REPORT: UAE cold chain logistics

The Middle East’s cold chain requirements continue to evolve, presenting new challenges and opportunities for LSPs in this sector.
The Middle East’s cold chain requirements continue to evolve, presenting new challenges and opportunities for LSPs in this sector.
The Middle East’s cold chain requirements continue to evolve, presenting new challenges and opportunities for LSPs in this sector.


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RSA launched its new cold chain facility in Dubai South in May, with Abhishek Ajay Shah, co-founder and managing director of RSA Logistics telling Logistics Middle East that they expect significant growth in the UAE’s food and beverage logistics sector.

“With one of the world’s fastest growing populations, mega events like Dubai Expo 2020 on the horizon, and 80% reliance on imported food, RSA Cold Chain is opening for business in a region that is in urgent need of more professional cold chain management facilities,” says Shah.

According to a report ‘Cold Chain: Global Market Intelligence (2011-2020)’ by Orbis Research, the global cold chain market is expected to grow at 7% CAGR from 2016 to 2020, with the greatest increase in demand coming from the Middle East, as well as the USA, Brazil, France and China.

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The new facility from RSA Cold Chain will eventually house 21,000 pallets, with phase one offering an initial capacity of 10,800 pallets, coupled with sophisticated, end-to-end 3PL services for packaged food, fresh fruit and vegetables, dairy products and frozen food. The warehouse comprises eight independent chambers, with a unique ammonia-based chilling system allowing each chamber to accommodate temperatures as low as -25 degrees.

The site for the new facility is strategically located just outside the bonded zone in Dubai South, maximising ease of access and minimising delays in the movement of food products. RSA Cold Chain will also provide temperature-controlled transportation, providing an end-to-end solution designed to meet the most stringent requirements for food storage and transportation.

“RSA Cold Chain fills an important gap in our customer service offerings,” adds Shah. “The cold chain sector is still in its infancy in the Middle East and we believe we are in the right place at the right time. We will now be able to offer a scalable and fast growing solution to quality-focused food companies in the region.”

As one of the first companies to start operations, RSA has been a critical partner in leveraging Dubai South’s integrated multimodal logistics platform. Thanks to the company’s unparalleled speed, connectivity and efficiency of operations, RSA can transfer goods from sea to air in only a matter of hours, according to Shah, who said Dubai South was an up-and-coming hub for cold chain operations in the country.

“We are excited to welcome RSA Logistics’ latest venture, RSA Cold Chain, as part of our Dubai South community,” said Khalifa Al Zaffin, executive chairman of Dubai Aviation City Corporation and Dubai South, at the launch ceremony. “RSA Logistics and Dubai South have shared a warm association since the inception of the free zone. We have enjoyed watching the company break frontiers with its expansion projects and look forward to seeing it grow more alongside the development of this dynamic zone.”

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Kuehne + Nagel is also expanding its cold chain offering, having recently launched the KN FreshChain solution, which Frederik Reifegerste, senior vice president sales & marketing, Middle East and Africa at Kuehne + Nagel, says is essential given the unique nature of the MENA region’s cold chain market. “The GCC is a very heterogeneous region. Kuehne + Nagel can currently identify countries with infrastructure that fully complies with GXP standards, while others are in the process of improving. In order to reduce the risk of temperature excursions, in particular cross-dock and temporary storage facilities, the entire cold chain must be unbroken and KN FreshChain is one of the ways to ensure this.”

The temperature-controlled handling, transport and warehousing service for perishables uses a range of third party provided active and semi-active devices to measure all relevant physical parameters of any enabled shipment in transit. “Due to the seasonal weather conditions, moving cold chain commodities within the GCC always bears a higher risk than in regions with a more moderate climate,” Reifegerste adds. “The implementation of harmonised electronic information exchange connecting origin and destination country will simplify the transit and cut lead times significantly.”

“According to a study by the United Nations, one third of perishables is lost or wasted globally – this equals 1.3 billion tonnes per year,” adds Edwin Kalischnig, secretary-general of the global non-profit Cool Chain Association. “Our health, as well as billions of dollars is at risk, as perishables move through the global chain, so the stakes are high.”

Although experts like Kalschnig have been impressed with the increasing regional awareness of cold chain logistics, it clear that more needs to be done to enforce consistent quality in the Middle East. “Several countries here have done a lot of work in establishing regulation of cold chain management and execution, yet there is still a long way to go to achieve world class standards,” agrees André Verdier, CEO of Dubai-based consultancy Innova Supply Chain. “Establishing regulations is only the first step in the drive towards safe cold chain practices - maintaining consistent quality standards relies upon the enforcement, auditing and inspection of the said practices by government officials and approved institutions.” Keeping up this pressure for participants along the cold chain is imperative, as Verdier finds it’s often the ‘last leg’ of the cold chain that requires the greatest attention.

It is for this reason that Kevin Hill, sales manager for the Middle East at Agility, says the company tries to control the entire supply chain process for its regional clients. Agility’s cold chain solutions have an end-to-end capability so it manages the supply chain and value across the entire process. We move reefer containers and chilled containers into the region through Jebel Ali Port so it’s an integrated part of the rest of our operations, then it’s a case of customs clearance and documentation,” says Hill. “We deal a lot with the municipality in terms of making sure the products are approved and the process of importing food goods is necessarily highly regulated and there is a detailed process that needs to be followed so we handle that for our clients.”

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Ramadan is the most challenging month for cold chain operations. “Ramadan is a significant challenge for us because you have a sudden spike in demand and reduced working hours for staff,” he says. “So we have to think carefully about planning and meeting that peak in demand. We manage that by working very closely with clients so that we know exactly what is needed and when and we also move our people away from some of the quieter operations and into the cold chain. It’s a question of working with clients to understand their priorities and knowing their inbound and outbound requirements, as well as what they need this year that’s different to last year. We have weekly meetings to ensure that these issues are sorted out ahead of time.”

 “Most of cold chain product goes through the DIP warehouse, where we have frozen chambers for Al Aslami, Carrefour, Armada who do Hershes chocolate,” he adds. “On the inbound all the expiry dates are recorded by our WMS system as well as the country of origin. This enables us to help our clients with their inventory, so that the first to expire goods are the first out.”