Dubai, Asharq Al-Awsat—DHL Express Middle East and North Africa (MENA) CEO Nour Suliman emphasized that the world today is witnessing an e-commerce boom, and that the Middle East must take advantage of this.
In an exclusive interview with Asharq Al-Awsat, the DHL Express CEO spoke about the central role that the Middle East occupies in the international shipping industry, outlined his company’s plans for the future in the region, particularly Saudi Arabia, and highlighted the importance role played by logistical companies on the global economy.
DHL Express describes itself as the world’s leading logistics company, providing express deliveries worldwide, boasting of freight forwarding with planes, trucks, ships and trains.
This interview has been edited for length.
Asharq Al-Awsat: Bearing in mind the growing number of delivery companies in the Middle East, what’s your view of the current level of competitiveness in regional markets?
Nour Suliman: The Saudi market is one of the largest in the Middle East, and is central to the regional economy. A recent study conducted by Deutsche Post DHL concluded that Saudi Arabia and the Gulf states are now among the 20 most influential nations in the international economy. This has created a constant push to expand the region’s service industries, particularly logistics, which in turn has opened the door to new competition in the shipping industry. This creates new opportunities throughout a variety of disciplines, and benefits local markets by allowing some breathing room for new businesses, provided that the services rendered by new businesses satisfy the market’s demands.
However the shipping industry, along with increased competition, form a sort of double-edged sword: on the one hand, the influx of new businesses is a healthy indicator of economic growth, provided that new businesses achieve high standards of performance, but on the other, the shipping industry is not one in which poor performance is a localized phenomenon. An effective shipping industry is a vital part of a functioning economic system, and if new shipping companies cut corners or are generally negligent, everyone suffers: not just the shipping industry itself, but all the industries that it serves. As a company that has provided express shipping around the world for more than 40 years, we hold ourselves to the high standards of quality and innovation that are necessary to keep the economy running smoothly.
Q: Lately e-commerce firms have seen some increased competition as well. What role have express shipping companies such as DHL played in the growth of e-commerce, and what effect do the two industries have on each other?
Well, the world around us is changing much more quickly than it did in the past. For example, land-line telephones took 40 years to achieve an active user base of 10 million people, whereas instant messaging programs reached this landmark within six months of their inception. That’s e-commerce. It’s one of the primary movers of the global economy, and is expected to surpass a value of SAR 4 trillion (USD 1.06 trillion) this year. It grew at a rate of 20 percent last year, and is expected to grow even faster next year. Shipping companies are at the heart of this growth: they present innovative solutions which maximize time and cost-effectiveness. Economic success is contingent upon the cooperation of everyone involved in the process. This cooperation does not only benefit shipping companies, producers, and e-commerce merchants: it allows everyone, even competitors, to provide services more effectively and more profitably.
Q: What portion of the market does DHL represent within Saudi Arabia as well as the broader Middle East?
DHL has recently seen clear growth in multiple regions around the world. In Asia, the Middle East, Africa, and Eastern Europe during 2012, DHL controlled between 36 and 47 percent of the local markets, which saw just over SAR 30 billion (USD 8 billion) in express shipping over the course of the year. We are confident that these numbers have continued to grow throughout 2013.
Q: To what extent does the economy rely on logistical services and express shipping companies?
The clearest example of commercial dependency on express shipping services is e-commerce. Without the global reach of fast, around-the-clock shipping and massive sorting centers, e-commerce would not have the strong presence we see today. But this isn’t limited to internet retailers alone: The fast shipping provided by DHL Express is a fundamental factor in production lines for basically every industry. Almost no commercial or industrial activity can continue without effective shipping.
Q: What is your take on the situation on the ground in the Middle East and North Africa?
The world today is witnessing a major boom in bilateral trade in three main regions: South Asia and the Pacific, the Middle East, and Latin America. Shipping operations in these areas have seen notable success, while more traditional centers of commerce have become mired in recession. This is a shift we’ve anticipated for years, and one for which we’ve made serious preparations. Last year, we opened a vital large-scale sorting center in China and expanded our fleet of jumbo jets, which includes the Boeing 777.
