the King Fahd Causeway connecting Bahrain to Saudi Arabia) countries in the Gulf Cooperation Council (GCC), Levant and even Europe; containers arriving at the port of Mina Salman from the Far East can be stripped, and individual deliveries be made by air or road to any part of the Arabian peninsula. Furthermore, less than container load (LCL) consignments can be consolidated at the port for onward shipment.

Bahrain has evolved into a highly integrated logistics hub, with a community of sophisticated freight forwarding operators and transport companies experienced in developing various alternatives to deliver solutions for customers.



With freight volumes continually increasing at Bahrain International Airport, the cargo community is also expanding: BAS Cargo Services and DHL, the two biggest players, are both seeking to increase resources and upgrade capability. At the new Global Logistics Services complex, a niche service is offered to fast track smaller cargo volumes.

Less than 5 km away, the Container Terminal at the port of Mina Salman has developed facilities for breaking down and consolidating individual container loads, a service which will also expand into the new Sheikh Khalifa bin Salman super-port.

Seaport and airport have a fast, direct link to the King Fahd Causeway, where several logistics operators, such as DHL, have developed special facilities for customs clearance.

Bahrain's transport infrastructure has attracted DHL, Aramex, GAC Express and TNT, who benefit from Bahrain's strategic location at the heart of the Gulf.

Strong regional air connections in the Middle East, and the causeway linking Bahrain to Saudi Arabia, make for very efficient access to the potential of key markets across the Middle East and beyond. Bahrain maintains a permanent advantage due to its proximity to Saudi Arabia.

The logistics industry is growing fast in response to increasing demand from businesses, and is supported by government investment in a number of large infrastructure projects.

Bahrain is investing US$2.9bn to upgrade its logistics infrastructure, including a new bridge to Qatar, an airport expansion, a state of the art logistics zone and a larger port. Bahrain has the shortest travel time between its seaport, airport and the logistics processing zone of anywhere in the Gulf, which enables more efficient and faster processing of trade goods.

In July 2009 the concept master-plan for Bahrain’s forthcoming ‘Investment Gateway’ complex was unveiled by Manara Development. The 600,000 sq m project, which was previously known as Al Hidd Development Project, will include a variety of warehouse and logistics facilities in close proximity to the new Khalifa bin Salman Port and Bahrain International Airport.



Bahrain Transport Infrastructure Map




Bahrain Transport Infrastructure

Roads

Total 3,498 km

Paved 2,768 km

Airports

Total 3

With Paved Runways 3

Heliports 1

Merchant Marine

By Type: Bulk Carrier 4, Container 4, Petroleum Tanker 1

Ports & Terminals

Mina' Salman and Sitrah

Pipelines

Gas 20 km

Oil 32 km


5.3.1 Road Network

Bahrain is a natural hub for the logistics sector. It forms a strategic stepping-stone between East and West and provides easy access to the major economies of the Gulf and major investments underway will further improve that position. Bahrain has a modern road network, including a 45-minute causeway connection to Saudi Arabia. A new planned causeway to Qatar is being planned. The King Fahd Causeway is a bridge linking Kohbar, Saudi Arabia and Bahrain. The road has four lanes and stretches 28 km.

However it was reported in late August 2009 that at least eight major road projects in Bahrain were facing delays because of the impact of the global economic crisis.

Bahrain's government is looking for private money to pump into massive infrastructure projects costing up to BD400m. However the ministry was committed to pushing the projects ahead, because infrastructure developments were vital to the country's economic growth.

It is exploring an array of finance options such as sukuks (Islamic bonds), private partnership and full privatisation.

The ministry was seeking contributions from private developers, similar to those in the cases of Bahrain City Centre, where developers contributed around 25 percent of the total road projects in the area and the Bahrain Bay developer's financing of the flyover into the development.



5.3.2 Ports

In 2009 APM Terminals Bahrain opened the gates of its Bahrain Gateway facility at Khalifa bin Salman Port, "offering ocean carriers new ways to optimise their upper (Middle East) Gulf route network to serve the growing regional market".

The terminal operator said the new Bahrain facility featured four new post-Panamax cranes with an 18-stack outreach, 1,800m of quay wall as well as 900,000 sq m storage and a channel depth of 12.8 metres. Channel dredging was ongoing and would reach 14 metres this year and then 15 metres in early 2010 to match the 15 metres draft alongside and in the turning basin.

APM Terminals Bahrain was transitioning between the old Bahrain port of Mina Salman and Khalifa Bin Salman Port. Both ports would be operational for one month during the phase-out of Mina Salman.

The first container vessel called at Khalifa Bin Salman Port in April and for the first two weeks containers entering Khalifa Bin Salman Port were empty containers and export containers booked to load on container vessels mid-April. Mina Salman continued to receive aluminium, containers and general cargo up to the last vessel call and ceased to operate as a commercial port from May 1.

This followed on from 2007 when the Bahrain government passed into law a 25 year concession for APM Terminals to manage and operate both Mina Salman and Khalifa bin Salman Port for a 25 year period.

Khalifa bin Salman

The Khalifa bin Salman Port is located in the north-eastern area of Bahrain, about 5 km from the Bahrain International Airport. The port has an Industrial area adjacent to it, which is being expanded as part of an extensive investment programme on more than 800 hectares of land.

The Bahrain Gateway Terminal located at the port has a total general cargo area of 900,000 sq m, 23,600 sq m of warehousing space and a total berth length of 1,800 metres. The maximum depth at the quayside will be 15 metres in 2010.

Mina Salman

The port of Mina Salman is located in the capital and largest city of Bahrain, Manama, which lies on the north-eastern tip of Bahrain Island in the Persian Gulf. The port's Container Terminal has two berths and a storage area of 423,000 sq m capable of accommodating up to nearly 10,000 TEUs (twenty-foot equivalent units).



5.3.3 Airports

Bahrain International Airport

Bahrain Airport Services operates the airport's 18,000 sq m Cargo Terminal. Services provided include export cargo sales, trans-shipment, inter-airport trucking and customs clearance. Also provided are break-bulk, bonded warehousing, freezers, chillers, cold store storage, and storage for dangerous goods, livestock, radioactive material, valuable and diplomatic cargo as well as mail facilities.

Bahrain International Airport has successfully established itself as a gateway into the Northern Gulf, attracting a diverse range of international airlines, including British Airways, Cathay Pacific, KLM and Lufthansa. In particular, Gulf Air operates approximately 400 weekly international and regional services from the airport, accounting for 55% of overall movements.

Traffic at Bahrain International Airport has steadily risen over the past decade. Bahrain Airport Services (BAS) recently announced record figures for passenger, cargo and aircraft movements during 2008, with 9.0m passengers travelling through the airport, marking a 32% increase compared to 2006 as well as 241,000 tons of cargo.

To support this growth commencing in 2008, the airport is undergoing an ambitious expansion programme valued at US$350m. Following its completion in 2010, the size of the airport's terminal building will be doubled, the number of aircraft stands will increase from 46 to 64, and the number of bridges will be doubled from seven to 14. As a result, the airport will be able to handle 15m passengers a year.

The additional gates will comprise stands to accommodate five numbers of Code E type aircraft (such as the Airbus A330 or A340 and Boeing 747 or 777), one Code C type aircraft (Airbus A320 and Boeing 737) and one Code F large aircraft (NLA). An existing parking bay will also be refurbished to accommodate Code F aircrafts, providing a total of two stands at the expanded terminal to cater to the new Airbus A380 super-sized aircrafts.

The expansion also includes a $3.8m investment to boost retailing facilities, in partnership with Bahrain Duty Free. This includes an expansion and redesign between gates 11 and 14, with new floors, ceilings and lighting to existing sections, together with new retail outlets and fast food shops.

The ambitious growth strategy is not limited to the forthcoming expansion. Indeed, further projects are being planned for the future to increase the airport's capacity to 22m passengers by 2020 and later to 45m. This growth will cater to future increases in passenger and aircraft traffic up to the year 2015, with passenger figures predicted to grow by roughly 12m and 15m per annum by that time.



5.4 Bahrain - Logistics Market

5.4.1 Overview

Bahrain is set to cement its position as the transport hub of the Gulf as the new Khalifa Bin Salman Port opened in Spring 2009 replacing the old port of Mina Salman.

The newly developed port - which has been dredged to a depth of 15 metres to accommodate any container ship currently in service - will have a capacity of 2.5m TEUs.

In addition to the trans-shipment opportunities within the region to countries such as Kuwait and Iraq, the Port gives ships direct access into Bahrain from Europe, Asia and North America without having to unload/reload in other ports. The development builds on Bahrain's already strong ability to trade with countries across the world demonstrated by the Kingdom's Free Trade Agreement with the USA.

Bahrain's geographical position both regional and within the logistics industry are the reasons why DHL's Middle East North Africa business chose to base its hub in the Kingdom - all DHL shipments to the Gulf pass through Manama and are distributed across the region from there.

APM Terminals, the world's second largest terminal operator, manages operations at the new Port.

In 2009, CEVA Logistics announced their intention to build a 10,000 sq m warehouse in the BLZ with the potential for expansion.

Bahrain's geographical position - just 40 km's away from Saudi Arabia and with excellent links to Qatar and the rest of the Gulf offers companies that supply oil and gas related equipment excellent market access. In addition the construction which began in 2009 of the Causeway between Qatar and Bahrain will further enhance Bahrain's connections to the world's third largest gas reserves.



5.4.2 Bahrain - Logistics Companies

Agility

Agility has a Logistics, Warehousing & Supply Chain facility measuring approximately 20,000 sq m located at Ma'ameer Industrial Area in Bahrain.

Aramex

Aramex has one office in Bahrain, located in Al Muharraq. In 2008 Aramex announced the opening of a new 4,000 sq m logistics centre in Bahrain designed to support the company's expanding supply chain solutions network across the GCC (Gulf Co-operation Council) region.

Aramex said the new facility had been designed to service a range of industries, including telecommunications, electronics and textiles. "Located in the Bahrain International Airport Free Zone, the state-of-the art facility will combine sea, air and land freight capabilities to offer an unparalleled third party logistics management system," it claimed.

"The infrastructure investment underlines Bahrain's increasing role as a supply chain solutions hub, led by its important geographic position within Aramex's regional network, connecting by land to Kuwait, Qatar and the Kingdom of Saudi Arabia."

Aramex went on to state that the Bahrain facility would form a vital part of its supply chain model, linking through to key logistics centres within the GCC. "Its strategic location in the airport's Global Logistics Services zone will also provide convenient access and ensure quick turnaround for cargo being shipped between the aircraft and warehouse."

DB Schenker Logistics

Schenker is represented by their agent Barwil Unitor, two leaders in maritime services that have merged to form a maritime services network. The new organisation was initially called Barwil Unitor Ships Service, but has been renamed Wilhelmsen Ships Service. It delivers vessel operating efficiency to the marine market, with focus on trading ships. The organisation is part of Wilhelmsen Maritime Services AS, a Wilh. Wilhelmsen Group Company.

GAC

GAC Bahrain, established in 1957, is located at the Mina Sulman Industrial Area and acts as a shipping and forwarding agent on the island. It also operates a container freight station/bonded warehouse inside Mina Salman dry cargo port and has an office at Bahrain International Airport. The company is able to offer comprehensive services at all Bahrain ports and terminals.

In 2007 GAC formally opened new facilities in Bahrain in the Middle East Gulf. When it inaugurated what it claimed was that Kingdom's first fully integrated logistics centre. GAC Bahrain's new facility in Muharraq offers multimodal services - road, sea and air. In



addition to dedicated customs on site 24/7, the facility provides bonded facilities for combined air/sea/road operation. Plans are already in place to build additional facilities for local storage and distribution.

Panalpina

Panalpina’s office is based in Manama and was opened in 1995. Major services include air freight and ocean freight services to Bahrain and eastern Saudi Arabia.

ProLogis

In 2008 ProLogis and Arcapita, a global investment company headquartered in Bahrain entered into a 50/50 joint venture agreement to create ProLogis Middle East. That venture, they stated, would develop and acquire a US$1bn portfolio of advanced logistics warehouse space in the Gulf Cooperation Council (GCC) region.

Under the terms of the agreement, ProLogis Middle East would acquire, finance, develop and manage warehousing properties in Saudi Arabia, Kuwait, Bahrain, Oman and Qatar. The new venture was expected to commence construction of its first sites during the second half of 2008. The initial focus would be on Saudi Arabia, with further developments to follow in the rest of the GCC.

Headquartered in Bahrain and with offices in Atlanta, London and Singapore, Arcapita's four principal lines of business are corporate investment, real estate investment, asset-based investment and venture capital. To date, Arcapita has completed 66 transactions with a total value of almost $23bn and has an equity capital base of $1.1bn.



6.0 Egypt

Egypt borders the Mediterranean Sea and the Red Sea north of Sudan, and includes the Asian Sinai Peninsula.

Egypt has a total land border of 2,665 km and a coastline of 2,450 km. It shares an 11 km border with the Gaza Strip, 266 km with Israel, 1,115 km with Libya and 1,273 km with Sudan.

Egypt is strategically located at the centre of the Middle East-North Africa (MENA) region and has traditionally played a leading role in regional politics and commerce. It is the largest country in the Arab world with a population that has trebled since 1950 to 75m people, further estimated to soar to 100m by 2035.

Egypt is one of the most important world transportation hubs. The main waterway is the Suez Canal, completed in 1869.

6.1 Economy

Annual Data 2008

Population (m) 77.1

GDP (US$ bn; Market Exchange Rate) 161.4 (est)

GDP (US$ bn; Purchasing Power Parity) 442.4 (est)

GDP per head(US$; Market Exchange Rate) 2,093 (est)

GDP per head(US$; Purchasing Power Parity) 5,739 (est)

Exchange rate (av) : US$ 5.4


Inflation 10.2%


6.2 Trade

Egypt stands out positively for its maritime connectivity and related services, as well as for the quality of its roads.

Although importing goods is neither costly nor time-consuming, importers raise concerns about the efficiency of customs and other border agencies. The high tariffs, which apply to 70% of all imported goods, as well as the tariff barriers, constitute the most important impediments to enabling trade in Egypt.





Main Exports




Main Imports




In 2007 the European Union (27) represented 29.1% of total Egyptian exports.





In 2007 the European Union (27) represented 23% of total Egyptian imports.


Transport facilities in Egypt are centred in Cairo and largely follow the pattern of settlement along the Nile.

Railways provide the main transportation links in Egypt. The rail network is extensive in the Nile Delta. Cairo is connected to Aswan by lines running southwards down the Nile, and the capital is also lined to Salloum in the west by track running along the coast.

The road network has expanded rapidly, covering the Nile Valley and Nile Delta, Mediterranean and Red Sea coasts, the Sinai, and the Western oases.

Egypt Air provides domestic air services to major tourist destinations from its Cairo hub, in addition to overseas routes. The Nile River system and the principal canals are important locally for transport. The Suez Canal is a major waterway of international commerce and navigation, linking the Mediterranean and Red Sea.



Egypt Transport Infrastructure Map


By mid 2009 revenue and traffic levels through the Suez Canal had fallen for six consecutive months. Vessel numbers were also down to 1,272 from 1,676 and volumes passing though the waterway had fallen from 73m tonnes to 53m tonnes. This was due to the global slump in trade, seasonal factors, and a rise in pirate attacks and not least of all shipping companies cutting costs and avoiding Suez Canal tolls by going the long way round the Cape of Good Hope.

Latest estimates suggest that Egypt’s total freight traffic, measured in million tonnes-km (m tkm) would rise by an annual average of 3.8% in the 2009-2013 forecast periods, slightly ahead of Egypt’s general rate of economic growth. The transport and communications sector employed 1.28m people, or 6.4% of the labour force, in 2008 and this could rise to 1.40m people by 2013.



Egypt Transport Infrastructure

Roadways (2004)

Total 92,370 km

Paved 74,820 km

Railways (2006)

Total 5,063 km

Standard Gauge 5,063 km

of which Electrified 62 km

Airports (2008)

Total 85


Heliports 3

Waterways (2007)

Total 3,500 km

Merchant Marine (2008)

By Type: Bulk Carrier 11, Cargo 28, Container 2, Passenger/Cargo 4, Petroleum Tanker 13, Roll-on/Roll-off 9

Ports & Terminals

Ayn Sukhnah, Alexandria, Damietta, El Dekheila, Sidi Kurayr and Suez

Pipelines (2008)

Condensate 320 km

Condensate/Gas 13 km

Gas 5,586 km

Liquid Petroleum Gas 956 km

Oil 4,314 km

Oil/Gas/Water 3 km

Refined Products 895 km

Unknown 59 km

Water 9 km


6.3.1 Road Network

Egypt has an extensive and well-developed road transport network including both domestic and international nodes serving domestic, business and international travellers. The two arterial axes providing East-West routes across Egypt, one on the west side of the Nile and one on the east, provide international connections to neighbouring countries. There are 26 bridges over the Nile, six flyover bridges on the road network and 107 movable and 991 fixed bridges over waterways.



There is an ongoing programme of construction of new bridges connecting the banks of the Nile. There is also a suspension bridge crossing the Suez Canal at Ismailia to connect the Delta with the Sinai Peninsula. Future plans aim to achieve the establishment of road networks to the latest technical specifications to guarantee safety and security, doubling the number of high-density single-lane roads, constructing new bridges connecting the Nile banks and flyover bridges to help improve traffic at crossroads.

Two routes in the Trans-African Highway network originate in Cairo and Egypt also has highway links with its neighbouring continent. The Trans-African Highway network comprises transcontinental road projects in Africa being developed by the United Nations Economic Commission for Africa (UNECA), the African Development Bank (ADB), and the African Union in conjunction with regional international communities. They aim to promote trade and alleviate poverty in Africa though highway infrastructure development and the management of road-based trade corridors. The total length of the nine highways in the network is 56,683 km.

Trans African Highway Network


6.3.2 Rail

The Egyptian railway system is by far the oldest railway network in Africa and the Middle East. The first line between Alexandria and Kafer Eassa was opened in 1854. Today, the system is operated by the Egyptian National Railways (ENR) and a major investment programme began in 2007 with the aim of modernising the rail network and improving safety standards.

The city of Cairo is served by the Cairo Metro, which is run by the National Authority for Tunnels. As at 2005 ENR operated 5,063 km of rail using standard gauge of 1435 mm.



Most of the rail system is focused on the Nile Delta with lines essentially fanning out from Cairo. In addition, there is a line to the west along the coast that eventually could link to Libya. From Cairo goes a major line south along the east bank of the Nile to Aswan (Sellel) in Upper Egypt.

Neighbouring Israel uses the same standard gauge but is no longer linked; in the South the railway system of Sudan operates on a narrow gauge and is reached after using the ferry past the Aswan dam. Rail service is a critical part of the transportation infrastructure of Egypt but of limited service for transit.

6.3.3 Ports

Egypt's geographical location lends an important aspect to its maritime transport sector. The Suez Canal provides water transportation between Europe and Asia, offering an alternative to navigating around Africa. The canal is around 192 km in length and has a maximum depth of 20 metres.

The canal is owned and maintained by the Suez Canal Authority (SCA) of the Arab Republic of Egypt. The canal is now extensively used by all modern ships, and is the fastest crossing from the Atlantic to the Indian Ocean. Taxes paid by the vessels represent an important source of income for the Egyptian government. Income from the Suez Canal brings in about US$2bn, contributing to 5% of Gross National Product (GNP).

Alexandria

The Port of Alexandria is the second most important city and the main seaport for Egypt. It is about 180 km northwest of Egypt's capital of Cairo and is linked by road, rail, and air to other cities in Egypt and by canal with the Nile River.

Its economy is based on the seaport, industrial and commercial activity and handles over 75% of Egypt's foreign trade.

Port Said

Port Said lies near the Suez Canal in north eastern Egypt and its economy is based on fishing, some industry. It is also important for exporting Egyptian cotton and rice as well as refuelling ships that pass through the Suez Canal.

Suez Port

Suez Port is one of the oldest ports on the Red Sea coast. It is located on the Northern end of the Suez Gulf at the Southern Entrance of the Suez Canal and consists of two docks, a trade dock and a shipyard dock. It has a free zone area for serving ships and three halls for arrival and departure. It provides tugging, pilotage, bunkering, rented motor boats and barge services.



Damietta Port Authority

Damietta is situated 70 km from the West of Port Said, 185 km to the East of Alexandria Port. Damietta port is one of the newest ports to have been established in Egypt and its large surface allows for future expansion of the port's activities. The navigational channel, which is 5 km in length, 90 km in width and has a depth of 15 metres, connects the port to the River Nile; vessels can be handled on all the 16 berths of the port, which is 3,950 metres in length with its total depth varying from 12 to 14.5 metres.

6.3.4 Airports

Cairo International Airport

Cairo International Airport, with its two international terminals, is Egypt’s main air traffic hub and it serves both passenger and cargo movements. The flight time from Cairo International Airport to any other domestic airport is no more than one hour.

EgyptAir operates more than 400 weekly flights from Cairo and several other Egyptian cities to over 66 International and Domestic destinations in Asia, Europe, Africa and North America. The EgyptAir freighter fleet has a carrying capacity of 82 tons. The airline operates three air cargo terminals and a perishable terminal at Cairo.

Cairo Airport Cargo Terminals strategy is to develop the Airport to be a central cargo hub to the rest of the Middle East & Africa. Currently, the cargo capacity is 200,000 tons per annum, and cargo volume is handled and stored through 5 cargo terminals.

Each terminal has its own storage area, equipment and customs facilities:

• EgyptAir Cargo

• Perishable Terminal

• Lufthansa Cargo Terminal

• Saudi Cargo Terminal

• Swiss Air and Qatari Terminal

Cairo International Airport handles and transports 99% of the air cargo volume of Egypt with 97% volume through international flights and 3% on domestic flights. Some 59% of cargo volume is export traffic while 41% is imported through one of the cargo terminals.

Existing Cargo Facilities

The Egypt Air cargo terminal is commonly referred to as the “Cargo Village” and was constructed in 1980. Since that time Egypt Air established a full cargo operation at the Airport. The capacity of the cargo shed is approximately 16,800 sq m. The Unit Load Device (ULD) staging area and truck court are both approximately 20m in depth and roughly 200m wide.

In the current terminal layout, approximately 2/3 of the available space is dedicated to import and 1/3 to export. The terminal can handle all types of goods. It is



equipped with a cold room, strong room for valuable items, chemical materials store and a store for radioactive materials with all perishable cargo transiting through the perishable terminal.

Perishable Terminal

The Horticultural Export Improvement Association (HEIA) was founded in 1996 in order to stimulate the exports of perishables to Europe and the Middle East. The HEIA initiated the construction of the first dedicated perishable terminal at Cairo Airport. The perishable terminal is a major asset for closed cool chain provisioning. It has stimulated the export volume by decreasing the amount of lost perishables due to exposure to high outside temperatures.

Established in 2003, this is the main gateway for the movement of fruit and vegetables to Europe and the Middle East. It is operated and managed by EgyptAir Cargo Company. The terminal facilities have a total area of 24,000 m, including cooling area of 4,000 m and capacity for storing 320 tons of cargo per 6 hours with 144 pallet positions.

The perishable terminal is funded by the Egyptian government and US Agency for International development (USAID). The total construction costs amounted to EGP16m. After a build, operate and transfer (BOT) agreement of 15 years the perishable terminal will be owned by Cairo Airport Company. Currently the perishable terminal is operated by Egypt Air and Horticultural Export Improvement Association.

The perishable terminal is built on an area of 24,000 sq m and is 8,000 sq m consisting of amongst others, of a ground area for cooled storage (4,000 sq m), expedition (730 sq m), acceptance area (1,130 sq m) and an import area (800 sq m). Plans are being developed to expand the perishable terminal from the current 8,000 sq m to 12,000 sq m in total.

The perishable terminal has airside access; it is located approximately 500 metres from the tarmac and there is a large acceptance area and it has 4 loading docks that are suitable for large trucks. The working procedures and quality control are up to industry standards and are in compliance with ISO 9000.

International Exporters Centre (IEC)

The IEC building is located just on the border of cargo area of Cairo Airport. The building itself has a rather unconventional shape as a cargo terminal. The present user of the building, Lufthansa, has managed to establish a reasonably effective cargo operation in this building despite its shape.

Air France / KLM

Air France / KLM Airlines already developed an extension of 1,000 sq m and invested in new equipment such as mobile x- rays.



Saudi Arabian Airlines terminal

Saudi Arabian Airlines is the sole user of their terminal and have a full cargo operation.

Air Cargo Egypt (ACE)

The ACE building was formerly known as International Air Cargo Company (IACC). The building is owned by a group of private investors. This terminal houses more than 10 airlines.

New Cargo City

Cairo Airport Company intends to develop an extension of the existing cargo area of Cairo International Airport, in order to accommodate the future growth of air cargo in Egypt. The total cargo area will be renamed Cairo Cargo City (CCC).

The new cargo facility is being developed at the Airport is part of an overall strategic plan to establish an efficient, profitable and successful cargo hub at Cairo International Airport. The scope of work includes:

• National cargo strategy for Egypt.

• International of EgyptAir cargo operations with the national cargo strategy.

• Restructure of the cargo village at Cairo to satisfy the greater cargo demands.

Egypt’s ambition is to develop its air cargo sector into a larger and more profitable industry with Cairo International Airport serving as a successful international cargo hub. In order to capitalise on the potential growth of the air cargo sector in Egypt, as well as the current cargo facilities, it is vital for Cairo Airport to develop a new cargo facility. The purpose of this facility will be to provide state of the art facilities to support the growth in cargo traffic, which reached 285,677 tons (including transit cargo) in 2008.

After finalising the feasibility study in May 2007, the local firm "Hamza & Associates", in cooperation with Lufthansa Consulting, was awarded the contract to plan and design the infrastructure and buildings for the new CCC. This process was completed in October 2008; CAC is in the process of initiating the necessary tender to start the construction work.

The first phase, which will include a Cargo Terminal capable of handling 170,000 tonnes and two forwarders buildings, is expected to go into operation in 2011. The second Terminal to be built in the second phase will add another 150,000 tons.

Alexandria Cargo Terminal

With growing market and customer demand, a second cargo terminal, with a storage capacity of 20,000 tons per annum, was launched in 1991 at Alexandria International Airport, with all facilities to serve the northern region of the Nile delta.



Tenth of Ramadan City Cargo Terminal

This is the third cargo terminal to be constructed at the heart of the industrial zone, and is located 30 minutes from Cairo airport, a hub for some 600 industrial factories producing garments, pharmaceutical products, furniture, crystal, ceramics and foodstuff that are exported all over the world. The terminal has a storage capacity of 30,000 tons and the complex contains an annex for cargo agent offices, and sales offices for both passenger and cargo as well as all the warehousing facilities.

6.3.5 Inland Waterways

6.3.5.1 The Suez Canal

The Suez Canal is considered to be the shortest link between the east and the west due to its unique geographic location; it is an important international navigation canal linking between the Mediterranean Sea at Port Said and the Red Sea at Suez. It is an artificial waterway running north to south across the Isthmus of Suez in north eastern Egypt; it connects the Mediterranean Sea with the Gulf of Suez, an arm of the Red Sea. The canal, about 163 km (about 101 miles) long, has no locks because the Mediterranean Sea and the Gulf of Suez have roughly the same water level. It takes between 12 and 16 hours for ships to transit the Canal, and approximately 76 ships transit the canal on a daily basis.

The Suez Canal's strategic importance lies in the fact that it is essential for world trade. It transports 14% of the total world trade, 26% of oil exports, 41% of the total volume of goods and cargo that reach Arab Gulf ports. In January 1998, the Egyptian government abolished its monopoly on ship agency services in Egypt and private companies were permitted to act as port agents at Egyptian ports, including the Suez Canal.

Statistics from the Suez Canal Authority show that in 2008, the canal brought in $5.38bn and transported 910.0m tons of cargo.



Suez Canal

Source: Suez Canal

The Suez Canal

Overall Length 194 km

From Fairway buoy to Port Said Lighthouse 22.5 km

From Waiting Area to Southern Entrance 15 km

From Port Said to Ismailia 78.5km

From Ismailia to Port Tawfik 83.65 km

Width at Water Level 300/365 m

Width between Buoys 180/205 m

Maximum Permissible Draught for Ships 62 ft

Canal Depth 21 m

Maximum Permissible Air Draft 68 m

Cross Sectional Area 4,500-4,800 sq m

Source: Suez Canal

The Canal is run in a convoy system allowing ships to transit at a fixed speed and a fixed separation distance between every two passing ships. Three convoys pass through the Canal every day, two southbound against one northbound. Each of the three convoys follows a certain system as for the time of entering the Canal, the speed limits and the emergency stopping distance between every two ships within the one convoy.

The Suez Canal had been doubled in four parts (78 Km.), and this allows the transit of ships in both directions:

1. Port Said by-pass 36.5 km. accomplished in 1980

2. Ballah by-pass 9 km. accomplished in 1955

3. Timsah by-pass 5 km. accomplished in 1980

4. Deversoir by-pass 27.5 km. accomplished in 1980



The doubling of the width of these certain sections of the canal reduces the transit time, and increases the volume of ships that can transit the canal daily.

The canal allows passage of ships up to 150,000 tons displacement. It permits ships up to 16 m (53 ft) draft to pass, and improvements are planned to increase this to 22 m (72 ft) by 2010, allowing passage of fully-laden supertankers.

The geographical position of the Suez Canal makes it the shortest route between East and West as compared with the Cape of Good Hope. The Canal route achieves a saving in distance, time, fuel consumption and ship operating costs.

Distance Savings

Source: Egyptian Maritime Data Bank

Suez Canal versus The Cape of Good Hope


Suezmax

The term ‘Suezmax’ refers to the largest ships capable of transiting the Suez Canal fully loaded, and is almost exclusively used in reference to tankers. Since the canal has no locks, the only serious limiting factors are draft (maximum depth below waterline), and height due to the Suez Canal Bridge.



The channel depth of the canal allows for a maximum of 16 m (53 ft) of draft, meaning many fully laden super-tankers are too deep to fit through, and either have to unload part of their cargo to other ships ('trans-shipment') or to a pipeline terminal before passing through, or alternatively avoid the Suez Canal and travel around the Cape of Good Hope instead.

Development Plans

Beginning in 2010, Egypt is to start work to deepen and widen the waterway. The canal will be deepened by 3.1 metres and widened by 17% to an average of 365 metres.

The planned improvements are meant to make it possible for fully loaded very large crude carriers (VLCCs) carrying Middle East oil to Europe and America to use the Suez Canal. As it stands, VLCCs discharge all or part of their cargoes into the Sumed pipeline that runs alongside the waterway, or they take the longer journey around South Africa.

Also in 2008, the Suez Canal Authority announced the consideration of adjusting its tolls for ships for 2009 in light of slower world economic growth and the international financial crisis. Revenue from canal tolls could fall slightly in 2008, despite the initial expectation of a 10 to 20% increase. This is a result of declining traffic, because of a drop in trade between Asia and Europe, and because pirates based in Somalia have driven some shippers to reroute their vessels around the Cape of Good Hope.

In 2007 the Suez Canal had decided to offer transit-fee discounts to boost trade before its rival in Panama completes its expansion. The Egyptian canal, the world's busiest waterway, hopes to attract Asia-to-US Pacific Ocean trade to the Atlantic via the passage.

The largest US trade lane is the Asia-to US market with almost 80% of imports from Asia arriving via the US West Coast. The Suez Canal Authority believes that frequent congestion at West Coast ports along with rising rail costs, will tempt shipping companies to opt for an all-water service to East Coast ports, using the Panama or Suez Canals. The Suez Canal is a two-way passage with higher capacity than the Panama Canal. But following the approval of a plan to double the Panama Canal's capacity, the Suez Canal stands to lose its capacity edge. The Egyptian waterway is currently said to handle 20% more ships than its Panama rival.

6.4 Egypt - Logistics Market

6.4.1 Overview

The poor state of the country’s transport infrastructure will remain an important factor in the development of the logistics market and there are doubts as to whether the investment flows hoped for by the transport ministry will materialise. Only moderate growth in domestic freight transport sectors between 2009 and 2013 is currently forecast. While the government has declared its intentions to improve all aspects of the transport infrastructure, these plans are long-term and the benefits are unlikely to make a major



difference to the freight transport industry until after 2013. As a result, the industry will have to continue to make use of the existing facilities for several years.

