Keeping pace with change
It is no secret that Dubai is booming. Established logistics firms launch new distribution points in the emirate every month and new companies spring up just as often.
With this comes the increasing pressure to offer a better service than competitors.
But companies are finding more and more that their best efforts to offer punctual, on the minute deliveries are being hamstrung by sprawling congestion on the major arterial routes.
It is clear that this is also affecting the local economy. A report published last month suggested that the UAE economy was suffering to the tune of US$1.36 billion a year because of traffic problems.
A separate study last year found that Dubai was the most congested city in the Middle East. All of this poses challenges for companies looking to tap the promising regional market effectively. Those that lack the muscle to battle through these challenges simply look elsewhere.
The Dubai Roads and Transport Authority (RTA) is steadily laying down new roads to cope with the increasing volumes of traffic and the metro system and revamped creek taxis may offer an incentive to many commuters to leave their cars at home.
It is clear that a combination of these will be required to overcome the endemic traffic problems. In the meantime, however, companies are developing innovative solutions to cope. DHL, for instance, has switched from cars to motorbikes in order that drivers may zip in and out of traffic. TNT is considering using the metro system and speed boats on the creek to deliver goods.
Another major solution is simply increased journey planning. If companies seek alternative routes and where possible choose delivery times that do not fall within peak periods this will also reduce congestion. As well as causing deliveries to be late, congestion also carries with it the additional issue of fuel efficiency.
Idling in traffic queues for hours is not only a waste of time; it is a waste of gas. Last month we discussed how several firms are utilising hybrid vehicles in their fleet. Hybrids are most cost-effective when they are used in situations where traffic or an urban environment forces vehicles to frequently stop and start.
However, as other projects across the region approach completion, it is conceivable that many firms will begin looking at alternatives to Dubai as a place to base their facilities.
Projects in Abu Dhabi and Bahrain are already making both destinations an attractive proposition, so the onus is on Dubai authorities to ensure that the emirate remains the most attractive location in the Middle East in which to base the logistics sector.
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Martin Croucher is the assistant editor of Logistics Middle East.