MIDDLE EAST\\\ By John Jeter


DOHA, Qatar – Come on in, the water’s


great. Actually,


yes, on a mid-March morning, the Persian Gulf’s 68°F makes for a nice scuba outing. From downtown, much of the 62km highway to Sealine Beach is 10 lanes, virtually all of them empty. Which begs the question: Why so much pavement? Well, Mesaieed Road serves as a micro-illustration of the region’s boom in infrastructure, which stakeholders say proves how inviting investment waters are


developments across the region, most in road-building: 1,069 projects totaling $122.6 billion. Drive through published


reports and interviews with local players and you’ll see even more projects region-wide with dimensions and costs that will make your head spin. A very few examples: Saudi Arabia’s Vision 2030


program, slated for the kingdom’s 12 logistics zones, envisions $48 billion in “transports and social infrastructure,” including roads,


“The Middle East really is beco


ming a logistics hub. I’m talking about hundreds of billions of dollars being spent on ports, airports, railways, roads.”


-- Bassel El Dabbagh, Agility GIL


rail, seaports, and airports, The National reported in September. Qatar is expected to spend


more than $200 billion on ports and highway expansions—never mind the eight new stadiums for World Cup 2022—a walloping 10% of its GDP on infrastructure. Etihad Rail is looking to raise


here. “The Middle East really is


becoming a logistics hub, with not only one country but several countries investing significantly in infrastructure,” says Bassel El Dabbagh, CEO of Agility GIL (Global Integrated Logistics), in Abu Dhabi. “I’m talking about hundreds of billions of dollars being spent on ports, airports, railways, roads.” Roads aren’t headline-


grabbers; those would be Dubai’s Jebel Ali Port, with DP World’s new $1.6 billion Terminal 4, or Saudi Arabia’s search for $429 billion in private-sector financing for a slew of projects, including five new airports. Still, roads are paving the way to industrial-strength growth in the Gulf Cooperation Council’s Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. In a February, an Orient


Planet Research report, “Fast Tracking Development: Road Infrastructure in GCC,” noted $1.4 trillion in active infrastructure


$3 billion to lay nearly 400 miles of track from the Saudi border to the UAE’s east coast in the second stage of a planned $11 billion network eventually linking the GCC, Bloomberg reported in July. Bahrain’s $32 billion


infrastructure spend helped lure FedEx Express as anchor tenant at Bahrain International Airport’s new $58.5 million, 269,000-square-foot cargo area, according to the Japan Times in February.


Dubai-based DP World has


growth having undergone development over the years and now including four terminals.” Container Terminal 4, or T4, is “due to begin operations soon,” the spokesman adds, giving the Middle East’s largest seaport an overall capacity exceeding 22 million TEUs. “By adding value at more


points on the supply chain through ports, inland container depots, free zones and special economic zones with digital technology, we can increase efficiency and speed to customers,” the spokesman says. These zones, some of which


offer 100% foreign ownership, include the region’s hottest hubs, so-called “logistics cities.” Here are just a very few examples: The marquee Dubai World Center features Dubai Logistics City, Maritime City, and Sharjah Airport, with an annual air cargo capacity of 12 million tons; the $52 million BBH Logistics City on the outskirts of Muscat, Oman; and King Abdullah Economic City, a $100 billion project that includes the King Abdullah Port, billed as the world’s second- fastest-growing port and aiming to handle 20 million TEUs. Fredrik Nyström, GAC


Group Vice-President–Middle East, echoes others who also see technology increasing here, with El Debbagh seeing e-commerce growth “catching up with percentages you see in Europe and in the States, I would say, in the next five to 10 years.” “Digitalization is no longer


just a nice-to-have strategy. It’s a must,” Nyström says. “Our digitalization ambitions will be key in driving future growth.” Moreover, digitalization


“Digitalization is no longer just a nice-to-have strategy. It’s a must.” -- Fredrik Nyström, GAC Group


invested $90 million toward Virgin Hyperloop One’s tube- transport system that can carry passengers and palletized cargo at speeds exceeding 600 mph, according to a variety of published reports. DP World, through a cites


spokesman, Jebel Ali Port as “one example of our


initiatives provide a leadership opportunity, he says, noting, “Although the GCC is still not as sophisticated as some on the technological front, GAC is committed to continuing to invest in this area in order to anticipate, lead, and adopt.” Meantime, despite the Middle


East’s notoriety for geopolitical tensions, oil and gas volatility, and its setting in the crossroads of international trade disputes,


Issue 6 2019 - FBJNA


he lists several reasons for investing here. “In addition to the strategic


location and infrastructure spends, look at the business environment. In terms of laws and regulations, particularly as they relate to logistics, those continue to be updated to make it more appealing for business, less restrictive, and with more focus on ease and speed of doing business,” Nyström says.


