Service with a smile

Micco has built its logistics expertise and expanded the number of services being offered to customers. By entering the 3PL sector, it hopes to compete with the industry bigwigs.

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By  Robeel Haq Published  May 29, 2006

|~|micco2.jpg|~|Vincent Basmadjian, business development manager, Micco|~|The demand for freight forwarding services in Abu Dhabi rocketed during the late 1970s, following a period of economical advancement in the emirate. The logistics industry flourished as international companies entered the region with grand ambitions for various warehousing and distribution facilities. In the midst of the boom, Micco was established in 1978 as a freight-forwarding specialist, transporting items throughout the world and specialising at the time in the oil and gas industry. “The company initially focused on freight forwarding services, basically sending and receiving customer’s goods using the most efficient methods possible to suit their individual requirements,” says Vincent Basmadjian, business development manager, Micco. More recently, the company has built on its logistics expertise and expanded the number of services being offered to customers. By entering the 3PL sector, it hopes to compete with some of the leading players in the industry and carve a unique niche for itself. “We are now a fully integrated logistics service provider offering end-to-end supply chain management,” explains Basmadjian. “Instead of focusing on individual aspects of the supply chain, we will ideally cover the customer’s entire logistics operations.” Micco is already managing the supply chain of companies from a wide range of different industries in the Middle East. “We have not targeted any particular industry until now,” says Basmadjian. “Being in a heavy growth phase at the moment, we have taken most customers wherever we can accommodate them. We have a big mix of customers at the moment, including companies dealing with automotive parts and electronics.” As the Middle East’s logistics industry becomes increasingly competitive, Micco has understood the need for companies to differentiate their services from competitors. Customers are constantly searching for innovative service providers that are capable of thinking outside the box. “Many logistics companies are focusing on price differentiation, offering the lowest prices possible to attract customers,” says Basmadjian. “Competing on price alone is a dangerous strategy in the Middle East. By undercutting the competition, these companies eventually undermine their profit levels.” Although Micco is determined to offer competitive prices to customers, the company is focusing primarily on offering a high quality of service. “We want to offer a consultation service to customers before providing any services. This way we identify their requirements before proposing a logistics solution.” Instead of focusing on individual links in the supply chain, Micco is hoping to manage the entire logistics operations of customers. “Although we welcome companies wanting to transport containers from one point to another, the perfect client is a company looking for complete supply chain management,” says Basmadjian. Micco currently has facilities in Abu Dhabi, Dubai Airport and Qatar. To compliment its growth as a business, the company is constructing a flagship facility in Jebel Ali. During the first phase of development, which was completed 18 months ago, Micco built office and warehousing space in Jebel Ali measuring 6000m². The second phase was completed last month and includes a 10,000m² expansion of the initial warehouse. The expansion is full covered and racked, with 60% of space being temperature controlled and 40% being ambient. Opposite this section is a large Dutch barn, which consists of 3000m² of bulk storage without racking systems. “The design of this facility provides a strong indication about Micco’s target market,” says Basmadjian. “The complete facility now provides a total of 55,000 racked pallet positions. A large amount of space is temperature controlled, which should appeal to specialised companies from the pharmaceutical industry, cosmetics industry and food manufacturers, as well as companies dealing in high-tech products.” The Dutch barn is proving popular amongst clients with two of Micco’s biggest customers already utilising the space available. “The first customer deals with high-value, fast moving airfreight shipments,” explains Basmadjian. “The second customer specialises in seafreight. Both are completely different to each other, but neither require temperature control, which makes the Dutch barn ideal.” The Jebel Ali facility is equipped with a variety of forklift trucks, supplied by Caterpillar and Famco. Micco mainly uses reach trucks and very narrow aisle (VNA) forklifts. Famco also provided the racking system in the first phase of development, and both Famco and Span provided racking during the second phase. The facility is equipped with a range of warehouse technology applications. Micco provides customers with online tracking facilities, which allows them to keep updated with the status of shipments, from the time a purchase order is issued until the order is fulfilled. Features on the system include multiple search criteria, the display of detailed shipment information and printer friendly results. In addition, the company has implemented the EXceed warehouse management system (WMS), which helps to track and locate the materials stored in the Jebel Ali warehouse. The technology uses radio frequencies to update the status of the barcoded materials, telling the warehouse manager exactly what space is occupied and available. With the Jebel Ali development complete, Micco is now planning its future moves. “Future planning is very important in the logistics industry,” says Basmadjian. “We have observed a boom-bust cycle in the Middle East. When things are good, they are very good. The amount of storage space available is limited during these periods and rates started increasing. Logistics companies then start building new warehousing facilities, which are constructed after around nine months to a year. By this time, the industry might have reached another cycle, where supply is outweighing demand and prices are being reduced.” “It is difficult to forecast these things because the Middle East economy is normally a little bit unpredictable. Overall though, we certainly have a very positive outlook on the logistics industry in the region,” he adds. Despite the uncertainty, Micco has already acquired space in Jebel Ali South, although the company is holding onto construction plans. “In the short term, we will concentrate on consolidation. We want to continue establishing ourselves as a quality brand, which we have done very well in the short time we have been around, partly due to our location and imposing size of our facility,” adds Basmadjian. “The next step is establishing ourselves as a top quality brand and reaching high levels in terms of quality,” he concludes. “We have not begun plans for construction at Jebel Ali South, but when the time comes, we will certainly have a presence there, as part of the longer term vision with Logistics City.” ||**||

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