Suez Canal jam a wake-up call to prepare for potential disruptions
World needs to 'stand united' to counter any threat to global trade: DP World CEO Sultan Ahmed bin Sulayem
The world’s priciest traffic jam in Egypt’s Suez Canal has highlighted existing vulnerabilities in global trade, a year after supply chains were disrupted by the coronavirus pandemic.
Sultan Ahmed bin Sulayem, chairman and CEO of DP World and one of Dubai’s most well-respected business figures, says the international community must better prepare for any scenario that threatens global trade.
Khaleej Times sat down with Bin Sulayem less than a month after the Suez Canal reopened to discuss the impact on the global supply chain, and how it serves as a wake-up call for companies that rely on existing shipping techniques.
The blockage of the vital artery that handles 14 per cent of world trade cost the global economy $400 million an hour — nearly $9 billion a day — according to recently-released shipping data. Showing how vulnerable the existing supply chain is, “who’s going to pay the losses?” says Bin Sulayem.
Bin Sulayem, who is an expert when it comes to cargo and logistics handling, is a solutions-driven leader known for thinking big. He is one of the masterminds behind the Palm Jumeirah artificial islands and is personally credited with much of Dubai’s economic growth thanks to the introduction of free trade zones in the 1980s.
When asked about how the international community should better prepare for future disruptions, Bin Sulayem didn’t hesitate to propose changes to the landscape, even if they include digging an additional canal from the Red Sea.
Leading one of the largest port operators in the world, Bin Sulayem says there has never been an incident of this severity when it comes to global trade disruption.
“Everybody took it for granted that the Suez Canal is open. Now, everybody who was importing something is delayed by a few weeks, and the delay is not going away. We are now dedicating our ports, whether it’s in Jeddah, or Sokhna in Egypt, or in Dubai, to deal with giving relief to the people who are stuck with cargo.”
Anything that endangers global trade is a major concern to the Dubai businessman. Attacks on tankers like those experienced in recent months require joint global effort, he says, to protect maritime trade routes at all costs, says Bin Sulayem.
“Whether it’s piracy like in West Africa or attacks in the Gulf, this is something that needs not just the UAE, but a world to stand united against it,” he said. “The [international community] has to use whatever they need to make sure the trade flows normally because it will cost the world a lot to have a disruption.”
In a year where the global supply chain suffered a significant blow, Bin Sulayem says DP World’s overall portfolio performed better than expected. Profits dropped by less than five per cent, and the container industry outperformed the gloomy pandemic predictions, illustrating the resilience of DP world as a global trade operator.
The company’s resilience however isn’t coincidental. Bin Sulayem led changes to the company’s business model by digitising logistics, investing in technology and expanding its global footprint to become an integral part of the entire supply chain.
“In 2014, 80 per cent of our revenue came from cargo handling inside the port. Today only 45 per cent comes from handling of cargo inside the port,” he explained, adding that it was a company priority not to depend solely on the cargo handled in the port.
“We have to be part of the supply chain and own some parts of the supply chain. So today we can do an end-to-end solution, from the factory floor to the consumer door.”
DP World’s operations currently include ports and terminals, industrial parks, logistics, economic free zones, maritime services and marinas. With a team of over 50,000 people working at 150 operations worldwide, being the biggest or the first was never his objective, says Bin Sulayem.
Recently appointed by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, to head the Dubai Chamber of International Trade, Bin Sulayem’s footprint has long expanded beyond ports.
In 2018, Bin Sulayem became the chairman of the Virgin Hyperloop initiative, a futuristic mode of transportation that will carry passengers and goods at speeds exceeding 1,000 kmh.
“If somebody invented technology like that to move cargo between cities, what would happen to our ports? We invested billions in our ports,” he says.
In another strategic move to diversify the business, Bin Sulayem became the biggest investor in the technology and witnessed history last November when the Hyperloop completed the world’s first passenger ride. The Hyperloop is a disruptive technology, says Sulayem, and its vision is in line with DP World’s core principle, to always follow the cargo.
“If someone wants to move cargo in the North Pole, we will be there. But we’ll only go if there’s cargo. We don’t look at how big we want to be, we don’t look at how many ports we want to handle, but how much cargo we can handle. Wherever our customers go, we will be. Efficiency for our customer and profitably for us — these are two criteria for our expansion.”
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