DHL Supply Chain says growing real estate opportunity in new GCC Economic zones
Companies in the Gulf region and globally are re-thinking their go-to-market strategies and, as a result, making different choices about how they locate, design and operate their distribution networks. This has created a new landscape for supply chain real estate, according to a report published by DHL, the world’s leading logistics company. The report analyses the new landscape of supply chain real estate. Global and regional supply chains are evolving, as they adapt to the new realities of commerce and competition.
The report states that while a healthier global economy fuels the demand for supply chain real estate, it is not the only driver. Four other forces are at work, and they are having a transformational effect on companies’ distribution centre (DC) networks.
In this landscape of change, the job of managing network real estate is a lot more complex.
David Christmas, Chief Executive Officer, DHL Supply Chain, Middle East, Russia and Turkey commented:
“New infrastructure projects in the region like the King Abdullah Economic City (KAEC) in the Kingdom of Saudi Arabia, or the Port of Duqm in the Sultanate of Oman, can provide attractive opportunities for 3PLs to become anchor tenants and address a growing customer expectation of being “globally local” in capability. For Example, BahwanExel, DHL Supply Chain’s joint venture in Oman has taken land in Duqm ahead of the development curve, while DHL Express has recently opened a new hub in Jeddah.
“Our latest research confirms the major change taking place in the way companies deploy real estate to support their distribution networks and operations. This is particularly the case in the Gulf region – which is now embracing e-commerce and technology innovation.
“For example, the use of smart technology that enables faster and more efficient delivery of services, and the moving away from long distant supply chains to “globally local’ ones, closer to customer demand. This new reality of commerce in the Gulf is re-shaping supply chain management and people’s expectations in the way goods are delivered and services, which is very exciting for the region “
Lisa Harrington, President of the lharrington group LLC, and author of the DHL report added:
“The face of global supply chain networks is changing. Gone are the days of operating a static real estate portfolio and tweaking it every five to seven years. Business is too dynamic and the stakes are too high.
“The fact is, the way companies manage their supply chain real estate portfolios has morphed from a tactical/operational concern to a strategic differentiator. Supply chains that operate more nimbly and at lower cost don’t just save money. They drive growth.”
As the companies interviewed for this research indicate, partnering with an integrated 3PL, one that is expert in both operations management and real estate, can provide a seamless and powerful solution.
The New Landscape of Supply Chain Real Estate is a report by Lisa Harrington, President of the lharrington group LLC, prepared in collaboration with DHL. Harrington is also Senior Research Fellow at the Robert H. Smith School of Business, University of Maryland.