Meanwhile, we continue to support development in the Middle East with many projects and border stations in Saudi Arabia, the Emirates, Egypt, and Morocco. The efficacy of these investments is evident in the honors bestowed upon DHL by several countries in the region: last year alone DHL received awards from Saudi Arabia, the UAE, Kuwait, and Morocco, and to top it off, DHL was named Asia’s favorite shipping company. This demonstrates that our leadership is not limited to the Middle East and North Africa, but extends across the world.
Q: What are the challenges facing DHL, particularly in countries suffering from political crises?
Naturally, DHL has been losing sleep over security and fuel in troubled areas of the Middle East. It is impossible for us to discharge our duties without first ensuring the safety of our crews on the ground, who cover a vast geographical area around the clock, not to mention securing shipments themselves. As for fuel, it is necessary and fundamental to everything we do, and without it we wouldn’t be able to move our trucks between cities, or make deliveries within cities. So we are constantly monitoring the situation in order to be able to secure our employees and our clients’ shipping. We have also set up contingency plans to provide fuel to our fleet of trucks and cars in the event of an emergency.
Q: What is your assessment of the caliber of logistical services in the Middle East?
Over the last few years the area has seen marked development in logistics services, specifically in Dubai, which has quickly become one of the world’s primary shipping stations. Manama has also seen continuous growth in this regard. But this is not enough. The focus should now shift to increasing investment in airports, shipping centers, and shipyards; projects which must happen in parallel with a review of current customs policy. That second point may seem odd, but it is an approach that has allowed the rest of the world to simultaneously facilitate trade, border control, and financial transactions. It is a combination that ensures the safe and orderly growth of business.
Q: How would you describe the role that logistical services is playing in the economic revival the region is currently undergoing?
We all know that the Middle East and North Africa are rich in natural resources such as oil and minerals, and this vital wealth contributes to economic mobility within the region and will continue to do so in the future. But geographic location is a form of wealth that should not be overlooked. The Middle East is at an intersection of commercial lay lines, and the area has become the linchpin of the global economic system, a position in which we should invest heavily.
We’ve already begun this process in Dubai, Riyadh, Manama, and Cairo due to the pivotal role these cities play in the region. But we still need to increase our support efforts until the Middle East occupies its true place as the center of global commerce and the key to accessing Asia, the Pacific, Europe, and Africa. The coming revival will undoubtedly be logistical in nature.
Q: For DHL, what is the significance of opening new sorting stations in Saudi Arabia?
We move shipments between more than 500 airports in more than 220 countries around the world. It’s impossible to estimate the flow of shipments to and from these countries, but they affect each other in a big way. A shipment from Brazil to Dubai, for instance, will influence customer satisfaction with our services on both ends of the transaction. When you consider that we process approximately 3,000 tons of shipments each month in Saudi Arabia alone, it is easy to see why we are so keen to pump funds into our infrastructure in the country.
Q: DHL has allocated funds to open two shipping stations in Dammam and Riyadh. What sort of benefits do these stations present to both Saudi Arabia and DHL?
These stations definitely add a lot to DHL’s operational capabilities in Saudi Arabia. They allow us to provide more services to our customers, greatly increase our reliability, exceed the expectations of our Saudi clients, and add a new strategic dimension to our express shipping services in the Kingdom. The country is primed for investment due to its unique geography, which is characterized by open space and shared borders with many countries. After years of depending on traditional facilities, the Saudi market has begun to utilize border stations in the heart of the largest cities in the country, including Riyadh, Dammam, and Jeddah. This opens new horizons for the region.
Q: What are DHL’s plans for the Middle East?
As far as Saudi Arabia is concerned, we announced recently that we were implementing the first phase of our border station in King Fahd International Airport in Dammam, which will accompany the border station already in place in King Khalid International Airport in Riyadh. We are also actively engaged in development programs in every city in the country until 2015. As for the region at large, we have important projects in the Emirates, Oman, Jordan, and Morocco, in addition to our project based out of the Cargo Village at Cairo International Airport, which we will implement soon.