The second edition of the High-Level Maritime Dialogue titled ‘Build Back Better: Shock-Resistant Supply Chains’ on 7 November, was hosted by FIATA, moderated by its Working Group Sea Chair and Senior Vice President, Mr Jens Roemer.
‘’Shipping lines and forwarders will have to learn to cope with unexpected service challenges as a new reality’’- Global Shippers Forum
In the context of high uncertainty and volatility, this unique set-up brought together high-level stakeholders from across the maritime supply chain to explore common goals and practical solutions in a constructive manner, to strengthen the maritime supply chain for greater resilience. The speaker line-up involved:
- Mr James Hookham, Secretary General, Global Shippers Forum (GSF)
- Mr John Butler, President and CEO, World Shipping Council (WSC)
- Ms Antonella Teodoro, Senior Consultant, MDS Transmodal, UK (MDST)
- Mr Alan Murphy, Founder and CEO, Sea Intelligence
- Ms Andrea Tang, International Trade Lawyer, International Federation Freight Forwarders Associations (FIATA)
Supply chain shifts as a response to changes in demand trends and global shocks
Supply chains have responded to a dramatic rise and fall in demand in recent years. Lessons are to be learned to prepare for uncertainties plaguing the future. “The problems encountered are not new; they exposed the vulnerability of the supply chain when planning and forecasting were not possible. The shocks brought by the pandemic cast a spotlight on the role of logistics, as well as its importance for the economic and social well-being of consumers”, said Ms Tang.
Supply chain shifts were considered, as well as the rise and fall in freight rates. It was noted by Ms Teodoro that “supply chain shifts were observed both in terms of geography and composition. When carriers repositioned capacity to the most profitable routes, new entrants attempted to service the gaps they left behind”. Mr Butler emphasised that “there is stiff competition in the shipping sector”, and that “carriers followed demand and did not create it”. Ms Teodoro recommended that ‘‘regulators should monitor such competition trends and transparency in the maritime supply chain closely to promote resilience”.
The need for infrastructural reform was unanimously agreed upon, noting hinterland congestion as an important contributor to the difficulties in the maritime supply chain. Mr Murphy commented that “instead of just consumer demand, the congestion in 2021 was exacerbated, as up to 15% of global liner capacity was stuck at bottlenecks. The reduction in demand has reduced congestion which is presently at 7.5% and could revert to pre-pandemic levels by spring 2023”. The importance of making governments aware of supply chain issues was emphasised by Mr Hookham: “if the sector is to make any arguments, now is the time to do so”.
In conclusion, Mr Roemer reminded participants that “the clock cannot be turned back but stakeholders and regulators must learn from mistakes of the past. No single stakeholder should be overconfident to impose plans that are not complementary with the overall system.”
Collaborating for decarbonisation
It was agreed that decarbonising the supply chain is an urgent priority for all stakeholders, constituting a key area for collaboration between the respective stakeholders. As highlighted by Mr Butler, ‘‘the industry is leading the way when it comes to implementation with shipping lines and energy companies investing in decarbonisation’’. The industry would benefit from an appropriate regulatory framework, governmental support, and advocacy for which stakeholders must come together to help the whole supply chain comply with Paris Agreement goals.
Shippers remain concerned about the cost of decarbonisation which will ultimately be borne by them. FIATA sought transparency in new decarbonisation initiatives, noting the need for forwarders to be able to provide their customers with choices as regards offsetting their emissions. It was emphasised that inclusivity is necessary, in particular for small and medium-sized enterprises (SMEs). FIATA emphasised that “SMEs should not be left behind, as they are the backbone of many developing economies. As they tend not to have access to longer-term contracts, they are more heavily impacted by shocks and uncertainty.”
Concluding the dialogue, decarbonisation was put firmly on the agenda as a theme for greater collaboration, whilst other areas of possible collaboration noted included sustainability, digitalisation and safety and security.
