King of the road

Road haulage is on the increase in the Gulf, and with improvements in border controls and customs procedures, as well as the region’s road infrastructure, it is now competing for a lion’s share of the logistics market

  • E-Mail
By  Laura Barnes Published  December 6, 2004

|~||~||~|The majority of cargo in the GCC has traditionally moved by sea or air. However, logistics companies are now increasingly turning to road haulage as a way of transporting goods across the Gulf, because of the improved road network in the region, and the simplified border control procedures. Logistics companies across the Middle East see road haulage as a quick and effective way of transporting goods from warehouse to client with minimal handling. It is quicker than sea but cheaper than airfreight, and so it is cost effective, convenient and flexible mode of transport. “The truck goes straight from supplier warehouse to customer warehouse, instead of having to go through the stages from warehouse to port… to loading and arrival at the other end… through the next port and then customs clearance. So it streamlines the process and the number of partners used, which in the long term benefits the person paying for the delivery,” says Peter Orange, regional manager, logistics, Gulf Agency Company (GAC). GAC, which is based at in the Jebel Ali Free Zone in Dubai, has a mixed fleet of new and used trucks ranging from one ton pick-ups for the UAE, to 45ft high cubed trailers going to Saudi Arabia and Kuwait. The majority of its cargo is household goods and fast moving consumables, which require a fast and cost effective service. GAC is predicting strong growth in its trucking operations, and other logistics companies share this view: “The road system is semi-developed, in the future there will be opportunities to further develop the trucking system, specifically by having existing fleet operators and new fleet operators developing their fleet and going the extra mile to give good service in the region,” comments Ali Mikail, director of freight & transport, PWC logistics. Companies looking to transport cargo in the Gulf by road once faced huge difficulties. The infrastructure was not developed and there was no clear route from country to country. However, road haulage is now becoming a much more viable option, as governments invest in improving their roads and highways and the optimistic outlook reflects the changes in the road system. ||**|||~||~||~|In the UAE, for instance, the road network in Dubai is seeing a major upgrade to accommodate the rapidly growing population and commerce, as part of a five-year redevelopment programme. Likewise in Abu Dhabi, an increase in traffic has lead to a number of roads being constructed to improve access between Mussafa and Mohd Bin Zayed City, with almost 80 km of new highways being built. Saudi Arabia has also invested hugely in its road network. “The road infrastructure throughout the GCC has improved immensely over the years, and roads in Saudi Arabia are now excellent,” comments Orange. “Some of the roads are so fantastic they are like runways, stretching for thousands of kilometres.” “The transport network is now fairly well developed across the GCC, especially in Saudi Arabia where there are large distances between towns, so they have to be well connected,” agrees Charbel Abou-Jaoude, managing director of logistics operations, PWC logistics. However, no matter how good the roads are, they are useless for international trade unless supported by quick and efficient custom procedures. Traditionally, these procedures have been fairly antiquated in the region, and not consistently applied across the board, leading to confusion and uncertainty about what to expect. Visa requirements, for instance, would change arbitrarily, and there can still be significant differences between different border points. All of this of confustion meant that clients with time sensitive requirements would often look for alternative modes of transport to avoid the potential hassles and delays that could occur at road border points. Despite some improvements these problems are still on going in some parts of the region. “A recent problem we had was with the Jordanian border control. A shipment was heading out of Syria and into Kuwait and the customs system that Jordan uses went down for two days. It caused a huge backlog at the borders and resulted in a massive delay with the shipment,” comments Abou-Jaoude. The GCC customs union has eased some of the difficulties within the Gulf, allowing duty to be paid at one point and therefore free movement of goods throughout the rest of the GCC. This has simplified much trans-border shipping, along with better regulations for handling consolidated consignments from different shippers. “We are keen on how things have progressed so far, we are able to send not just full trailer loads going from warehouse to warehouse but also part loads as well, with multiple shippers. This is much easier to do now than it was a few years ago,” comments Orange. Others agree that the market is booming but there is still room for improvement, so the road haulage industry should not become complacent. “In the three years’ I have been here, I have noticed a difference, as you travel around the GCC, they are becoming business-oriented and they want your business,” agrees Steve Barrett, operations manager, TNT. The improvements in procedures is already seeing more cargo within the Gulf moving by road rather than sea or air. “There has been a drop in the amount of cargo being flown from Bahrain into Saudi Arabia, for instance, as it is now so much more easier to use road haulage instead,” admits Hussein Zaki vice president, Saudia Cargo. “We are carrying much less cargo from Bahrain nowadays, as more of it is going by truck instead,” he adds. To further this move towards road, governments are also investing in IT systems that will spend up clearance of goods coming into the country, particularly by road, PWC Logistics, for instance, is putting in place a system to assist in customs declaration in Kuwait. It has been asked by Kuwaiti authorities to help modernise its customs and borders procedure by providing information by operating in the ports of Kuwait. The result is to provide a system and infrastructure for the customs officials to use in order to streamline the customs process. “We hope that similar companies will follow in our footstep and help out in other areas,” adds Abou-Jaoude Hopefully this will further help to develop the road haulage market.” LME ||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code