The logistics market in Egypt is extremely under developed, with most companies concentrating on the forwarding side of the business, or local transportation. A number of foreign companies operate in Egypt but even these have only a very small warehousing / logistics element to their business, instead focusing on sea freight and air freight forwarding. No overseas logistics companies operate a fleet of vehicles in Egypt. Warehouses in the country are (with few exceptions) small and basic and have historically been located next to a manufacturing plant.

While the manufacture / production of certain goods for export comprises a large market, particularly textiles and clothing to Europe and the US as well as perishable foods to Europe, there is little opportunity to undertake value added work in addition to the freight forwarding services that many companies already provide.

Instead, opportunities exist in both serving the growing retail markets as well as providing value added services to Egypt’s rapidly expanding construction sector (residential and industrial). There is also an opportunity to emulate the operation that Agility has developed for Procter & Gamble (and also Aramex for Unilever). Both of these CPG companies have awarded major handling and storage contracts to their respective providers which, in turn, have developed substantial facilities by which they plan to launch add-on services and target additional clients.

6.4.2 Egypt - Logistics Companies

Agility

Agility has branch offices in Cairo (3), Alexandria (2), Port Said and Damettia Port and it is operating from a single site located in the warehousing district in the southern part of 6th October City. This facility is some 210 metres in length by 55 metres in width and is one of only a handful currently operational at the dedicated zone. At present, no other facility has the size and sophistication of this warehouse. The facility is located on 155,000 sq m of land and comprises storage capacity of some 43,000 sq m (with ample office space on a mezzanine floor). There are some 62,000 racked pallet spaces.

APM Terminals (AP Moller – Maersk Group)

In 2007 negotiations between the Egyptian government and Suez Canal Container Terminal (SCCT) at Port Said, 60% owned by APM Terminals, resulted in signing an agreement launching Phase II of SCCT's container terminal. The Phase II development will double the SCCT terminal capacity by 2011 and elevate SCCT's role as one of the largest container terminals in the Middle East and Mediterranean. This new phase will expand SCCT with 24 Super-Post Panamax cranes and a terminal capacity of 5.1m TEUs. Suez Canal Container Terminal (SCCT) is already a leading trans-shipment centre for the Eastern Mediterranean.



Aramex

Aramex has three offices in Egypt, two of which are located in Cairo and the third in Alexandria. Aramex's main office in Egypt is located in Cairo, and it has branch offices in Abo Rawash, October, Alexandria, Assuit, Sharm Sheikh, Port Said, Mansoura, Luxor, Aswan, Hurghada and Heliopolis.

In 2008 Aramex announced the opening of a new 6,500 sq m logistics centre in Cairo, Egypt.

That development, stated Aramex, would enhance the company's previous 5,000 sq m facility and expand its supply chain solutions network in the North African country. Located in the Abou Rawash area with easy access to the ring road, the new Cairo facility forms a vital part of Aramex's supply chain solutions infrastructure in the country and links through to Aramex's other key logistics centres across the MENA (Middle East North Africa) region.

In 2006 Aramex acquired a leading Egyptian freight forwarding company "Freight Professionals". With this acquisition they consolidated their presence in Egypt as a major player providing a full, multi-modal transportation link to every country in the world as well as full coverage of the domestic local market.

Operational since 1995, Freight Professionals employed 86 people and had offices at Alexandria's and Cairo's Airports as well as at Port Said, in addition to its main offices in Cairo. The company also provided customs brokerage services in the respective ports.

The decision to acquire this freight forwarding company fitted within their strategic direction of solidifying and expanding their presence in the region. Freight Professionals provided them with a clear competitive advantage in the Egyptian market, adding new expertise, specifically in Sea Freight.

COSCO Group

In 2007 COSCO Pacific completed the acquisition of a 20% equity interest in Suez Canal Container Terminal S.A.E. (SCCT) from Egyptian International Container Terminal S.A., a subsidiary of Danish group A.P. Moller-Maersk.

SCCT, which commenced operations since in October 2004, manages and operates a container terminal at Phase I of East Port Said Port in Egypt, located at the northern entrance of the Suez Canal. Equipped with a quay length of 1,200 metres, depth alongside of 16.5 metres and a yard area of 600,000 sq m, the terminal has four deepwater berths capable of handling a total of 2.55m TEUs per annum. Phase II of the East Port Said Port development will double the handling capacity to 5.1m TEUs per annum.

The overall investment in Phase I and Phase II of SCCT amounted to US$730m. The total container throughput of SCCT in 2007 is expected to reach approximately 1.75m TEUs.




In 2009 DB Schenker established a direct presence in Egypt through participation in a joint venture.

The new Cairo–based joint venture company, which would be headed by DB Schenker, had been founded with longstanding partner ITS (International Transport Service Ltd).

Schenker had been partnered in Egypt by a subsidiary of the Swift Group, ITS. Swift Group has been providing logistics solutions to the Egyptian market since 1991.

Swift Group employed 505 people and has network offices in Cairo, at Cairo Airport, in Alexandria, Port Said, Suez, 6th of October, 10th of Ramadan, Damiette, Auga and Dubai.

It had 13 operating business units and its range of activities include air freight forwarding, ocean freight forwarding, customs clearance brokerage, supply chain management, global logistics services, project forwarding, heavy lifts transport services, door-to-door household removal services and neutral ocean consolidation services.

Deutsche Post DHL

In Egypt Deutsche Post DHL operates three divisions: DGF (DHL Global Forwarding), DHL Express and DHL Freight (branded as Nile Perishable Trading, NPT). The company is now 100% owned by Deutsche Post, having been previously owned in full and in part by two agents, Air fast Freight Services (the AEI Agent) and Misra Freight Agencies (the Danzas agent).

Deutsche Post DHL also works for a number of holding companies, such as Alshaya Egypt LLC (which owns brands such as Starbucks and Mothercare in Egypt). The company imports goods and then distributes them to various retail outlets. Physical inland transportation is not undertaken by DHL itself, it is either given to DHL Express (for store deliveries) or sub-contracted to local delivery companies. DHL Express gets around the daytime delivery ban by using mini-buses instead of delivery vehicles.

DHL Global Forwarding considers its main freight forwarder competitors to be K+N, Schenker, Expeditors, UTI and Panalpina (although Panalpina is now focussing more on the oil and gas industries). Of the local companies, Aramex and 3a are competitors.

DHL Global Forwarding is also active in project forwarding, handling oil and infrastructure projects (including the Metro), including pipes and heavy industrial equipment. The company feels that the Nile is only suitable for niche cargoes, e.g. food from the upper Nile to the south (Aswan).

DHL Freight (branded as Nile Perishable Trading, NPT)

Nile Perishables started business in 2006 and concentrates on handling the export of fruit and vegetables (in refrigerated containers) mainly to Italy and the Netherlands, with some also going to the UK. Temperature controlled freight is not a big business at present but is expected to grow very quickly. K+N are also active in the segment, as are some local players. DHL owns one warehouse in El Obour (which will move to a new larger facility at



Tenth Ramadan in the near future (size to be confirmed), and a further transit warehouse at the airport. El Obour is some 25 km from the airport and the new facility will be temperature and humidity controlled and will be designed to accommodate pharmaceutical and FMCG customers (fresh produce and frozen processed foods).

GAC

Gulf Agency Co. (Egypt) Ltd. was established in 1996 in preparation for the privatisation of Egyptian shipping agency services, which came into effect in 1998. It provides a range of shipping and logistics services, as well as assistance and services for vessels transiting the Suez Canal. GAC Egypt has offices in Alexandria, Cairo, Damietta, Suez, Port Said, and Safaga. Other operations in Egypt include the company's regional office in Cairo and GAC Bunker Fuels (Egypt) Ltd, also in Cairo.

Hutchison Port Holdings

Alexandria International Container Terminals (AICT), operates the Ports of Alexandria and El Dekheila, both located on the Mediterranean Sea in Egypt. AICT developed two general cargo terminals into modern container handling facilities, of which the first phase was scheduled for completion in 2007.

Kuehne+Nagel

Kuehne+Nagel's offices in Egypt are located in Cairo and Alexandria. Kuehne + Nagel operate in Egypt through a joint venture it established in 1984 with International Associated Cargo Carrier SAE, shipping and forwarding company based in Cairo. Subsequently Kuehne + Nagel Egypt was established in 1987.

Customers are offered a range of services, including international import and export forwarding by air, sea and land, as well as customs clearance, domestic distribution, removal transports and industrial projects. K+N's JV Company has 90 staff. The company is focused on expanding the contract logistics business and now operates from 3 locations in Egypt.

K+N acts primarily as an air and sea freight provider and a customs clearance agent and, to date, only has a small contract logistics operation and operates in niche markets, such as oil and gas, personal effects, project forwarding, exhibition logistics and perishable logistics. The company operates leased warehouses in the Cairo area only.

NOSCO

NOSCO was founded in 1976 to serve the Egyptian trucking industry. The company provides inland transportation, customs clearance and heavy haulage. NOSCO has facilities located in Cairo, Alexandria, and Damietta in Egypt.

NOSCO owns and operates its own fleet of trucks and mobile cranes and services centres in major oil fields and all Egyptian ports.



Panalpina Group

Panalpina Egypt is part of its North Africa Area and was established with an office in Cairo in 1995. It provides a range of forwarding services through Egypt's major airports and seaports in Alexandria, Damietta, Port Said and Suez. Panalpina also has experience in handling project business and trade fair forwarding as well as cargo for the Oil and Gas industry.

Toll Global Forwarding (TGF)

In 2007 BALtrans opened a new office in Egypt, named Premier BALtrans Egypt. Premier BALtrans Middle East was assigned the task of opening offices in 12 countries under the Premier BALtrans brand.



7.0 Iran

Iran is situated in the Middle East and borders the Gulf of Oman, the Persian Gulf and the Caspian Sea, between Iraq and Pakistan.

7.1 Economy

Annual Data 2008

Population (m) 72.1

GDP (US$ m; Market Exchange Rate) 319,494 (est)

GDP (US$ m; Purchasing Power Parity) 827,965 (est)

GDP per head (US$; Market Exchange Rate) 4,433 (est)

GDP per head (US$; Purchasing Power Parity) 11,489 (est)

Exchange rate IR:US$ 9,429

Real GDP growth 6%

Inflation 16.4%


7.2 Trade

Oil earnings comprise over 80% of export revenue. High oil prices since 2000 have resulted in large trade surpluses, despite a marked rise in import spending. With at least 14 vehicle manufacturers and 1,200 parts suppliers, the automotive industry is one of Iran’s key business sectors, after oil production. The industry is dominated by two publicly owned carmakers: Iran Khodro and Saïpa. PSA Peugeot Citroën assembles vehicles under license with both firms.

The automotive industry generates the need for a dynamic supply sector. Around 2,000 companies provide Iranian car factories with what they require and due to high import taxes, the market is very well suited for joint ventures and local subsidiaries. High-end technology from Europe is very popular. This is a development that is opening up new opportunities to international logistics service providers, who can find more business in trade with Iran. Foreign companies have been allowed to own 100% of an Iranian firm since the beginning of 2009. This is new and the government in Tehran hopes that it will attract investment activity from foreign entrepreneurs.





Main Exports




Main Imports




In 2007 the European Union (27) represented 19.8% of total Iranian exports.





In 2007 the European Union (27) represented 9% of total Iranian imports.


Transport policy in Iran is overseen by Tehran and is decided in terms of five-year plans set forth by parliament and the government (the plan for 2005–2010 is the current one). The country’s rail network covers 9,400 km and an additional 4,000 km are currently under construction.

In rail construction the current government is far behind what was targeted in the fourth five-year plan (2005–2010). A total of $1bn was invested in railway projects in the past Iranian year 2008/2009 (to March 2009). The amount budgeted for rail development annually is $222m.

Some 30% of the country’s freight is to be transported by rail by 2010. The Iranian railway carried a total of 43.7m tons on domestic routes last year. An additional 2.8m tons were attributed to transit traffic. The latter is more likely to be moved by rail than on the roads.

Tolls are charged on Iran’s road network. Trucks have to stop at control points along the motorways, where their tachographs are checked and they have to prove that they have adhered to the maximum speed of 80 km/h.

The deep-sea ports of Khorramshahr, Abadan and Bandar Abbas are being upgraded and expanded. New port information systems are to be installed; the country’s ports still have capacity for another 12m tons of freight per year.



A fund is being set up to equip the national shipping industry. It will receive IRR400bn ($41m). Shipping is an important sector in Iran, which has a 3,000 km coastline and the leading shipping line in the commercial fleet is the state-owned company Irisl. However the USA banned Irisl ships from calling at US ports at the beginning of 2009, saying that the shipping line is sailing on behalf of Iran’s ministry of defence.

The government in Teheran has decided to privatise the maritime sector. Marine equipment worth IRR500bn ($51.4m) will pass into private ownership by 2009. Port facilities worth IRR200bn ($20.6m) were sold to private investors in the past five years. 24 handling terminals in the ports are operated by private companies, which have invested IRR1bn ($103,000) so far.

Iran Transport Infrastructure Map




Iran Transport Infrastructure

Roads

Total 172,927 km

Paved 125,908 km

Expressways 1,429 km

Railways

Total 8,367 km

Broad Gauge 94 km


of which Electrified 146 km

Airports

Total 317


Heliports 14

Waterways

Total 850 km

Merchant Marine

By Type: Bulk Carrier 18, Cargo 34, Chemical Tanker 4, Container 6, Liquefied Gas 1, Passenger/Cargo 4, Petroleum Tanker 2, Refrigerated Cargo 2, Roll-on/Roll-off 3

Ports & Terminals

Assaluyeh, Bandar Abbas and Bandar-e-Eman Khomeyni


7.3.1 Road Network

Iran has extensive transit corridor networks between Asia and Europe as well as an infrastructure of roads, railways and active ports on the Caspian Sea, the Persian Gulf and the Gulf of Oman.

Its network of roads connects Turkey, Nakhichevan, Armenia, Azerbaijan, Iraq, on the one side, and Turkmenistan, Afghanistan and Pakistan on the other.

East-West Corridor

• Northern Track 1: Starts from the north-eastern towns of Sarakhs, Lotfabad, Bajgiran and Inche Borun and connects Tehran via Bazargan, Sero and Razi to Turkey.

• Northern Track 2: Starts from the north-eastern areas and joins passageways in the north-west.

• Central Track: Starts from two branches, one in the northern and the other in the south-eastern areas of Dogharoon and Mirjave. The track connects the



central cities of Tehran and Isfahan to the border point of Khosravi and other points in the north-west and south.

North-South Corridor

• Western Track: Runs from Astara, Bilesavar and Jolfa through to the ports of Imam Khomeini, Khorramshahr and Abadan.

• Eastern-Central Track: Runs from northern ports and the border points in the north-west and north-east of the country through to the central cities of Bandar Abbas, Chabahar and Bushehr.

• The north-south corridor is an arterial route between the Central Asia, Transcaucasia and the Russian Federation, on the one hand, and the Persian Gulf and East Africa, on the other.

7.3.2 Railway Network

Iran's rail network still remains a relatively minor player in Iran's transport sector compared to road transport. To a large extent, this is due to the relatively poor competitive position of rail versus road, which in turn depends on many factors such as the country's geography, human settlements and the urbanisation patterns as well as overall government policy in terms of infrastructure investments, pricing and tariff controls.

As road delivery can access fuel subsidies and cheap fuel costs, it is automatically preferred to the railway system, which has to mainly secure its maintenance costs from the users. The government has decided to modernise 5,600 km of these rail lines and also plans to lay out another 3,500 km of electrified railway lines. The objective is to ensure that railways carry 3.5% of the country's total passenger traffic and 8.5% of the total freight traffic. The government is particularly interested in developing the East-West corridor.

7.3.3 Airports

Imam Khomeini International Airport (IKIA)

Imam Khomeini International Airport is in Tehran and the airport complex is located in a 15,000 ha area located some 45km to the south of Tehran, on the Tehran-Qom highway, in Fashafouyeh, near Shar-e Rey.

It was designed to replace Mehrabad International Airport, which is in the west of the city, now inside the city boundaries.

Imam Khomeini International Airport (IKIA) in Tehran, Iran, opened in May 2004 and was immediately closed by the Islamic Revolutionary Guard amid security concerns over foreign involvement in the management of the airport. However despite this by October 2007, it was announced that as of the end of that month all international flights except



those bound to and from Damascus, Jeddah and Medina were to be transferred to the Imam Khomeini International Airport and the IKIA became Tehran's primary international airport. All flights have now been moved to IKIA except domestic flights and flights to Saudi Arabia for Hajj and Umrah.

7.3.4 Ports

Iran provides a major sea bridge connecting Europe, Central Asia and the Caucasus on the one hand, and the Persian Gulf and the Indian Ocean on the other. Its major ports on the Persian Gulf are Shaheed Rajayee, Imam Khomeini, Bushehr, Khorramshahr, and Bandar Abbas The main northern ports of the Caspian Sea are Anzali, Nowshahr and Amirabad.

Bandar Abbas

Bandar Abbas (previously called Gameron or Qamerun) is a major port city in southern Iran, capital of the Hormozagan province, and is one of the major gateway ports to Iran. It is situated in the middle of the Strait of Hormoz, linking the Persian Gulf to the Sea of Oman. It is located 500km to the south of Kerman and connected by good road and railroad networks. The port city has an international airport with regular flights to other countries in the Persian Gulf.

By May 2009 container throughput had fallen year on year by 6.8% and handled a total of 160,452 TEUs, down from 172,103 TEUs in May 2008. Throughput at the port for January 1 2009 - May 31 2009 stands at 777,585 TEUs, a 6.58% drop from the same period's throughput of 832,329 in 2008.

When phase one of the second container terminal at Bandar Abbas opened in 2008, the port's annual container capacity increased from 1.7m TEUs to 3.3m with plans to double the current capacity over the next three years. Phase II of the new facility was scheduled to become operational in early 2012.

Amirabad

The Port of Amirabad takes advantage of the strategic importance of the Caspian Sea to adjacent markets and trade as well as its potential to improve the country’s transportation and communication networks.

It is Iran’s only northern port connected to the nation’s railroad system. It offers both rail and truck roll-on/roll-off berths with a large part dedicated to support the port’s petrochemicals plants and oil refineries. The ports Special Economic Zone will in future contain three areas for oil, industry, and general cargo including new transit warehouses adding an extra 30,000 sq m of storage area.

Shahid Rajai

The Port of Shahid Rajai is located on Hormuz Bay about 23km west-southwest of the city of Bandar Abbas with the major cargoes including oil, bulk, and break bulk as well as



some transit goods. Export goods include petroleum, hand-woven carpets, fruit, nuts, hide and skin, as well as iron and steel with imports including machinery, military supplies, metal works, foodstuffs, and pharmaceuticals.

Imam Khomeini

The Imam Khomeini Port is located in the south-western coast of Iran on the Persian Gulf with facilities including a container terminal; terminals for industrial concentrates; grains; general and break bulk; and barges and minerals it also has a silo for grain.

The port is linked to Tehran and other Iranian cities by road, rail, and air and contains some 300,000 sq m of warehouse with a container terminal capacity of 400,000 TEUs, including 350 TEUs of refrigerated cargo per annum.

7.4 Iran’s Logistics Market

7.4.1 Overview

Latest indications suggest that freight traffic will grow by an average of 3.8% per annum in the 2009-2013 forecast period taking into account on the one hand the turbulence over the recent elections as well as the fact that the necessary investments in new pipelines, shipping and port and rail capacity have not been made.

However global demand for Iran’s natural gas and petrochemicals, much of which will need to be pumped to coastal terminals and shipped by liquefied natural gas (LNG) tankers is increasing and new investment and export deals with China will help.

Road haulage growth has lagged behind GDP in recent years, reflecting the poor quality of the highway network. Rail freight has also lagged behind the general growth of the Iranian economy, despite much talk of building a new rail-based north-south transport corridor linking Iran to its regional neighbours that will not have a great impact on capacity for the next few years’ growth prospects.

Airfreight growth is constrained by an ageing aircraft fleet and the effect of US sanctions and the global recession of 2009-2010 will inevitably impact core freight modes of pipelines and shipping. Given the country’s abundance of natural resources it has a poor track record in providing investment opportunities in the transport sector.



7.4.2 Iran - Logistics Companies

Aramex

Aramex has one office in Iran, located in Tehran.


Schenker is represented by its agent Delta Bar International Transport & Shipping Services established in 1989 with the purpose of providing transport (air, sea, land) services as a link for developing economy & trade relations between Iran & other countries in the world.

Delta Bar is one of the leading companies in freight forwarding field in Iran with 38 employees, 3 offices (Bazargan, Mashad, Bandar Abbas) and 16 agent in Astara, Arak, Ahwaz, Anzali, B.I.K. Esfahan, Ghazvin, Chabahar, Lotfabad, Sarakhs, Badjgiran, Sirdjan, Yazd, Pol, Orumieh and Dogarun.

Delta Bar has developed services for transit of goods to and from CIS countries and Afghanistan via Bandar Abbas.

GAC

GAC Iran was set up as a professional shipping company in 1958. GAC Iran's active customer base as at 2007 includes most major ship owners, ship managers and oil companies.

In December 2004, GAC Shipping FZCO was established in Dubai, as the support services hub for the Group's operations in Iran.

In addition to professional shipping agency services for all types of vessels including tankers, containers, dry/bulk, offshore and marine, GAC Iran also provides container, terminal, land transportation, transit and logistics services.

Kuehne+Nagel

Kuehne+Nagel's offices in Iran are located in Bandar Abbas and Tehran.



8.0 Iraq

Iraq is located in the Middle East and borders the Persian Gulf between Iran and Kuwait.

8.1 Economy

Annual Data 2008

Population (m) 28.9

GDP (US$ bn; Market Exchange Rate) 93.8

GDP (US$ bn; Purchasing Power Parity) 112.8

Inflation 6.8%


8.2 Trade





Main Exports

Source: WTO

Main Imports

Source: WTO




Rebuilding the transport system in Iraq is the key to the successful reconstruction of the country. It is a highly complex undertaking encompassing rebuilding public transport services for cargo and passengers, inland waterways and ports, railways, civil aviation, postal services and multi-modal facilities.

Reconstruction efforts since the US-led war in 2003 have been continuously hampered by violence, corruption and red tape. However Iraq’s Ministry of Construction and Housing now wants to ease the bureaucracy for international companies with the enforcement of a new law that will mean financial privileges for investors as well as the long-term lease of government-backed construction projects.

Iraq Transport Infrastructure Map




Iraq Transport Infrastructure

Roads

Total 44,900 km

Paved 37,851 km

Railways

Total 2,272 km


Airports

Total 105


Heliports 17

Waterways

Total 5,279 km

Merchant Marine

By Type: Cargo 10, Petroleum Tanker 4

Ports & Terminals

Al Basrah, Khawr az Zubayr and Umm Qasr


8.3.1 Road Network

Iraq has three bridges which provide essential transportation links within Iraq, and also between its neighbouring countries.

The Al Mat Bridge is a critical link on the main international highway between Baghdad and Jordan and is used by more than 3,000 trucks daily. The bridge enables the transportation of reconstruction, commercial and humanitarian aid and goods to Iraq from Jordan and elsewhere.

The Khazir Bridge is located in northern Iraq and crosses the greater Zab River. The double-span concrete bridge is essential for the transport of fuel and agricultural products in the north.

The Tikrit Bridge runs over the Tigris River between Tikrit and Kirkuk. Following the war in the country, the Tikrit Bridge was the third and final bridge on a major transport route in the country that needed repairs. The bridge is an important link between the Iraqi cities of Tikrit and Kirkuk

In the aftermath of the war there, Iraq's transportation networks are vital supports of commerce, culture and infrastructure as the country begins to rebuild.




In early 2009 the Iraqi minister for transportation confirmed that a new railway that will link Iraq to Syria will be launched on 1st June, allowing for the transfer of freight from southern Europe to the Persian Gulf and that Iraq had repaired the railway that connects Umm Qasr port to the Syrian border.

Also in 2009 it was reported that Germany's national rail operator Deutsche Bahn was holding talks with Iraq on rebuilding its rail infrastructure. The company is particularly interested in working to rebuild the country's freight train network and was hoping to operate it later with Iraqi partners. There are still no details of the value of the investment planned nor the scale of the project.

One of the issues to be discussed was an expansion of Iraq's rail network initiated after exploratory discussions with Iraq a year ago.

With the completion of the construction of the Iran-Iraq rail line by the end of the year rail connections would be established between the Mediterranean Sea and the Caspian Sea, the nations of Central Asia and the Caucasus. The project's second phase was the 35km between Shalamcheh and Basra.

The second and most important phase of the construction of this line was the crossing of the Arvandrud, which cost $110m with Iranian companies doing the work. The first phase of this project was the 50km from Khorramshahr to Shalamcheh. With the construction of this rail line, in addition to the establishment of rail connections between Iran, Iraq and Syria, the transportation of goods would start between the Caspian and Mediterranean seas, as well as Iraq’s ability to be able to export its goods to Central Asia and Pakistan.

In 2004 USAID assisted in the construction of 72km of new track and rail facilities between the Port of Umm Qasr and Shuaiba Junction, located west of Basra and connecting to the Baghdad trunk lines. This project was a joint US-Iraqi effort; the USAID constructed the civil facilities and provided project management and materials, and the Iraqi Republic Railways contributed project designs and materials, and supervised construction.

8.3.3 Airports

There are 108 airports in Iraq, 75 of which have a paved runway. Baghdad and Basra are both international airports, while Mosul, Kirkuk and Irbil are domestic airports.

Since the re-opening of Baghdad International Airport in July 2003, commercial capability continues to expand through a number of renovations, while Basra has completed its commercial reparations.

Cargo traffic is dealt with at the three airports of Basra, Ardebil and Sulaimaniyah and a large number of freighter aircrafts, including DHL and Lufthansa, land daily in Iraq carrying relief materials and other commercial cargo.



8.3.4 Ports

Iraq has little port capacity, a fact that reflected the low level of foreign trade and the country's traditional overland orientation toward Syria and Turkey rather than toward the Gulf.

Basra, 590 km south of the Iraqi capital Baghdad, has five commercial ports and two oil ports: al-Maaqal and Faw, a small port on the al-Faw Peninsula near the Shatt al-Arab waterway and the Persian Gulf.

In the early 1970s, Umm al-Qasr port was built, and in 1974, Khour al-Zubeir and Abu Fallous ports were established on the Shatt al-Arab.

The Gulf port of Basra has been expanded many times, and a newer port was built at Umm Qasr to relieve pressure on Basra. Before shipping could be resumed after the war, the Shatt al Arab will have to be cleared of explosives and wreckage, which could take years.

Iraq's only deepwater ocean port is the Port of Umm Qasr, which is located on a canalised part of the Khawr Abd Allah estuary which leads to the Persian Gulf and a small inlet separates the port from the border of Kuwait. The port is connected to Basra by a branch of the main Iraqi Republic Railways, and Umm Qasr has a civil aviation airport.

APL operates a dedicated container feeder service that calls direct at Umm Qasr, connecting it to Jebel Ali (with a transit time of 3 days) supported by priority berthing facilities at Jebel Ali. It was among the first carriers to announce the re- opening of the commercial service to Umm Qasr and has its own dedicated Iraqi agent with offices in Baghdad, Basra and Umm Qasr. The other two main ports in Iraq are Al Basrah and Khawr az Zubayr.

8.4 Iraq’s Logistics Market

8.4.1 Overview

Transportation of cargo to Iraq is an extremely complicated task. Specific experience and expertise is essential to satisfy the many and varied requirements that apply to moving goods to and from Iraq. Constantly changing rules and regulations complicate matters even further.

For it to become one of the biggest oil exporters, Iraq will require huge investment in logistics and as the economy continues to recover logistics and transport services will find a ready market.

Global companies, such as Agility, FedEx, DHL, UPS, TNT, have already entered the Iraqi market as well as Jordanian, Saudi and Turkish firms entering Iraq’s trucking market.



Freight forwarders/consolidators

Iraq’s trade with the outside world was severely restricted by United Nations sanctions for over a decade. Since 2003, imports have boomed. Goods are pouring into Iraq by sea and land routes. Adding to this trend, Iraqi exports are expected to diversify and increase. Freight forwarders and consolidators, especially those with established connections in the region, should do well in Iraq.

Road freight

Trucks handle much of the freight shipping services in Iraq. Main routes are:

1. Umm Qasr to Baghdad;

2. Aqaba, Jordan to Baghdad; and

3. Tartous, Syria to Baghdad.

The trucks are often old and in fair to poor condition. There are private trucking companies as well as government trucking firms, with some joint public-private companies as well. Government involvement will decrease as privatisation of the trucking industry moves forward.

Package/document delivery

As economic activity increases, the need for delivery services will expand as well. Large international firms are operating in Iraq, but there may well be local and regional opportunities for new companies to enter this market.

Cold storage/cold transport

There is limited availability of both cold storage and cold transport for perishable goods in Iraq. As the country’s processed foods industry diversifies and expands, more services will be required.

8.4.2 Iraq - Logistics Companies

Agility

By 2008 Agility announced it had further expanded its presence in Iraq with the creation of a joint venture partnership to open up its operations in the Kurdistan region of Iraq. Agility Kurdistan Limited had been established "to capitalise on the vast opportunities presented in the Kurdish region's developing market while solidifying and strengthening Agility's role in Iraq as a whole".

Agility claimed to share close ties with the government of the Kurdistan region and they believed the new venture would also support the development of that part of Iraq. "Agility Kurdistan will be able to play a positive role in the progression and development of the region. We have strong support from the Kurdish government and we are also working



closely with non-governmental organisations and will be instrumental in aiding and assisting the expansion of the area's infrastructure."

Besides supporting the development of the Kurdish supply chain network, they were confident that the new organisation's operations will have other positive effects for the country. "We anticipate that our presence in the region will encourage more foreign direct investment and will help boost the Kurdish economy and also benefit the whole of Iraq," they said.

The joint venture partnership for Agility Kurdistan involves Agility and Kurdistan Capital Investment, along with two other well-established regional business figures. The newly-formed entity will be investing in the construction of warehousing facilities in order to provide storage, transportation, freight forwarding, customs clearance and associated services to its customers. It will also be exploring real estate activities.

In 2007 Agility Defense & Government Services (DGS) announced that it had been awarded a three-month extension for the Strategic Supply Chain Management System which includes the wholesale warehousing and distribution of reconstruction equipment and materials to enhance the Iraqi Ministries of Defence and Interior physical capabilities throughout Iraq. The sole source extension was awarded by the Gulf Region Division (GRD) of the Army Corps of Engineers and has a maximum value of $72.5m over the potential three-month period. The contracting authority for this award is Joint Contracting Command - Iraq.

Agility DGS will continue to handle receiving, warehouse storage, shipping, and distribution services to support Iraqi reconstruction efforts. Up to 100 trucks per day transport materials and equipment, including vehicles of all types, computers, office supplies, and medical equipment, from warehouses to locations throughout Iraq. Agility supports this contract through two primary warehouse distribution complexes located at Abu Ghraib, near Baghdad, and Umm Qasr, a port facility south of Basra and air cargo operational facilities at Baghdad and Basra International Airports.

Aramex

Aramex has two offices in Iraq, one located in Baghdad and the other in Erbil.

GAC

GAC Iraq operates at the country's ports, including Umm Qasr and Basrah Oil Terminal, with locally based staff coordinated by GAC Kuwait. The operation is supported by the Group's offices in neighbouring countries, which serve as important entry points for Iraq business. The United Nations' World Food Programme (WFP) appointed GAC as its port agent in the Middle East, handling WFP aid shipments to Iraq.



9.0 Jordan

Jordan is mostly a landlocked country, except its southern tip, where it has some 26km of shoreline along the Gulf of Aqaba, with access to the Red Sea. Its strategic location bordering with Syria in the north, Iraq and Saudi Arabia in the East and South and West Bank and Sinai Peninsula on the west has played an important role in increasing the cross-border trade volume and helping in economic development. The existence of a strong and expanding cross-country transport network has contributed immensely to its development as one of the fast emerging markets in the region.

Geographic Area (sq km)

Total 92,300

Land 91,971

Water 329


9.1 Economy

Annual Data 2008

Population (m) 6.1



GDP per head (US$; Market Exchange Rate) 3,299


Exchange rate JD: US$ 0.709


Inflation 6.6%




9.2 Trade



The Aqaba Special Economic Zone Authority (ASEZA)

The Aqaba Special Economic Zone (ASEZ) was launched in 2001 as a duty-free, low tax and multi-sector development zone offering global investment opportunities in a world-class business environment ranging from tourism to recreational services, from professional services to multi-modal logistics, from value-added industries to light manufacturing.

