Logistics Centers as strategic areas of national development

Mahmood Al BastakiChief Executive Officer,Dubai Trade

August 26, 2014

Perspectives from Dubai, United Arab Emirates

19931994

19951996

19971998

19992000

20012002

20032004

20052006

20072008

20092010

20112012

0

10

20

30

40

50

60

70

80

0%

10%

20%

30%

40%

50%

60%

70%

80%

World GDP (Trillion US$) World Trade (Trillion US$) Trade as % of World GDP

Trill

ion

US$

State of the World Economy & Trade

Share of World Trade has increased by more than 12% in World GDP, bouncing back from the slump in 2008/09 as compared to 9% growth in the previous 10 years from

1993 to 2002

Data Source – World Bank.World Trade above refers to World Merchandise Trade

Broad Trends that fuelled Trade growth

Slow growth in Local markets

Increased globalisation of Multi National Companies

Creation of New Global Value

Chains

Advancement in

Shipping, Air &

Railroad

Innovations in

ICT

Unbundling of

Services

Importance of Logistics Centers in the Global Value Chains

Value added operations

Provide intermodal connectivity

Foster infrastructure rationalization

Improve transportation quality & service frequency

Core components of a Logistics Center

Infrastructure

Operators

Logistical service

providers

Transport providers

Trade Facilitator

s

Trade Policy

Regulators

Hard Infrastructure

Soft Infrastructure

Logistics Center – Dubai Example

Hard Infrastructu

re

Soft Infrastruc

ture

Logistics Center – Dubai Example

Palm Jebel Ali Palm

Jumeriah

World Islands

Jebel Ali Port

Cruise Terminal

Jebel Ali Free Zone

Dubai World Central

Cargo Village

Airport Free Zone

Dubai Airport

Jebel Ali Port: The 9th largest in the world (2012). Planned capacity to reach 19 mn TEU by 2014

Dubai International Airport Cargo Gateway: 2nd busiest airport in the world (international passengers) and 3rd for international freight traffic.

Jebel Ali Free Zone: One of the largest free zones houses 7,300 multinational companies which generated trade worth USD 100 billion in 2013.

Dubai World Central: Planned to become the busiest airport city in the world, DWC handled 210,000 tonnes of cargo in 2013

Logistics Corridor

Logistics Corridor

Dubai World Central Master Plan

Logistics Center – Dubai Example

Hard Infrastructu

re

Soft Infrastruc

ture

Freight Forwarders &

Customs Brokers

Transport Companies

Free Zone Companies

Customs Authority

Sea Port Operator

Shipping Lines & Agents

Company Licensing

Authorities

Exporters & Importers

Air Cargo Handlers

Financial Institutions

Insurance Companies

Soft Infrastructure Participants

Chamber of Commerce

Visit Multiple counters

Long queues at counters

Paper intensive

Lack of transparency and standardised procedures

Permit Authorities

Dubai Trade - Single Window for Trade

Freight Forwarders &

Customs Brokers

Transport Companies

Free Zone Companies

Shipping Lines & Agents

Exporters & Importers

Seamless integration between the two is a must

Hard Infrastructu

re

Soft Infrastruc

ture

Key Indicators

30 entities connected

45 min transit time between Sea-Air trans-shipment

83 million transactions

85% of cargo moves without human intervention by Customs

Trading across Borders rank

#4Registered

Companies

100,000

Impact on the Economy

400.04% 6 >

TOTAL SAVINGS IN EXPORT AND IMPORT TO TRADERS $40.2 BN

Source – Emirates Competitiveness Council Policy in Action Series, Issue 03 (Dated Jan, 2012)

COST OF CAPITAL(ASSUMPTION)

0.04%PER DAY

DAYS SAVED IN EXPORT

DAYS SAVED IN IMPORT

3PER TRANSACTION

3PER TRANSACTION

TOTAL MERCHANDISE EXPORT

$185 BN

TOTAL MERCHANDISE IMPORT

$150 BN

TOTAL SAVINGS IN EXPORT

$22.2 BN

TOTAL SAVINGS IN IMPORT

$18.0 BN

X

X

X

=

=

TOTAL SAVINGS IN EXPORT AND IMPORT TO TRADERS $40.2 BN