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Inside SCLG
Moving the
logistics industry
forward
JOHN HALPIN
The author
DESPITE the continuing slowdown in
economic activity worldwide, we at the
Supply Chain and Logistics Group (SCLG)
are still bullish about our industry
and the vital role it plays in the global
economy. And being in Dubai has a lot
to do about this optimism, as the city
is a regional logistics hub. No wonder
the government has called for greater
participation by the industry’s private
sector in economic growth. The Dubai
Department of Economic Development
has created a series of forums for the
public and the private sectors to meet
and discuss the various challenges and
opportunities in the industry.
We have various concerns on how
to take advantage of the emerging
opportunities and how to tackle the
various challenges we face. Companies
engaged in the supply chain and logistics
business, for instance, face the daily
challenge of how to transport large
number of goods from port to port,
including which routes to take, the
loading capacity of support services, such
as trucks and vans, and the extent to
which they can be filled.
The credit crisis also remains a
problem to the industry, as banks are
still keeping tight reins on letters of
credit. We are well aware, however, that
we shouldn’t dwell so much on such
tight lending policies and, instead, move
forward, by looking for other sources of
financing. A distinguished speaker in a
recent SCLG-organised forum put it aptly
when he emphasised that companies
should prioritise partnerships and
streamline their operations to help ride
out the financial turmoil. Integrating our
systems to trim costs will undoubtedly
give us a good source of internal
financing.
The sea piracy off the coast of Somalia
is another issue that continues to dog our
industry. The pirates have become more
brazen in their criminal acts, engaging in
kidnap-for-ransom and earning millions
of dollars in ransom for hijacked ships.
This is a serious concern for companies
providing supply chain and logistics
services, as taking a safer but longer
route means spending more for fuel and
delayed shipping schedules.
Recently, the Somali pirates earned
$3.2 million when they released a
Ukrainian ship laden with Soviet-era
tanks and other heavy weapons. They
counted the money, dropped from
air through a parachute, and left in
motorboats. All this happened within
sight of the US Navy, who couldn’t arrest
the pirates for fear of endangering
the lives of the other seamen being
held hostage in separate areas. These
activities affect international commerce
and require the full support of the
international security community in
addressing the safe passage of vessels
around the globe.
There are other issues affecting our
industry that are much closer to home,
so we at the SCLG have been conducting
a series of forums to listen to the
concerns of our members and help them
find ways to deal with the current crisis.
We have some of the industry’s most
innovative and determined leaders, who
are much needed during challenging
times. By working closely together, we
will continue to provide solutions to
various challenges, and position the
regional industry as the benchmark
by which the global supply-chain
community measures itself.
John Halpin is general manager of Hy-Tech
Logistics Recruitment Services.
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The supply chain and logistics link March 2009