The ASEZ covers an area of 375 sq km encompassing the entire Jordanian coastline (27 km), the sea-ports of Jordan, an international airport operating under an Open Skies airport policy and the city of Aqaba with a current population of 95,000 people.

This high level of economic activity indicates a developing role of the ASEZ as one of the most important ports in the region. However, ASEZA’s vision is not to confine economic activity to the port or to commercial activity alone; Aqaba will develop into a logistics centre providing services to the rest of the Kingdom and throughout the region.



Main Exports


Main Imports





Given its strategic geographic location, many countries, particularly Syria and Iraq are using Jordan's transport network for their exports. Jordan has a modern road network of 7,694 km with roads linking all major cities. The port of Aqaba is considered one of the most efficient in the Middle East region because of its ideal location and modern equipment. The port plays an important role as a transhipment centre for the countries in the region.

Following the government strategy of actively developing the country's involvement in the lucrative Middle East logistics industry, Jordan developed its logistics infrastructure by removing transport bottlenecks and providing access to affordable land for urban development purposes. It reinforced this development by signing a free trade agreement with the United States and maintaining other international trade agreements with the EU and neighbouring countries. Jordan has since attracted a growing list of international, regional and local players from the logistics industry including TNT, Aramex and DHL.

Despite Jordan's logistics issues such as the rising price of land and the resistance of companies to outsource their supply chains, the country has still successfully marketed itself as a multi-modal distribution centre with airports, seaports and efficient road access to neighbouring countries, including Iraq, Saudi Arabia and Syria. Jordan's ability to provide logistic support in the rebuilding of Iraq has helped boost land transportation trade once again. The main five Iraq contractors - KBR, DynCorp, Bectel, Flour and Parsons - not only use Jordan as a gateway to Iraq but also have offices in Amman. Over 300 FTLs (full truck load) move across the border between Jordan and Iraq, delivering anything from FMCG goods to construction supplies.

Jordan Transport Infrastructure Map




Jordan Transport Infrastructure

Roadways (2006)

Total 7,694 km

Paved 7,694 km

Railways (2006)

Total 505 km

Narrow Gauge 505 km

Airports (2008)

Total 17


Heliports 1


By Type: Cargo 8, Container 1, Passenger/Cargo 7, Petroleum Tanker 2, Roll-on/Roll-off 3

Ports & Terminals

Al 'Aqabah


9.3.1 Road Network

Jordan is served by nearly 8,000 km of roads. The country’s main national artery is the 330-kilometre highway that links Amman to Al Aqabah. Over the past decade, the government has made efforts to improve the quality and capacity of the road network. By 2002 Jordan had more than 346,000 passenger cars, an additional 145,000 vans, and more than 14,000 buses. To further its efforts to become a pivotal transportation and economic centre, in 2004 the government became the first regional state to institute a new road network sign system that would unify the region’s highways in order to facilitate trans-border commerce and tourism.


In comparison to the country’s road system, Jordan’s rail network is underdeveloped and limited. The predominant passenger feature of the network is a section of the Hijaz Railway that runs through Amman, linking Syria’s capital Damascus with the Saudi Arabian city of Medina. Additionally, a twice-weekly express link between Amman and Damascus was established in 1999. Plans are currently in progress for expansions to the rail system, including upgrading the internal rail link between Amman and Az Zarqa and establishing an international link between Jordan and the Israeli city of Haifa. The vast majority of the country’s 618 km of track are devoted to transporting freight, predominantly phosphates, from outlying mines to Al Aqabah.



9.3.3 Airports

Royal Jordanian Airlines and many other international airlines serve the air terminal in Amman. Air transportation is handled at 3 airports: Queen Alia International Airport, Amman Civil Airport and King Hussein International Airport, also known as Aqaba International Airport.

Improvements to the Queen Alia, Amman/Marka and Aqaba airports are underway through the introduction of new computerised systems, as well as the upgrading and maintenance of other facilities. The main cargo hub at the terminal in Amman has a fully automated Cargo Handling and Revenue Management System (CHARMS). The air services network connects about 50 destinations in Europe, Middle East, North Africa, Far East, Indian sub-continent and North America.

Jordan's ambitions to increase tourism have placed an increased focus on the country's airports, which are handling a growing number of passengers every year. In particular, the government is planning to enhance the role of Queen Alia International Airport as a leading aviation hub, which will be achieved through a US$380m expansion and modernisation programme.

The airport, which is located close to the capital city of Amman, features two 31,000 sq m, three-storey terminals. However, the expansion programme will include the construction of a new 900,000 sq ft terminal building, which will be completed in two phases. The first phase is scheduled for completion in 2010 and will increase the airport's total capacity to 9m passengers a year. The second phase will increase this figure to 12m passengers a year.

The government is hoping to encourage private sector participation in the airport's expansion and rehabilitation. Queen Alia International Airport is home to the country's national flag carrier Royal Jordanian Airlines. In addition, a number of international and regional carriers are currently operating flights from the airport, including British Airways, Lufthansa, Emirates, Etihad Airways, Qatar Airways, Gulf Air, Saudi Arabian Airlines and Air Arabia.

9.3.4 Ports

The Port of Aqaba is at the head of the Gulf of Aqaba and is well-known as an industrial centre and an important exporter of phosphate and shells. It handles nearly 80% of Jordan’s exports and over 60% of the country’s imports.



9.4 Jordan’s Logistics Market

9.4.1 Overview

The logistics industry in Jordan is still at the early stages of development but the hope is that increased attention is being directed toward the potential of the industry in the country. Aqaba is positioning itself as a logistics gateway for the region and has attracted many leading freight forwarders to the country.

80% of the land trucking in Jordan is carried out by individual owner drivers rather than by companies although efforts are being made to make the industry more competitive by the authorities.

An Aqaba Logistics Village has also been established. This consists of 1.5m sq m of land with speculative warehouse development, built by the National Real Estate Company of Kuwait. The Village will also contain two 10,000 sq m container freight terminals and seven distribution centres. This investment has been supported by an air cargo terminal that is operating sea-air linkages into Iraq.

Mafraq to the north of the country is also developing as a logistics hub. It is anticipated that Mafraq will become an important regional transit point as it lies at the crossroads for the region and would certainly be at the centre of any future rail project.

Along with development, the most pressing problem is to bring professionalism and technology to all companies in the sector.

9.4.2 Jordan - Logistics Companies

Agility

Jordan is seen as a vital link between the Levant, the GCC and Iraq and it is becoming another important commercial centre in the Middle East. Agility has a presence in Jordan with a logistics & distribution facility and it also has a hub for their Overland Transport Fleet operating within the region.

Aramex

Aramex has two offices in Jordan, both located in Amman.




Schenker is represented in Jordan by the GLFS Group. Headquartered in Amman the group also have branch offices and 6,000 sq m of warehousing based in Iraq. Part of the Bax Global acquisition GLFS replaced Naber & Co as Schenkers representative in the area. In cooperation with Schenker and other similar companies, the company handles land transportation (full loaded and groupage truck), as well as air freight and ocean freight.

GAC

Gulf Agency Company (Jordan) W.L.L. was established in 1985 in partnership with a leading shipping and industrial family to provide a full range of shipping and logistics services. With offices in the capital, Amman, and in the port of Aqaba, GAC Jordan covers all cargo destinations within Jordan and neighbouring countries.

Kuehne + Nagel

Kuehne + Nagel's offices in Jordan are located in Amman and in the Aqaba Free Zone.

Panalpina Group

In Jordan, Panalpina works through an agent: Amin Kawar & Sons Co based in Amman.

Royal Jordanian

In 2007 Royal Jordanian inaugurated the first phase of a programme to upgrade its cargo terminal at Amman's Queen Alia International Airport. This phase included the deployment of new forklift trucks and automated work stations to speed up cargo handling.

New shelves and pallet storage facilities were set to be added to the terminal before the end of 2007. The airline was also looking at deploying new IT systems to improve performance across its operations.



10.0 Kuwait

Kuwait borders the Persian Gulf between Iraq and Saudi Arabia and has a total land border of 462 km. It has a total coastline of 499 km.

10.1 Economy

Annual Data 2008

Population (m) 3.4

GDP (US$ m; Market Exchange Rate) 148,811 (est)




Exchange rate KD: US$ 0.269


Inflation 4.9%


10.2 Trade

Source: The World Factbook Note: Figures for 2008 are estimates.



Main Exports

Exports are dominated by oil sales in turn financing a rising level of imports.


Main Imports

Source: The Economist Note: Figures for 2004 are the most recent available.





In 2007 the European Union (27) represented 7.8% of total Kuwaiti exports.


Source: The Economist In 2007 the European Union (27) represented 33.2% of total Kuwaiti imports.




Kuwait is a small country and many of the challenges of distributing goods and services found in other, larger countries do not exist in Kuwait. Kuwait International Airport is located south of the city and is easily accessed by road. It has a number of regular flights to destinations in the Middle East, Europe and Asia and can handle the world's largest aircraft. Kuwait's road system is well developed, with modern multi-lane expressways linking all areas of the country. There are no railways in the country.

Kuwait Transport Infrastructure Map




Kuwait Transport Infrastructure

Roadways

Total 5,749 km

Paved 4,887 km

Airports

Total 7


Heliports 4

Merchant Marine

By Type: Bulk Carrier 2, Cargo 1, Carrier 3, Container 6, Liquified Gas 4, Petroleum Tanker 22

Ports & Terminals

Ash Shu'aybah, Ash Shuwaykh, Az Zawr (Mina' Sa'ud), Mina' 'Abd Allah, Mina' al Ahmadi


10.3.1 Road Network

Kuwait's road network consists of a radial grid design. With seven major Ring Roads and a number of major dual-carriage expressways, the road network links Kuwait City to every area of Kuwait, as well as to the Iraqi and Saudi Arabian borders.

Kuwait has 5,749 km of road network, of which 4,887 km is paved. Kuwait has a good road infrastructure which has previously suffered the effects of increased demands made on it by the expanding urban population. A number of roads suffer from excessive use by heavy loads. As a result, restrictions have been implemented as to when heavy vehicles are permitted to use certain roads. The government is investing heavily in upgrading a number of roads.

10.3.2 Airports

Kuwait International Airport, which is located 16 km south of Kuwait City, can currently handle in excess of 6m passengers a year. The government ordered a modernisation programme for the airport during the early 1990s, valued at US$60m, which was completed in two phases.

Kuwait Airways Company (KAC) is the official carrier that operates in the country. It was established in 1954. KAC operates the air cargo services at the airport and is well equipped to handle all types of cargo. The Cargo Terminals for Kuwait Airlines are open 24 hours. The Cargo Reservation unit plans bookings and loading information of outbound cargo as well as transit. The Cargo Terminal Warehouses also have facilities for certain cargo types, including fridges, freezers, a strong room, racks, a radio active material room, a special area for explosive cargo, and a separate area for perishable cargo.



10.3.3 Ports

Mina Al Shuwaikh and Mina Shuaiba are Kuwait's two principle ports and together they handle most of the country's imported goods. Both are equipped with facilities to manage most kinds of cargo. The small port at Mina Abd Allah is also used for the export of oil products. The country is working to regain its role as a trans-shipment point in the region following the significant drop in world trade with Iraq after the Gulf War.

The Kuwait Port Authority (KPA) expects demand for port services to continue to rise significantly as the country has a strong appetite for imported consumer products. It is making a major effort to gear up equipment, systems and infrastructure for both terminals to provide shipping lines and port users with operations and transport flows.

Port of Shuwaikh

The Port of Shuwaikh is Kuwait’s most important port and is located west of Kuwait city and the port easily serves ocean-going vessels at deep-water berths as well as having modern container facilities.

Port of Shuaiba

The Port of Shuaiba lies about 45 km southeast of Kuwait City and is Kuwait’s second port as well as having an oil refinery, a petrochemical plant, and a seafood-packing plant. The port most important goods being imported raw materials, equipment, and machinery for the industrial area and exports of products made in the port region.

Boubyan Island

In early 2009 Kuwait announced plans to launch a tender to develop a port on Boubyan Island, located at the mouth of the waterway that leads to Iraq’s only port.

However by the mid year it was reported that work on the Boubyan Island mega project in Kuwait has been painfully slow, with only 2% of the development completed in the two years since ground was broken.

The three-stage project is scheduled to be fully complete in 2014, transforming the island into a marine transport hub with a major sea port, together with tourist resorts and nature reserves.

A number of construction experts have suggested that new firms should be appointed to assist with the work in conjunction with already-appointed contractors in order to move the project forwards. Such a move would save public funds, increase transparency and speed up development work.

The first phase of the Boubyan Island work began in 2007 and involves soil treatment and the construction of roads and bridges. It is estimated to cost US $411m (KD118m). The second phase (2009-2013) will focus on excavating the port area while the final phase (2009-2014) includes the design and construction of the port itself.



10.4 Kuwait’s Logistics Market

10.4.1 Overview

Despite its accumulated oil wealth, Kuwait is being affected quite seriously by the current global downturn and the expectation is that average annual GDP growth will fall over the next five years (down from 7.6% in the previous five years). This will bring down freight volumes, albeit on the plus side Kuwait is a relatively small country and its trading sector – and therefore transport network – has a large re-export component.

Kuwait has evolved as a trade hub for its larger neighbours, particularly Iran and Iraq, which have had limitations on their direct links with the international community.

Most bulk transport will continue to be waterborne and consist largely of oil and related goods. Transit trade, particularly that involving Iraq, will comprise raw materials involved in Iraq’s re-building (aggregates, basic metals and the like) and machinery related to building and construction work.

10.4.2 Kuwait - Logistics Companies

Agility

In 2008 Agility announced the signing of a KD3.2m contract with Kuwait National Petroleum Company (KNPC) to provide 4PL solutions in Kuwait. Under a five year contract due to commence at the beginning of 2009, Agility would manage warehousing activities such as materials handling and spare parts, preservation and reorganisation for KNPC in Kuwait.

In 2007 Agility Defense & Government Services (DGS), announced its award for the Kuwait Dining Facilities (DFAC) contract. The competitively bid fixed price contract was awarded by the U.S. Defense Logistics Agency (DLA) and had a 1 year base period and two one-year options. The contract is worth up to $127m over a potential three-year period.

Agility DGS would build and provide food services for 11 dining facilities serving US service personnel throughout Kuwait. This contract builds on defence contracts it has already won in the Gulf such as Subsistence Prime Vendor.

The Kuwait DFAC contract award follows other significant wins by Agility DGS, including two contracts for the U.S. Navy for global contingency services. In June 2005, Agility DGS also secured the five-year Subsistence Prime Vendor contract for the provision of food and related items to the U.S. military and the five-year U.S. Army Heavy-Lift contract.

Aramex

Aramex has one office in Kuwait, located in the country's capital Kuwait City.




Schenker is represented by its agent Alghanim Group one of the many shipping agency, Freight forwarding & General Trading companies in Kuwait. The group offers services for Shipping Agency, Ship broking, Project cargoes, Customs clearance, Haulage, Warehousing, Packing, Insurance, Air-freight and Sea-freight shipments to and from all around the world to Kuwait.

They are an associate of Fouad Alghanim & Sons Group of 36 companies, established in 1960, and employ over 3,600 employees.

GAC

GAC Kuwait was established in 1956, as a joint venture with two local businessmen, it now employs more than 100 staff and offers a range of shipping and logistics services.

Kuehne+Nagel

Kuehne + Nagel has an office in Kuwait located in Kuwait City.



11.0 Lebanon

Lebanon is situated at the centre of the Eastern Mediterranean. Lebanon has 225 km of coastline facing the Mediterranean Sea and along the coast are the five cities of Beirut, Byblos, Sidon, Tripoli and Tyre. It has a total land border of 454 km, of which it shares 79 km with Israel and 375 km with Syria.

11.1 Economy

Annual Data 2008

Population (m) 4.02



Inflation 10% (est)


11.2 Trade


Note: Figures for 2008 are estimates



Main Exports

Source: WTO

Main Imports

Source: WTO





Note: In 2007 the European Union (27) represented 10.6% of total Lebanese exports.


Source: The World Factbook Note: In 2007 the European Union (27) represented 41.8% of total Lebanese imports.




The Lebanese infrastructure suffered massive disruption in 2006 when more than 94 roads and 74 bridges, all three airports and four ports were bombed by Israel.

However despite this by 2008 it was reported that the construction market in Lebanon was thriving and on the rise with foreign investment expected to double to over $3bn. More than 15,000 homes, 91 bridges, 630 roads, and other infrastructure, including electricity stations, utility lines, sewage systems, factories and communications network, all slated for reconstruction.

The United Arab Emirates promised to pay for the rebuilding of the Port of Ouzai, as well as hospitals and schools in southern Lebanon. Qatar said it would pay for the reconstruction of the village of Bint Jbeil in the south of the country, and a host of Qatari companies were jostling to enter the Lebanon reconstruction market. The United States pledged $230m.

Lebanon Transport Infrastructure Map

Source Transport Intelligence



Lebanon Transport Infrastructure

Roadways

Total 6,970 km

Expressways 170 km

Railways

Total 401 km

Standard Gauge 319 km

Narrow Gauge 82 km

Airports

Total 7


Merchant Marine

By Type: Bulk Carrier 3, Cargo 13, Carrier 11, Passenger/Cargo 1, Refrigerated Cargo 1, Roll-on/Roll-off 2, Vehicle Carrier 2

Ports & Terminals

Beirut and Tripoli


11.3.1 Road Network

The classified road network will play an important role in activating the socio-economic sector in Lebanon. It is well developed and extends throughout the whole country.

There are 6,970km of roadway in Lebanon, including 170km of expressways.

The prolonged years of conflict (1975-1990) had badly affected the road network, which the country has since been working to rebuild and improve.


The three main lines of the railway system were badly damaged in the war. A regional assessment report of the coastal zone has highlighted the difficulty of rebuilding the old railway system and of building a new system further inland due to difficult topography.

Studies have been conducted for the rebuilding and upgrading of 170km of rails along the coast. However, in light of the concerns raised about the potential impact of such an upgraded railway on the coastal area, the feasibility of an alternative alignment is being considered.

There have been several attempts to revive the Lebanese Railway system but so far none have been acted upon. There remain 401km of railway line in Lebanon, but the usage of these is limited because the condition of the track is poor.



11.3.3 Airports

Rafic Hariri International Airport is the only commercial airport currently operational in Lebanon, located 9km from Beirut's city centre. The airport facility, which is the main hub for Lebanon's national flag carrier Middle Eastern Airlines (MEA), is operated and maintained by Middle East Airport Services (MEAS). The Beirut International Airport has been subject to a thorough rebuilding and expansion.

The government has approved millions of dollars in investment to develop the airport over the years. More recently, an expansion programme was completed in two phases; the first was finished in 1998, while the second was completed in 2000. These projects reportedly cost around US$450m, funded by the European Bank for Investment and the Kuwaiti Fund for Arab Economic Development.

Airlines currently operating from Rafic Hariri International Airport include Air Arabia, Emirates, Jazeera Airways, British Airways, Royal Jordanian, Austrian Airlines, Kuwait Airways and Malaysia Airlines.

Air transport bilateral agreements have been signed and activated with the following countries: Armenia, Sri Lanka, Republic of China, Brazil, Poland, Bulgaria, Indonesia and Chad, Holland and France. Lebanon has already signed and ratified several international agreements.

11.3.4 Ports

The Port of Beirut plays an important role in Lebanon's commercial activities. After World War II, Beirut became the most important Arab port of the Eastern Mediterranean serving the Arab world. A free-port area for re-exports added to Beirut's success. During the conflict, the Port of Beirut virtually closed down and related commerce ground to a halt.

Work has been completed on the reconstruction of the Duty Free Zone at the Port of Beirut to restore its pre-war capacity and a project for the rebuilding and expansion of the Port of Beirut is underway. The location of the Port of Beirut makes it the midpoint between the three continents of Europe, Asia and Africa, allowing the port to provide passage for ship fleets between the east and west. Tripoli in the north and Sidon in the south are the other main ports of the Lebanon.

Beirut

The Port of Beirut is the biggest city and capital of Lebanon. Lying on a peninsula at the foot of the Lebanon Mountains in the centre of the Mediterranean coastline, it is the country’s most important seaport. In the early 1990s the Port of Beirut was expanded, and a new container terminal was constructed with a capacity approaching 700,000 TEUs every year



11.4 Lebanon’s Logistics Market

11.4.1 Overview

The Logistic Free Zone area (LFZ) at the Port of Beirut was inaugurated in 2007 and the Port of Beirut intends to be one of the main hubs of cargo distribution in the Middle East as well attracting international logistics companies.

The warehouses receive cargo direct into the free zone destination with goods often going through some operations such as packing and re-packing or any needed operation when it is necessary, in preparation for export via land, sea or air or for import to inside Lebanon.

Investment in the LFZ is open for any business operating in sectors related to transport, transit, export and international trade and some have already taken the initiative to rent land in this area and to build modern warehouses on it.

The LFZ consists of a total area of 11,200 sq m and has been successful since its re-launch after the end of the civil war. The general cargo area consists of 12 warehouses and a grain silo with a capacity of 120,000 tons. The Port of Beirut has been selected as a trans-shipment hub for MSC and CMA-CGM. The latter is currently in the process of building a $12m regional headquarters near the port.

In 2009 Syria and Lebanon held talks over improving transport co-operation between the two countries. The Syrian transport minister held talks with Lebanese diplomatic officials in Damascus over building new transport links between the neighbours.

In particular, the two countries discussed speeding up the road crossings between the countries to end current frequent delays, hampering the cross-border transfer of goods. Syria, Lebanon and Jordan might adopt a common code of practice to improve efficiency at border crossings between the three countries. Cargo trucks travel frequently between the countries but there is still no consistency between crossings. However, no formal schedule for the new framework has been set out.

11.4.2 Lebanon - Logistics Companies

Aramex

Aramex has one office in Lebanon, located in Beirut.

In 2007 the Beirut Port Authority launched its new logistics free zone which houses facilities for key regional and international providers including Aramex. Aramex unveiled its logistics centre which will reinforce the company's multimodal solutions. The new centre will generate better transit times for the sea and land movement of goods from Europe and North Africa to the GCC and Levant countries.



In 2006 it was reported that Aramex had delivered over 500 tons of food and medicines including 400 tons donated by the UAE residents as part of its 'Aid Lebanon With Us' campaign to support Lebanon.

The company teamed up with Emirates National Oil Company (ENOC) and Majid Al Futtaim Group to set up a relief network to collect aid donations for Lebanon.

Aramex’s task force devised an action plan to assemble tons of aid materials from the various collection points and sort them out by categories namely food, hygiene products and medical supplies. The team packaged these materials and shipped them to the set destination in Lebanon.


Schenker is represented by its agent Beirut Cargo Centre (BCC) a freight forwarder company in the region. BCC is considered among the leading forwarding companies in Lebanon with more than 130 employees.

BCC have since 2006 opened a new Logistics Centre within the Beirut Port Free Zone and they hope to capitalise on the fact that on average it currently takes more than 18 days for a container to travel from any major European Port to Dubai, whereas it takes around 10 days for the same container to reach Beirut with a frequency of a weekly sailing. Then any subsequent deliveries to countries such as Syria, Kuwait, Iraq and even Dubai can be reached quicker overland and still beat the sea timings.

The new centre has 5,000 sq m of occupied area with 7,500 Pallets positions on conventional racking system, 6 loading docks with an open storage yard. In addition there is space for un-racked areas inside warehouse for customer specific racking.

GAC

GAC Lebanon provides a range of shipping and logistics services. Branch offices in the northern port of Tripoli and at Saida (Sidon), in the south, support the head office in Beiruit. The first GAC office in Lebanon was established in 1967 but was forced to close in mid-1975 due to the outbreak of civil war. Sixteen years later the office reopened to provide a full range of ship agency services at all ports and terminals in the country.

Kuehne + Nagel

Kuehne + Nagel Lebanon was established in 1999 and provides national and international customers with logistics solutions. The company has regular services to/from countries throughout the Middle East, and customers in Lebanon are offered logistics and warehouse solutions, including customs clearance, warehousing, inventory control and packing / repacking services. The branch office is located in Beirut.

Panalpina Group

In Lebanon, Panalpina works through an agent COSERV based in Beirut.



12.0 Oman

Oman lies at the eastern corner of the Arabian Peninsula and borders Saudi Arabia and the United Arab Emirates in the West, Yemen in the South, the Strait of Hormuz in the North and the Arabian Sea in the East. Oman is the third largest country in the Arabian Peninsula. Oman has a total land border of 1,374 km with 2,092 km of coastline.

12.1 Economy

Annual Data 2008

Population (m) 3.42


GDP (US$ bn; Purchasing Power Parity) 67 (est)

GDP growth rate 6.7% (est)


12.2 Trade

The Petroleum Development Oman (PDO) has been central to Oman’s economy since at least 1962 and is the country's second largest employer, after the government. PDO's major shareholders include Royal Dutch/Shell, Total, and Partex and its production is estimated to be about 720,000 bbl/d. Muscat also has major trading companies such as Suhail Bahwan, which is a trading partner for corporations such as Toshiba, Subaru, Seiko, Hewlett Packard, General Motors; Saud Bahwan Group whose trading partners are Toyota, Daihatsu and Hertz Rent-a-Car; and Zubair Automotive whose trading partners include Mitsubishi, and Chrysler brands such as Dodge.

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Main Exports

Source: WTO



Main Imports

Source: WTO



In 2007 the European Union (27) represented 1.9% of total Omani exports.





In 2007 the European Union (27) represented 19.2% of total Omani imports.




Oman Transport Infrastructure Map

Source: Transport Intelligence Oman Transport Infrastructure

Roadways

Total 42,300 km

Paved 16,500 km

Expressways 550 km

Airports

Total 130


Heliports 2

Merchant Marine

By Type: Chemical Tanker 1, Passenger 1, Passenger/Cargo 1

Ports & Terminals

Mina' Qabus and Salalah




12.3.1 Road Network

The Muscat area is well serviced by paved roads and dual-carriageway connects most major cities and towns in the country. Public transportation in Muscat does not include rail, and bus services are limited in their route coverage. There is no rail or metro network in the country.

12.3.2 Airports

The main airport is Muscat International Airport (formerly Seeb International Airport), the airport was renamed on February 1, 2008 and is around 25km from the city's business district of Ruwi and 15 to 20km from the main residential localities of Al-Khuwair, Madinat Al Sultan Qaboos, Shati Al-Qurm and Al-Qurm. Muscat is the headquarters for the local Oman Air, which flies to several destinations within the Middle East, the Indian Subcontinent and East Africa.

At the moment the airport is being expanded and modernized. The airport will be upgraded to 12m passenger capacity during the initial stage and subsequently to 48m. The initial stage is scheduled for completion in 2011.

The expansion project for Muscat International Airport will include a new modern terminal and a new runway that can handle the new Airbus A380. It will include a new control tower with a height of 90 metres, 32 aerobridges, a new cargo terminal and extra 6,000 car spaces. Once the construction of the new runway is completed, upgrade work will progress on the existing one, in order to allow it to handle the larger aircraft.

Oman Air is the country's national carrier, and has its hub base at Muscat International Airport. Established in 1981, the airline started operations in 1993. It was formed as the result of a merger of the former Gulf Air Light Aircraft division and Oman International Services, as Oman Aviation Services. It currently operates as a major hub for both Gulf Air and the country's national flag carrier Oman Air. In addition, a number of international airlines operate flights from the airport, including British Airways, Emirates, Indian Airlines, Jazeera Airways, Kuwait Airways, Pakistan International Airlines and Thai Airways International.

Salalah International Airport is situated in Dhofar, the southern region of Oman. The airport attracts regional and international tourists from all parts of the Arab Peninsula and elsewhere in the world.

12.3.3 Ports

Oman has three major seaports: the Port of Salalah, Sohar Industrial Port and Port Qaboos (Muscat).



Salalah

The Port of Salalah is the deepwater port in the southern Dhofar region of Oman, which can accommodate large vessels and is the main Container Trans-shipment Terminal of the region. The port offers a sheltered harbour protected by a breakwater.

The port is located close to the direct shipping lanes between Europe and the Far East and also has easy access to the Gulf, Red Sea, Indian Ocean and the East Coast of Africa. Situated right at the major East-West shipping lanes, Salalah holds a good strategic location in the heart of the Indian Ocean Rim and caters to some of the world's largest ocean going vessels.

The port is one of the largest in the world and has highly sophisticated container handling equipment. The Salalah Port Services Company (SAOG) operates the terminal, under a 30-year concession agreement. Other partners in the SAOG venture include: Maersk, the Omani government, pensions funds, other Omani companies and public subscribers.

Sohar

Sohar is a deep sea port 220km northwest of its capital Muscat. The management of this industrial port lies with Sohar Industrial Port Company (SIPC SOAC), a 50/50 joint venture between the Government of Oman and the Port of Rotterdam. The original agreement between the two parties was signed in 2002 and included a port area of 2,100 ha and for SIPC to manage and develop the port until 2025.

Today, the port is fully operational with state-of-the-art facilities. With current investments exceeding $14billion it is one of the world's largest port development projects. Located just before the Strait of Hormuz, Port of Sohar is within easy reach of the booming economies of the Gulf and the Indian subcontinent and with great connectivity to Abu Dhabi, Dubai, Al Ain and Muscat.

Sohar houses three clusters: logistics, petrochemicals and metals. The three terminals are operated by leading companies; Steinweg for general cargo, Odfjell/Oiltanking for liquid and OICT for containers.

Its location at the mouth of the Strait of Hormuz makes the port a potential gateway to the countries of the Gulf Co-operation Council. Trans-shipping cargoes to land-based transport means that vessels do not have to enter the strait and the Arabian Gulf, making for faster ship turn-around times, thereby cutting costs and reducing insurance premiums.

Sohar's road network allows freight to be moved in hours by land to Dubai, Abu Dhabi, Al Ain and Muscat, all of which are within 240 km of the port.

Muscat

Port Qaboos (Muscat) has been in operation for many years and has Oman's first bunkering terminal. The bunkering terminal is operated by joint Omani-Saudi venture company, Oasis Energy Co LLC. It has the capacity for 20,000 cu m of fuel oil and gas oil to meet the needs of the commercial, military and fishing sectors.



12.4 Oman’s Logistics Market

12.4.1 Overview

Due to its strategic location, Oman is now putting in place the infrastructure needed to turn the country into a major logistics hub. With both regional trade and consumer demand for imports on the rise, logistics firms are looking increasingly at Oman as a base of operations.

While this will provide support for shipping demand, the development of Sohar and eventually, of its sister port at Duqm, will also be a clear boost. Strategically situated along the world’s major shipping lanes, the busy and rapidly growing markets of Dubai, Iran, and the Indian sub-continent, these ports have the twin advantages of being outside the Strait of Hormuz and inside the Gulf Co-operation Council (GCC) customs union.

The overall outlook for the freight business in Oman is encouraging despite the tougher international climate and weak near-term oil prices. For the 2009-2013 period the transport sector should outpace the economy as a whole.

12.4.2 Oman – Logistics Companies

Aramex

Aramex has one office in Oman, located in Muscat.

In 2007 Aramex announced that it had partnered with Oman Post to handle express deliveries on its behalf to the MENA region, Indian Sub-Continent and Europe.

Aramex will serve as the key logistics provider for the handling of express deliveries on behalf of Oman Post. The service includes the GCC, MENA and South Asian regions. The benefits of the relationship for Oman Post are that Aramex has the capability, resources and flexibility to reach markets earlier untouched by the government shipment arm.


Schenker is represented by their agent Khimji Ramdas (KR) who is also the preferred trade and business partner for leading international companies because of its extensive and well-established infrastructure. KR’s strength lies in an extensive distribution network covering the entire consumer market of Oman, supported by a fleet of distribution vans and warehousing facilities.

With 15 warehouses in the capital region covering 27,000 sq m and 19 warehouses in the interiors covering 13,695 sq m, KR can offer storage and supply systems.

The KR fleet comprises of more than 100 vehicles ranging from 1 to 10 tons operating in the capital area and the interior markets. KR offices are located across Oman with headquarters in the capital Muscat.



GAC

GAC Oman was established in 1971, originally as a shipping agent, handling vessels at Port Sultan Qaboos.

