‘Port-centric logistics corridors are future’

Filed on February 25, 2013

A Worldwide focus on port-centric integrated logistics corridors is helping usher in a new era of seamless and sustainable trade.

Sultan Ahmed bin Sulayem, chairman of Dubai-based global ports operator DP World, spoke about how advanced approaches to logistical needs are pivotal to the future of world economies. Excerpts:

Can you explain the port-centric logistics approach?

Port-centric logistics corridors can be described with the phrase ‘connecting business, creating the future’ and doing that in a way that is sustainable for trade, business and the environment. Like the industry, the term is not new. It can be defined as a distribution centre that is located at a port as opposed to inland, bringing companies closer to the markets they serve and decreasing freight miles. The complexity of modern logistics networks today means hinterland connectivity, and not just ports in isolation, are the focus of attention. The buzzwords are integration and sustainability, both of which are imperative given the long-term nature of the involvement our industry has with the communities in which we operate.

Can you explain the increased relevance of this way of operating?

The business case is stronger today than it has ever been for creating distribution centres at or near the port rather than trucking containers to far-off warehouses and then distributing back out to market, sometimes doubling the mileage and increasing the number of hand-offs of goods, which increases security risks as well as cost. Money is saved with better visibility of inventory. Costs are brought down through improved time to market of key product lines and reduced transportation. Efficiency is increased through faster processing times. Road miles are cut and green objectives are achieved through less road congestion, fewer emissions and decreased environmental pollution.

What are the best-case examples of port-centric logistics around the world?

Our London Gateway project comprises a new 3.5-million twenty-foot equivalent unit (TEU) deep-sea container port located just east of London on the north bank of the Thames and is due to open in the fourth quarter of 2013. It is adjacent to what will be the largest rail-connected logistics park development in Europe at some 9.25m sq ft, with 15 million consumers located within 80km of the site.

Elsewhere, some significant shifts in logistics patterns are expected when the expanded Panama Canal opens. Regional ports nearby are creating new terminal facilities, and as part of the business case for expansion, they believe port-centric logistics can be a magnet for investment, with available land for development.

I would also highlight our flagship port, Jebel Ali in Dubai. This is built entirely on the port-centric integrated logistics model. The Dubai Logistics Corridor (DLC) links Jebel Ali port with the free-zone logistics park and the new Dubai World Central Airport. At some 200sq km, the DLC connects and integrates more than 6,500 companies, providing shippers with a 30-minute link between the port and the airport.

What are the challenges and opportunities of this approach?

The only way the complexities of a global supply chain work smoothly is through the competence of the most important asset in any business: its people. Sustainability of global freight and logistics will only happen with the connection of people and their business brains working together as one to ensure efficiencies throughout the supply chain. Integrated logistics corridors bring together people from different organisations, empowering them to provide solutions and resolve issues that straddle traditional boundaries. Working together, they bring multiple skill sets to resolve problems that organisations working in isolation often cannot solve on their own.

What else will smarter methods of logistics contribute to our future societies?

The big picture is that boosting trade between nations breaks down barriers between people, brings cultures together and fosters greater understanding. And the knock-on effect is the generation of jobs and livelihoods, with engaged communities that have a sense of purpose and hope. We all have a part to play in forging the connections to make that happen.

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