Jebel Ali Free Zone (Jafza) accounted for over 50 per cent of Dubai’s Polymers and Petrochemical trade, valued at more than AED 49 billion in 2021
Global economies are facing increased pressure from uncertainty in oil prices, capacity, and supply chain disruptions. The petrochemicals sector is not exempt from these global challenges. Despite this, Jebel Ali Free Zone’s (Jafza) petrochemical sector witnessed stability. One indication of this is the increase in export volumes in 2021, which grew 52 per cent year-on-year. Additionally, last year, the free zone alone accounted for over 50 per cent of Dubai’s Polymers and Petrochemicals trade, valued at more than AED 49 billion.
Enabling Seamless Trade
DP World, through its local and regional assets, multimodal connectivity, cost-effective supply chain solutions and digital trade platforms has supported petrochemical trade lanes and ecosystems worldwide. The company plays a crucial role in facilitating the growth of the regional and global petrochemicals sector through Jebel Ali.
The integrated logistics offerings, supported by connectivity across international petrochemical
trade lanes and the ecosystem at the Jebel Ali hub, give the industry the most attractive logistic
proposition. Additionally, its vast network of global liners has contributed to the success of the
UAE and the region.
The Jebel Ali Connectivity
DP World’s petrochemical hub, which spans the port and the free zone, handles over one-third of the UAE’s polymer and petrochemical trade through Jebel Ali Port. With storage being an essential factor in the industry, finding a suitable site with convenient connectivity for trade and transport, and a very high standard of safety due to the nature of the products is integral. Jebel Ali Port’s solutions meet all these requirements while ensuring reduced costs and time-efficient operations for customers.
Jebel Ali Port complements the traders’ ambitions with tank terminals and warehousing, specialised storage space for packed lubricants, fuels and industrial chemicals, ISO tanks storage and hazardous goods warehouses.
The port comprises tank terminals with 11 dedicated berths for liquid handling, spread over an area of 2 million square metres with over 1 million cubic metres of liquid bulk storage space. The Chemical berth is well equipped with a storage capacity of over 250,000 cubic meters to store various grades of chemicals.
Prominent industry players such as DOW, BASF, Total and Gulf Petrochem are now headquartered within Jafza and create the basis of a healthy ecosystem of almost 600 companies in the sector. Jafza’s strategic location is also ideal for serving demand in the Middle East and Africa. Its industrial facilities for processing and value-added services make it the perfect base for chemical and petrochemical traders serving growing markets in the Indian Subcontinent and the Middle East.
As a household name in the industry, Global GSA Group has never been so active. With a new office in Greece and having acquired three companies in Italy this year, the GSA is demonstrating how its extreme flexibility, extensive local expertise and highly engaged workforce are driving its success.
True to the company’s motto “Making the impossible possible!”, the Global GSA Group’s team distinguishes itself not only by its dedication and passion but also by its access to the right network locally. “We are currently present worldwide with a team of energetic, reliable and experienced professionals with the highest standard of expertise, which we have been perfecting since our beginnings. This constitutes a real strength and a substantial asset to our partner airlines’ business.” says Ismail Durmaz, Chief Executive Officer.
Founded in 1995, Global GSA Group was able to adapt to the industry’s constant evolutions, including digital transformation to become a forerunner in the world of GSAs. This agility enabled it to successfully support its clients in particularly difficult periods such as the Covid pandemic and beyond. By exceeding clients’ expectations during those troubled times, Global GSA Group proved it has what it takes to tackle any challenging situation.
Aytekin Saray, Chief Commercial Officer explains: “Although the last few years have been a testing time for airlines, we proved that we were a reliable partner. Thanks to our strong local ties, we managed to supply them with regular market information, enabling them to always be a step ahead and to adapt their strategy accordingly.”
Today, Global GSA Group boasts 74 offices in 46 countries, represents 62 airlines and ranks in the top 5 GSAs worldwide. Always seeking to conquer new territories, it is planning to further expand its presence worldwide, with a focus on the South America and Southeast Asia regions.
As Global GSA Group continues its rising curve in an increasingly tense climate, 2023 clearly promises to be the year it unleashes the true lion inside it, reinforcing its unique position on the market as the ideal committed partner with solid solutions.
The relationship between the two powerhouse companies began in January 2018 when they partnered to provide finished vehicle logistics services to Almajdouie Auto (MMC), the importer of Hyundai in Saudi Arabia.