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Logistics passport, a game changer

Muzaffar Rizvi/Dubai
Filed on February 8, 2020

(KT file)

The World Logistics Passport (WLP) will be a game changer to strengthen Dubai's position as a global trade hub by connecting key markets in Asia, Africa, and Latin America, as part of the emirate's Silk Road strategy to lift economic relations among the participating nations.

The landmark initiative, which was launched on the sidelines of the 50th World Economic Forum in Davos last month, will play a key role in connecting the three regions. The pilot project has been operational since July 2019 and has increased inter-regional trade by 10 per cent.

Top government officials, analysts, and experts said that the platform is designed to standardise and simplify processes, uniform data, boost trade efficiency, reduce trade costs and hyper-connect governmental entities with logistics hubs. They said that the UAE's logistics markets have benefitted from huge investments in infrastructure, with industry estimates putting its size at $30 billion.

Sheikh Ahmed bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority and Chairman and Chief Executive of Emirates Airline and Group, said that the Dubai Logistics Passport initiative will help connect international markets by mobilising Dubai's resources and infrastructure.

"The investments we made in Dubai's airports, ports and free zones have made the city a global logistics hub and a bridge between the east and the west. The Dubai Silk Road strategy responds to the changes in international trade by offering new state-of-the-art logistics services using the latest smart applications," Sheikh Ahmed said.

Capital of new economy

UAE Minister of Economy Sultan bin Saeed Al Mansouri said that the effective utilisation of advanced infrastructure and technological advancements enables Dubai and the UAE to develop an effective network capable of supporting global trade, and seamlessly linking commercial hubs.

"The initiative aims to position Dubai as the capital of the new economy in the region and to achieve the ambitious target of Dh2 trillion revenue from Dubai's non-oil foreign trade by 2025," the minister said.

He added that the World Logistics Passport marks the beginning of the implementation of the Dubai Silk Road strategy that will lead to a new phase of economic growth.

"We aim to further boost Dubai's position as a global economic and business hub, powered by our exceptional connectivity and logistics," he said.

Innovative landmark move

Shailesh Dash, a Dubai-based entrepreneur and financier, described the World Logistics Passport as another innovative landmark by Dubai.

"We are very excited about the initiative and the overall benefits such a platform would bring to the regional and international logistics industry. With Dubai embarking on such an ambitious initiative, it will further cement its position as a global trade hub," Dash said.

Dash, who is also chairman of Gulf Pinnacle Logistics, said Dubai is not only eyeing to be the link between Asia, Europe and Africa but is also taking the right steps to serve South America.

"Given the UAE's strategic location, being the connecting point between east and west, coupled with this initiative's ability to find synergies between governmental entities and logistical hubs, Dubai's high quality infrastructure, data-driven processes and technology and its ability to provide a win-win solution for all trade partners perfectly positions the Emirate to emerge as a prominent logistics hub," he elaborated.

The Federal Competitiveness and Statistics Authority recently said the logistics sector's gross output amounted to Dh219 billion in 2018 with the sector's contribution to the country's gross domestic product (GDP) projected to increase to eight per cent by 2021.

Domestically, the UAE is investing in big ticket infrastructure projects such as Al Mafraq-Al Ghuwaifat road upgrade and the creation of a 1,200km rail network. The market is also undertaking expansions at its main air and sea ports.

Jebel Ali, which serves as a multi-modal hub and free zone and facilitates domestic, regional and global trade flows, connecting the UAE with 140 ports worldwide, is undergoing expansions to increase handling capacity to 22.1 million TEUs.

Moreover, the UAE is trying to position itself to be the region's e-commerce hub by encouraging new businesses and startups such as Shipa.com and luring global talent and investment through ambitious projects such as Commercity in Dubai. The emirate is building a Dh3.2 billion e-commerce city, which would be spread over 2.1 million square feet.

Logistics is backbone of trade

Jitendra Gianchandani, chairman of Jitendra Consulting Group, said that logistics are the backbone of trade. Efficient logistics reduces trade cost, saves time, and helps countries to compete globally.

"Trade is the engine for global economic growth, and nobody can question Dubai's position as an international hub in the region because of its excellent infrastructure, state-of-the-art facilities and consistent economic policies," Gianchandani told Khaleej Times on Saturday.

"The latest World Logistics Passport will facilitate companies and traders to use Dubai's world-leading logistics facilities in return for cost and time savings and enhanced customs clearances. It will not only increase the ease of moving goods in Dubai but will also foster more optimal direct trade routes between Latin America, Africa and Asia," he said.

He said this initiative will help Dubai to expand its global footprint through partnerships and knowledge exchange with other global trade hubs.

"As per 2018 World Bank Group, among 160 countries, UAE ranks 11th when it comes to Logistics Performance Index. The initiative is set to benefit UAE to improve its ranking to top 10 and also benefits the shipping, courier and logistics industries across the region and ultimately help contribute a significant share to Dubai's growing economy," Gianchandani said.

Free movement of goods

Shahzad Ahmed, chairman and chief executive of Blue Ocean Group, said the World Logistics Passport will ease the free movement of goods and services across countries and help reduce time, paperwork and cost.

"As the countries in the world become more closer and inter-dependent on each other on goods and services, the free movement of goods and services would become crucial. Thus Logistics Passport would play a great role in strengthening the steady and fast supply of goods and services," Ahmed told Khaleej Times.

To a question, how this initiative will benefit the logistics industry in the region he said wholesale distribution and logistics business is changing due to the change in consumer behaviour - from brick and morter model to the e-commerce environment.

"With the value of online e-commerce on track to double from $1.37 trillion in 2014 to $2.75 trillion in 2019 - en route to a projected $4.48 trillion in 2021 - understanding customers at a mass level while interacting with them as individuals is the true business survival skill," he said.

Moreover, he said the global distribution market is moving towards digital platform.

"Globally, the number of Internet users rose to 4.2 billion people in 2018, up from 3.04 billion in 2014. The number of Internet users rose to 164 million in Middle East and North Africa region," he said.

- muzaffarrizvi@khaleejtimes.com


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