GAC Oman operates from its own purpose built office in Muscat and it has a fully-fledged warehouse located adjacent to the office. There are two additional offices in the capital city area - at the Seeb Airport and the main sea port, Port Sultan Qaboos. The company also has offices in Salalah to the south, and Sohar in the north.

GAC Oman offers shipping and logistics services, and has a total staff strength of 128.

Panalpina Group

In Oman, Panalpina works through an agent: Middle East Shipping & Transport (MEST) Co. LLC a subsidiary of Suhail Bahwan Group (Holding) LLC based in Muscat.



13.0 Qatar

Qatar is a Middle Eastern country with a peninsula bordering the Persian Gulf and Saudi Arabia. It shares its 60 km land border with Saudia Arabia and has a coastline of 563 km.

13.1 Economy

Annual Data 2008

Population (m) 1.6


GDP (US$ bn; Purchasing Power Parity) 91.1

GDP per head (US$ bn; Market Exchange Rate) 67,348

GDP per head (US$ bn; Purchasing Power Parity) 58,635

Exchange rate QR:US$ 3.64


Inflation 11.2%


13.2 Trade

Source: The World Factbook Note: Figures for 2008 are estimates.



Main Exports


Main Imports






In 2007 Japan represented 41.5% of total Qatari exports.



In 2007 the European Union (27) represented 34.8% of total Qatari imports.




Qatar Transport Infrastructure Map




Qatar Transport Infrastructure

Roadways

Total 7,790 km

Airports

Total 5


Heliports 1

Merchant Marine

By Type: Bulk Carrier 2, Cargo 2, Chemical Tanker 2, Container 8, Liquefied Gas 4, Petroleum Tanker 4

Ports & Terminals

Doha and Ra's Laffan


13.3.1 Road Network

The modern road system in Qatar was established only in the late sixties, but has developed quickly and has overland truck routes from Europe through Saudi Arabia via the Trans-Arabia Highway and road links with the United Arab Emirates and Oman. It consists primarily of two and three lane carriageways. The road network is currently undergoing vast upgrades, including the construction of many highways, the largest such highway under construction is the Doha expressway.

There are five main highways connecting Doha to its neighbouring cities. These are the Dukhan highway to the west of the city, the Al-Shamal Road which connects Doha to the north of the country, the Al-Khor Expressway connecting Doha to the northern town of Al-Khor, and the Wakrah/Messaid Road which connects Doha to the south of the country. Finally, Salwa Road runs through south Doha and connects the city to the Saudi border to the south of the country.

The Doha Expressway Project is establishing a highway route which will improve connections within Doha, but also extend better links between Doha and the north of Qatar. Several phases of the Expressway have been completed. The domestic trucking industry in Qatar is largely localised in market scope and though substantial prospects exist for bringing import cargoes into Qatar from other regional centres, long-distance trucking operations are hamstrung by lack of adequate return cargo.


In 2009 the world’s longest fixed-link marine crossing had been given the go ahead, with work on the construction of a multi-billion-dollar causeway linking Bahrain to Qatar earmarked to start early in 2010. The project – known as the Qatar-Bahrain Friendship Bridge - will include 22km of viaduct bridges, 18km of built-up embankments, a four-lane



motorway and a rail link. The railway link will eventually be connected up to the wider GCC network, and should provide extensive logistics services by linking up the major industrial areas in both countries.

The road link could open by 2014, while the railway line may need another two years. Although final specifications are likely to be revealed only in October, earlier estimates as to the cost of the entire project came in at around US$3bn.

Earlier in 2008 the government of Qatar agreed on a long-term cooperation with German rail and logistics group Deutsche Bahn (DB) aimed at setting up a modern integrated railway system in that Middle East state and possibly international freight and passenger links with neighbouring countries.

A memorandum of understanding to that effect was signed by investment company Qatari Diar and DB ML AG in Doha.

The German group said it would develop the conceptual design and provide consultancy services for those plans, which were based on a multi-billion dollar project involving the establishment of an efficient local transport system in Doha.

That project also envisaged the development of international freight and passenger lines, including a possible high-speed rail link to Bahrain. DB said it was not expected to make any financial contribution but would merely provide expertise to help set up a competitive railway infrastructure.

DB said a joint project group comprising around 60 transport experts and planning engineers from DB International GmbH would draw up various planning options and track layouts for several different transport systems in cooperation with the Qatari partner.

They included:

• An east coast rail link, a passenger and freight railway linking Ras Laffan industrial complex with the new port in Mesaieed via Doha.

• A high-speed link between the new international airport and Doha city centre and across the planned causeway bridge to Manama in Bahrain.

• A Doha expressway based on GCC rail studies, which would provide a freight rail link between Qatar and the border to Saudi Arabia.

In early September 2009 Qatar was preparing to tender construction work on one of five rail networks it planned to build over the next 10 years. The New Doha International Airport Steering Committee had invited firms to pre-qualify for a contract to build a train station at the $11bn airport that is under construction.

The project involved building a railway station terminal for an express airport rail line that will connect to rail and metro stations in downtown Doha and other rail networks.

Indications were that the steering committee wanted to finish the station in time for the opening of the first Phase of the airport in 2011.



13.3.3 Airports

Doha International Airport and its cargo warehouse are operated by Qatar Aviation, which is the sister company to Qatar Airways Cargo. It has warehouse facilities that include a mail area, strong room, cold room and freezer section.

The New Doha International Airport and, at more than 2,000 hectares, will be one of the largest in the world.

Contracts were originally awarded in 2005 for the New Doha International Airport (NDIA) to add airfield paving and road tunnel with a value: US $500m. Construction is in progress and is expected to be completed in the third quarter of 2010. Work includes the construction of two runways of 4.8km and 4.2km each, taxiways, aprons, an isolation pad, remote parking bays, 650 metre midfield tunnel structure, drainage comprising of 46km concrete lined ditches, airfield lighting, signage and site final grading.

Once the first phase is completed in 2009, NDIA will be able to handle 24m passengers a year, which is triple the capacity of the currently airport. Upon final completion in 2015, this figure will rise to 50m passengers a year, in addition to 320,000 planes (including the Airbus A380-800 super jumbos) and 2m tonnes of cargo.

Airlines currently operating from Doha International Airport include Qatar Airways, Emirates, Gulf Air, British Airways, KLM, Air India, Kuwait Airways and Royal Jordanian.

It is estimated to be the second biggest Middle East air cargo airport with more to come when it comes online in 2012, three years later than its planned launch date. The facility – the new home for Qatar Airways – will be able to handle 1.3m tonnes of cargo a year.

In 2008 Qatar Airways Cargo announced the introduction of its newest freighter route, a weekly operation linking the airline's operational hub of Doha with Zaragoza in northern Spain. The Middle East airline said the service would be operated every Saturday using an A300-600 freighter.

The return flight from Zaragoza would stop in Dubai, increasing Qatar Airways' freighter services to that emirate to three times a week.

Qatar Airways Cargo currently had a freighter network of 18 destinations worldwide. Destinations served from Doha include Algiers, Tunis, Amsterdam, Bahrain, Chennai, Colombo, Dhaka, Dubai, Frankfurt, Istanbul, Karachi, Khartoum, Lahore, Luxembourg, Milan and Nairobi.



13.3.4 Ports

Qatar has three main export terminals in Ras Laffan, Umm Said, and Messaieed as well as Halul Island. The ports at Doha and Umm Sa'id are modern deepwater ports, where tanker terminals are located. Qatar's National Navigation and Transport Co. have a virtual monopoly on all shipments arriving into the country.

Doha Port

The Doha Port is among the country's largest ports, and is located just off the Doha Corniche and is the main seaport servicing Doha. Plans for a new port are being developed due to the port's location in central Doha and the resultant traffic and pollution problems; the proposed location of the port is near the town of Al Wakra, just south of the New Doha airport

Port Expansion

Doha Port has been experiencing capacity shortages due to the rising traffic growth. This has largely driven the plans for the New Doha Port to be designed and built on a 500 hectare site approximately 4km east of the new airport.

The new port will cater for ships carrying up to 5,000 TEUs, and will be able to handle up to 3m TEUs a year - compared to the 100,000 container capacity at the existing Doha port. The port will be linked to the mainland by an 8.5 km long bridge with existing operations at the Doha Port to be shifted to the new port by the end of 2014. The port will be located to the south of Doha, between Mesaieed and Al Wakra.

The port will enable Qatar to expand its maritime sector, on which the country's import and export sectors are heavily dependent. Qatar's location on a peninsula in the Persian Gulf makes maritime transport the most sensible option, with easy access to Asian trade routes via the Arabian Sea and Indian Ocean, and connections to African and European markets either via the Cape of Good Hope or the Suez Canal.

Messaieed Seaport

Messaieed is at the heart of Qatar's industry and is situated 45km south of Doha. It has both a commercial port and an oil-exporting port. There are refineries in Messaieed as well as other industrial establishments producing steel, natural gas liquids, fertilizers, and petrochemicals.

Messaieed's location on the country's east coast makes it ideally suited for oil exports through the Strait of Hormuz, and the importation of oil-related equipment.



Port Expansion

Messaieed Seaport is a major port, handling a range of petroleum products with goods imported and exported accounting for nearly 60% of GDP. The port handles over 1,000 vessels per year, consisting of tankers, gas carriers, chemical tankers, bulk carriers, feeder container vessels, military vessels, general cargo ships and other types of crafts.

Ras Laffan Seaport

The Port of Ras Laffan is located about 70km north-northeast of the Port of Doha in Ad Dawhah, the country’s capital and is among the world's largest LNG export terminals with an exporting capacity of the port is 30m tons per annum. Qatar Petroleum owns and operates the Port of Ras Laffan and operates the country’s oil pipeline network that moves oil from the fields to the country’s sole refinery and to export terminals.

Anticipating dramatic increases in cargo volume, the Port is planning to expand over the next two decades including new liquefied natural gas berths, a liquid cargo berth, dry docks, and repair yards. This will be made possible by additional dredging and the reclamation of land and with the construction of breakwaters.

Port Expansion

The world's largest LNG export terminal, Ras Laffan Port boasts three operational LNG berths, capable of accommodating a wide range of vessels, including the Q-Flex and Q-Max classes. A fourth LNG berth is due for completion at the end of 2009, with the construction of two more berths under way.

The port also includes three liquid product berths to enhance the export of LPG, GTL and refinery products, with three more liquid product berths due to be completed shortly. Ras Laffan City, the multi-purpose industrial city built around the port, is building two dry docks, capable of receiving some of the biggest vessels afloat, plus a floating dock and ship repair facilities. A new plan for the port layout is designed to cater for a projected 3,000 shipments expected in the near future.



13.4 Qatar’s Logistics Market

13.4.1 Overview

Qatar is investing heavily in its infrastructure with the aim of becoming a world-class maritime hub. Calls of container vessels in Qatar are increasing, with companies such as Qatar Navigation putting in orders for more ships.

Qatar's major ports, based at Doha, Mesaieed, and Ras Laffan, have been witnessing major improvement programmes to cope with the influx of traffic. Previously, what has been lacking was the sufficient port infrastructure, governmental reforms and marketing activities to promote this potential.

However, things are now changing with the expansion of Ras Laffan and Mesaieed Ports, both of which will have efficient container handling berths and operations.

Ras Laffan, which operates as an industrial port for the region, is working towards becoming a ‘multi-purpose, multi-dimensional industry city'. With a 20-year master-plan drawn up in 2005, the development is being moved forward to meet the current and future needs of the companies based in the area.

The government's investment in upgrading the shipping infrastructure has been increasingly attracting other major players, such as GAC Worldwide, into the region. As well as sea freight services, the logistics operator offers economical consolidation services for cargo from Europe, the Americas, the Middle East and Asia to Qatar. Volumes for its sea freight business have been growing steadily at 25% for the past five years, buoyed by a strong economy that has averaged over 10% since 2001.

The oil and gas industry in Qatar is also a pull for international logistics companies, such as Expeditors and Panalpina. Spare parts for the major gas installations is a particularly important sector.

13.4.2 Qatar - Logistics Companies

Agility

In 2009 Agility was awarded a major new contact in Qatar by RasGas, the country’s premier liquefied natural gas (LNG) enterprise. The scope of the multi-million dollar contract comprised global freight forwarding, transportation and customs clearance for a period of four years, both locally and around the world.

Agility said: “Qatar is crucially important to the growth of Agility in the region and this deal represents an important milestone in our company’s 6 year history locally. During this time we have invested substantial sums in Qatar to ensure that our global reach and local capabilities match to deliver unparalleled standards of service for important clients such as RasGas.”



Agility provides unique supply chain solutions and logistics services that support upstream (O&G exploration phase and crude oil), midstream (gas-related) and downstream (refined/finished products).

RasGas Company Limited is owned by Qatar Petroleum and ExxonMobil RasGas Inc. It operates production facilities to treat, liquefy and export LNG to countries across Asia, Europe and USA. Based in Ras Laffan, Qatar, RasGas currently produces over 20m metric tonnes of LNG per year (Mta) with five trains in operation. It is expected that this production will be approximately 37 Mta by the end of the decade, with the completion of seven operational trains.

Earlier in 2009 Agility Qatar announced that it had signed a Memorandum of Understanding to enter into merger discussions with the Gulf Warehousing Company ("GWC"), a company listed on the Doha Securities Market. The merger aimed to create one of the strongest logistics players in the Qatar market with a comprehensive service portfolio for existing and prospective customers in the country. The new entity will be called GWC - Agility.

Over the last few years both GWC and Agility Qatar have made significant strides in transforming their organisations into regional logistics and warehousing leaders, and the merger would further accelerate this development for both companies.

In 2007 Agility Project Logistics formed a partnership with Transcar Projects Ltd. to win the global shipping contract for two phases of the Pearl Gas to Liquids (GTL) in Ras Laffan, Qatar. Agility Project Logistics is a specialised group within global logistics provider Agility. Transcar is a privately held project freight forwarder, managing general and project cargoes.

The Pearl GTL project, the world's largest gas-to-liquid project, has been developed by Qatar Petroleum and Shell and involves over 1m freight tons of cargo lined up for its construction. The facility, once complete, would be equipped to produce 140,000 bbl/d of GTL products and approximately 120,000 bbl/d of condensate, liquefied petroleum gas and ethane.

GWC

In 2006 the Gulf Warehousing Company (GWC) announced plans for a large-scale warehousing complex covering 1m sq metres in Qatar. Logistics Village Qatar (LVQ) has been developed in three phases, with the first stage of construction comprising 83,000 sq m of multi-purpose warehouses and 23,200 sq m of accommodation. Valued at approximately QR250m, the first phase is scheduled for completion in the third quarter of 2010.

LVQ will be a one-stop centre for all supply chain and logistics requirements supported by latest technology and managed to best practices. LVQ is poised to fulfil the demands for supply chain expertise and services to meet the needs rising from Qatar’s economic growth rate.



In addition to development of the warehouse infrastructure, LVQ will also develop a container yard, truck repair and maintenance facility, car parking and PDI area, open yard, auction centre, recreational facilities as well as the general administrative building.

Aramex

Aramex has one office in Qatar, located in Doha.

DB Deutsche Bahn AG

In 2008 the government of Qatar agreed on a long-term cooperation with German rail and logistics group Deutsche Bahn (DB) aimed at setting up a modern integrated railway system in that Middle East state and possibly international freight and passenger links with neighbouring countries. (see rail)

Expeditors International

In 2007 following a new partnership with Al Majaz IT Company, Expeditors is expected to commence operations in Qatar. The company offered a range of supply chain solutions, including vendor consolidation, air and ocean freight forwarding, customs brokerage, insurance, product distribution and value added services.

GAC

Developments in Qatar in the late 1970s, together with the anticipated end of the State run monopoly on shipping agency services, prompted the establishment of GAC Qatar in 1979. Until the shipping market opened in 2001 GAC Qatar expanded its cargo related services. At that time, the company obtained its ship agency.

GAC Qatar provides a comprehensive range of services, including port agency attendance to all types of tanker and dry cargo, as well as cruise vessels, plus combined offshore logistics and port agency support for drilling rigs, supply/work boats and barges. GAC Qatar also coordinates berthing, embarkation/ disembarkation arrangements and assistance in any unforeseen matters that may arise.

In 2006 GAC Logistics signed a global agreement with Qatar Airways for the movement of cargo between Doha and more than 70 worldwide destinations served by the Doha-based airline. Under the agreement, GAC was assured preferential treatment for space allocation and competitive rates by Qatar Airways, while GAC was committed to transporting airfreight cargo on the airline, which is one of the fastest growing in the world.

Panalpina

Since 1994, Panalpina has become an important partner for Qatar's Oil and Gas industry. Besides the forwarding services, Panalpina Qatar as part of Panalpina's Middle East area offers direct dedicated Air Freight services into Doha, operates a supply base for a major operator in the gas industry in Ras Laffan and provides EDI links and many door-to-site



services. Panalpina Gulf LLC has launched a weekly scheduled flight from Dubai to Macau via Bishkek, the capital of Kyrgyzstan, with feeder services to Kazakhstan and Uzbekistan.

SEKO

In 2008 SEKO announced it had opened a new facility in Qatar, in the Middle East. The SEKO Qatar office provided both import and export trade, customs brokerage services and served all of the Qatar Peninsula and surrounding areas. It is situated near the Doha International Airport and the Doha Seaport, and is bordered by the Persian Gulf and Saudi Arabia. SEKO planned to open a new warehouse facility in the Qatar industrial area with warehouse management services by the end of the year.



14.0 Saudi Arabia

Saudi Arabia is the world's leading petroleum exporter. Petroleum exports fuel the Saudi economy. Oil accounts for more than 90% of exports and nearly 75% of government revenues.Saudi Arabia is the largest country in the Middle East, bordering the Persian Gulf and the Red Sea and to the north of Yemen. Its extensive coastlines on the Persian Gulf and Red Sea provide it with leverage in shipping through the Persian Gulf and Suez Canal.

14.1 Economy

Annual Data 2008

Population (m) 24.9

GDP (US$ m; Market Exchange Rate) 468,887



GDP per head (US$ Purchasing Power Parity) 23,692 (est)

Exchange rate SR:US$ 3.8


Inflation 3.4%




14.2 Trade



Rising oil export revenue brought the trade surplus up to over US$151bn in 2007, and the current-account surplus was equivalent to 25.4% of GDP. Oil accounted for 90% of export earnings in 2007, and petrochemicals are the main non-oil export. Crude oil output averaged 9.2m barrels/day in 2008.



Main Exports


Main Imports






In 2007 the European Union (27) represented 7.1% of total Saudi Arabian exports.



In 2007 the European Union (27) represented 31.9% of total Saudi Arabian imports.




Saudi Arabia Transport Infrastructure Map




Saudi Arabia Transport Infrastructure

Roadways

Total 221,372 km

Paved 47,529 km


Railways

Total 1,392 km


Airports

Total 215


Heliports 8

Merchant Marine

By Type: Cargo 5, Chemical Tanker 13, Container 5, Passenger/Cargo 8, Petroleum Tanker 20, Refrigerated Cargo 3, Roll-on/Roll-off 8

Ports & Terminals

Ad Dammam, Al Jubayl, Jiddah and Yanbu' al Sinaiyah


14.3.1 Road Network

In its 2009 budget, Saudi Arabia announced it had allocated SR11.5bn (US $3.06bn) for road construction projects and indicated that the length of roads built in this year would total 8,250 km.

With the massive increase in traffic that has ensued from the country’s industrial and agricultural development, it has been necessary to upgrade many of the inter-city roads to expressways, with anything up to eight lanes for traffic.

Some of the more important inter-city highways are;

• Dammam - Abu Hadriya - Ras Tanura Highway (257kms

• Khaybar - Al Ola Highway (175kms)

• Makkah - Madinah Al Munawarah Highway (421kms)

• Riyadh - Dammam Highway (383kms)

• Riyadh - Sedir - al Qasim Highway (317kms)

• Riyadh - Taif Highway (750kms)

• Taif - Abha-Gizan Highway (750kms)

The cities too have become congested by the growth in traffic and a number of cities now enjoy the benefits of ring-roads which serve to reduce congestion and pollution in city



centres. A further development is the construction of networks of over- and under-passes within the cities which again serve to facilitate driving in city centres.

While a major effort has been devoted to inter-city and in-city road-building, agricultural communities have not been neglected and isolated villages are now connected by road to the main road network, so that the country can claim to have a fully integrated, modern, nation-wide network of roads.

Dhahran-Jubail Highway

The Dhahran-Jubail Highway is an important roadway located in the Eastern Province of Saudi Arabia. It connects Dhahran in the south to Jubail in the north, and crosses the cities of Dammam, Qatif and nearby Ras Tanura. The distance to the Persian Gulf from the highway varies from 2 to 14 km, and there are two roads connecting it with King Fahd International Airport.

The significance of this region lies with the presence of the three cities of Dhahran, Jubail and Ras Tanura. Dhahran is a major oil administration centre and Jubail is a major operations centre for the petrochemical industry. Ras Tanura is home to a significant oil refining and shipping port.

King Fahd Causeway

The King Fahd Causeway is a bridge linking Kohbar, Saudi Arabia and Bahrain. The road has four lanes and stretches 28 km.




Planned Extensions to the Saudi Arabian Rail Network

Legend:

Existing Network: Black

Land Bridge: Blue

North-South Line: Green

Highspeed Haramain: Red

Other Projects: Purple

Source: Transport Intelligence/Saudi Railways Organisation

In Saudi Arabia, railways remain the least developed means of transportation. There are vast distances to cover, in often adverse environmental conditions, and airline services are a more practical mode of transportation.

The Saudi Arabian railway network consists of two lines that connect the port city of Dammam and the capital, Riyadh, further inland. A 556-km-line for freight traffic was built back in the 1950s, whereas the 449-km-line for passenger service was not constructed until the 1980s. The Saudi Railways Organisation (SRO) transports around 850,000 passengers and 850m metric ton-km of freight per year. The Kingdom's railways are managed by the Saudi Government Railways Organisation.



The Riyadh-Dammam railway line has station stops at Hofuf and Abqaiq and is being extended to Jubail Industrial City, the site of major industrial facilities. Eventually, the railway network will reach Makkah, Jeddah and Medina, and an extension will link Riyadh to mining areas in the northern parts of the country. This expansion is being carried out with the involvement of the private sector. The 2,400km of the “North-South Railway” has been prioritised by the Saudi government due to its vital importance to the national economy. It will be ready to transport freight by the beginning of 2010.

The US$136.8m project extends from Haditha, on the Saudi border with Jordan, to Riyadh, passing through the provinces of Jouf, Hail, Qassim and Sudair, and will allow the transport of phosphates and bauxite from the north to processing plants in the south. The project is part of the country's plan to increase its railway network. The railway will cater for the transport of freight and will service the country's northern mining initiatives.

The railway will serve as a vital link between planned mining projects in the north of the kingdom and processing plants and ports on Saudi's Gulf coast. Geographical surveys have shown that on top of its considerable oil wealth, Saudi Arabia also boasts mineral reserves. Deposits of bauxite, phosphorus, copper, gold and iron have been located.

The North-South railway will stretch from Haditha in the north of Saudi Arabia, near the country's border with Jordan, south to Riyadh, where it will join up with the existing Dammam-Riyadh railway, offering connections to the sea port of Dammam. It will feature two branches: one to Jalamid, the site of considerable phosphate deposits, and one to Ras Azoor via Zabirah, the location of bauxite deposits. The North-South railway is just one of the railway projects currently underway in Saudi Arabia, as the country expands its railway network. Other rail projects being developed in the Kingdom include the Landbridge Project, linking Jeddah with the existing Riyadh-Dammam route, and the 450-kilometre Haramain link that will connect Jeddah with Makkah and Medina.

Landbridge Project

The Saudi Landbridge will transform the existing rail network in the Kingdom of Saudi Arabia with a world-class freight and passenger rail link across the country. It will have the capability to move large quantities of cargo over long distances at competitive rates and will offer safe and comfortable overland passenger transport.

The railway will connect the port cities of Jeddah, Dammam and Jubail and will pass through the capital city Riyadh and serve its dry port.

The project will involve:

1. Construction of a c. 950 km new line between Riyadh and Jeddah

2. Construction of a c. 115 km new line between Dammam and Jubail Upgrade of the existing rail link between Riyadh and Dammam, including connection to the new Riyadh-Jeddah and Dammam-Jubail lines

3. Integration of the new lines with Jeddah Islamic Port, King Abdul Aziz Port, Dammam and Riyadh Dry Port



In mid-2009 Riyadh reaffirmed its commitment to the kingdom's transport infrastructure and took the decision to bankroll the Saudi Landbridge itself. Two bid rounds over two years had failed to deliver and it appeared that the banks were still too cautious to finance a project of this scale.

The freight railway linking Saudi Arabia's Gulf and Red Sea coasts was in danger of drifting indefinitely and given the prevailing market conditions it was not realistic to expect international banks to fork out $7bn for a 50-year BOT concession when the financial returns were uncertain.

14.3.3 Airports

King Khalid International Airport

King Khalid International Airport is located 35km north of Riyadh, Saudi Arabia. It was opened in 1983 to handle increasing demand for regional and international transport in Saudi Arabia. Measuring 225 sq km in total, King Khalid International Airport includes four passenger terminals, a control tower, a mosque and a ceremonial mall, a 10,000 car multilevel garage, and two 4,140 metre parallel runways with associated taxiways.

It has been constructed to meet the increasing international and local air transport requirements for Riyadh region and it is an alternative landing site for NASA's Space Shuttle.

In addition to the passenger terminal areas, there are 65 buildings on the site, including an automated cargo terminal, a food preparation centre, housing and utility structures. There is also a 7,400 acre office and industrial park for aviation-related industry and commercial services at the airport.

From its inauguration, it had the capacity to handle 7.5m passengers a year, although this figure had doubled by 2000. Various airlines currently operate from the airport, including Saudi Arabian Airlines, Air Arabia, Etihad Airways, Emirates, Cathay Pacific, Gulf Air, Middle East Airlines, Pakistan International Airlines and Royal Jordanian.

King Abdulaziz International Airport

King Abdulaziz International Airport is an aviation facility located to the north of Jeddah, Saudi Arabia. Named after King Abdulaziz Al Saud, the airport is Saudi Arabia's third largest air facility.

The North Terminal at Jeddah airport is used by all foreign airlines. The South Terminal was reserved for the exclusive use of Saudi Arabian Airlines until 2007 when also the privately owned Saudi carriers Nas Air and Sama Airlines were given permission to use this terminal. Jeddah-KAIA airport serves as a major hub for Saudi Arabian Airlines.

A variety of international airlines offer flights from the north terminal, including Emirates, Air Arabia, Pakistan International Airlines, Turkish Airlines, Air India, Singapore Airlines,



Ethiopian Airlines and Royal Brunei. The south terminal is exclusively reserved for the country's national flag carrier Saudi Arabian Airlines.

To handle increasing volumes of passengers and cargo, the Saudi government is developing New Jeddah International Airport, which will be constructed in three stages. The project involves the modernisation of the existing north and south terminals and upgrades to the existing runway and airfield systems to accommodate the Airbus A380 super jumbo. It will have four new terminal buildings, a high-speed rail link and capacity for 80m passengers per annum at a cost of US$240m.

Dhahran International Airport

Dhahran International Airport in Dhahran formerly served the Ash Sharqiyah Province (Eastern Province) in Saudi Arabia. In 1999, after the opening of King Fahd International Airport, all scheduled flights were shifted out of Dhahran and the airport now serves as the King Abdulaziz Air Base of the Royal Saudi Air Force.

King Fahd International Airport

King Fahd International Airport is located 15km northwest of Dammam, Saudi Arabia. It is the largest airport in the world in terms of land area (780 sq km).

Completed in 1999, King Fahd International Airport is the third major hub for Saudi Arabian Airlines after King Khalid International Airport in Riyadh and King Abdulaziz International Airport in Jeddah.

The airport is the hub of Sama Airlines. It mainly serves Dammam, Dhahran, Khobar, Qatif, Ras Tanura and Jubail. However, it serves the entire Eastern Province of the Kingdom as it is the only operational airport in the province.

Prince Mohammad Bin Abdulaziz International Airport

Prince Mohammad Bin Abdulaziz International Airport or Prince Mohammad Airport is a regional airport in the western Saudi city of Medina. Opened in 1974, it handles mostly domestic flights, although it has limited scheduled international services to regional destinations such as Cairo, Damascus, and Istanbul. It also handles charter international flights during the Hajj season.

14.3.4 Ports

The Saudi Ports Authority handles 95% of the exports and imports in the country and 61% of all cargo handled in the GCC states of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE.

In early 2008 the Saudi Arabian government signed a contract for the design and construction of a new port in Raas Al-Zour.



The new facility, located on the central east coast of Saudi Arabia, will include dedicated terminals for general cargo, liquid bulk and dry bulk goods. The US$586m contract was signed with China Harbour Engineering Company (CHEC).

The announcement followed confirmation in 2007 that a consortium of three national and international companies had been selected to build a north-south railway in the Kingdom. The landmark project will cover approximately 1,097 miles and provide for the transportation of freight, minerals and passengers across Saudi Arabia. The railway project is scheduled for completion in 2011.

The railway and port development projects are critical to the success of Saudi Arabia's ambitious $3.5bn downstream oil and gas projects. The new rail links will provide vital transportation to the multibillion-dollar fertilizer plant and aluminium smelter to be developed at Ras Al-Zour by Saudi Arabian Mining Company (Ma'aden).

In October 2009 the Saudi Ports Authority announced that 68.07m tonnes of cargo was handled at the Kingdom’s port facilities during the first half of 2009, marking a decline of 8.68% compared to the same period in 2008.

The biggest declines were experienced at King Abdulaziz Port in Dammam (-26.97%) and Jeddah Islamic Port (-20.24%), while volumes increased by 4.78% at King Fahad Industrial Port in Yanbu and 2.65% at King Fahad Industrial Port in Jubail.

Jeddah Islamic Port

Jeddah Islamic Port is the major port for Saudi Arabia and is located on the Red Sea west of Mecca. It is Saudi Arabia’s commercial capital being situated between Africa and the Middle East and is also the country’s third busiest industrial city.

The port handles approaching 59% of Saudi Arabia's seaborne imports is about to expand including the ongoing construction of the third container station in the north western part of the port with a capacity to handle up to 1.5m containers.

Its terminals serve containers, bulk commodities such as grains and edible oils, roll-on/roll-off cargo, general cargo, livestock, frozen and chilled cargo, as well as passengers as well as being equipped with a large marine fleet.

King Abdul Aziz Port

The port is the second busiest port and was created to handle non-oil shipping. It is connected to the rest of Saudi Arabia through the national rail and highway networks and has become the kingdoms biggest marine outlet in the east.

Dhiba Sea Port

Dhiba Sea Port is located at the North end of the Red Sea coast and serves an area that extends to the Mediterranean Sea. It is the nearest port in Saudi Arabia to the Suez Canal and ports in Egypt. It is constantly being developed in an effort to further increase both passenger and cargo traffic.



The Jubail Commercial Port

The Jubail Commercial Port is situated on the Arabian Gulf about 14km southeast of the King Fahd Industrial Port in Jubail and is one of the biggest man-made ports in the world on reclaimed land.

King Fahad Industrial Port

King Fahad Industrial Port in Yanbu lies on the shores of the Red Sea about 300km north-northwest of Jeddah Islamic Port and is the second busiest port on Saudi Arabia’s western coast. It is a major port for shipments of oil is the base for three oil refineries, several petrochemical plants, and a plastics factory with three important pipelines for oil beginning in the oilfields in the east and ending at the Red Sea in the Port in Yanbu.

The port is the largest on the Red Sea for the export of crude oil, refined petroleum products, and petrochemicals it also exports construction materials and equipment.

14.4 Saudi Arabia’s Logistics Market

14.4.1 Overview

Saudi Arabia, with its petrodollar revenues, has shown recent commitment to reforming and improving its transport sector, and the current policy agenda (including greater private sector involvement) should bring results. Oil and gas exports will be the drivers of foreign trade. Although the pace of trade growth will ease, tanker exports will remain dynamic. Big infrastructure projects will also help to expand transport capacity and boost demand for cargo.

The international focus on Saudi Arabia’s logistics industry has increased with companies such as DB Schenker, TALKE Logistics and Kuehne + Nagel continuing to invest in the local market. The local government has embarked on an investment programme, funding the development of several warehousing and transportation hubs throughout the country, from the US$8bn Prince Abdul Aziz bin Mousaed Economic City in the northern city of Hail to the $26.6bn King Abdullah Economic City in the western coast of Rabigh.