21 Like others, he cites


increasing Chinese interests. In just one instance, as the Financial Times


reported in


May, a Chinese conglomerate initiated a 15-year feasibility study for a $10 billion development at Khalifa Industrial Zone Abu Dhabi. “Investors should be


investing more,” he says. “I think it’s a very attractive environment for investors.”


Airline, 3PL Relate Overnight Logistics Response to Blockade By John Jeter


DOHA, Qatar – It’s nearly 11 p.m. local time one early June when a flight carrying Guillaume Halleux, Chief Cargo Officer of Qatar Airways Cargo, lands in Melbourne. He turns on his cellphone to find it filled with dozens of texts and missed calls. A crisis of seriously global proportions. “I couldn’t believe it,” he says,


recalling the June 5 day two years ago when five countries dropped a sudden and stunning blockade around the tiny Persian Gulf nation—starting with Bahrain, then Saudi Arabia, UAE, Yemen, and the Maldives immediately following. “Could this escalate to war?” No, but the surprise—and


surprising—blockade, which remains a geopolitical head- scratcher here, did escalate supply chain operations in what had to be one of the world’s largest emergency food-logistics operations in recent memory. In March, Halleux and


Matthew Phelps, General Manager of GWC Logistics, the largest 3PL in the country, welcomed a FBJNA reporter to their respective offices. They discussed everything from the blockade to GWC’s massive multibillion-dollar Logistics Village Qatar to Qatar Airways’ addition of five new cargo freighters this year. The blockade hit with


stunning force—and was met with an equally stunning response. Qatar, about the size of Connecticut with a population of 2.6 million, was importing 99% of its food, 80% of that from its Gulf neighbors, according to news reports. Worse, the only road with access to Saudi Arabia was closed, halting all trucking into Qatar. Halleux says Qatar Airways


Cargo flew 15 charters a day for the first month of the crisis,


while Phelps says some 400 charters during the same period essentially obliterated the Washington Post’s first-day prediction: “Qatar could face a food crisis in spat with Arab neighbors.” “We immediately started to


work on a contingency plan to fly double or triple volumes of fresh meat from Australia to Qatar,” Halleux says. Not just meat. Qatar Airways Cargo, along with carriers from a raſt of allied nations, rallied to bring in perishables from produce to dairy products, along with everyday necessities. “We even had to adapt some


trailers to accommodate goods,” Phelps says.


country. “The first few weeks cost


a fortune, but we didn’t think about it,” he says. “We didn’t have time. We never discussed or negotiated how much all these goods were going to cost, we had to fulfill the need and talk about the money later.” Halleux, in his office near


the old Doha Airport just a few miles from GWC’s glass-façade headquarters, says the charter flights were “ordered and paid for by the importing companies in Qatar. “In order to operate them, we


decided to cancel a number of commercial freighter flights to free up aircraſt block hours,” he adds. “Customers globally were affected by our cancellations, but they understood and supported


“We do expect a surge of air volumes in 2022, related to delayed projects mostly or to last-minute orders.” -- Guillaume Halleux, Qatar Airways Cargo


us. Many offered their help.” With the blockade behind


them—the crisis part of it, anyway—Halleux and Phelps look forward. Phelps looks out his office window, where, in the distance, he can see one of the eight new stadiums built for the FIFA World Cup in 2022. GWC’s already handled a slew


Even before the end of


the blockade’s first full day of implementation, supermarket shelves, he says, were “even fuller than usual”—curbing social media posts about a grim end to Ramadan the sundown before. Over an espresso in GWC’s


headquarters on Doha’s D Ring,


just across the broad


commercial boulevard from LuLu Hypermarket grocery store, Phelps also discussed the short-term impact on revenues for delivering provisions, virtually overnight, to an entire


of international games there, Phelps says. Halleux makes the world’s largest sporting event sound like another day at the office—all this in a country that managed through a geopolitical debacle that few, if any, other nations have had to face in this millennium: a flip-the-switch snap of its supply chain. In no-sweat understatement,


Halleux says of the World Cup, “We do expect a surge of air volumes in 2022, related to delayed projects mostly or to last-minute orders.”


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