DP World: Enhancing Commerce Through The Supply Chain

April 9, 2013 in Infrastructure

Across the Middle East, the marine industry continues to benefit from improvements in infrastructure, resulting in additional commerce and employment creation at many of the region’s ports.

Within this sphere, DP World is a market leader in the global marine terminal industry, providing a range of services designed to enhance its customers’ supply chain efficiencies, including bringing together container, general cargo, bulk, and other terminals, free zones, intermodal, logistics facilities, customs services, infrastructure developments and consultancy services.

DPWorld04Mr Mohammed Al Muallem is the Senior Vice President and Managing Director for DP World’s UAE Region. For the past 30 years, having gained an engineering degree, he has acquired experience within the industry, firstly at Port Rashid.

I joined in 1983 as a Technical Trainee. The position was a great start to understand the business, and this along with my local and overseas training saw me move to the position of Senior Manager of Technical by 1991,” he recalls.

In 2005, DPA merged with DPI (the international port management arm) to establish DP World. Today the business operates over 60 terminals across six continents with container handling generating around 80 per cent of its revenue.

We have 30,000 people employed across the world in the Group. There is no separate Middle East region in our structure; it forms part of our Europe, Middle East and Africa Region,” Al Muallem describes, “the UAE Region employs 6250 employees from 46 nationalities,” he continues.

Customer focus is part of everything we do and ingrained into our mindset. Efficiency and sustainability will remain the guiding principles for our industry over the coming decades and while we continue to innovate to speed up handling and movement of containers to an extraordinary degree, we always have our gaze fixed firmly on our customers’ needs and those of the global communities surrounding our various locations.

Jebel Ali Port is a good example. We have continued to expand capacity there to meet our customers’ needs, especially their requirement for ports capable of handling ultra large vessels. With the 5 million TEU capacity expansion underway, taking total capacity to 19 million TEU in 2014, Jebel Ali will be able to handle ten of the new generation 18,000 TEU capacity mega vessels at one time – the only port in the region able to do so.”

DP World, like its competitors, has felt the effects of the global economic downturn and made adjustments, as Al Muallem explains, however, this does not stop investment:

DP World, has responded to recent challenges by focusing on efficiency and cost management. In our business, we invest for the long term with average concession life of more than 40 years across our global portfolio of more than 60 marine terminals, and we therefore necessarily take a long term view.

DPWorld03Our strategy focuses on providing quality services where and when our customers need us to be. Around three quarters of our business is in emerging markets but we also focus on developed markets where we can add value to our customers.

During the worst of the recession we continued to invest in our terminals in markets where capacity is constrained in line with market need. These include, for example, moving ahead with our London Gateway port and business park in the UK, and completing new terminals or expansions in Karachi, Pakistan, Callao, Peru, Dakar, Senegal, amongst others.”

According to Al Muallem, another key challenge within the industry is the shortage of ready-skilled staff. However, he says that the industry is addressing the problem, whilst DP World has invested heavily in training opportunities:

We recently hosted a meeting of shipping lines and others in the supply chain industry together with executives from the World Economic Forum to discuss issues and challenges facing the region. A lack of proper skills and training was highlighted and consideration needs to be given to a UAE maritime academy to address skill shortages in the sector,” he states.

“There are ongoing training programmes for staff as part of their employment with us. We have dedicated training programmes within our own training wing called the DP World Institute, which all staff has access to. Specialised and operational training courses have been developed and are offered within Jebel Ali Port at the purpose built Operational Training Center (OTC). All level of staff from quay crane drivers to business unit General Managers has access to training and everyone is encouraged to pursue personal development.

Importantly, training courses are delivered by a mix of academic professionals from leading international schools and current DP World business managers, which provides a balance between current academic thought and real-world experience. Additionally, our global network also provides unparalleled employment opportunities for our staff,” he continues.

Of course the skills learned are an invaluable asset to DP World when it comes to forging relationships both with customers and suppliers. Supply chain is a crucial element to the company’s ongoing success in terms of timeframes, quality, reliability and cost-savings and Al Muallem indicates that regular communication is essential:

DPWorld02Being a global operator with business units across the world means that we are constantly in discussion with all major suppliers, to maximise resources when it comes to all aspects of port development. This includes civil works, operating equipment, IT systems, external funding, etc.

Quality, professionalism, customer service focus service and transparency are key to any relationship with our suppliers. We believe in building good relationships with our vendors, recognising that they are partners with us in meeting the changing needs of our customers.