Most local companies believe the importance of supply chain management is increasing, with logistics operations being considered the second most important business function after sales and marketing. There is, however, a traditional reluctance when it comes to outsourcing these operations. This is changing, with increased diversification from oil-based activities.

One of the major challenges facing the industry is the limitation of relevant skills and capabilities in the local workforce which is resulting in low-levels of success when implementing supply chain operations in-house.

Another challenge which has been identified is the low-level of collaboration, both upstream and downstream, between suppliers and customers.



14.4.2 Saudi Arabia - Logistics Companies

Agility

By 2007 Agility had completed its Saudi Arabia network with the intention that it would be fully operational and as result the company's coverage of the Middle East would pose a significant barrier to entry for any competitors considering entering the logistics market.

Compared to a number of developed markets around the world, Saudi Arabia’s logistics industry has been relatively unscathed by the global recession, prompting a sharp increase in investment from warehousing and transportation companies.

Agility has revealed plans to develop its network of storage facilities throughout the Kingdom, with warehousing being constructed in key cities such as Dammam and Jeddah.

“We have a plan to establish a network of warehousing facilities and transportation assets across KSA that are capable of offering local, regional, and global solutions,” stated Agility.

Aramex

Aramex has three offices in Saudi Arabia, one located in Riyadh, another in Dammam and the third in Jeddah. Aramex upgraded its trucking network in Saudi Arabia by investing in a fleet of 50ft vehicles. The logistics company purchased a total of 12 vehicles to be used for daily journeys between Damman, Riyadh and Jeddah, covering Aramex's three main hubs in Saudi Arabia's Eastern, Central and Western regions.

The vehicles include onboard GPRS equipment, allowing customers to track their shipments from collection to delivery by logging onto the Aramex website for real-time updates. Growing demand for logistics services in markets such as Saudi Arabia has resulted in increased profits for Aramex.


Schenker has been in the Saudi Arabian market for over 30 years, originally entering the market to assist in the construction of King Abdul Aziz international airport in Jeddah. Schenker customers are active in all commercial and industrial sectors. Schenker offers its services at three locations across Saudi, namely Riyadh (HQ), Jeddah and Dammam.

In early 2009 DB Schenker reported further expansion of its network in the Middle East. Specifically it said it had founded a separate company in Saudi Arabia under the name Schenker Saudi Arabia LLC.

Explaining the background to that development, DB Schenker said that for many years it had been represented in Saudi Arabia by partners. The new company, located in Riyadh, would support its customers from another three offices in Dammam, Jeddah and Al Jubayl.



"DB Schenker has an experienced team of over 80 employees and is developing further the client relationships it has built up over the last 30 years in Saudi Arabia," it continued. "Schenker Saudi Arabia LLC is fully integrated into DB Schenker's worldwide network and offers a full range of logistics services. A major focus of its activities lies in the global project logistics business."

DB Schenker added that there were also plans to set up other national companies and cooperation agreements in order to continue to deepen and expand the business. "The near Middle East/Africa region is one of the most interesting growth markets for global network and logistics activities."

DP World

In early 2008 Emaar, The Economic City (Emaar.E.C), the Tadawul-listed company developing King Abdullah Economic City (KAEC), and global marine terminal operator DP World signed a Memorandum of Understanding (MoU), with regard to developing and operating the Sea Port of KAEC.

One of the six key components of the 168m sq m KAEC, the Sea Port would be the largest in the Red Sea and one of the top 10 ports in the world with a capacity to handle 20m TEU (twenty foot equivalent container units). A multipurpose cargo terminal was scheduled to be operational by end of 2010 and a 1.6m TEU container terminal by mid-2011 after which the capacity of the port would be increased on several phases.

In addition to creating 15,000 direct and indirect jobs, the port was expected to contribute an average SAR10bn to the Kingdom's GDP annually, on completion of all phases.

The Saudi Arabian General Investment Authority (SAGIA) governor said that “SAGIA is committed to the Kingdom's Vision to make the Saudi economy one of the top 10 competitive economies in the world by the turn of this decade. To achieve our goal, we encourage major local, regional and international companies to invest in the infrastructure to augment investment in high-growth strategic sectors, most importantly the transport sector, and thus enhance the competitiveness of these sectors, which contribute to overall economic development”.

Extending over 14 sq km, the KAEC Sea Port will be equipped to receive the new generation mega-vessels, with a nominal capacity of around 10,000 TEU and more, and will utilise global positioning technologies, advanced information management systems and automated processes.

The KAEC Sea Port will provide a qualitative and quantitative leap to the marine transportation and logistic services sector of Saudi Arabia that will boost the Kingdom's global competitive advantage. Logistics is one of the fastest growing sectors, and creating a world-class port is an important part of building a robust economic environment.

The KAEC Sea Port will contribute to the total transportation and port network of Saudi Arabia, and seeks to leverage its strategic location on the Red Sea, which is one of the most important sea routes between the East and West. The Sea Port will be integrated



with the Industrial Zone and logistics hub to provide a logistics operation within KAEC that will further promote regional trade.

KAEC has six zones: The Sea Port, Industrial Zone, Central Business District (including financial district), Educational Zone, Resort District and Residential Communities. Work was progressing on schedule on the first phase of the project including the Sea Port, Industrial Zone, Resort District and Residential Communities.

GAC

GAC Saudi Arabia was established in 1958 and has grown from a single operational office at Ras Tanura to have its own operations in the major ports of Dammam, Jeddah, Yanbu, Jubail, Ras Tanura, Ras Al-Khafji and Rabigh, as well as the dry port in Riyadh.

However, with an economic boom following shortly afterwards, the company’s operations have developed encompassing everything from warehousing and distribution to ship agency and marine operations.

GAC became a pioneer in Saudi Arabia’s logistics market when it introduced freight forwarding to its service portfolio in 1985.

Kuehne + Nagel

Kuehne + Nagel's offices in Saudi Arabia are located in Ad Dammam, Jeddah and Riyadh. By mid 2008 Kuehne + Nagel announced that it had become the first global logistics provider to operate a wholly-owned national subsidiary in Saudi Arabia. That development, explained the Swiss group, meant K+N could now consistently pursue its strategic objectives in the Kingdom.

K+N explained that it had entered Saudi Arabia in 1976 via a 50/50 joint venture with E.A. Juffali & Bros, Orient Transport Company. Following a change in domestic legislation, it had acquired the remaining shares from the joint venture partner in 2007.

Now, effective mid-July that year, the national company had begun operating under the global K+N brand as Kuehne + Nagel Ltd, with its headquarters in Jeddah, branches in Riyadh and Dammam, and 80 staff.

K+N commented, "The establishment of a wholly-owned national company in Saudi Arabia provides us with significant strategic and operational advantages. Customers can now fully leverage the quality and scope of our globally standardised business and IT processes together with our comprehensive portfolio of forwarding and logistics services. At the same time, we can consistently pursue our investment and development objectives in the Kingdom in terms of both operations and staffing."

K+N added that the national company was firmly positioned in the Saudi sea and air freight markets - "a strong foundation for the continued expansion of the oil and gas logistics business". Contract logistics, the group's third business pillar, would be set up in the course of this year and see considerable investment in 2009.



The company's employees in Saudi Arabia provide national and international customers with international freight forwarding services that range from transportation, import and export by air, sea and land to customs clearance, domestic distribution, as well as industrial projects.

Panalpina Group

With branches in Jeddah, Al Khobar and Riyadh, Panalpina Saudi Arabia serves all the country's main commercial and industrial cities.

SEKO

In early 2008, the US-based logistics company SEKO announced plans to increase its Saudi Arabian operations, with offices in Jeddah, Damman and Riyadh. “Saudi Arabia adds an integral element to our global network,” it said.

“With increasing volumes of imports into Saudi Arabia and exports to worldwide destinations, the office is well positioned to take advantage of this flourishing trade zone and will greatly benefit from the country’s growing infrastructure.”

Alfred Talke GmbH

With a focus on emerging markets in the Middle East, Talke selected Saudi Arabia as the host country for its first warehousing centre in the region.

The facility, which opened in the Port of Al Jubail, measures 100,000 sq m in total and provides a base for the storage of petrochemical products, together with a range of value-added services for plastics in granulate or powder form. “We are convinced that our investment will play a positive role in the development of logistics in Saudi Arabia,” said Alfred Talke.

According to Talke, the facility at Al Jubail supports the strong development of the petrochemical industry and the Kingdom’s role in the global economy.

“Our new facility is a major milestone in our strategy to support the local petrochemical industry with state-of-the-art logistical concepts, which will support the tremendous growth here in the Kingdom,” it said. “This will help our manufacturers to bring their products to the global markets in a flexible and efficient manner.”



15.0 Syria

Syria borders the Mediterranean Sea between Lebanon and Turkey. It has a total land border of 2,253km and a coastline of 193km.

15.1 Economy

Annual Data 2008

Population (m) 20.18



Inflation 14.6 (est)


15.2 Trade

Given the policies adopted from the 1960s through the late 1980s, which included nationalisation of companies and private assets, Syria failed to join an increasingly interconnected global economy.

Syria withdrew from the General Agreement on Tariffs and Trade (GATT) in 1951 because of Israel's accession. It is not a member of the World Trade Organisation (WTO), although it submitted a request to begin the accession process in 2001.

Syria is developing regional free trade agreements. As of 1 January 2005, the Greater Arab Free Trade Area (GAFTA) came into effect and customs duties were eliminated between Syria and all other members of GAFTA.

In addition, Syria has signed a free trade agreement with Turkey, which came into force in January 2007, and initialled an Association Agreement with the European Union, which has yet to be signed.





Main Exports

Source: WTO



Main Imports

Source: WTO



In 2007 the European Union (27) represented 40.7% of total Syrian exports.





In 2007 the European Union (27) represented 19.6% of total Syrian imports.


Historically Syria has been a major crossroads for international trade. However its status as a regional transport centre has been challenged in recent years, mainly due to a lack of investment and insularity. The country is in the process of restating itself as a gateway to the Middle East and the government’s 10th Five-Year Plan (2006-10) makes developing transport infrastructure a high priority, allocating around $1.5bn to the development of a nationwide multi-modal transport network.

As well as rebuilding existing infrastructure, new ports, airports, railways and roads are under construction. Although the transport sector still remains predominantly state-run, private investment is increasing as the government promotes public-private partnerships (PPPs) and foreign direct investment (FDI).

Significant upgrades are currently underway on the country’s infrastructure, including the Tartous and Latakia container terminals and the Damascus airport. In addition rail and road networks are being expanded, to provide better links both domestically and internationally. Though the global economic downturn will impact Syria should continue to attract significant investment, based on its strategic positioning and increasingly business-friendly policies.

Syria shares two main corridors with the EURO-MED transport network, the Trans-Mashrek (north-south) corridor and the east-west corridor with links to Iraq and the Gulf



region. In view of its strategic location, it could play in future an important role as transit country for oil and gas, equal in importance to its present oil exports. It has been very actively participating in regional transport initiatives in the past.

Additionally, it benefited from EIB loans in favour of Tartous port modernisation and the enlargement of the Aleppo/Raqqa/Deir-ez-Zour highway, both part of the east-west corridor of the EURO-MED transport network.

Syria Transport Infrastructure Map




Syria Transport Infrastructure

Roads

Total 97,401 km

Paved 19,290 km


Railways

Total 2,711 km


Narrow Gauge 251 km

Airports

Total 101


Heliports 7

Waterways

Total 900 km

Merchant Marine

By Type:Bulk Carrier 5, Cargo 65, Carrier 4, Container 1, Petroleum Tanker 1, Roll-on/Roll-off 1

Ports & Terminals

Latakia and Tartus


15.3.1 Road Network

Syria has a road network which consists of 97, 401 km, of which 19,290 km is paved and 1,103 km are expressways.

Syria's road network is the chief means of transporting goods and passengers. Major roads include the highway between Damascus and Aleppo and the road between Damascus and Baghdad.

In 2009 Syria and Lebanon held talks over improving transport co-operation between the two countries. In particular, the two countries discussed speeding up the road crossings between the countries to end current frequent delays, hampering the cross-border transfer of goods.

Indications are that Syria, Lebanon and Jordan might adopt a common code of practice to improve efficiency at border crossings between the three countries. Cargo trucks travel frequently between the countries but there was still no consistency between crossings.




Syria has a total railway network of 2,711 km, of which 2,460 km is standard gauge and 251 km is narrow gauge track.

Syria's railways are well developed. A northern line runs north eastward from Aleppo into Turkey and then east along the border to Al-Qamishli, where it crosses the north eastern extremity of Syria on the way to Baghdad.

The Hejaz Railway runs from Damascus to Amman, and another runs from Aleppo to Tripoli. Aleppo and Damascus are also linked by rail. Smaller lines run between Beirut in Lebanon and Damascus.

In early 2009 the Iraqi minister for transportation confirmed that a new railway that will link Iraq to Syria will be launched on 1st June, allowing for the transfer of freight from southern Europe to the Persian Gulf and that Iraq had repaired the railway that connects Umm Qasr port to the Syrian border.

The move comes shortly after the confirmation of a Jordanian plan to begin work on a US$6bn railway in 2010 that will link the port hub of Aqaba to the Syrian border, via Amman and Zarqa, and will also link the kingdom with Saudi Arabia.

15.3.3 Airports

Syria has international airports at Damascus and Aleppo, and several domestic airports are located throughout the country, including those at Al-Qāmishlī, Latakia, Dayr al-Zawr, and Tadmur. International services connect Syria with Arab, other Asian, and European countries. Domestic and international services are provided by Syrian Arab Airlines.

Syria has 101 airports, including 28 with paved runways, and also has 7 heliports.

15.3.4 Ports

The Port of Latakia

The port lies on Syria's north-western shores on the Mediterranean Sea and is about 45km southeast of Syria's border with Turkey.

It serves a vast agricultural region exporting many products including pottery, cereals, fruit, eggs, cotton, tobacco, vegetable oil, asphalt, and bitumen. The port facilities serve tankers, container ships, and vessels carrying general, bulk, and roll-on/roll-off cargoes.

The port is being modernised including better equipment, processes, and improved training of port personnel.



15.4 Syria’s Logistics Market

15.4.1 Overview

Syria is a major gateway for European and Middle East markets and has many historic economic links with many countries such as Germany and the Far East.

Syria’s road network remains the primary means of transporting goods and passengers with major roads including the highway between Damascus and Aleppo and the road between Damascus and Baghdad.

Syria’s railways are well developed and the country’s chief ports, Latakia and Tartus were built after independence. Syria has international airports at Damascus and Aleppo, and several domestic airports are located throughout the country.

Syria’s traditional economic sectors such as agriculture, tourism, industry and commerce are insufficient to develop its economy. As globalisation and the financial crisis impacted Syria so it has had to focus on logistics and supply chain activities.

As a result Syria is actively developing its infrastructure across all the attributes of Ports, Dry ports, Roads, railways, utilities and multi-modal facilities. One such development is at Hesiyah a strategic regional hub located between Damascus and Aleppo on Syria’s north-south highway. It lies close to main east-west routes and has existing rail links. It is also the location for a new industrial city being built with good infrastructure on demand and is situated close to the Syrian Oil and Gas Hub at Homs where the Arab Gas Pipeline is situated. Syria is the shortest route to transport oil from Iraq to the Mediterranean and the main pipeline from Kirkuk to Baniyas on the coast is currently being refurbished where there is ample export capacity available.



Syria: Strategic Location

Source: DHL Express

15.4.2 Syria - Logistics Companies

Aramex

Aramex has one office in Syria, located in Damascus.

CEVA

In Syria CEVA provides both freight management and contract logistics services for a wide range of customers across all industry sectors. Its offices are based in Damascus and Latakia. Its freight management services cover all air, ocean and road transport requirements, linked into CEVA Ground Middle Eastern Network, supported by customs brokerage and value added services. Its range of warehousing and distribution services has complete reach across the country with a range of services also available such as Kitting, Co Packing, Goods on Hanger, Reverse Logistics, Warranty Repair Management.


Schenker is represented in Syria by Al Ghayth Trade & Transport, which is located in Damascus.

Gulf

Iraq Iran Asia

Europe Mediterranean

N Africa

Russia Caucasus

Turkey

Syria



T. Gargour & Fils (TGF)

As much of Iraqi destined cargo as possible is handled through the Syrian Ports of Tartous and Lattakia. TGF started serving vessels in those two ports. This had been done under the umbrella of the Middle East Shipping Services in Syria (MSS).

MSS Syria has offices in Damascus, Tartous, Lattakia and Banias.



16.0 UAE

The United Arab Emirates were formed in 1971. The UAE consists of seven states, termed emirates, which are:

1. Abu Dhabi

2. Dubai

3. Sharjah

4. Ajman

5. Umm al-Quwain

6. Ras al-Khaimah

7. Fujairah.

16.1 Economy

Annual Data 2008

Population (m) 5.6

GDP (US$ bn; Market Exchange Rate) 253 (est)




Exchange rate Dh:US$ 3.67


Inflation 13.2%


16.2 Trade

The United Arab Emirates (UAE) has very good infrastructure-related services, and a conducive and secure business environment, characterised in particular by its ease of hiring foreign labour. The most important obstacle to trading across borders in the UAE remains the restricted access to the country's goods markets through pervasive tariffs: the UAE applies a uniform tariff of 5% on almost all imported goods.




Note: Figures for 2008 are estimates

Main Exports




Main Imports




In 2007 the European Union (27) represented 2% of total exports from the United Arab Emirates.





In 2007 the European Union (27) represented 23% of total imports from the United Arab Emirates.

16.2.2 Free Trade Zones

Jabel Ali Free Zone (JAFZA)

Jafza is built over an area of 48 sq km and ranks among the world’s largest and the fastest growing free zones. In its 23 years of operation, Jafza has seen the number of companies grow from 19 in 1985 to over 6100 in 2008. Situated between Jebel Ali Port the world’s 6th largest seaport and the upcoming Al Maktoum International Airport, Jafza claims to be the only free zone in the world to be located between the two major logistics enablers. With its six lane highway Jafza claims to facilitate the transportation of goods (custom bound) from sea to air in just 20 minutes.

Jebel Ali Port is part of DP World, which is the 4th largest port operator in the world with 49 marine terminals and 12 new developments across 31 countries.

JAFZA has benefited from major investments in its infrastructure and logistics capabilities.

Advantages of setting up in JAFZA include a lack of import and re-export duty, zero corporate taxes for a 50-year renewable period and the permission of 100% foreign ownership of a company, as opposed to UAE regulations where at least 51% of a company must be owned by a UAE national.



Sharjah Airport International Free Zone (SAIF)

Easily accessible to seaports on the Indian Ocean (Port Khor Fakkan) and the Arabian Gulf (Port Khalid), SAIF-Zone is built adjacent to the Sharjah International Airport and has registered strong growth since its inception in 1995. With over 1,800 companies operating out of it, it has the distinction of being the first ISO certified Airport Free Zone in the world.

Around half of SAIF tenants are Indian showing the advantage of setting up in a free zone within UAE not only to cater for the Gulf market but also in the CIS and Africa.

Dubai Internet City (DIC)

Dubai Internet City (DIC) is conceived as a strategic base for companies targeting emerging markets in a vast region extending from the Middle East to the Indian subcontinent, and Africa to the CIS countries. Dubai Internet City opened doors in October 2000, developed by Dubai Holding, an affiliate of the Government of Dubai.

DIC now features an international community of ICT companies including global giants like Microsoft, Cisco Systems, IBM, HP, Dell, Siemens, Sun Microsystems, Computer Associates, PeopleSoft and Sony Ericsson. Many small and medium businesses (SMBs) and promising entrepreneurial ventures are also part of the community. The cluster comprises companies from a variety of sectors - Software Development, Business Services, Web Based and e-Commerce, Consultancy, Sales and Marketing and Back Office.

Ajman Free Zone

Strategically situated at the entrance of the Arabian Gulf, Ajman Free Zone's proximity to Sharjah and Dubai provides access to the two international airports and four ports. Ajman Port currently serves over 1,000 vessels in a year and has twelve berths.

Hamriyah Free Zone, Sharjah

Hamriyah Free Zone Authority was established in November 1995 and is located in Sharjah. It has access to neighbouring and global countries through land, sea and air. Hamriyah Free Zone manages an area of approximately 12m sq m of prime industrial and commercial land and a 14 metres deep water port which includes room for expansion. It is fast becoming one of the cornerstones of the United Arab Emirates industrial development and provides competitive incentives and opportunities to establish a business in a tax free environment, full company ownership, exemptions from all commercial levies and repatriation of capital and profits.

The Emirate of Sharjah is the third largest emirate of the United Arab Emirates. Sharjah is 10 km away from Dubai and 76 km away from Abu Dhabi the capital of the United Arab Emirates. Sharjah is known for its strength as the industrial backbone of the U.A.E., 40% of the total numbers of businesses in the U.A.E. are based in Sharjah. The majority of these industries are petrochemicals, textiles, leather, food and basic non-metal industries. Sharjah contains the main administrative and commercial centres along with cultural and



traditional projects. Links with the outside world are provided by Sharjah International Airport, Port Khalid, Port Khorfakkan and Hamriyah Free Zone Port.

Fujairah Free Zone

The Free Zone of Fujairah was established in November 1987 and is connected to the Port of Fujairah which offers shipping services connecting to all Arabian Gulf ports, the Red Sea, Iran, India and Pakistan on weekly feeder vessels. Mainline services arrive from the UK, North Europe, Mediterranean, Far East and North America on a weekly service, and offer sailing twice weekly to the Far East and once a week to North America. The port's modern facilities include 800 m of deep water quay (12.5 m draught), 6 ship-to-shore gantry cranes and 11 rubber-tyred yard cranes. The port also handles bulk dry cargos, Ro/Ro cargo, livestock and general cargo in addition to regular containers.

Fujairah area is about 1,450 sq km and main cities and villages in Fujairah are Dibba, Murbeh, Qidfa, Al Bidiyah, Masafi and Al-Siji. Fujairah is linked by modern highways to all major cities in the UAE and a 90 minutes drive time from Sharjah, less than two hours from Dubai, and just three and a half hours from Abu Dhabi.

The Fujairah Free Zone Authority is planning to create its own logistics park to capitalise on the current distribution boom in the Middle East. This represents an expansion strategy for the free zone, which recorded 25% growth in 2005 compared to the previous year. They are hoping to tempt companies to the project by offering a one-stop selection of warehousing and distribution facilities.

Ras Al Khaimah Free Trade Zone

The Emirate of Ras Al Khaimah is the most northerly Emirate in the UAE and borders Oman on its Northern and Eastern limits. It covers 1,684 sq km and has 64 km of coastline. RAKFTZ is connected to Saqr Port in the industrial area of Khor Khuwair and is the Emirate's main port providing bulk and container services. It has eight deep water berths, each 200 m long, is dredged to 12.2 metres and has two Ro-Ro ramps plus specialised berths for handling bulk cement and aggregate.

Other services include ship handling, crew changes and 40,000 sq m of covered storage together with a vast open storage area. It is also the closest port in the UAE to Bandar Abbas in Iran. The modern RAK Airport is currently undergoing an upgrade. It operates cargo and passenger services to a variety of destinations covering the Middle East, North & East Africa, Central Asia, India and the Far East. In total 27 airlines operate scheduled and non-scheduled flights from this airport. There are two dual-carriageways that link RAK with the other northern emirates and beyond. The Emirates Highway has recently been extended to Sharjah, Ajman Umm Al Qawain and Ras Al Khaimah.

In July 2009 Ras Al Khaimah Free Trade Zone (RAKFTZ) reported a 14.5% increase in revenue during the second quarter of 2009, compared to the same period last year.

The free zone also registered 554 new customers between April and June 2009 – an increase of 14.7% from 2008 figures.



Its target for 2009 was to have 2000 new companies by the end of the year and with 931 companies already registered in the first half of 2009, it was confident that it would reach this target.


The United Arab Emirates has a strong transportation and communications infrastructure which has provided a basis for creating one of the world's key trade and trans-shipment hubs. The country has achieved progress in a short span of three decades emerging to be a template for other oil-based economies in the region. Its strategic geographic location, with the Indian sub-continent to the east, other Gulf Cooperation Council (GCC) countries, East Mediterranean and North Africa to the west, Iran and CIS Republics to the north and East/South Africa to the south have further made it an ideal logistics hub for this region.

UAE Transport Infrastructure Map




UAE Transport Infrastructure

Roadways (2008)

Total 4,080 km

Paved 4,080 km

Expressways 253 km

Airports (2008)

Total 39


Heliports 5


By Type: Bulk Carrier 6, Cargo 9, Chemical Tanker 4, Container 8, Liquefied Gas 1, Passenger/Cargo 1, Petroleum Tanker 24, Roll-on/Roll-off 4, Specialised Tanker 1

Ports & Terminals

Mina' Zayid (Abu Dhabi), Al Fujayrah, Mina' Jabal 'Ali (Dubai), Mina' Rashid (Dubai), Mina' Saqr (Ra's al Khaymah) and Khawr Fakkan (Sharjah)

Pipelines (2008)

Condensate 458 km

Gas 2,129 km

Liquid Petroleum Gas 220 km

Oil 1,310 km

Refined Products 212 km

Water 90 km


16.3.1 Road Network

Most of the transportation between members of the United Arab Emirates (UAE) is road-based with the link connecting the Northern Emirates with the rest of the region known as Emirates Road. However it was clear in 2007 that the highway's capacity was increasingly under pressure by ever-growing inter-emirates traffic and several projects were instigated to improve the road network.

The Ajman emirate was keen to develop a new connection that would allow future large-scale residential areas such as the Al-Zora project to be directly connected to the Emirates Road. In addition a third lane will be added soon on the Dubai-Fujairah section of road with more improvements in the pipeline.

Sharjah and its neighbours Dubai are working on the main road that linked the two cities, the Al-Ittihad road which is set to become an expressway 16-lanes wide on some stretches and include several over- and under-passes. Other upgrades included Sharjah's Al-Wahda Street, which was planned to become a double-decker expressway by 2010.



In mid-October 2009 Abu Dhabi completed a major milestone in its infrastructure plans when a bridge opened to link Saadiyat Island with the city. As part of “Plan Abu Dhabi 2030”, the UAE capital opened the 10-lane Sheikh Khalifa Bridge and a 27km expressway.

The 1.4km-long bridge connects Saadiyat Island to Abu Dhabi for the first time and also celebrated the launch of the newly constructed 10-lane expressway, which stretches from Port Zayed on the Abu Dhabi mainland to the Shahama District, passing through Saadiyat and Yas islands. The Sheikh Khalifa Bridge, which will now serve as the new gateway into Abu Dhabi, is part of major infrastructure works on Saadiyat Island.


In 2005, the federal government launched a feasibility study for the construction of a freight and passenger train network. The railroad would connect the seven emirates - from Al Ruwais in the west to Ras al-Khaimah in the north and Fujairah and Khor Fakkan on the East Coast. The railroad would primarily be dedicated to freight, but would also carry passengers. The whole network would be 700 to 1000km long, would not be electrified, and would allow 100 conventional trains to operate each day.

In early 2009 a federal bill on the formation of the Union Railway Company was passed by the UAE Ministry of Services, paving the way for the construction of a nationwide railway. The UAE government approved a federal law to set up an AED1bn ($272m) railway company.

The Etihad Trains Company, which would be 100 percent owned by the government, would transport goods and passengers and would invest in a countrywide rail network that would link the emirates. Run by at least seven board members, the new company would specialise in leasing, owning and selling trains.

“According to the decree, the "Etihad Trains Company" shall, among other objectives, strive to link the rural areas with the urban areas of the country to accelerate growth and development in the country and facilitate easy, cheap and safe means of transport of passengers and goods, to minimise environmental pollution stemming from carbon combustion from cars on the roads and highways”.

Tenders for the project, which were estimated to cost US$3bn, would be offered by 2015, officials said. The Union Railway Company, a fully government-owned entity, will own and operate trains, and invest in the transportation of passengers and goods on a railway connecting the seven kingdoms of the UAE.

Construction would be divided into two phases; the first would focus on creating an industrial railway for goods, which would take five years to complete, while the second would be a passenger line consisting of 621 miles of track running from the coast to the border with Saudi Arabia.

It was hoped that the railway would increase trade between the emirates and ease traffic congestions as well as being connected to other train networks in neighbouring countries.



16.3.3 Airports

Airports are found throughout the country with Dubai International Airport as the main airport of the country. Other important airports include Abu Dhabi International Airport, Sharjah International Airport, and Al Ain International Airport.

The UAE is home to the largest airline in the Middle East, Emirates. It has Dubai as its hub, and flies to over 100 destinations across six continents. The airline was the eighth-largest airline in the world in terms of international passengers carried and fifth-largest in the world in terms of scheduled international passenger-km flown in 2008.

Etihad Airways, from Abu Dhabi, is also growing, with over 200 aircraft on order.

Dubai International Airport

Dubai International Airport is an international airport serving Dubai, the largest city of the United Arab Emirates. It is a major aviation hub in the Middle East, and is the main airport of Dubai. It is situated in the Al Garhoud district, 4km southeast of Dubai. The airport is operated by the Department of Civil Aviation and is the home base of Dubai's international airline, Emirates Airline and Emirates SkyCargo; the Emirates hub is the largest airline hub in the Middle East and Africa; it handles 60% of all passenger traffic, and accounts for 38% of all aircraft movements at the airport.

In 2008, the airport was the 20th busiest airport in the world by passenger traffic and 11th busiest by cargo traffic. The airport also was the 6th busiest airport in the world by international passenger traffic.

The new $4.5bn Terminal 3 opened on 14 October 2008, and Terminal 2 was upgraded in January 2009. Concourse 3 is also part of Terminal 3, and is expected to be completed by 2011. It will be built exclusively for the Emirates Airbus A380. Terminal 3 will add 1.5 sq km and is the single largest building in the world by floor space.

Dubai International Airport will be complemented by Al Maktoum International Airport (Dubai World Central International Airport), a new 140 sq km airport that will help handle the influx of travellers well into the future.

Cargo

In addition to being an important passenger traffic hub, the airport is one of the busiest cargo airports in the world and fuelled by high economic growth from Emirates Airline, the airport handled 1,824,991 tonnes of air cargo in 2008, an increase of 9.4% over the 2007 fiscal year, making it the 11th-busiest airfreight hub in the world and the busiest in the Middle East.

In addition the total freight handled between January and March in 2009 reached 425,172 tonnes as compared to 423,291 tonnes in the first quarter of 2008 with March the busiest month for cargo with over 159,301 tonnes cargo, up nearly 3.5% over the corresponding period in 2008.



Jebel Ali Airport City

Dubai Logistics City

Dubai Logistics City (DLC) is an integrated logistics platform with all transport modes, logistics and value added services, including light manufacturing and assembly, in a single customs bonded and Free Zone environment.

DLC is adjacent to what will eventually be the world's largest airport, the DWC-Al Maktoum International Airport. Already the regional centre for re-export, retail, leisure, aviation, IT and banking, Dubai has more than 60% of the entire Middle East's imports transiting its borders.

Spanning 25 sq km, DLC is designed to ultimately handle 12m tonnes of air cargo annually in up to 22 air cargo terminals.

DLC is part of the Jebel Ali Airport City Free Zone and delivers all the advantages of the Dubai free zone. All transport modes, logistics and value added services, including manufacturing and light assembly, are located in a single customs bonded and Free Zone environment. It is part of the Jebel Ali Airport City along with the Jebel Ali International Airport and adjacent to the Jebel Ali Port and Free Zone.

DLC provides this free zone platform exclusively for logistics businesses to ensure the logistics community can collaborate and will find sufficient space to expand in the future.

With exception of applications for the DLC Office Park, free zone and operations licences will only be issued to companies closely related to logistics business:

• forwarders engaged in multi-modal cargo handling

• logistics service providers offering warehousing and value added services in a multi-client environment and with multi-modal transport needs

• contract logistics service providers with dedicated or custom designed facilities for distribution and value added services

• industry and trading companies which self-operate their distribution centres, final assembly and other value adding activities as part of their down-stream order fulfillment processes.

DLC facilities are designed to support the operations of logistics businesses:

• Air cargo terminals: Directly at the apron and designed for air cargo terminal handling service providers

• Land plots for industry or contract logistics

• Land plots for forwarders: Exclusively for forwarders with access to the airport’s apron and optimal for mid-sized and larger forwarding



businesses who want to combine shipment handling and consolidation operations and warehousing/distributions services

• Shared forwarders warehouses: Near the air cargo terminals and aimed at small and medium sized cargo handling operations

• Integrator facilities: DLC provides a dedicated section for express parcels facilities directly at the apron.

