City Slicker

(Dubai, United Arab Emirates 05/05/2009)

From: Arabian Supply Chain
Dateline: May 5, 2009

How the family-owned RSA Logistics company took on the industry’s biggest hitters to become the first operator at Dubai Logistics City.

The global perception of logistics activities in the Middle East has undergone a radical transformation in recent years. Suffering from an image crisis in the 1980s, with unwarranted stereotypes of dusty cargo being shackled onto camels and transported to makeshift facilities, the region has proudly reinvented itself with billion-dollar transportation developments that match the highest of international standards and, in some cases, exceed them by a considerable distance.

The United Arab Emirates has emerged as the most successful example of this logistical makeover, with Dubai Logistics City (DLC) being played as a trump card in the country’s ongoing development strategy. Boasting of direct links to the bustling Jebel Ali Port and forthcoming Al Maktoum International Airport, the project spans a whopping 21.5 square kilometres and caters to roughly two billion people in the Middle East, Indian subcontinent and Africa - all within three or four hours of flying time from Dubai.

Its unsurprising, therefore, that DLC has received a flattering response from the global logistics industry ever since its launch in 2005, with heavyweights such as Kuehne + Nagel, Panalpina and Deutsche Post DHL coming to the fore as early-bird investors, each racing to complete their ambitious warehousing facilities as quickly as possible.

However, Dubai has a habit of favouring the underdog and instead of a logistical powerhouse starting the first DLC operations, it’s actually a relative unknown that has raced past the finish line in pole position.

A family-owned enterprise, RSA Logistics commemorated the launch of warehousing operations at Dubai Logistics City last month with a well-attended ceremony. The news might have raised a couple of eyebrows, but for the company’s marketing director Kirit Mehta, it wasn’t a conscious effort to achieve this particular milestone in DLC history.

“We’re pleasantly surprised and honoured that such a historical moment for our company has also marked a breakthrough for Dubai Logistics City,” he states with a humble sense of pride.

“RSA Logistics will always be remembered as the first company to start operations here, although we’ve never considered this a race or a competition with others. At the end of the day, everyone will be operating from the same development and working together as a community.”

RSA Logistics was actually conceived at Jebel Ali Free Zone, where it dabbled in the logistics industry with a minor warehouse facility. Although business was healthy and warranted a significant expansion, the company was knocked by a waiting list for land and decided to look elsewhere, around the same time that Dubai Logistics City was launched.

The timing was perfect and RSA Logistics was amongst the first companies to register in September 2005.

“The project seemed really exciting, especially since we could utilise the land, sea and air transportation links to serve our target markets in the upper Gulf and Africa,” explains Mehta. “After reserving a 20,000m2 plot of land, we decided to really make this worthwhile and increased to 65,000m2. The previous warehouse in Jebel Ali Free Zone was later sold.”

With the land reserved, the next stage was designing the warehouse, which involved various discussions with the Dubai Logistics City team. A construction contract was later issued to Amana Steel Building and the facility was completed on fast-track within a year, a massive achievement by global standards.
 
“A handful of companies had started their construction around the same time, although we benefited from faster decision-making because we’re a privately-owned business,” admits Mehta. “Of course, some teething issues were encountered along the way, but the management of Dubai Logistics City were really professional and made the process as seamless as possible.”

Measuring 25,000m2 and boasting 26,585 pallet positions, the facility has been equipped with a racking system from SSI Schaefer, forklift trucks from Yale and Linde, and a warehouse management system from Flotilla.

“We spent a lot of time in researching the materials handling market and picking the best solutions for our requirements. Brands such as SSI Schaefer, Yale and Linde are world-class and showcase our desire to provide a quality solution to customers,” says Mehta. “In addition to the traditional warehousing and fulfilment services, we have also launched a number of value-added options, including packaging, re-packaging, assembly, inspection and quality control.”

Operations at the facility are already in full swing and the company has received a significant amount of attention from its ‘first operator’ status at Dubai Logistics City, which comes as a welcome bonus. “People are talking about RSA Logistics, which is a great thing and has helped to boost the number of enquiries that we have received since our operational launch. Customers and suppliers have been really supported from the very beginning,” says Mehta.

Of course, it’s impossible to ignore the clash between RSA Logistics being launched and the global recession, which has dented the logistics industry’s confidence throughout the world, including the Middle East. Such an outcome was impossible to predict when the company initiated its plans, admits Mehta. “There is a slowdown in the Middle East, although we’re confident about a recovery in the long-term, especially when Al Maktoum International Airport is opened,” he says. “In the meantime, we have adjusted our short-term targets. For example, we initially expected to reach capacity with storage space in six months, although this has been extended to one year now.”

Preparing for the inevitable upturn, RSA Logistics is already planning its second phase of development, which covers areas such as a truckling fleet and temperature-controlled storage. It has also reserved space at the freight forwarding area of Dubai Logistics City to directly handle its shipments from Al Maktoum International Airport.

“Cargo that has been transported by sea will be broken-down, stored and re-distributed at the warehouse, while a similar process will be conducted for air cargo at the freight forwarding area,” says Mehta. “It’s another step towards reaching our goal of providing customers with a complete solution that can be compared with the best in the world. Although we’re considered newcomers to the Middle East logistics industry, we’re planning to have a presence for many years to come and I’m confident the historical achievements will continue in the future.”

Link: Arabian Supply Chain

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