Dubai Logistics City

A Quantum Leap in Logistics

1- What is the Dubai Logistics City project and what reasons have
led to its development?

Dubai Logistics City (DLC) is the world's first truly integrated logistics
platform with all transport modes, logistics and value added services,
including light manufacturing and assembly, in a single customs bonded and
Free Zone environment. DLC is adjacent to what will eventually be the
world's largest airport, the DWC-Al Maktoum International Airport.

The reasons which have led to the development of DLC is that Dubai as a
city is already the regional centre for re-export, retail, leisure, aviation, IT
and banking, it has more than 60% of the entire Middle East's imports
transiting its borders.

Also, the logistics service providers face significant operational constraints

in cargo handling.

Another reason is that there is no, or only limited, capability to meet the
growing demand for value-added services in logistics.

Additionally, Dubai Int’l Airport was expected to reach capacity in the near
future and would not be an optimal logistics solution.

Also, with a logistics market growing in excess of 20% annually, Dubai is

now driving even further growth through the creation of DLC. This unique
platform supports the emirate's market leading position as a logistics hub for
the wider Middle East and beyond - a market of more than two billion
potential customers from around the globe.
2- Which factors should be considered when making the decision
whether to set up a branch for Schmidt & Partner Logistics
Solutions Inc. in Dubai or not?

 Total airside cargo volume.

 Total cargo capacity.
 Landside volumes.
 Airfreight tonnage.

3- What are the advantages and disadvantages of establishing a

branch at Dubai Logistics City?

Advantages:

 The facilities in the DLC are considered to be the best in the region,
because they are very flexible and enable a fast handling of goods.
 The situation for the logistics activities seemed to be satisfactory.
 Concerning both the airside and landside, there are no constraints for
growth in volume because they have accounted for it in their long-term
planning.
 DLC will be constructed in the desert. For this reason, vast expansion
possibilities are available even though space in closer proximity to the
city is limited.
 The location in Jebel Ali was chosen to be best for Dubai Logistics City
because of its direct proximity to the Jebel All Port. This will enable
companies to benefit from perfect tri-modality within a single customs
bonded zone.
 It will be very easy to change freight from air, sea or land transportation
of goods arriving at Dubai Logistics City could easily be transported to
the neighboring countries, as well as to further locations.
Disadvantages:

 Qualified manpower are difficult to find.

 The implementation of new technologies or improved security systems
are challenges in the future of DLC.
 Another critical aspect which had to be considered was that the amount
of space that is directly on the border of the airport is limited. Therefore,
the infrastructure has to be very well structured to make efficient
transporting and easy handling of the goods possible.
 The free zone will be built in modules as a result of these challenges.
This development will depend on the demand for spaces.
 Besides Dubai Logistics City, there will also be offices, research and
development buildings, and residential areas among other things which
require more attention.

4- What are possible opportunities and risks that companies settling

in Dubai and the Dubai Logistics City itself might have to face in
the future?

Principally, the target companies for the Dubai Logistics City (DLC) project
are logistics service providers and manufacturers with high transport
volumes. Companies cannot buy, only rent land long-term at DLC if they
operate in the logistics sector.

Especially for tri-modal logistics service providers, Dubai Logistics City of-
fers a range of opportunities. Tri-modal logistics service providers use three
different ways of transportation: air, sea and land transportation. Potential
industries that could primarily take advantage of Dubai Logistics City are
consumer electronics, pharmaceutical products, high-tech products, spare
parts and products which make use of value-added services within the
supply chain.
5- What advice should Peter give to his boss? Should Schmidt &
Partner Logistics Solutions Inc. establish a new branch at Dubai
Logistics City?

Any company thinking about entering a new project or expanding its

operations somehow will first think if this new approach is useful to its
customers and major client. This is what Peter did; he analyzed Schmidt &
Partner Logistics Solutions Inc.’s most valuable clients to see whether they
are going to get benefited or not and consequently, give benefit to Schmidt
& Partner Logistics Solutions Inc.

One of the important clients is an international clothing company. Its

production sites are primarily in East Asia and India. They sell their products
worldwide but the main market is Central and Western Europe. The
company had significant problems in the past with the quality of its
products. Many stores complained that they did not get the clothes in a
proper condition and therefore better handling was needed.

Another representative client is a fruit supplier from India. The fruits are
primarily sold in Germany. The fruits are mostly transported by ship and
trucks, and only under special circumstances with airplanes. The company
faces some problems with the durability of a few kinds of fruits because of
significant temperature differences during the transportation.

A third client is a producer of medical equipment. The products are produced

at different production sites in Asia. The crucial aspect for this company is
reliable and short-term delivery. However, the company also focuses on cost
optimisation and therefore tries to do most of the transportation by sea
freight instead of air freight.

Looking at each problem which faces the major clients of Schmidt & Partner
Logistics Solutions Inc., I believe that with the advantages of DLC and its
strategic location on the world map, Peter should advice his boss to go ahead
and be part of DLC.