Al Maktoum International Airport

Dubai International Airport Cargo gateway (Dubai Cargo Village)

The new structure of Dubai Cargo Village was unveiled in early 2008 when the hub adjoined the forthcoming cargo facility at Al Maktoum International Airport in Jebel Ali, under the combined title of Dubai Cargo City.

It was established in 1991 to handle all air cargo operations at Dubai International Airport, but increasing cargo traffic resulted in the cargo building going over capacity: it had originally been equipped to handle 250,000 annual tonnes. In 1997 the cargo terminal handled in excess of 400,000 tonnes and the trend showed that there would be a need to provide facilities for up to a million annual tonnes of air cargo by 2006, 2m tonnes by the year 2014 and 2.7m tonnes by 2018.

To cope with the demand for cargo space, the Department of Civil Aviation embarked upon a major cargo expansion programme to increase freight handling capacity at the cargo village.

Controlled by Dubai Airports Company, the newly structured body that will govern both of Dubai's airports, the restructuring was expected to enhance coordination between the two developments. The restructuring programme had been a year in the making and saw Dubai Cargo Village be renamed Dubai International Airport Cargo Gateway, with the adjacent cargo hub in Jebel Ali becoming Al Maktoum Airport Cargo Gateway.

Construction of the approximately US$75m cargo terminal at Al Maktoum International Airport was by 2008 over 50% complete. The first phase of the project saw the terminal initially handle 200,000 tonnes per annum, with the option to expand by a further 600,000 tonnes. By 2013 it is expected to become the largest of its kind in the world, handling more than 12m tonnes of cargo annually.

Meanwhile, Dubai Cargo Village had completed construction of its Cargo Mega Terminal, which then had a handling capacity of 1.2m tonnes.

Abu Dhabi International Airport

Abu Dhabi International Airport is in Abu Dhabi, the capital of the United Arab Emirates. The airport is one of the fastest growing airports in the world in terms of passengers, new airline operators, and infrastructural development. The airport is now undergoing a major expansion; the total amount earmarked for projects is US$6.8bn.



Abu Dhabi airport is the second largest in the UAE and its terminal spaces are dominated by Etihad Airways which is the United Arab Emirates second largest air carrier after Emirates Airline.

Work is underway on a new terminal at the airport, to open in 2009. Once completed, the airport's three terminals will have an approximate capacity of 12m passengers per annum. It is expected that passenger numbers will reach this level in 2011.

In early 2009 Abu Dhabi International airport announced that it would sign up the first companies for its logistics zone by the end of that year. Abu Dhabi Airports Company (ADAC) announced that the first phase of the zone, which was currently under construction, would be ready for customers to move in.

The site would include a range of light industrial units, commercial offices and plots of land for development by customers themselves. The second phase of construction will begin in 2011, with work finishing in 2015.

The logistics park is adjacent to the airport and close to the new Khlalifa port, which is being built.

Although the development of logistics parks in the United Arab Emirates has traditionally focused on Dubai, a string of multi-billion dollar projects have recently been launched in other parts of the country. Leading the revolution has been Abu Dhabi Airports Company (ADAC), a regional powerhouse in the aviation sector with management responsibility for the airports in Abu Dhabi and Al Ain.

The centrepiece of ADAC’s US$6.8bn development strategy is Abu Dhabi Airport Business Park, which is being constructed on 12 sq km of land and will include around 2 sq km of space for a warehousing and transportation complex.

The project has received a considerable amount of interest from the logistics sector, especially from freight forwarders, importers, exporters and Maintenance, Repair and Operations (MRO) specialists – proving that demand for such developments outside of Dubai is plentiful.

Abu Dhabi Logistics Park will offer a wide range of facilities, from light industrial units in a variety of designs to commercial offices and plots of land for tailored developments.

The project is being developed in two phases, construction of phase one has already commenced and should be completed in 2010. The development of phase two is scheduled for 2011 and will be completed in 2015.

Sharjah International Airport

Sharjah International Airport is located in Sharjah, United Arab Emirates and is an important cargo airport and home base of the low-cost carrier Air Arabia.



Al-Ain International airport.

In 2009 Abu Dhabi Airports Company (ADAC) announced a joint venture with the UAE's Helios SinoGulf Property Development to build a logistics and business park next to Al-Ain International airport. The first phase of the project would cost more than AED900m ($250m). Development will begin immediately and was scheduled to be completed in 2010.

The UAE authorities have designated the logistics park as a free zone covering 650,000 sq m. It will include office space, distribution centres, light industrial units and freight-forwarding stations. The business park will also cater for the needs of air cargo and aerospace companies. ADAC was developing Al-Ain as a hub for low-cost airlines, executive and charter flights, and cargo. Helios SinoGulf Property Development is a joint venture of the UK's Helios Properties and Abu Dhabi-based SinoGulf.

16.3.4 Ports

The United Arab Emirates (UAE) has several modern ports, including Dubai’s Port Rashid and Jebel Ali. Port Rashid contains a large shipyard, and Jebel Ali is located on one of the world’s biggest man-made harbours. Port Rashid is a man-made commercial port named after Sheikh Rashid bin Saeed Al Maktoum.

Port Jebel Ali

Port Jebel Ali is 35km southwest of the city of Dubai and since 2008 all cargo operations were transferred from Port Rashid to Port Jebel Ali with Port Rashid subsequently becoming a cruise terminal and mixed-use urban waterfront area. The port is the biggest man-made harbour in the world and the biggest Middle East port and is home to many companies from over 100 countries of the world. Throughput at DP World’s flagship port increased by 1.15m TEUs in 2008 to 11.8m TEUs. Congestion problems, along with the downturn in global trade hit the port hard in the second half of the year. DP World indicated that the increasingly challenging conditions during 2008 were expected to remain for the foreseeable future.

The port connects to Dubai’s expressway system and to the Dubai International Airport Cargo Village where facilities are capable of handling perishable and time-sensitive cargoes, making four-hour transit from ship to aircraft possible. In mid-2009 Dubai's Jebel Ali Free Zone Authority (Jafza) reported an 18% growth in revenues during the first quarter of 2009. The group, part of the local Economic Zones World (EZW), also said it would freeze charges imposed on companies using the free zone, which lies adjacent to Dubai's Jebel Ali port. The company had not revealed its precise revenue figures but said the results, coming in during the economic downturn, showed the strength of its business model at Jebel Ali, as well as the port and free zone's importance as a services hub for the region. Jafza had also indicated it would consider submissions from businesses based in the free zone to have their fees reduced in the short term, to help them during the downturn.



Port Rashid

Port Rashid handles containerised, general, and roll-on/roll-off cargo as well as passenger vessels. In 2008 it was decided that all cargo operations would be moved to Port Jebel Ali and that Port Rashid would become a cruise terminal and mixed-use urban waterfront area.

Port Zayed

Port Zayed is the port serving the city of Abu Dhabi and is located in northeast Abu Dhabi and has developed because the deepwater access to transportation by oil tankers is so good. Eventually the port will move to Waweelah to reduce the number of heavy goods vehicles in the city as well as releasing land for development of commercial and residential properties.

16.4 UAE’s Logistics Market

16.4.1 Overview

Although the current oil price boom is easing, the UAE economy is expected to grow by an average of 4.1% per annum over the next five years, providing support for the freight business.

Infrastructure investment will also remain high, with the emirates continuing to focus on a variety of ambitious transport projects in aviation and shipping. Overall the UAE freight sector will expand rapidly in the short term but will slow as global conditions eventually change.

The UAE economy is dynamic and is now more diversified and shows evidence of robustness to withstand external shocks. Strong investment in transport infrastructure and the global ambitions of companies like Emirates Airlines and DP World will be strong positive factors.

The number of free trade zones in the country has meant that many multinational manufacturers have been attracted to the region, from which they can distribute product to the whole of the Middle East. The highly connected nature of the UAE, with excellent air, sea and road links in terms of destinations and frequencies, and the business-friendly environment, has meant that the UAE is the location of choice for regional distribution centres.



16.4.2 UAE - Logistics Companies

Agility

In 2009 Agility announced the launch of its new Container Freight Station (CFS), a major new consolidation and redistribution service, from its hub in Dubai. This new service would be offered to all shippers and consignees who had shipments of less than a container load (LCL).

By creating this hub, Agility could now consolidate the cargoes originating from various world ports and redistribute them throughout the Gulf and Africa. Furthermore, Agility had co-launched this service in the Far East and Europe.

The CEO of Agility Dubai, said, "Consolidation of LCL cargo is an important part of the ocean freight business and whilst we appreciate this is not a new product; we believe we have a competitive advantage to offer our clients - our global network. We have the global presence from which to leverage more countries and areas than our competitors. In addition, we have substantial buying power with major carriers, meaning we can deliver greater value as well as a greater service to our clients."

Agility believed that at a time when consignees were shipping smaller volumes, the LCL market was likely to grow. Dubai's Jebel Ali Free Zone (JAFZA) port was well placed to cater to this market as turnaround times for vessels were very quick compared to other ports. This meant that goods could be cleared and delivered to Agility's CFS, and ready for redistribution within 8-12 hours of the vessel's arrival.

Agility's CFS would offer handling and temporary storage of import/export laden and empty containers carried under customs control. The covered facility dedicated for this service comprised of 1,000 sq m with capacity for around 900 pallet positions. Other specific features included: free pick up of cargo with JAFZA; value added services; door to door services; precise service schedules and multiple weekly frequencies.

Previously in 2007 Agility agreed a joint venture with Mubadla & Al Bateen Investments (two UAE companies) to form Agility Abu Dhabi. This provided integrated logistics solutions including warehousing, transportation, distribution, freight forwarding, project logistics and other value-added supply chain services to businesses in Adu Dhabi.

In 2006 Agility (then PWC Logistics) and Al-Ghaith Holding PJSC announced the signing of a joint venture agreement to provide automotive logistics services the company would provide services for the import of motor vehicles arriving in the Emirates each year.

The newly formed company, Automotive Logistics Middle East (ALME), would be headquartered in Dubai's Jebel Ali Free Zone and managed by PWC Logistics. ALME would focus on providing automobile pre-delivery and inspection and replacement parts logistics services to vehicle manufacturers, original equipment agents and used vehicle dealers throughout the GCC. ALME would also offer logistics solutions tailored to meet the specific requirements of motor vehicle exhibition and event organizers. ALME is Dubai's first third-party logistics solution provider to offer these types of services.



Operations would begin using a sheltered storage and workshop facility, with a capacity of over 500 vehicles, located near the vehicle off-loading berth at the Jebel Ali Free Zone.

Tristar Transport previously a division of PWC Logistics, which has operated in the UAE since 1991, is major player in road haulage. Tristar operates a large fleet of road tankers and flatbed trailers. The company's services vary from distributing industrial chemicals to Jet A1 bridging operations for the aviation industry.

Ahmadah RAK International Logistics Services L.L.C.

In 2007 H.H. Sheikh Saud bin Saqr Al Qasimi, Crown Prince and Deputy Ruler of Ras Al Khaimah, opened the RAK Global Logistics Park and Inland Container Depot established by RAK Global Logistics LLC, a joint venture between RAK Ceramics PSC and Global Cargo System Ltd.

The Logistics Park is located at the centre of the fast growing industrial zone in RAK and has a warehousing capacity of 2,500 sq metres plus a 12 metre high fully racked warehouse which is capable of storing and distributing around 10,000 cubic metre of cargo. The new Inland Container Depot (ICD) is spread over 20,000 sq m and is equipped to handle 1,500 TEUs.

Sheikh Saud commented that the new facility would considerably enhance the logistics infrastructure of Ras Al Khaimah, thereby adding to its competitive advantages on the industrial and manufacturing front.

To support the ICD operation a new company called RAK Global Transport LLC was formed with an existing fleet of 50 trailers and trucks which will be expanded up to 200 units. RAK Global Logistics is also interested in setting up a 1m sq m RAK Logistics City with the patronage of the Government of Ras Al Khaimah.

Aramex

Aramex has three offices in the United Arab Emirates, two located in Dubai and the other in Abu Dhabi.

In 2009 Aramex announced a regional cargo agreement with Air Arabia. The agreement covered the Middle East, Africa, the Indian subcontinent and the Commonwealth of Independent States. Aramex would operate a new sorting hub for express cargo shipments, using the low-cost carrier's freight facility at Sharjah International airport.

The company will use Air Arabia's extensive network of short-haul destinations to expand its express freight services. Air Arabia is adding four new aircraft to its fleet in 2009 and introducing two new destinations – Athens and Goa – to its international network.

In 2008 Aramex announced it was in the final stages of completing phase two of a new logistics centre in Dubai's Jebel Ali port and free zone which, it said, would provide "a major boost to the company's supply chain solution capabilities".



In another separate development it has also launched a supply chain solution specifically for the Gulf region's booming fashion retail sector. Aramex said the new 10,000 sq m logistics centre development in Jebel Ali formed part of a 25,000 sq m "mega-facility" and strategic hub for its key markets across the Gulf region. Features included a temperature-controlled storage area and an inventory management system with real time visibility of inventory levels.

During 2007 Aramex revealed plans to create a specialised warehousing facility in Dubai for the perishables market. The logistics company designed its latest 'cool chain' solution to capitalise on the market growth for flowers and other perishables coming into the United Arab Emirates, intended for either the local market of redistribution into other countries.

Aramex had intentions to create a complete 'cool chain' solution, and so treated the warehousing facility as the starting point for this process. The company also provided a fleet of refrigerated trucks, which will make daily trips across the Middle East. In addition, the temperature controlled hub offered a variety of value-added services, including cutting, wrapping and branding, which were supported by a tracking system, inventory management software and online ordering technology.

During 2005 Memo Express, a subsidiary of ARAMEX International, announced that it had signed an agreement with Eros Digital Home to offer international shipping services for customers shopping at their stores. Eros Digital Home is a multi-brand retail chain of Eros Group dealing in consumer electronics and home appliances from leading brands like Hitachi, Samsung, BenQ, Canon and Nikon.

As part of the first of its kind agreement, Eros Digital Home was now able to offer a unique opportunity to its customers to use customised, secure and fast air, sea and land transportation services to ship purchased products to their choice of destination. The agreement, primarily targeted at tourists, covered all Eros Digital Home outlets in UAE.

For its part, Memo Express offered various shipping modes at discounted rates on all Eros Digital Home shipments to suit the customers' requirements. This unique agreement was expected to go a long way in benefiting the burgeoning tourist segment in the UAE, who prefer to travel without additional baggage.

The delivery services were backed by Memo Express dedicated global support network. Backed by their shipping rates and delivery services, they were confident that Eros shoppers would have a more enjoyable shopping experience that would also help in enhancing customer loyalty and build competitive advantages for both companies.

Eros Electricals is a family owned business of Badri Group of Companies, is the sole distributor of Hitachi range of electronics and home appliances, Samsung digital products and mobile phones, I-Audio MP3 players, Lennox air conditioning products, Aiphone intercoms and security systems as well as the Taurus brand of kitchen appliances.

As far back as 2004 Aramex International Limited (AIL) announced plans to invest more than Dhs20m in the development and expansion of its Jebel Ali logistics centre. The first phase of the expansion would see capacity increased to 50,000 sq feet, growing to



83,000 in phase two. The company had also upgraded, or was in the process of upgrading, centres in Egypt, Jordan, Saudi Arabia, Lebanon, Kuwait and Bahrain. The Aramex centre at New York's JFK airport area was also in line for a facelift.

At the time Aramex was expanding its logistics capacity and coverage in many markets and this was a reflection of the growth in the market and the dynamism of Aramex in taking timely moves to benefit from emerging trends. This new investment gave them a unique location to serve the accelerated growth of businesses in the Jebel Ali zone. This new Jebel Ali logistics centre was one among several state-of-the-art centres they were establishing around the region, including the GCC and Levant. At the time Aramex already employed over 800 people in the UAE and expected the Jebel Ali expansion to add 100 jobs.

APL Logistics

In 2009 APL Logistics launched 'flow center' operations within Dubai Logistics City's (DLC) international free trade zone. The business was one of the first logistics providers to pioneer the use of the DLC which had been created to maximize Dubai's position as a regional trading location, with around 60% of the Middle East's imports transiting its borders.

APL Logistics' 'flow center' model focused on enhancing the speed and reliability of product movement by linking specialized multi-country consolidation, distribution and other value-added services with international transportation networks.

The operations were based in one of the largest facilities in the DLC and could access a scalable capacity of up to 25,000 sq m and 26,585 pallet positions due to its partnership agreement with the Dubai-based facility owner, RSA Logistics DWC LLC. In line with demand, the centre could be expanded to 40,000 sq m to provide APL Logistics with the flexibility to create fully customised consolidation and distribution services to a range of customer segments.

The facility was adjacent to a number of light manufacturing sites and was close to Dubai's air cargo terminal, Jebel Ali Port and road transportation links.

"Developing an advanced flow centre facility in the Dubai Logistics City - the world's first fully integrated transport and logistics custom-bonded zone - demonstrates the strategic importance of this as a major gateway to the region. As one of the first providers to leverage the use of this location it deepens our footprint in the Middle East and complements our existing range of integrated logistics services for local and international customers. These focus on accelerating the movement of goods into the region from Asia's key manufacturing locations and efficiently redistributing products domestically, throughout the Gulf or into sub-Saharan Africa," commented APL Logistics Middle East.

They continued: "In today's unpredictable market environment, companies need supply chains that can quickly respond to shifting consumer demand. Our adaptable consolidation and de-consolidation capabilities work around this to reduce storage, labor and inventory costs."



Barloworld logistics

In 2008 Barloworld Logistics acquired Dubai-based Swift Group and its affiliates in the Far East, India, UAE, Africa and Germany. The acquisition provided several niche services and logistics activities between South East Asia, the Indian sub-continent, Europe and Africa.

The Swift group was privately held and had grown an international network specialising in logistics solutions and services. Swift had well-established services between South-East Asia and Western Europe and a number of freight logistics solutions specific to African markets.

Swift had over 600 employees in 46 offices in 20 countries, spanning the Middle East, Far East, the Indian sub-continent, and Africa.

The acquisition included the marketing operations of one of Swift's business partners in Germany, which had been responsible for the commercialisation of sea-air combined transport, operating from the Far East and the Indian sub-continent via the UAE to various destinations in Europe.

The cost of acquiring the Swift group and its affiliates was US$70m, subject to final adjustment based on profit and other warranties to be achieved.

Swift was one of the first companies to reserve space in Dubai Logistics City for a purpose built logistics centre (29,000 sq m) and an additional airside facility at the new World Central Airport to provide air connectivity for shipments (25,000 sq m). Swift had a total of 18,000 pallet positions in its warehouses in the Jebel Ali Free Zone in Dubai, capable of cool, air-conditioned and dry storage.

Services into Africa include Swift Perishable Logistics operating from the Dubai Flower Centre, offering African farmers and traders opportunities to export perishables around the world via Swift's African network; and the SAM (Sea Air Model) - the first combined sea-air transport solution into several destination points in Africa with scheduled services from origin points in the Far East and India, via transit points in Dubai.

CEVA

In 2009 CEVA Logistics reported the signing of an agreement with Technogym, "a world leader in the design of fitness equipment with a turnover of more than €400m", relating to the latter's logistics operations in the Middle East.

That deal included the import of professional gym equipment into the United Arab Emirates and the management of warehousing operations for the Middle East. "In addition, CEVA will take charge of Technogym's home delivery operations, product assembly and business installation services to gyms and sporting venues in the region.

"As part of the agreement, CEVA will dedicate 1,400 sq m of its warehouse space in the Jafza region of Dubai exclusively to Technogym. A special fleet of vehicles will support the entire operation, which is expected to handle 13,000 products per year." Earlier that same year CEVA Logistics reported the securing of two contracts in the Middle East.



The first was from WABCO, a leader in the supply of safety and control systems for commercial vehicles, which had appointed CEVA to manage its logistics and export services in the Middle East, North Africa and Indian subcontinent.

Under that contract, stated CEVA, it would warehouse, collect and pack WABCO's products in the Middle East and manage all inbound freight as part of a global lead service supplier agreement. It would also manage customs clearance and outbound exports from Dubai.

The second contract represented a renewal of CEVA's partnership with GO Sport - said to be the largest distributor of sports gear in the United Arab Emirates − for the management of the latter's supply chain in the Middle East.

The new contract, explained CEVA, included home delivery and assembly solutions with the support of a dedicated fleet. All activities would be carried out at a new CEVA warehouse in the Jafza region, "a site that plays a central role in the company's development strategy for the Middle East".

GO Sport, described as the third largest distributor of sports clothing, footwear and equipment in France, with 160 stores worldwide and five in the Middle East, started its cooperation with CEVA in 2007. "Today, 90% of GO Sport's Middle Eastern supply chain is managed by CEVA, which processes over 1.5m garments, sporting equipment and accessories for the retailer," added CEVA.

In 2008 CEVA Logistics FZE announced, that it had initiated "massive" expansion at its Jafza (Jebel Ali Free Zone) facility in Dubai to support the company's rapidly growing operations in that region.

CEVA Logistics FZE, which was the regional headquarters and logistics hub of Netherlands-based global group CEVA's Middle East operations, said the facility would grow sevenfold in the next 12 months, from an existing 20,000 sq m to 135,000 sq m. That development, it explained, formed part of an AED3bn (US$810m/€630m) expansion plan by the group to increase its presence in the region.

"In the first phase we expect to open our first 20,000 sq m warehouse in November followed by a 30,000 sq m facility in December. These two facilities will support CEVA's industrial and automobile logistics services, respectively, in the region," said CEVA Logistics FZE.

CEVA said it would open a 65,000 sq m multi-purpose facility, now under construction, in October 2009, and would also be building a number of local warehouses across the region to support its diverse logistics services.

CEVA added that its Middle East business portfolio included customers in the oil and gas, industrial, automotive and tyres, retail and fashion, technology and hospitality sectors.

In 2006 CEVA (previously TNT) unveiled a two-year contract with Volvo for transportation services from the automobile manufacturer's newly-built Regional Parts Distribution Centre (RPDC) in Dubai.



The distribution centre makes spare parts available to dealers of Volvo trucks, Mack trucks, Renault trucks, Volvo Construction Equipment and Volvo buses in 17 countries throughout the Middle East and Africa.

The link-up saw CEVA responsible for transporting more than 1.1m kilograms of spare parts annually from the Volvo RPDC, of which 90% are moved through the company's strategic Middle East Road Network (MERN).

Key reasons for CEVA's success are its ability to meet and exceed Volvo's transit time requirements and in offering competitive rates in the high volume trade lanes across the region.

With plans to open new road hubs in the UAE, Bahrain and Saudi in 2007, as well as an additional trucking facility in Kuwait, further strengthening the MERN, CEVA is continuing to cater for its rapid regional growth and on-going penetration of Gulf markets over the next five years.


Schenker in the United Arab Emirates offers a range of services in coordination with local partners for the Gulf and Middle East region including; International freight forwarding services, Air and Sea freight import and export, Groupage cargo services by sea and air, Door to Door services, Transhipment cargo services, Containerised (FCL/LCL), Break Bulk and Ro/Ro services, Full/Split air charters, Schenker MARINE PARTS service, Aeroparts Systems, Personnel effects packing and removal service, Customs brokerage and clearance service, Third party logistics and distribution, Project and heavy lift cargo handling, Fairs and Exhibition logistics and Overland trucking.

In Abu Dhabi Schenker is represented by their partner Salem Freight International (SFI) established in 1968 recognised as one of the leading freight forwarders in U.A.E. specialising in Project forwarding, Exhibitions & Fairs handling, Military equipment, Ship/Aircraft engines and A.O.G Spares, etc.

Customers range from individuals with personal effects to government and private sector companies whose line of activities spread into various fields which includes but not limited to Oil and energy, Power plants, Aviation and Naval industries, Defence and Military Products, General Industries and Utility products.

In Dubai Schenker is represented by their partner Airlink who employ over 420 people with an annual turnover of around $195m. Airlink is one of the region's successful travel, transport and logistics organisations.

In 2008 DB Schenker announced a further expansion of its presence in the United Arab Emirates following its acquisition of BAX. DB Schenker said the new Dubai company consisted of a team of over 100 experienced employees and benefitted from numerous existing customer relationships. As a member of DB Schenker's worldwide network, it continued, Schenker LLC would offer customers the entire range of logistical services. "The current expansion of the harbour facilities, coupled with the benefits of Dubai



Logistics City and the international airport, are driving the creation of one of the world's biggest logistical hubs in Dubai."

DB Schenker also pointed out that since June 2007, it had linked markets in Asia, Europe and the US with its regularly-scheduled air freight services from Dubai to Toledo, Ohio, via Frankfurt-Hahn in Germany. That offer, it explained, was designed to meet the special requirements of the electronics, automotive, machinery and apparel industries.

In addition, Schenker AG has set up its own regional head office in Dubai which will manage and further expand the company's activities in the Near/Middle East and East Africa.

DHL Global Forwarding

In 2008 Danzas AEI Emirates1, part of global logistics group DHL, officially opened a new AED185m (US$50m) plus multi-purpose logistics facility in Dubai's Jebel Ali Free Zone (Jafza), "further consolidating the operation's Middle Eastern strategic footprint".

DHL claimed that the 80,000 sq m facility, at the equivalent of 11 football pitches, was the largest of its kind in the Middle East and offered "the perfect platform for companies to profitably leverage their supply chains using the new hub as a global gateway".

Explaining the background to that development, DHL Global Forwarding commented: "An increasing number of companies from diverse industries including life science, automotive and technology have chosen Dubai as an attractive production and logistics location.

"The Gulf is ideally positioned, with access not just to Europe, Africa and Asia but also to the fast developing Indian subcontinent and its huge manufacturing output. Our global experience of aligning logistics services with trade lanes will be further enhanced by the integrated, innovative services provided at the new Jafza facility. This is combined with the future benefits of operating from the only free zone in the world to be located between an airport and a sea port."

DHL said the new facility, which had a built-up area of 54,000 sq m, was fully air-conditioned and included 6,700 sq m of office space and an 8,000 sq m temperature-controlled, life sciences distribution centre. The building was equipped with world-class security infrastructure that would be certified under the Technology Asset Protection Association (TAPA) guidelines.

1 Danzas AEI Emirates is a joint venture between Al Tayer Group, a diversified regional business established in 1979 and headquartered in Dubai, and DHL Management Ltd, a subsidiary of German global logistics group Deutsche Post World Net now renamed Deutsche Post DHL.



Also that year DHL entered into a strategic partnership with Dubai Industrial City in the UAE to develop a dedicated logistics park to provide "a single control point for, and access to, a full range of end-to-end logistics services" to companies based in that complex.

Under that agreement, stated DHL, contract logistics provider DHL Supply Chain, in collaboration with Deutsche Post DHL sister companies DHL Express, Danzas AEI and DHL Global Forwarding, was developing a "unique supply model" called transPARK.

Dubai Industrial City, explained that transPARK would support the massive demand for logistics services that was being generated by the industrial and manufacturing sector.

It is estimated that Dubai Industrial City's clients, collectively, will require up to 25,000 containers of start-up equipment to become operational.

Considered the third largest non-real estate project in Dubai, Dubai Industrial City was designed to promote the continued expansion of the industrial sector in the region, particularly high-value manufacturing and production in small and medium sector industries. The ultimate objective was to make Dubai less dependent on imports.

With access to DHL's network and experience, transPARK would provide a complete range of supply chain solutions. It meant companies at Dubai Industrial City could focus on their core business and have greater control over cost and risk, helping to drive savings and increase value.

DHL Supply Chain

In 2007 DHL stated that it planned to expand its logistics capacity in Dubai of around 85,000 sq m by more than 300,000 sq m within the coming years. The company has earmarked several million US dollars for expanding Dubai World Central. The first fully-integrated logistics platform and the world's largest airport would take shape on a total area covering around 140 sq km. The projected investment is a move aimed at securing the company's position in the Middle East.

DSV A/S

In 2007 DSV Air & Sea Holding, part of the Danish DSV Group acquired 100% of the shares of Active Freight Management LCC in Dubai, UAE. Active Freight Management LCC was DSV's current co-operation partner in Dubai prior to the acquisition. The company had a budgeted turnover of DKK40m in 2007 and had 12 employees working at the location in Dubai. The company changed its name to DSV Air & Sea LCC.

Empost

During 2007 the maiden Empost scheduled freighter flight an Airbus 300 with a capacity of 44 tonnes touched down at the Al Ain International Airport, making Empost the first local courier company in the region to do so. The event marked the dawn of a new chapter in Empost's transformation from a local courier company to an International Freighter operator, thus making it a total logistics solutions provider.



Empost was the first scheduled freighter operator to choose Al Ain International Airport as its regional hub. The Airport, fully equipped to handle large volumes of cargo, is strategically located, with Abu Dhabi and Dubai reachable in an hour's time.

Empost scheduled freighter operations debut flight had been part of a long term plan including a fleet expansion of 50 Aircraft by the year 2012. The Scheduled Freighter Operations were implemented in four phases networked with major cities in the Indian subcontinent, Middle East and Europe by the end of 2008.

During the first phase of operations, Empost Freighter operated two flights a week from Dhaka to Al Ain and onward via Istanbul to Amsterdam. While Al Ain would be the main hub for Empost Freighter Operations, the European sector was connected through its regional hub in Amsterdam. Empost also had finalised a European trucking network to offer its customers transhipments throughout Europe.

The Freighter Operations not only added a new dimension to the recently introduced freight forwarding solutions of Empost, but also helped the ever growing demand for capacity within the Indian sub continent.

GAC

The GAC Group provides a range of shipping, logistics and marine services throughout the United Arab Emirates. Within the UAE GAC operates in Abu Dhabi, Fujairah, Ras Al Khaimah, Sharjah and Dubai.

Dubai is home to the GAC Group's Corporate Head Office , as well as a range of other services, including:

• Dubai Hub Agency Centre & the Global Disbursement Centre

• Gulf Transfer Services, GAC's ship-to-ship transfer experts

• GAC Marine Logistics head office - the Group's one-stop ship spares logistics' service

• CargoGulf Services E.C. - GAC's container consolidation arm

• Abu Dhabi is home to GAC Marine.

The Emirate of Sharjah is home to Gulf and Continental Bunker Fuels Co. Ltd. BVI (GACBF), part of the GAC Group's network of offices arranging bunker supplies worldwide.

Gulftainer Co. Ltd

In mid-2009 Sharjah-based ports operator Gulftainer won a five-year deal to oversee logistics operations at Abu Dhabi's main petrochemicals production complex. The company will manage operations at the Abu Dhabi National Polymers Company (Borouge) petrochemicals complex at Ruwais. Gulftainer would provide bagging and packaging services as well as the maintenance of vehicles and equipment at the site. Borouge awarded the contract in preparation for the second-phase expansion of the company's production capacity at Ruwais, which will result in production increasing from



580,000 tonnes a year (t/y) of polyethylene (PE) to 1.2m t/y and the addition of 400,000 t/y of propylene production from 2010.

Borouge is also building container hubs in Singapore, Shanghai and Guanghzou, and will rely on Gulftainer's experience in supply chain management to ensure these new projects run smoothly. Earlier in 2009 Gulftainer announced that volumes at its UAE terminals – Khorfakkan Container Terminal (KCT) and Sharjah Container Terminal (SCT) – grew by more than 15% in 2008, compared with 2007, to total just over 2.5m TEUs.

Commenting on the increase, Gulftainer said: "We are all delighted that these record volume levels have been handled by our terminals – and even more proud of the fact that this achievement reflects the growing faith that lines and traders throughout the UAE have in our ability to deliver fast, efficient and economical performance."

Sharjah-based Gulftainer, which had been operating in the UAE since 1976, operate two ports in the country. "KCT is strategically located on Sharjah's Indian Ocean coast, outside the sensitive Straits of Hormuz and close to the main east-west shipping routes, and is one of the world's leading container transhipment ports with numerous feeder ship connections to Gulf ports, Iran, India, Pakistan and East Africa," stated the company.

"SCT was the first purpose-built and fully-equipped modern container terminal in the Middle East and lies adjacent to Sharjah's industrial area, which accommodates over 45% of the non-oil manufacturing capacity of the UAE. SCT handles containers on behalf of over 30 shipping lines, including all of the world's top 20 companies."