We recently held an appreciation event to recognize our top vendors. Our achievements are very much supported by the commitment and hard work of our vendors – our success is their success.

At the same time however, as a vital link in the supply chain, we believe in keeping costs down and ensuring our customers move their goods smoothly and efficiently to market:

In Dubai, Jebel Ali port is both gateway and hub to a wider region of two billion people, and the trading center for more than 6,500 companies in the Jebel Ali Free Zone, which, with our flagship Jebel Ali port and the Al Maktoum Airport, provides a seamless sea-land-air link, known as the Dubai Logistics Corridor. The planned Etihad Rail network will add a further dimension, contributing to the even more rapid movement of goods.

Technology has also transformed supply chains. In the port industry, initiatives include crane automation or semi automation, computer aided vessel planning, e-gates providing fast exit through port gates, and RFID powered yard management. We have the latest state-of-the-art equipment in place to ensure the safeguarding of our customers’ assets.

Technology has the power to break down barriers to speed trade. The Dubai Trade electronic portal is a great example. It creates one seamless offering to make life easier for business.

DPWorld01By providing integrated electronic services that connect a wide range of trade and logistics providers and key government agencies, including Dubai Customs, within a single electronic window it cuts red tape and oils the wheels of business. Services include an online platform for traders, shipping lines and agents, clearing and forwarding agents, hauliers, and free zone licencees amongst others.

The Internet and wireless technology have created a Market Space, as distinguished from the physical world of the marketplace, and it may hold the answers to our sustainable future.

Sustainability has of course become a very much en vogue term for customer and provider alike. Al Muallem is acutely aware that customers are seeking greater agility, reliability and economies of scale;

We at DP World aim to be leaders on these issues, looking to meet changing needs tomorrow as well as today. Supply chains are fundamental to how people live their lives and we need to be conscious of the difference we can make by maximising efficiency and the effectiveness of everything we do.

The supply chain industry for example plays a pivotal role in food security supply, which is becoming increasingly important in a world with 7 billion people and growing.”

With an eye fixed firmly on the future, the company constantly invests in terminal infrastructure, facilities, technology and people, working closely with customers and business partners to provide quality services. In taking this customer-centric approach, DP World is building on the established relationships and superior level of service demonstrated at its flagship Jebel Ali facility in Dubai, which has been voted “Best Seaport in the Middle East” for 18 consecutive years.

Such accolades are further endorsement of DP World’s success and the business handled 56.1 million TEU (twenty-foot equivalent units) across its global portfolio in 2012, a 2.4 per cent increase over the prior year. Adjusting for the divestment of four joint venture terminals during the year, like for like gross container volume growth was also 3.7 per cent ahead of 2011.

This annual increase in gross container volumes was driven by a good performance from the Americas, Asia Pacific and Middle East regions where the focus on delivering improved efficiencies and productivity attracted more containers into our ports,” Al Muallem comments.

The UAE Region continued to operate at very high levels of capacity utilization, increasing the number of containers handed to 13.3 million TEU for the year,” he adds.

The state of the art services offered at Jebel Ali Port made it the port of choice for many shipping lines and a pioneer gateway to the region’s market. The port continues to deliver growth in throughput and capacity and aims to have expanded its capacity to reach 19 million TEU by 2014, partly due to the opening of the Terminal 2 expansion, which will add 1 million TEU later this year – and with the new Terminal 3 development, scheduled to add 4 million TEU in 2014.

Elsewhere, 2013 is an exciting year for us with planned new capacity on track to open in Santos (Brazil), Jebel Ali (UAE) and London Gateway (UK). Whilst there remains much uncertainty in the macro economy we believe we are well positioned to make further progress in 2013,” says Al Muallem.

We have 11 major expansions or new developments underway currently in nine countries and capacity is expected to rise to around 103 million TEU by 2020, in line with market demand.

We believe that we will continue to outperform the industry. We see an enormous impact ahead coming from the new ultra-large container ships of more than 15,000 TEU capacity. Ships of 18,000 TEU are already being built and are coming into operation.

Planning ahead to make sure we can meet our customers’ expanding requirements means today we have at least 10 terminals in our global portfolio already handling the ultra large container ships. That number will increase as more of these ships call at more of our terminals, particularly in emerging markets. Indeed, our emerging market terminals handled 200 per cent more of the ultra-large vessels in the first six months of 2012 than at the same time in 2011,” he concludes.