INTERVIEW: Richard Bell, RHS Logistics
It has taken decades for companies such as Aramex, Gulf Agency Company (GAC) and Agility to establish their brands in the Middle East. And while it’s difficult to imagine the logistics industry without these regional powerhouses, each of them are relative newcomers in comparison to the Rais Hassan Saadi (RHS) Group, which was launched back in 1910 with a primary focus on shipping and freight forwarding.
Over the past 100 years, the company has successfully ventured into numerous other segments, from travel and tourism to real estate and civil contracting, but logistics has remained at the heart of its operations. In particular, the success of the group’s 3PL division, RHS Logistics, has truly cemented its status as a market leader, with storage facilities across the United Arab Emirates, including a trio of flagship warehouses in Jebel Ali Free Zone.
“I’m not sure how many companies have reached the 100-year breakthrough in Dubai, but we were amongst the first organisations to be legally established in the emirate, so there’s a great sense of achievement in the group,” states Richard Bell, general manager of RHS Logistics. “Everyone is really proud to celebrate this milestone anniversary.”
With such vast experience in the local market, it’s unsurprising that RHS Logistics has experienced a continued cycle of highs and lows within the industry. However, the recent impact of a global recession has been incomparable to past events, according to Bell, although a rebound is currently underway. “There have been little dips along the way, but nothing as significant as the recent downturn,” he explains. “It had quite a significant impact on our operations, albeit for a short period of time. We implemented a diversification strategy that allowed the company to rebound soon afterwards.”
RHS Logistics has traditionally been involved in the high-tech sector, with well-known customers such as Dell, HP and Toshiba. More recently, as part of this diversification programme, it has successfully forayed into the retail and fast moving consumer goods (FMCG) markets.
“These are high priority industries and the commonality is offering a value-added proposition to all customers,” states Bell. “This comes from various avenues, such as promotional packaging, labeling and bills of materials, in additional to a sophisticated storage and retrieval system with good inventory management, barcode technology and radio frequency solutions. These are common requirements from customers in today’s market.”
The approach has received a warm response from the market. with new business wins from Asus Technologies and Showtime in the technology sector, joined by Go Sport and Sacoor Brothers in the retail fold. In addition, FMCG heavyweight Unilever awarded a major contract to RHS Logistics this year. Reflecting on activities over the past 12 months, Bell underlines the importance of the Unilever appointment. “In particular, securing this account will remain a major highlight for this year, as a number of industry players responded to the tender. The entire process was very thorough and complex, but it was based on finding a partner with dynamic capability and functionality, which matched our core strengths.”
A tender for the contract was issued at the beginning of this year, with a pre-defined lead time for applicants to understand Unilever’s requirements and develop a suitable proposal.
“There was a lot of competition for this contract and its clear that Unilever will demand the very highest standards of service and test our capabilities. But the account has raised our exposure in the consumer sector and will help RHS Logistics to keep expanding our offer and grow our business,” says Bell.
Under the contract, RHS Logistics will provide storage and handling services for a maximum of 20,000CBM of products from the Unilever Home and Personal Care range, as well as food products in differing temperature regimes. In addition, it is able to bid on every value-added process as they become available. “We are very fortunate to land a contract of this size and scale. What makes Unilever unique for RHS Logistics is the speed of their operations. The turnaround is very fast, with goods transported to the Jebel Ali warehouse, reworked and quickly moved out again. Volumes will fluctuate depending on customer demand, so we need to ensure that our workforce and facility is equipped to deal with those peaks.”
With growing competition for such contracts, a number of rival companies have started to undersell their warehouse space in locations around the Middle East – a trend that Bell is very much against. “The logistics industry needs to watch the prices we are putting into the market and we shouldn’t undersell ourselves. Obviously you need to be price competitive, but be confident in your offer,” he warns.
“The range of operators in Jebel Ali Free Zone, for example, is excellent. I honestly believe that customers are very fortunate in the wide range of services that are available with first class logistics service providers. We should all remind ourselves of that and be confident in our facilities and services, and price them accordingly. At the end of the day, although clients will naturally pursue reduced tariff, they will actually benefit more from the value proposition, which needs to be communicated to them. This is the route that I would recommend for our industry.”
Following a string of recent contract wins, RHS Logistics has announced plans to invest in the development of technology systems and personnel, which is actually stipulated in customer contracts. “As part of our agreement with clients, it’s clearly stated that over the course of their contract, we will invest a certain amount in information systems, in developing our personnel, and other such factors. Principles have been extremely responsive to that commitment,” states Bell. “Information technology is a continuous development process and we have implemented a lot of software outside our main WMS, which is individually
tailored to our client requirements. Some of this has been developed in-house and others have been purchased.”
Infrastructure developments are also on the horizon in the United Arab Emirates, especially with continued progress at Dubai Logistics City and expansion of Jebel Ali Free Zone. “Looking ahead, we will look to complement the infrastructure developments in Dubai. For example, we will embrace opportunities at the Dubai World Central project, with the recent opening of Al Maktoum International Airport and Dubai Logistics City. That is definitely on our roadmap,” states Bell.
“We’re also looking at the latest phase of our development at Jebel Ali Free Zone. RHS Logistics has three buildings in the free zone and negotiations have commenced for land to accommodate a fourth warehouse. I am looking to take 50,000m2 and build around 30,000m2, ideally breaking ground in six months. A recovery has been cautiously noticed in volumes, especially in the high tech sector, and we are continuously bidding for new contracts, so building capacity is needed to support the growth.”
There has long been talk about RHS Logistics taking its successful business model to other parts of the world. And while this has not materialised to date, Bell indicates there is some truth to the trade talk. “I believe we are regional operators and this is our Middle East region. If we were to expand internationally, I would see RHS Logistics entering the Far East and Europe, rather than secondary markets in the GCC, especially when we have a firm presence in the UAE, which is already well accepted as the primary hub for Middle East logistics.”