In early 2008 shipping lines were continuing to expand their services to cater for the growth in (particularly) container movements. The 'FMS' service between the Far East and Gulftainer's Khorfakkan terminal started operation at the end of 2007 and was expanding with additional ships. The Korean Lines involved in the service, Hanjin, Heung-A, Sinokor, C+ Line, STX Panocean and KMTC contributed a total of five ships for a weekly service. In late 2007 the maiden call of the 1,700 TEU 'Santa Maddalena' at Khorfakkan was a welcome return for CSAV services at Gulftainer's flagship terminal.

The Santiago headquartered carrier joined with CMA-CGM and provided 3 of the 8 ships operating on the joint service giving a weekly frequency to customers on the key service corridors from east coast South America to the Middle East. Transit times were also improved with, for example, Rio Grande to Khorfakkan now only 24 days.

At about the same time Gulftainer's Khorfakkan Container Terminal hosted its new service in November, the 'Hanjin Qingdao’. The 2,500 TEU ship was operating on a load-port rotation covering China, Korea and South East Asia and the service added a further three ships early in 2008.

Partners on the new service were fellow Korean companies, Heung A, STX Panocean, Sinokor and C&Line. They recognised the benefits of calling at the region's most productive and cost effective major container terminal hub in Khorfakkan, from where they could serve the UAE markets quickly and simply via the Sharjah ICD, and also the surrounding regions of the Gulf, Iran, Pakistan, India and East Africa by interconnected relay services.



Kuehne + Nagel

Kuehne+Nagel's offices in the United Arab Emirates are located in Abu Dhabi, Dubai and Jebel Ali. In 2007 Kuehne + Nagel began construction of a facility in Dubai Logistics City (DLC), set to become the world's largest supply chain community within Dubai World Central (DWC), the city taking shape at Jebel Ali in Dubai, United Arab Emirates.

The facility, for which Kuehne + Nagel had leased 52,000 sq m of land on a long-term basis, paved the way for the development of the company's Dubai base into the principal Kuehne + Nagel distribution hub for the Middle East.

The facility became operational mid-2008, upon completion of the first phase of construction, featuring 17,000 sq m of warehouse space - with the option to expand to a total of 30,000 sq m. The facility complemented the company's existing 16,000 sq m logistics terminal in the Jebel Ali Free Zone.

Phase one of the facility was equipped with temperature controlled VNA (very narrow aisle) racking and conventional ambient racking. Total capacity exceeded 20,000 pallet locations, with over 5,000 sq m of handling area for value added services like kitting and final assembly activities.

Panalpina

The United Arab Emirates have become a key centre of international trade, particularly for oil and gas firms. Panalpina offices in Dubai and Sharjah are specialised in Air Freight and Ocean Freight as well as project-related consignments while at Sharjah airport Panalpina operates its own bonded warehouse with direct access to airside.

Dubai-based Al Naboodah Cargo Centre and Panalpina have been operating jointly as a partnership venture for over five years in the region. Al Naboodah Cargo has knowledge of the local markets, having been in the multi-modal transport field for over twenty years. It also provides Panalpina access to economical, time definite and value added services. The benefit for Al Naboodah comes in the form of having access to Panalpina's worldwide network, which they could never have achieved individually in such a short time span.

Using Panalpina's network, Al Naboodah is able to move cargo to and from any part of the world. One of the immediate targets of Al Naboodah and Panalpina partnership is to develop a Middle East warehouse and distribution hub. With common goals for growth and expansion such as this, the partnership would undoubtedly grow stronger.

In 2006 Panalpina made the decision to move into a new logistics centre in Dubai Logistics City, which would be part of Dubai World Central at Jebel Ali.

The new terminal was located in Dubai Logistics City (DLC) within Dubai World Central. The latter is a huge, multi-phase self-sustained development at Jebel Ali. It included a cluster of specialised zones as well as Dubai World Central International Airport, which, when completed, would be the world's largest airport with a capacity equal to that of Chicago O'Hare and London Heathrow.



Dubai World Central would be a new city where eventually some 750,000 people would live and work. It would be an integrated multi-modal logistics platform in a single customs bonded and free zone environment, adjacent to the Jebel Ali Free Zone and Seaport.

Rudolph Logistik Group

In 2007 Rudolph Logistik Group made its first large step outside of Europe. In cooperation with Audi Volkswagen Middle East (AVME) and its joint venture partner Hellmann Worldwide Logistics, Rudolph opened a new logistics centre in Dubai (United Arab Emirates). On behalf of Volkswagen Genuine Parts, Rudolph and Hellmann operate the first original parts centre, comprising 10,000 sq m, on the Arabian Peninsula.

In their joint venture, Rudolph & Hellmann Automotive FZCO (RHA), Rudolph Logistik Group, Baunatal (Germany), and Hellmann Worldwide Logistics LLC, Dubai (UAE) are bundling their competences in the area of international automobile logistics. In April of 2006, RHA was awarded the contract for the new complex logistics project in the desert.

By January 2007, RHA began stocking the warehouse with the goods coming directly from the VW Genuine Parts Centre in Baunatal - mainly via sea freight. From March of that year onwards, about 25,000 Genuine Parts were available on a continuous basis for the Volkswagen Group in Dubai. In the long term, this figure rose to a total of up to 65,000.

RHA organises storage, picking and distribution in the new Genuine Parts Depot via a scanner system. Order and storage process management is done with VW's own IT-systems. The product range includes everything from car body parts to motors through to screws. However, in contrast to the usual practice in Germany, dealers in the Middle East receive their supplies through importers. A total of eight importers now source their parts directly from Dubai, so that they can forward them much more quickly to all of the Audi and VW dealers throughout the entire Arabian Peninsula.

While a majority of the parts reach the importers via truck, RHA delivers urgent express shipments within 24 hours via airfreight. The company's new Genuine Parts Depot is located in the Jebel Ali Free Trade Zone at the gates of Dubai city with a direct connection to Port Rashid and in the immediate vicinity of Dubai Airport. If needed it can expand the existing storage area by another 10,000 sq m.



Appendix 1: Logistics Provider Profiles

17.0 Egypt

17.1 3 A Logistics & Projects

3A Logistics & Projects was incorporated in 1997 as a privately owned International Freight Forwarding company and its offices are located in Cairo, Alexandria, Port Said and Sosdi.

The company offers the following services:

• Air freight (Import & Export)

• Ocean freight (Import & Export)

• Consolidation

• Project

• Bonded & non-bonded warehousing. Its has tax free bonded warehouse located in dry port in 6th of October City (Sosdi), which covers area of 3,000 sq m and offers space for 200 container at the open yard area. The warehouse is equipped in air conditioning and anti dust system.

• Custom brokerage

• Consolidation: sea freight consolidation link from Europe, USA & Far east directly to Alexandria port, Port Said port and Sosdi dry port.



17.2 Egytrans

Egytrans Egyptian Transport and Commercial Services Co. S.A.E. was established in 1973 by Wael Leheta. It is an Egyptian transportation, freight forwarding and project forwarding company with operations based in Cairo, Alexandria, Port Said, Damietta, Suez and further branches in Noweiba and Salloum.

17.2.1 Finances

Source: Egytrans

Egytrans Finances: Total [EGPm]

2007 2008

Revenues 148.24 194.17

Operating Profit 7.13 7.07

Margin % 4.81 3.60

Source: Egytrans



17.2.2 Operations

Project Logistics

Project Activities (2008) freight tons

Import

Petrochemical projects 10,000

Cement projects 15,000

Petroleum projects 25,000

Electricity projects 80000

Export

Steel structures 50,000

Source: Egytrans

Consolidation

Provides for the grouping of small volume shipments from multiple clients into joint containers for both import or export. This activity takes place mainly in the company's Alexandria and Port Said branches.

Free Zone Warehouse

Egytrans Free Zone Warehouse has an area of 6,000 sq m located in the General Free Zone Area in Port Said. It can store all types of goods such as raw materials, production requirements of garments, leather, rubber products, building supplies for floating vessels, ship spare parts, household machines, electronics, equipment and machines, office equipment, perfumes and hardware.

In 2009 Egytrans signed a Memorandum of Understanding (MoU) with the River Transport Authority giving Egytrans the right to establish facilities for handling containers and cargo in Cairo. Egytrans also signed a Term Sheet with Beltone Capital Holding for Financial Investments S.A.E. regulating the initial agreement between the two parties concerning their partnership in an integrated river transport project with capital of EGP 150,000,000.

Egytrans has agents around the world in the following geographical areas:

• Far East • U.S.A. & Canada • Indian Sub-continent • Europe & Mediterranean Basin • Australia • Africa • Middle East • South America



17.3 El Wafaa Transport

El Wafaa Transport is primarily a trucking company, which covers the whole of Egypt. It offers LTL, FTL and Reefer Container Transportation, as well as the coordination of land side operations. El Waffa's transport division has its own equipment including two mobile cranes, each weighing 35 tones, 3 Low-bed Trailers and 21 trucks.

It has a storage yard area of 25,000 sq m at Om Zgheo in Alexandria & can arrange secure storage. El Wafaa Transport is privately owned and a member of the Ewa-Group.

The EWA-GROUP handles & coordinates land side operation for project Cargo arriving & departing to points around the globe.

17.4 Mesco

The Marine & Engineering Service Company (MESCO) was established in 1985. It is privately owned and managed as a family enterprise to provide service for the shipping business for both local and foreign companies operating in Egypt.

It is one of the largest shipping companies in Egypt with offices in major Egyptian cities and ports (Cairo, Alexandria, Damietta, Port Said and Suez) as well as 10th of Ramadan industrial city and a new office in Cairo International Airport.

MECSO offers and renders services of consolidated cargo from around the world and manages the deconsolidation & trans-shipment of the merchandise to its final destinations.

Import Service

Mesco serves worldwide ports through its import agent's networks. Its warehouses offer packing and unpacking of consolidated containers, and are equipped with facilities for all LCL operations.

Export Service

Export services include all ports with weekly voyages leaving both Dekeilah & Alexandria ports throughout worldwide coverage for Europe - Africa -U.S.A - Central & South America & Canada.



Tramp Lines

Mesco's General Cargo / Break Bulk Division are newly established within its range of services and it offers the shipping of cargo through conventional vessels.

Cargo might be bulk such as coal & fertilizers, seeds, bagged cargo, as well as general cargo with different materials & odd dimensions such as heavy lifts, bulldozers, metal pipes, steel coils.

It can also transport liquid cargoes through ISO tankers to any destination.

The services provided include:

• Export and Import space bookings on a vessel calling at all Egyptian ports

• Negotiating transport deals

• Chartering a vessel for larger quantities (shiploads)

• Owner representatives for tramp liners

• Ship agents

• Custom clearance and Cargo handling

• Inland transportation from & to Egyptian ports

• Trucking of cargo.

Suez Canal Transit

The Suez Canal transit services are coordinated from MESCO's head office in Alexandria and supported through its office network at Port Said, Suez, Sokhna and Cairo Airport.



17.5 Nosco

NOSCO was founded in 1976 to serve the Egyptian trucking industry. The company provides inland transportation, customs clearance and heavy haulage and has facilities located in Cairo, Alexandria, and Damietta in Egypt.

NOSCO owns and operates its own fleet of trucks and mobile cranes and services centres in major oil fields and all Egyptian ports.

Services include:

• Inland Transportation

• Customs Clearance

• Heavy Haulage

• Offloading at Site by means of cranes and hydraulic jacks

• Air and Sea Freight Forwarding

• Maintenance and Operation of Others' Fleets

• Handling Project Shipments

• Packaging

• Storage

• LCL & FCL Services.



18.0 Iraq

18.1 Middle East Shipping Services Ltd (MSS)

Middle East Shipping Services Ltd (MSS) is an Iraqi registered shipping company formed in 1990 by Al Bunnia from Iraq and T. Gargour & Fils (TGF) from Jordan.

Al Bunnia is an Iraqi trade and industry company covering many sectors, from raw material extraction to agricultural products and foodstuff processing, to distribution, cars and heavy machinery. T. Gargour & Fils is one of the oldest shipping agents and trading companies in the Middle East. Amin Kawar & Sons Co. is a ship agent in Jordan and joined Gargour/Al Bunnia at the beginning of 2003.

Middle East Shipping Services is a private company. MSS is headquartered in Iraq and also operates in Jordan and Syria. It has office locations in Baghdad, Basra, Amman, Aqaba, Demascus, Lattakia and Tartous.

It offers the following services:

Maritime Transport

MSS offers a range of shipping services. MSS represents and acts for various parties including Liners, Owners, Charterers and Freight Forwarders.

Forwarding Operations

MSS offers inland transportation for all types of cargo to all governorates of Iraq as well as neighbouring countries. MSS also provides security escorts tailored to the requirements of clients.

Warehousing

MSS provides warehousing facilities for storage in Baghdad & Basra as well as cross loading facilities at Iraqi/Kuwaiti borders. All warehousing facilities have communication equipment, including phones and internet services.

Heavy Equipment

MSS provides a variety of heavy equipment ranging from mobile cranes and forklifts to lift trucks and excavators.



19.0 Jordan

19.1 T. Gargour & Fils

T. Gargour & Fils (TGF) was founded in 1928 in Jafa, Palestine by Tawfiq Gargour in partnership with his four sons. The company is one of the oldest shipping agents and trading companies in the region. It operates across the world through an international network of business activities. These activities range from auto dealership, shipping services, and ship agencies to commercial maritime operations.

Through its network of offices operating in Amman, Aqaba, Beirut, Bethlehem, Baghdad, Basra and Umm Qasr, TGF has contributed to the growth in potential of the Middle/Near East shipping business. TGF represents and acts for various parties including Liners, Owners, Charterers, Freight Forwarders, NVOCCs and Cargo interests. Additionally, TGF offers inland transportation for transit cargo to neighbouring countries, mainly Iraq, through its sub-contractors.

TGF operates in Syria and Iraq under the name of Middle East Shipping Services (MSS). It offers shipping services at all Syrian Ports. MSS is headquartered in Iraq and also operates in Jordan and Syria. It has office locations in Baghdad, Basra, Amman, Aqaba, Demascus, Lattakia and Tartous.



20.0 Kuwait

20.1 Agility

Agility is a Kuwait-based company with much of its revenues in the international freight forwarding sector based upon its acquisition of GeoLogistics (formerly LEP International). It operates a network of warehousing facilities and in the Middle East a fleet of 3,000 vehicles. Through its subsidiary, Transoceanic Shipping Inc., United States, Agility provides project logistics solutions for the construction, mining, and oil and gas industries. In 2007, it restructured into 3 divisions:

• Agility Global Integrated Logistics (GIL), is headquartered in Switzerland and provides supply chain solutions to customers in technology, retail, chemicals, and other industries

• Agility Defense & Government Services (DGS), based in Washington, offers logistics services to governments, relief agencies and international institutions worldwide

• Agility Investments, based in Dubai.

20.1.1 Finances

In mid-2009 Agility again returned figures illustrating its growing competitiveness. The Kuwaiti owned company's half-year numbers described gross revenue as falling 9% year-on-year at KWD821m*, whilst net profit rose by 3% to KWD83.3m. Net profit after exceptionals rose 3% year-on year to KWD 74.9m whilst operating profit rose by 5% to KWD83.3m.

Agility has an interesting mix of businesses which contrasts with most other big logistics service providers. For example around a third of its business is in defence related logistics. Until recently this was driven by its contracts to supply the US Armed Forces in Iraq; however as this business winds down it had successfully diversified in both support of the US Army in Afghanistan and of American armed forces elsewhere. For example it won a contract to manage fuel logistics in Guam for the US Airforce and the management of US Army vehicle spares warehouses across continental US.

Such big wins led to an increase in revenue for the 'Defense and Government Services' division over the half year of 4.3% on a year-on-year basis to KWD 351.3m, whilst net revenue margin year-on-year grew by 1.8% to KWD120.6m. It appears this is set to grow further in the coming quarters.

The largest business division, 'Global Integrated Logistics' conformed more to the present trend with a year-on-year fall in revenue of 15.8% at KWD 492.8 million. However the



lower cost of freight services enabled Agility GIS to increase net revenue by 1.2% to KWD 153.6m and increase gross margin to 31.2%. This performance was better than most LSPs who had generally experienced a fall of in-excess of 20% in revenue. Agility's senior management ascribes its good performance to a mix of higher exposure to emerging markets and competitive strength. They also point out that customers were attracted by the company's financial stability.

Agility has business in energy and related infrastructure project logistics, including wins in Australia. Whilst Agility said that it was not wholly dependent on oil and gas business, it was worth noting that in its core markets in both Russia and the Middle East oil and gas investment had been highly variable

Overall Agility continued to gain market strength. Its businesses were highly diversified yet benefit from the level of exposure to a string of growth markets. Buoyed by a stream of investment income from Kuwait and having net debt of just KWD 82m the company was, in the words of its management, set for "bold new initiatives" both in terms of organic market strength and acquisitions.

Kuwaiti Dinar 1 = US$3.49/ €2.429

Full year 2008

In March 2009 Agility reported "strong" financial results for its 2008 fiscal year ending December 31, "despite the global slowdown that started in 4Q 08". The company stated that revenue was up 16% on 2007 to US$6.8bn, net profit was a "robust" $526m million or 51.5 US cents per share, and the operating profit figure was $600m.

The Chairman and Managing Director of Agility commented: "We are proud of the quality of profits which stems from Agility's focus and determination in growing its core operations. Even though we began to feel the impact of the global economic crisis in our commercial business in the fourth quarter of 2008 as world trade volumes slowed, Agility was able to achieve strong profits which helped enhance our balance sheet position."

He continued: "In order to capitalise on opportunities emanating from the global financial crisis and to position Agility as the preeminent supply chain partner for commercial and public sector entities, the Board of Directors is recommending to shareholders that no dividends be paid for the fiscal year 2008. Agility believes that the ongoing financial crisis has created unique opportunities for forging new partnerships and acquiring assets on the basis of attractive and previously unobtainable business terms."

Agility also reported that its asset base had grown 6 % in 2008 to $6bn. "The company borrowed approximately $850m from international and regional banks, using the funds to pay down short-term debt and extend the maturity of remaining debt. As a result, over 60% of Agility's debt is due after 2010, a strong position in the current credit environment."



Source: Agility

*2006 revenue figures have been restated.

Agility Finances: Total [KWDm]

2002 2003 2004 2005 2006 2007 2008

Revenues 14.97 44.02 143.57 453.24 1,325.98 1,667.09 1,835.68

Operating Profit (Loss) 7.50 26.10 81.10 126.20 174.43 174.20 160.65

Margin % 50.10 59.30 56.50 27.80 13.15 10.45 8.70

Source: Agility

The Group's efforts to re-organise and integrate its business activities were substantially, but not entirely, completed during the later part of 2007. Therefore, for the year ended 31 December 2008, the primary segments are the business segments based on the internal reporting systems and not the primary business segments of GIL, DGS and Investments.



Source: Agility

Agility Finances: Revenue by Reporting Segments % to Total [KWDm]

2007 2008

Logistics and Freight Forwarding Revenues 1,591.98 1,744.58

Rental Revenue 23.36 25.88

Other Services 51.74 65.22

Source: Agility

Global Integrated Logistics (GIL)

GIL accounted for 59% of Agility's revenue in 2008. Its revenue rose 17% year on year. Revenue from continuing operations rose 12%; the remaining increase came from new acquisitions.

GIL expanded its European network through acquisitions, establishing offices in Austria, Slovenia, Poland, Hungary, Denmark and Finland. Through GIL, Agility invested in Algeria, Libya, Morocco and the Kurdish region of Iraq, and continued to develop its third-party logistics (3PL) capabilities throughout the Middle East and Africa.

The company sought to expand its presence and capabilities in China and acquired Shenzhen-based ocean freight forwarder COSA Freight and purchased Shanghai-based logistics provider Baisui Logistics in order to serve the growing Chinese domestic market.



GIL won important new business from Nokia, Siemens, Cadbury, Emerson, Flextronics and others. It continued to demonstrate strength in the segment serving mid-size customers.

Defense & Government Services (DGS)

DGS contributed 37% of Agility's overall revenue. DGS revenue grew about 13% from the previous year. It achieved an estimated 20% growth in business from new customers, including the United Nations, U.S. Department of State, U.S. Marine Corps, U.S. Defense Energy Support Center and U.S. Defense Supply Center Columbus.

DGS experienced record growth in its Commodities Services business and positioned itself for further growth by winning:

• A USD 223m Industrial Prime Vendor contract to supply and deliver repair parts for communications and electronics equipment at the Tobyhanna Army Depot in Pennsylvania.

• Contracts to manage bulk fuel supplies at U.S. Air Force installations in Portugal, Germany, Turkey, Japan, South Korea and Guam.

• A USD140m contract to manage and distribute personal gear at all 19 U.S. Marines Corps bases worldwide.

Source: Agility



Agility Finances: Revenue by Business Segment % to Total [KWDm]

2008

Global Integrated Logistics (GIL) 1,083.05

Defense & Government Services (DGS) 679.20

Investments 73.43

Source: Agility

In terms of geography Agility generates the majority of its revenue in the Asian market. Its relative weakness in the US market compared to its Asian and European divisions should be noted.

Source: Agility

Agility Finances: Revenue by Geographic Location % to Total [KWDm]

2004 2005 2006 2007 2008

Asia 164.34 359.39 964.31 1,113.13 1,166.19

Europe 0.05 99.56 324.08 483.65 528.46

Americas 1.02 61.39 115.92 208.96 254.59

Africa 1.39 1.32 2.23 17.82 32.97

Source: Agility



20.1.2 Operations

In late 2007, Agility was re-structured into three business segments;

• Global Integrated Logistics (GIL)

• Defence & Government Services (DGS)

• Investments

Global Integrated Logistics (GIL)

GIL is Agility's commercial division providing freight management and contract logistics services to customers on a global basis. The segment is divided into; Freight Management, Contract Logistics, Fairs and Events, Project Logistics and Chemicals Logistics.

Defence and Government Services (DGS)

The DGS business group provides logistics solutions to various government entities and non governmental organisations on a global basis. A large proportion of the work carried out takes place in the Middle East. Customers include the; US Defence Logistics Agency (DLA), US Army, US Navy, US Air Force, Army Air Force Exchange Service (AAFES) and the Department of State.

Agility Global Network

Source: Agility



20.1.3 Strategy

By the end of 2007 Agility had finished the re-organisaton of its business into three new operating segments (see above). Agility's focus continues to remain on emerging markets, such as India and South Asia, as well as Greater China. In 2009 Agility announced that it had signed a conditional agreement to acquire Cosa Freight, a full service ocean freight forwarder with offices in six key locations across China and a presence in Hong Kong, the US and Canada.

Agility also aimed to expand its Global Integrated Logistics business and diversify the growth of its Defence and Government Services business, mainly through organic growth.

Agility had developed from being primarily in real estate to one of the leading providers of logistics services in the Middle East. This transformation was being achieved through organic growth coupled with a series of acquisitions, mainly in 2005, that established a presence in a number of new countries.

Its acquisition of GeoLogistics provided the company with a freight-forwarding platform that the company supported with subsequent complementary acquisitions. This reduced the company's reliance upon US Armed Forces contracts, which at the end of 2006 accounted for 60% of the company's EBITDA. Further, the new subsidiaries are able to create business for each other.

Its new structure allowed it to provide global clients with expanded logistics services and it aims to expand its service offerings into three geographical regions:

• India

• Southeast Asia, China

• Eastern Europe

In contrast to the already saturated markets in the USA and Western Europe, Agility estimates that these emerging markets are under-served and therefore provide ample growth opportunities.

Strategy News

2009

August - Agility launched its new Container Freight Station (CFS) a major new consolidation and redistribution service from its hub in Dubai. The service, which has been designed for shippers and consignees with shipments of less than a container load (LCL), will offer handling and temporary storage of import/export laden and empty containers carried under customs control.

“Consolidation of LCL cargo is an important part of the ocean freight business and whilst we appreciate this is not a new product; we believe we have a competitive advantage to offer our clients – our global network,” commented Agility.



“We have the global presence from which to leverage more countries and areas than our competitor. In addition, we have substantial buying power with major carriers, meaning we can deliver greater value as well as a greater service to our clients,” they added.

January - Agility Qatar announced that it signed a Memorandum of Understanding to enter into merger discussions with the Gulf Warehousing Company ("GWC"), a company listed on the Doha Securities Market. The merger aims to create one of the strongest logistics players in the Qatar market with a comprehensive service portfolio for existing and prospective customers in the country. The new entity will be called GWC – Agility.



20.2 Risco

Refrigeration Industries and Storage Company (RISCO) has evolved into a total logistics provider from the 1970s when it was a cold storage and warehousing firm. Clients represent several business categories including suppliers of perishable goods in Kuwait and Iraq, co-operatives and supermarkets in Kuwait, local and foreign contractors for the coalition forces in Iraq and companies involved in the reconstruction.

Most contracts require RISCO to take delivery of items from the port and store the chilled, frozen or dry products for dispatch to various destinations, particularly Iraq.

RISCO launched services in cold storage and warehousing in 1976, adding supply chain and logistics solutions. It provides transportation overland of all types of cargo such as frozen, chilled, dry, reefer/dry containers and bulk. Its services include customs clearance and international freight forwarding for land transportation as well as repair and maintenance of fleet vehicles of all makes.

Two of the RISCO's cold storage facilities are located at the Vegetable Market in Shuwaikh and at Shuwaikh Harbour, while the third warehouse is only for dry products, located at Al Dajeej, Farwaniya, near Kuwait International Airport.

RISCO's total warehouse volume capacity is 125,000 cu m, of which 8,445 cu m is for chilled items and 14,580 cu m for frozen. A large area of 76,975 cu m has been allotted for "convertible storage - chilled/frozen and dry" and another 25,000 cu m is available at Al Dajeej.

The cold stores at the Vegetable Market are planed to be further expanded to provide an additional volume of 9,000 cu m the volume there is currently 70,000 cu m.

Both cold stores at the Vegetable Market and at the port have sophisticated refrigeration facilities to handle temperature ranges from -25 degrees C to 25 degrees C as well as the latest handling equipment to guarantee correct storage and prompt service. The equipment includes 47 pallet transporters, 13 reach trucks and four forklifts (all battery operated) and eight other diesel-operated forklifts.

Increasing requirements for Transport & Distribution Services in the region, have allowed RISCO to increase its fleet units from 5 to 207 units and there was another fleet expansion in 2005, raising the fleet strength to 241 including:

• 162 reefer trailer trucks

• 9 normal reefer trucks

• 34 normal flat beds and flat beds with generator set with head while generator sets are equipped of 40 / 50 KVA and auxiliary tank.



• 2 refrigerated reefer vans.

The transport services work coverage is from Kuwait to any point of destination either in Iraqi Territorial Areas, or other neighbouring Gulf Countries, or as far as Europe depending on agreement.

Apart from handling, storage and supply for manpower services and equipment other services have been added such as documentation, packing, repacking, and stretch wrapping.

Since 2004 Shuwaikh Harbour Cold Store was at the centre of a massive repair and reconstruction works and now offers improved facilities.



21.0 United Arab Emirates

21.1 Ahmadah RAK International Logistics Services L.L.C.

Ahmadah RAK is regional trucking service, offering customers door-to-door delivery options. Operating within a daily collection schedule linking the main GCC states and with the GCC customs unification and improved regional road networks, Ahmadah RAK is an alternative to moving goods across the Gulf countries, as compared with other traditional modes such as sea or air freight.

Ahmadah RAK International Logistics, the freight forwarding and distribution arm of the Group specialises in logistics and supply chain solutions. Its operations are aimed at satisfying the needs of international and local companies and it serves the consumer goods, textile, pharmaceutical, automotive, electronics, oil & gas and entertainment industries.

In 2007 H.H. Sheikh Saud bin Saqr Al Qasimi, Crown Prince and Deputy Ruler of Ras Al Khaimah, opened the RAK Global Logistics Park and Inland Container Depot (ICD) established by RAK Global Logistics LLC, a joint venture between RAK Ceramics PSC and Global Cargo System Ltd.

The Logistics Park is located at the centre of the fast growing industrial zone in RAK and has a warehousing capacity of 2,500 sq m plus a 12 metre high fully racked warehouse which is capable of storing and distributing around 10,000 cu m of cargo. The new Inland Container Depot is spread over 20,000 sq m and is equipped to handle 1,500 TEUs.

Sheikh Saud commented that the new facility would considerably enhance the logistics infrastructure of Ras Al Khaimah, thereby adding to its competitive advantages on the industrial and manufacturing front.

To support the ICD operation a new company called RAK Global Transport LLC has been formed with an existing fleet of 50 trailers and trucks which will be expanded up to 200 units. RAK Global Logistics is also interested in setting up a 1m sq m RAK Logistics City with the patronage of the Government of Ras Al Khaimah.

It offers the following services:

Transportation:

• single or multi-drop option to and from any location

• vehicle planning, and modern communication systems to ensure accurate tracking of vehicles

• time-sensitive delivery schedules.



Its fleet is predominantly Mercedes-Benz, its purpose built service & maintenance facility has its own fully equipped spare parts store enabling a single source servicing solution for the fleet.

Bulk:

• goods and manufacturing product, from raw materials to scrap metal

• range of vehicles, which are capable of moving bulk consignments

Contract distribution:

• pre-determined volumes and routes assessed, vehicles are assigned from its fleet or often purchased solely to service the contract.

Warehouse & Chilled Distribution:

Among Ahamadah RAK logistics assets include warehousing facilities, which range from dry, air-conditioned, to chilled & frozen storage.

• centralised logistics

• real - time sock reports & stock visibility via the internet

• electronic fulfillment

• regional Solutions.

Maintenance & Backup Vehicles:

• on site maintenance

• multiple bay washes

• on-site facilities and boarding for vehicle operators.

Recovery & Breakdown Support.



21.2 Al-Futtaim Group

The Al-Futtaim Group was established in the 1930s, as a trading enterprise and then during the 1940s and 50s it developed into a commercial, industrial and services organisation. It is one of the leading business houses in the lower Gulf region.

Al-Futtaim Group includes collectively over 40 companies, involved in automotive, electronics, retail, watches and jewellery, travel, construction, engineering, marketing communications, logistics, insurance and real estate markets in the UAE, Bahrain, Kuwait, Qatar, Oman and Egypt as well as having business interests in Pakistan and Europe. It is privately owned.

The Al-Futtaim Group is divided into the following operational divisions:

• Automotive

• Electronics

• Retail

• Services, including Al-Futtaim Logistics

• Overseas

• Insurance

• Industries

• Real Estate

The Al-Futtaim Group represents many of the world's leading brands, including Toyota, Lexus, Honda, Volvo, Chrysler, Jeep and Dodge, Panasonic, Toshiba, Sanyo, Aftron, Alcatel, IKEA, Ace, Marks & Spencer, Toys R Us, Seiko, Raymond Weil, Westar, Kolber and Minato Pearls.

21.2.1 Al_Futtaim Logistics

Al-Futtaim Logistics was established in the 1980s and became both regional and global provider of supply chain solutions. The company operates not only in the UAE region but also globally through its strategic alliances and partners across the world.

Al-Futtaim specialises in several key sectors, including:

• retail

• automotive

• FMCG

• technology



• humanitarian

• hospitality

• industrial

• 4PL Management.

The Distribution Centre at Jebel Ali Free Zone

This is Al-Futtaim Logistics' main logistics facility providing warehousing and distribution services, operating 24 hours a day, 7 days a week. The warehouse complex is equipped with modern materials handling equipment, height adjustable dock levellers and a flexible storage racking system, customised to meet individual requirements.

It also offers cool store with a capacity in excess of 5,000 pallets for storage of food products, pharmaceuticals, and other temperature and humidity sensitive products.

Local Warehousing and Distribution Hubs

These are located in Rashidiya and Al-Quoz in Dubai, the Port Zayed and Mussafah industrial areas in Abu Dhabi and Al-Ain. From these premises, Al-Futtaim Logistics operates both customer dedicated and general warehousing/distribution facilities.

The company provides a dedicated valuables warehouse at Dubai Cargo Village for a range of luxury consumer goods and other high-value items. Items stored includes automotive spare parts, retail fashion goods, consumer electronics products and spare parts, communications equipment, food items, machinery, computer parts and accessories.

Road Transport

Al-Futtaim Logistics is also a road transport service provider in the UAE and GCC, operating its own fleet of vehicles and using IT systems such as SAP R/3 to manage it.

