Dirk van Doorn, commercial manager for DHL's Express Freight & Logistics in the UAE, reveals his views on the industry.
Why is air cargo currently experiencing such a boom in the Middle East marketplace?
The primary reason for the air cargo boom is that oil prices are high and a number of Gulf countries have decided to invest the money in upgrading infrastructure within the oil industry segment. A good example would be refi neries, as many parts are flown in with a very expensive down time. In addition, owing to the oil boom, governments have decided to invest in infrastructure such as roads and housing. All of these projects have an element of airfreight involved.
Supplying Iraq and Afghanistan has also become a key issue with some serious limitations operating from Asia and the European Union directly into Iraq. At the moment, materials are transhipped via Bahrain and Dubai into Iraq, which is leading to increased volumes from these locations.
Finally, with airlines such as Emirates expanding into Africa, Dubai has also become a vital transit point for the redistribution of airfreight into Africa and GCC.
The sea-air business has also grown significantly with materials being shipped into Jebel Ali and then flown off to their final destinations.
In summary, the main drivers are high oil prices, demand for goods in the Gulf and transhipments.
What are some of the problems facing air cargo companies within the Middle East?
I think the main problem involves capacity issues on certain routes, such as Dubai-Africa. In addition, the fuel surcharge continues to eat away at airline profi ts, which is making airfreight increasingly expensive.
What areas should cargo companies focus on?
Cargo companies should focus on customer service, cost management and consistent reliability. Companies need to think ahead and should know how to invest in the right aircraft and equipment.
What changes or influences are occurring at the moment?
The most noticeable changes that have occurred in the airfreight industry include the very high fuel surcharge with no real end in sight. In addition, increased security awareness has also been introduced.
How do you see the future of air cargo within the Middle East?
The future is bright, provided countries in the Gulf and surrounding areas continue on the spending spree that we have recently witnessed. As long as some of the big contracting companies keep their project completion deadlines unfulfi lled, there will always be a continued need for airfreight.
Any other comments or advice on air cargo in the region?
It is interesting to note how some airlines and cargo companies are moving large pieces of freight using a combination of air and road in the Gulf. The point being that you can fly freight into Dubai and then truck it into Bahrain or Doha and still achieve a reasonable transit time.
Dubai will probably catalyse the entire Middle Eastern growth in cargo movement. The investment in the 12 million tonne annual cargo through-put capability of the Dubai World Central development at Jebel Ali is indicative of how Dubai aims to facilitate growth in cargo and passenger traffic in the next few years. By the end of the year, the Cargo Mega Terminal, with 1.2 million tonnes of capacity, will boost capacity and efficiency at the hub. With these developments, Dubai will become a leading worldwide hub.
This will also allow unconstrained growth of trade and provide the critical logistical activities for business, as well as manufacturing and production companies, to go unconstrained and become very competitive in the marketplace.
Changes in the region's cargo industry will depend on unpredictable factors, such as fuel prices and political stability. Saying that, Dubai's position in the region allows us to make projections with strong confidence.