Services offered include:

• Container transportation

• Full Truck Load, curtain-siders

• Groupage

• Distribution - fleet of delivery trucks makes regular, twice daily (or more frequently if required by customers) deliveries to retail outlets and customer premises all over the UAE. Inter-city or point-to-point, deliveries are routed through a central trans-shipment hub in Dubai.

• Specialised road transport vehicles - include car carriers, refrigerated trucks for frozen and chilled loads, livestock carriers, side loaders and container tipping trailers as well as curtain-side trucks.



Automotive Logistics

Vehicle Transportation

Using modern car carriers, Al-Futtaim Logistics moves a variety of vehicles to locations throughout the UAE and GCC. Every year, the company moves tens of thousands of vehicles ranging from saloon cars and 4WD vehicles, to trucks and buses. In collaboration with its partners, the company also undertakes transportation of vehicles by sea or air.

Vehicle Storage

Al-Futtaim Logistics operates long and short term covered and open vehicle storage facilities in Jebel Ali and Abu Dhabi, with a combined storage capacity of over 6,000 vehicles.

Pre-Delivery Inspection

Vehicles are inspected, de-waxed and washed.

Parts and Spares Inventory Management

Automotive parts and spares are imported by sea and air into the Jebel Ali Distribution Centre and stored using the SAP R/3 warehouse management system. Twice daily or more often thousands of line items are distributed to showrooms and dealers all over the UAE and GCC. The lead time, from ordering to delivery of parts within the UAE, is less than 4 hours.

Freight Forwarding

Al-Futtaim Logistics works with international freight forwarders, shipping lines and airlines, utilizing modern material handling facilities.

Facilities

An airfreight terminal office with warehousing facilities for import and export cargo is located at Dubai Cargo Village. Sea freight operations is located next to Jebel Ali Port, and includes scheduled import and export FCL and LCL consolidation services, as well as project cargo. This facility also includes a Container Freight Station.

In addition, Al-Futtaim Logistics has an office at Port Rashid, close to Dubai's business centre.

IT

Al-Futtaim Logistics offers on-line customs brokerage through the Internet based E-Mirsal Dubai Customs module, which provides shorter lead times in clearance, import delivery and export dispatch services.



21.3 Aramex

ARAMEX is a United Arab Emirates-based public joint stock company that offers freight, express, logistics and supply chain management businesses solutions through the acquisition and ownership of controlling interests in companies in the Middle East and other parts of the world.

It provides express delivery and freight forwarding services from its offices worldwide. It operates through a network of 40 independent express companies across the world with a support of more than 12,000 offices and a fleet of 33,000 vehicles offering such services as international and domestic express, freight forwarding, logistics and warehousing, shop & ship mailbox service, and catalogue shopping. In January 2009, Aramex acquired Metrofile Middle East LLC.

21.3.1 Finances

In November 2009 Aramex announced its financial results for the three months ending September 30, 2009. The company declared a net profit of AED 41.7 million for the period, an increase of 23% compared to AED 33.9 million in the corresponding period of 2008. Revenues for the third quarter of this year stood at AED 487.6 million, a decline of 11% compared to AED 545.7 million in the same period last year.

Net profit for the first nine months of 2009 climbed 24% to AED 134.8 million, compared to AED 108.5 million for the same period in 2008.

The decrease in the company's revenues was primarily a result of a marked reduction in global freight forwarding activity, resulting in a decline of 20% in freight revenues across the network. Third quarter revenues were also negatively impacted by the extended number of public holidays and reduced business hours, including those on account of Ramadan and Eid holidays in the Middle East and North Africa region during the period.

"In spite of the extremely challenging economic conditions that have prevailed during the first nine months of this year, impacting growth in our revenues, we have consistently announced double–digit increases in our net income quarter after quarter," said Fadi Ghandour, Founder and CEO of Aramex. "This consistency is testament to the resilience and flexibility of our asset–light business model, and the entrepreneurial and innovative thinking of our people.

"We continue to review expansion opportunities in underserved markets, especially in Africa and Central Asia," Ghandour said. "As Aramex adjusts its long–term growth strategy in line with evolving market dynamics, we are also determined to upgrade and expand our existing logistics infrastructure in core markets."



Full Year 2008

In February 2009 Aramex, which is listed on the Dubai Financial Market, published its key financial figures for 2008.

For the year ending December 31, 2008, the company reported that its revenue grew from AED 1.784bn* to AED 2.080bn, an increase of 17% compared with 2007. Net profit increased by 21% over the same period, from AED 121.5m to AED 147.3m.

According to Aramex, net profit for the fourth quarter (Q4) of 2008 went up by 21% compared with Q4 2007 to AED 38.8m, "mainly driven by the significant improvement in margins of Aramex's key products". Revenue for the period increased to AED 500.5m compared with AED 495m for Q4 2007.

"The growth in revenue in the fourth quarter was impacted by the lower number of working days due to an increase in the number of holidays in the Middle East and flat to negative growth in revenues in European and North American markets," stated the company.

The founder and CEO of Aramex, said 2008 had been "a good year" for the company. "We were able to maintain our revenue growth and profit margins at a very healthy level, a result of a very serious effort to control the upward spiralling costs in the first nine months of the year.

"Our fourth quarter revenue slowed to a halt, a result of the global financial crisis, with December showing the most weakness, because of the holiday season and of the global economic slowdown.

"We have a very healthy balance sheet with little debt and we intend to keep it that way in 2009 - meaning we will only embark upon new acquisitions if the value is very attractive in key strategic markets."

*AED 1 = US$0.27



Source: Aramex

Aramex Finances: Total [AEDm]

2001 2002 2003 2004 2005 2006 2007 2008

Revenues 427.95 501.42 556.58 693.15 853.85 1,360.00 1,784.00 2,080.00

Operating Income 22.03 28.20 47.23 57.92 86.46 95.20 121.60 147.30

Margin % 5.14 5.62 8.48 8.35 10.10 7.00 6.81 7.08

Source: Aramex



Source: Aramex

Aramex Finances: Revenue by Business Segment % to Total [AEDm]

2004 2005 2006 2007 2008

International Express 294.52 369.12 439.77 519.08 610.34

Freight Forwarding 245.31 282.99 611.19 823.99 912.59

Domestic Express 93.09 120.87 176.96 224.99 295.66

Publications & Distributions 29.87 33.42 34.57 35.95 35.96

Logistics 3.18 7.49 52.62 106.76 132.65

Other 27.17 39.95 48.69 73.00 92.74

Source: Aramex



Source: Aramex

Aramex Finances: Revenue by Geographic Location % to Total [AEDm]

2005 2006 2007 2008

Middle East 914.90 1,148.20 1,472.20 1,816.00

Europe 60.10 363.60 480.60 467.40

North America 42.90 47.30 68.60 93.60

Asia & Indian Sub Continent 96.80 114.60 141.60 171.90

Source: Aramex

21.3.2 Operations

The Aramex Global Distribution Alliance (GDA) brings together 40 independent express companies from around the world, each specialising in their own region and together covering the world with the same, unified standards and business procedures. The network has more than 12,000 offices, 33,000 vehicles and 66,000 employees serving alliance customers.

The company's own express and forwarding network extends to more than 200 offices in 35 countries, employing over 3,500 people. With over 1,200 couriers delivering in the Middle East and the Asian sub-continent, the company uses 1,159 vehicles, including cars and vans and more than 297 motorcycles for inter-city deliveries.

Aramex has one of the most extensive sea, land and air freight forwarding networks in the Middle East.



Memo Express

Established in 1983, Memo Express, a subsidiary of Aramex International, is a total transportation solutions provider in the UAE, employing over 300 people with a client base consisting of some of UAE's leading companies and organisations. Memo Express's domestic delivery solutions provide a service for the collection and delivery of packages that are time specific. Moreover it also offers services such as inter-city and inter-emirate express delivery, bulk distribution, visa express, dispatch room management as well as international express service which provides delivery of documents and parcels to over 200 countries around the world.

Operations News

In 2009 Aramex announced that it had signed an agreement with Vodafone Qatar Q.S.C, one of the region's new mobile telecommunications operators, to provide express and logistics solutions in Qatar.

Under the terms of that contract, stated Aramex, it would provide a range of integrated logistics and express services for Vodafone Qatar, including network logistics, retail distribution, logistics management and support of various marketing initiatives. "The agreement with Vodafone Qatar further expands Aramex's growing portfolio of telecommunications companies in the region and enhances its servicing capabilities for the sector."

As part of the contract, continued Aramex, it would further provide a range of services, including express and freight shipping, inventory management and provision of warehouse space for storage of handsets, SIM cards and marketing material. Additionally, it would provide Vodafone Qatar with key value–added services including a break-bulk facility at Vodafone's main station fully equipped with steel shelves, CCTV system and smoke detectors, as well as packing and dispatch.

21.3.3 Strategy

After going public on the Dubai Financial Market in June 2005, Aramex has speeded up the pace of implementing the expansion and acquisition strategy it has launched more than a year previously, one which aims at capitalising on its position as a leading total transportation solutions provider in the region and reinforcing its global presence as it looks to acquire companies involved in logistics, air freight and express transport, which are of a similar size to Aramex.

Some of the recent moves in this direction were the acquisition of InfoFort, the region's leading document storage and Management Company, followed by Priority Airfreight, a UK-based express service provider that specialised in courier traffic between the UK and the US markets.

Further acquisitions include Al Khazen Distribution, the only independent publication distribution company in Palestine, and most recently the acquisition of Freight Professionals, a top Egyptian freight forwarding company.



The expansion follows Aramex's global strategy that seeks to establish presence in major markets around the world and provide the logistical infrastructure necessary to connect global markets.

The company continues to put their strong results down to the success of its growth strategy especially in freight forwarding and international and domestic express services.

There are further plans to grow the company in the region, with new operations in Egypt, the UAE and Saudi Arabia. In addition they established a logistics centre in Beirut Seaport, and are doubling the size of its logistics facility at Queen Alia International Airport in Amman.



21.4 DP World

DP World is a company owned by the government of Dubai in the United Arab Emirates and is a global port operator with a portfolio of operations in Asia, Australia, Europe, Latin America, and the Middle East; the company lists 48 marine terminals in 31 countries. In 2007, the terminals operated by DP World handled an estimated 43.3 million TEU. Its flagship port is Jebel Ali facility in Dubai.

21.4.1 Finances

In 2009 the container trade may have experienced precipitous falls in volumes but they had not affected the container ports operator DP World too badly. Half year results announced saw container through-put fall by 1.3m TEU to 12.3 million on a year-on-year basis. Revenue was down from US$1.6bn to US$1.4bn, whilst profits after tax and exceptional items fell by almost US$100m to US$188m. Yet EBITDA margins remain robust at 38.7%.

The falls in volumes experienced by DP World appear quite modest bearing in mind the collapse in trade seen on certain key trades. This seems to be due to DP World's market posture, with heavy exposure to the Gulf and other emerging markets and relatively under-weight in trans-pacific trades.

DP World's big investments in Dubai performed reasonably well with a 7% fall in containers off-setting the "very challenging operating environment" in Europe, resulting in a 20% decline for the established terminals. The business in Europe, Middle East and Africa was boosted however by the opening of four new terminals.

The company's Asia Pacific and Indian terminals were least effected by the recession with a 10% fall in volumes for the half year compared to the same period in 2008, at 2.7m TEU. Revenue and profits fell even less. In contrast volumes in the America and Australia fell by 16% with revenues falling 31% and EBITDA halving to US$59m.

Speaking to reporters after announcing the results, DP World's CEO, described the outlook for the rest of the year as "bleak" despite seeing a pick-up in volumes and freight rates. However it is difficult not to contrast the performance of the big terminal companies with that of the acute distress seen in the shipping sector. Despite the huge investment in port capacity seen over the past decade the leading players seem to have a more viable business model than that of the many of their customers.

Full Year 2008

In March 2009 DP World reported that it had had a strong 2008 but the prospects for 2009 were making the Dubai-based global port container terminal operator reconsider



some of its major projects, including a big new port development outside London, England.

Container traffic throughput at many of DP World's big terminals around the world was buoyant last year, with the group achieving an overall 15% increase in annual volume to 27.7m TEUs. That pushed up EBITDA (earnings before interest, tax, depreciation and amortisation) by 22% to US$1.3bn.

DP World's 'home' ports in Dubai continued to drive profits, with an 11% growth in container volume being sustained throughout the year, enabling the Emirate's port complex to achieve an annual traffic figure of 12m TEUs. In contrast, the company stated that its European ports had been affected by the worldwide economic recession, particularly at the back end of 2008, as were its Australian and American terminals. Volumes in Asia, however, continued to grow in double figures due to DP World's greater exposure to the east-west trades around South East Asia and the Indian sub-continent, rather than the transpacific routes.

It was likely that the company's profits had yet to fully reflect the downturn in worldwide container trades. That probability was reflected in remarks made by the Chairman of DP World, who observed that "the volume deceleration we saw in the last quarter of 2008 has continued into early 2009 and shows little sign of easing in the foreseeable future.

Falling utilisation rates across container terminals globally mean the demand for new capacity in the short-term is much diminished. Taking into account our existing pipeline of committed capacity, the company has decided to defer much of our planned new capacity until such time as higher utilisation rates return."

The company said it was committed to big terminal development projects in Vietnam, Djibouti and Peru. However, it was more equivocal about the 'London Gateway' project in south-east England. Comments from DP World suggest that it was looking to slow the rollout of full capacity at the terminal which was scheduled to open at the end of 2010.



Source: DP World

DP World Finances: Total [US$m]

2005 2006 2007 2008

Revenues 674.90 3,486.78 2,731.44 3,283.00

Gross Profit 386.62 996.69 848.17 1139.79

Margin % 57.20 28.58 31.05 34.71

Source: DP World



Source: DP World

DP World Finances: Revenue By Geographical Location % to Total [US$m]

2007 2008

Europe, Middle East and Africa 1473.45 2009.35

Americas, Australia and New Zealand 797.00 756.81

Asia Pacific and Indian Subcontinent 460.99 516.96

Source: DP World

21.4.2 Operations

DP World has achieved double-digit growth annually since the company started operations in 2001. It is one of the largest marine terminal operators in the world with 48 marine terminals and 13 new developments across 31 countries.

Its team of more than 30,000 staff serve customers globally and it handles more than 100,000 containers a day in 61,000 vessels a year, nearly 170 vessels daily.



Port Locations

Source DP World.

Operations News

2009

In March DP World announced the launch of online general cargo services for customers at its flagship Jebel Ali Port in the UAE (United Arab Emirates).

Those services, explained DP World, would be provided through e–service platform Dubai Trade, part of the Dubai World Group, and would cover export booking, berth booking and creation of shipping notes.

"The new online services will eliminate time–consuming manual procedures and facilitate easier and faster business flow," claimed DP World. It said that development was in line with the port operator's increased focus on transferring all customer–related documentation and payment processes to the electronic platform.

DP World commented: "By releasing online general cargo services, DP World, UAE Region, has taken another major step in improving customer satisfaction. Dubai In addition to making procedures easier for customers, the services will help us achieve better results through speed and higher levels of efficiency."

DP World said online export booking would enable cargo agents to book exports and nominate the shipping line through Dubai Trade, providing all the basic details about the consignment. Similarly, berth booking could be done through Dubai Trade, which would enable online planning and scheduling of a berth at the port, based on the estimated time of the ship's arrival. "The new services also include online creation of the shipping note, which is the document for each shipment detailing the booking reference needed for receipt of an export container or export break bulk cargo in port."



DP World added that those developments were the latest in a series of steps that DP World, UAE Region, had taken in collaboration with Dubai Trade to enhance customer services. In 2008, for example, online payment of port charges and opening of a deposit account had been enabled through Dubai Trade's Rosoom platform.

21.4.3 Strategy

In 2007 DP World restructured to become a pure ports operator, operating 42 terminals across 22 countries, with a pipeline of 13 new developments set to increase capacity substantially over the next 10 years. As part of this restructuring process, which took place before the company undertook the initial public offering in November 2007, it transferred or sold assets that did not enhance its port operating business or meet its strategic objectives.

During 2007, it added four new terminals or terminal developments to its portfolio. It established a footprint in Africa, in Dakar (Senegal); it reached an agreement to acquire the concession holder and operator of Sokhna Port (Egypt); and obtained final approvals to develop the greenfield London Gateway project in the UK and Maasvlaakte 2 terminal in Rotterdam, the Netherlands. In addition, it established a joint venture to develop and operate the new Khalifa Port in Abu Dhabi, UAE.

It continued implementing its strategy to match capacity to customers' increased demands and during the year grew capacity by 12% following major expansion projects at Qingdao (China) in the first half of the year and at Jebel Ali (UAE) in the second half of the year. Smaller expansion projects were completed at Vancouver (Canada), Southampton (UK), Constanta (Romania) and Chennai (India) taking its capacity for 2007 to 54.2 million TEU.

Furthermore, it continued to make progress on its existing pipeline of new developments, which were progressing in line with its rollout plans, with the earliest planned for 2009. The construction of its ports in Callao (Peru) and Yarimca (Turkey) begin in the first half of 2008.



21.5 Empost

Empost is one of UAE's fastest growing integrated freight forwarding and logistics solutions providers and offers a range of value-added services such as personal collection and delivery of business or personal mail, Mandoub Services, Empost Direct. In addition Empost Stores offer a range of courier, postal and stationery products.

It also offers Freight forwarding, Warehousing and Distribution, Packing and Removals and land transportation and is a wholly owned subsidiary of the Emirates Post.

Empost provides an international courier express service and country wide distribution infrastructure through its transportation network. The company owns a fleet of over 705 vehicles and employs over 1,000 people.

With operations in Asia, Africa, Europe and the Americas, Empost has expanded from a local courier company to become a worldwide integrated total logistics solutions provider.

In 2007 Empost announced the launch of its Cargo and Logistics service offering air, land and sea freight operations through the Logistics division of Empost.

The portfolio of services offered by the land, air and sea freight division included: Door-to-Door and Airport-to-Airport forwarding, Sea-to-Air trans-shipments and Air-to-Air trans-shipments, Customs Clearance, Warehouse & Distribution and Land transportation within UAE and the globe.



21.6 GAC

Gulf Agency Shipping (GAC) was established in Kuwait as an international shipping agency in 1956. Following decades of expansion, the GAC network now covers all five continents through a network of over 7,000 staff and 250 offices in over 40 countries. GAC's services are complemented by Global Network Agents in key ports not covered by their own offices.

The company's services are grouped into Shipping, Logistics, Marine and Solutions business areas. Its target market ranges from the oil & gas sector, retail, automotive to dry bulk and cruise liners.

GAC's expansion has been primarily through partnerships with, and acquisitions of, shipping and logistics companies. The provisions of services are coordinated through a network of four regional Hub Agency Centres based in Houston, London, Dubai and Singapore.

GAC is a private company however current estimates suggest an annual Global turnover in excess of $1.2bn.

21.6.1 Operations

GAC Group has over 250 offices in over 40 countries, to serve over 1000 locations. They company employs over 7,000 staff worldwide.

The GAC Group network covers most of the world's major ports and offshore platforms. In some cases, GAC or an affiliated company are the sole operators of a port. In other cases a GAC operation will own warehousing facilities or a distribution centre close by a port facility.

Road

The Middle Eastern based GAC Group has launched GAC XPRESS, a 'Less than Trailer Load' trucking service for the Middle East region. GAC XPRESS uses a fleet of GAC vehicles, offering depot-to-depot or door-to-door delivery options. Initially catering for major cities in Bahrain, Kuwait, Saudi Arabia and the United Arab Emirates, the next expansion phase will expand coverage to include Iraq, Iran and the Levant countries. Operations are managed by offices in Bahrain and Dubai.

GAC Logistics

GAC partners major air carriers to provide a service in which goods are collected at the point of origin, cleared through customs and delivered to the end consignees.



Cargo Gulf is GAC's branded NVOCC (Non Vessel Operating Common Carrier) consolidation services for cargo between Europe, the Americas, the Middle East and Asia. For LCL shipments (Less than Full Container Load), CargoGulf operates a weekly consolidation container to destinations around the world. Cargo Gulf also assists customers for FCL (Full Container Load) shipments.

GAC Logistics provides the supply chain solutions in rapidly changing industries such as electronic, fashion and footwear. The Sea/Air trade lanes span from Asia, to Europe and the United States, and allow the choice between hubs via either Dubai or Singapore. Cargo is received at a dedicated CFS at origin, and loaded into GAC's own consolidation containers or complete FCL containers.

GAC's Distribution Centre in Dubai is one of the largest facilities in the Middle East. It has the capacity to handle a high number of product lines from a multi-customer base, using high bay, mobile, palletised, shelved and bulk storage solutions as well as automation to maximise utilisation of space and warehousing with temperatures ranging from ambient to cool (+18C.), to frozen (-30C.)

GAC Logistics' other warehousing and distribution centres are located in the Philippines, Qatar, Sharjah, Abu Dhabi, Egypt, Sri Lanka, and Saudi Arabia.

21.6.2 Strategy

In 2008 GAC launched a new five-year growth strategy to take it to 2012.

Labelled 'Vision Y – Global Values', the latest strategy is described by GAC as a natural extension of its previous 'Vision X – Global Reach' strategic plan "which laid the foundation for GAC's drive to become a recognised global player in its core businesses".

Expanding on the company's latest strategic development, GAC said the new five-year plan both built on the growth momentum created over past five years and added an important "values component".

"Rapid growth is good for the bottom line and for extending services to all corners of the globe but it is a challenge to maintain your core values in such circumstances. Vision Y – Global Values puts renewed emphasis on our operating culture, which is unique in the business world," it stated.

"For example, we truly value long term partnerships with our customers and with our operating partners around the world. This is evident in our relationship with NYK, dating back to 1958, and with our many business partners in the Gulf region from the late 50s and early 60s."

From its beginnings in the Middle East, GAC has grown through acquisitions, partnerships, and new ventures into a global on and offshore logistics company. As at 2008 the company operated over 250 offices in over 40 countries, serving over 1,000 locations. GAC Group continues to pursue and expansionist strategy, particularly with respect to the emerging markets. Algeria has been identified as a new market for GAC Logistics in particular.



GAC Logistics forecasts that its profit and operations will grow by 20% in 2008 as a result of the growth in the transportation market in Dubai. This will follow on from 20% growth reported in 2007, driven by continuing expansion of its GAC Logistics Park in the Jebel Ali Free Zone. A further Dh18m is expected to be invested in 2008 in new handling equipment and to reconfigure rackings. Further growth is expected to continue with the establishment of Dubai World Central (DWC) and the reservation of 200,000sq m of land in Dubai Logistics City (DLC). Growing demand for air freight is being met through partnerships with major air carriers.

GAC Logistics has a fleet of 120 trucks, will add 60 more in 2008, and have plans to expand the fleet by at least 100% in 2009.

Although GAC Group provides services to nearly every industrial sector, GAC Marine, GAC Logistics, and GAC Shipping all specialise in services to the Oil & Gas and related sectors. In fact much of GAC Group's expansion has been driven by an ambition to better service this industry.



21.7 Global Cargo System

Global Cargo System was established in United Arab Emirates, in Dubai in October 1998. GCS is owned by Direct Shipping Services (DSS). GCS ships cargo daily, transporting it world-wide via its integrated truck, ship, plane and train transportation systems.

GCS' warehouses around the world have separate facilities for valuables, perishables, dangerous goods, and for small parcels. It provides services over land and sea together, by coordinating transport for local and international shipments throughout the world assisted by international agents.

GCS' products and services include:

• Warehousing

• Sea and air freight



21.8 Global Shipping & Logistics (GSL)

Global Shipping & Logistics (GSL) is part of the UAE-based Al Shirawi Group - Oasis Investment Company (OIC). Since GSL's inception in 1975, the company has become a leading logistics provider within the United Arab Emirates, offering temperature-controlled and ambient storage facilities and a range of freight management and local warehouse & distribution solutions. The company is headquartered in Dubai.

The company started as a port services provider but developed into a full service logistics company, working for parts of the Al Shirawi Group. Following a period as the in-house provider for the group, the company became 'corporatised' as a third party logistics provider and since works for a range of various clients. Global Shipping & Logistics is an express service provider based in the United Arab Emirates in the Middle East, but extending its service offering around the globe.

In 2008 GSL announced that a Dh130m warehouse and distribution development was completed measuring 100,000 sqm in total and including 7500 sqm of cold storage capacity and 10,000 sqm of temperature controlled storage. This was expanded during its second phase of development earlier in 2009, with an additional 7300 sq m cold storage and 10,500 sq m temperature controlled storage.

The warehousing and distribution centre at Dubai Investment Park caters for temperate, chilled and frozen goods. The operation was designed for local traders as well as international clients in the automotive, electronic and food and drink sectors.

Services include:

• Warehousing

• Local Distribution

• Freight Management

• Project Cargo

• Value Added Additional Services

Global Shipping & Logistics (GSL) will commence the third development phase for its Dubai warehousing complex in 2010. The expansion was necessary because its initial facilities were operating to full capacity and demand was continuing to increase. It has captured around 90% of the ice cream market and 75% of the chocolate market in a relatively short period of time, with customers including global brands such as Baskin-Robbins, Coldstone Creamery, Kraft and Federal Foods. In response, it decided to double its warehousing size in phase two and the space has almost been booked already. The third phase of development should be completed in 2011.



21.9 Gulftainer Co. Ltd

Gulftainer Company Limited was established in 1976 in the Emirate of Sharjah in the United Arab Emirates. It operates the container terminals in Khorfakkan (KCT) and Sharjah (SCT) on behalf of the Sharjah Port Authority. KCT is located on Sharjah's Indian Ocean coast, outside the sensitive Straits of Hormuz and close to the main east-west shipping routes, and is one of the world's leading container trans-shipment ports with numerous feeder ship connections to Gulf Ports, Iran, India, Pakistan and East Africa.

SCT was the first purpose-built and fully-equipped modern Container Terminal in the Middle East, and lies adjacent to Sharjah's industrial area, which accommodates over 45% of the non-oil manufacturing capacity of the UAE. SCT handles containers on behalf of over 30 shipping lines, including all of the world's top 20 companies.

Gulftainer also owns heavy transport fleets, an inland container depot, a container repair company, and a shipping agency.

21.9.1 Operations

Divisions include:

• Khorfakkan Container Terminal, Khorfakkan

• Sharjah Container Terminal, Sharjah

• Transport Division (Speedtrux & Trucktainer), Sharjah

• Sharjah Inland Container Depot and Warehousing Depot

• Gulf Container Repair, Khorfakkan / Sharjah

• Gulftainer Shipping Agencies, Sharjah

• International Port Management (I.P.M.)

• Gulftainer (Kuwait) Ltd.

• Gulftainer Pakistan - Transport and Logistics

• Gulftainer Comoros Islands (Gulf-Com)

Sharjah Inland Container Depot

Sharjah Inland Container Depot was opened in April 2004 and is located on the edge of the Sharjah city next to the Dubai border and close to the Emirates highway. All Sharjah and Northern Emirates containers from K.C.T. are received at and distributed from SICD.



The SICD contains offices, warehousing, L.C.L. facilities, workshops and a Container Repair facility (under development). The depot covers an area of 150,000 sq m and is capable of stacking 18000 TEUs. There are 200 reefer points. The facility is equipped with advanced mobile container handling equipment and controlled by a sub-second response computer system.

The first phase of the SICD expansion plan was completed with the construction of 11 warehouses providing over 90,000 sq ft of secure, insulated covered storage.

21.9.2 Strategy

While Gulftainer has invested heavily in overseas ventures, it has continued to invest in its home territory facilities. Both KCT and SCT have undergone recent upgrades and further substantial capital improvement projects are under way.

Khorfakkan Container Terminal

Phase One

Phase 1 of the terminal's major expansion has been completed, providing 4 Super Post Panamax gantries on 400 metres of berth with 16 metre draft alongside and a total of 350,000 sq m of storage space.

Phase Two

Phase Two of the facility's expansion scheme started in June 2007, with the construction of a new 400 metre quay. This would raise the total berthing line at KCT to almost 1.5km. At least six super post-panamax cranes would be delivered for the new terminal, which was scheduled to open in late 2008. The latest development follows the commissioning of a new 400 metre berth with four super-post-panamax gantry cranes in late 2006. It was all part of Gulftainer's plan to raise KCT's throughput capacity up to 4m TEUs by 2012.

Phase 2 will provide another 400 metre of berth and at least 6 new Super Post Panamax gantries by the end of 2008.

Sharjah Container Terminal

The growth in cargo handled at SCT resulted in an expansion of that terminal. A second container berth was being developed with total stacking capacity for containers throughout the port being increased. While additional mobile cranes had been commissioned, Sharjah Port Authority and Gulftainer also ordered two post-panamax gantry cranes for the operation. These new units were scheduled for delivery in the first quarter of 2008 and would speed up ship-to-shore cargo transfers significantly while opening up SCT to bigger ships.

Also, an additional berth would be created at right angles to the current terminal, overall draft was set to be improved to 12.5 meters and additional storage area of 30,000 sq m would be constructed.



Sharjah Inland Container Depot

Gulftainer had added significant value to its inland container depot, which was opened in 2004, with 11 warehouse units (2 x 600 cu m and 9 x 800 cu m capacity) on the site, all of which were commissioned in 2007 and were immediately rented out.

Phase two has been planned, which meant looking at additional warehousing space while evaluating the types of service it provided.

Gulftainer have been expanding into a global market. Its most important overseas operations are:

• The Shuwaikh container terminal in Kuwait. The company is also a consultant to Kuwait Port Authority (KPA).

• Port of Moroni in the Comoros Islands (Port of Mutsamudu, also in the Comoros Islands, with effect from 2008.)

• The GTL-MTI transport services group in Pakistan.

• A strategic partnership with Lanco lnfratech Ltd.

Its investment drive was focused on smaller general cargo/container ports in emerging markets. Quite often these ports have been experiencing rapid growth in their cargo volumes but have suffered productivity lapses and/or operational difficulties so have been in need of new investment, management procedures and/or systems upgrades.

Momentum Logistics

Momentum Logistics is a third party logistics (3PL) company, launched in the fourth quarter of 2008.

Momentum offers a suite of 3PL and supply chain management services, providing an independent extension of the services offered by Gulftainer.

Momentum’s offices in the Sharjah Inland Container Depot (SICD) form the base of operations for its first freight forwarding office, which, along with its transportation division, is ready to commence operations. According to Momentum this will be the first of three offices, with another scheduled to open in Dubai in 2009, and the third in Abu Dhabi later in 2009.

Once Momentum has established itself within the UAE, the company plans to continue its expansion, with a total projected investment of AED1bn over the next seven years.

International Logistics City (ILC) is a 700,000 square metres development located in Sharjah that will become home to Momentum’s first 25,000 square metre distribution centres.

The city will house distribution centres offering temperature controlled solutions, warehouses, a transportation park, a container freight station, a container repair workshop, self storage facilities, offices, personnel accommodation blocks and a food court.



21.10 RHS logistics

RHS Logistics represents the 3PL division of the RHS Group of companies operating out of Jebel Ali Duty Free Zone, Dubai, and UAE. Rais Hassan Saadi (RHS) was founded in 1910. Since inception, RHS core business has been shipping and freight related services. With offices in the entire major the United Arab Emirates ports, the group employs over 500 personnel dealing in all aspects of ship agency and allied activities.

RHS Logistics offers a local delivery operation within the United Arab Emirates and a regional replenishment operation throughout the Middle East. The company does not provide storage capabilities for chemical, hazardous or strong smelling cargo.

RHS Logistics' main distribution centre comprises over 26,000 pallet locations of which 12,000 are air-conditioned and 14,000 are for ambient storage. The distribution centre occupies 18,000 sq m on a 50,000 sq m plot. The facility offers 32,000 sq m of usable open air secure storage for containers, cars, machinery, large project cargo and oil field supplies. The company has also provided 4,600 sq m of space for value-added activities.

RHS Logistics system capabilities support the management of stocks in satellite warehouses throughout the region, to give complete inventory visibility.

RHS Logistics is planning to expand its distribution centre to 30,000 sq m, providing 40,000 pallet locations. The distribution centre is designed to support a wide variety of picking methodologies and general storage. It also facilitates cross-docking and flow through of product for rapid turnover and dispatch.

RHS Logistics principally operates as a ship agency, owning its own fleet and offering:

• Container leasing

• Freight forwarding

• NVOCC

• Air freight

• Logistics, distribution, warehousing & bonded CFS

• Insurance

• Travel & tours agency

• Trading

• Representation & sponsorship

• Real estate & civil contracting

• Oil field support services.



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