United Arab Emirates

Air transport and logistics in Dubai

Juha Wilén
May 2008
Table of contents

1. INTRODUCTION .............................................................................................................. 3
2. DUBAI INTERNATIONAL AIRPORT (DIA) ............................................................ 3
3. CARGO FACILITIES OF DIA IN DETAIL ................................................................ 4
4. AL MAKTOUM INTERNATIONAL AIRPORT AND
DUBAI LOGISTICS CITY IN DUBAI WORLD CENTRAL.................................... 6
5. DHL OPERATIONS IN UAE.......................................................................................... 9
6. SOURCES ............................................................................................................................ 10

Juha Wilén

Finpro ry

Firstname.lastname@finpro.fi

Tel. +358 40 3433 325

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1. INTRODUCTION

The Emirate of Dubai in the United Arab Emirates has been an important place for marine and
air cargo traffic and logistics already for several years. Dubai has two ports, Jebel Ali and Port
Rashid, both operated by Dubai Ports World. Throughput in these ports increased 20 per cent
in 2007 from the previous year and amounted to 10.65 million TEUs. Together Jebel Ali and
Port Rashid formed the 7th biggest container port in the world in 2007. Operations in Jebel Ali
alone grew more than 25 per cent to over 9.9 million TEUs in 2007.

Dubai has at the moment one big commercial airport, Dubai International Airport (DIA), which
is situated next to the city centre. There will be a second airport called Al Maktoum Interna-
tional Airport that is being built within a mega development under construction called Dubai
World Central. DWC is situated east from Jebel Ali Port and Jebel Ali Free Zone, c. 40 kilome-
tres south from Dubai International Airport. Al Maktoum will be the largest airport in the world
in terms of both passenger and cargo movements.

Besides the Al Maktoum Airport, Dubai World Central will accommodate five special areas or
cities. The most important of them for transport and logistics companies is Dubai Logistics
City (DLC). In addition, there will be Commercial City, Aviation City, Residential City and Golf
Resort. Al Maktoum Airport and Dubai Logistics City will strengthen Dubai’s position in air
transport and logistics even further.

When Al Maktoum Airport, Dubai Logistics City and Jebel Ali Port are regarded as one entity,
Dubai will have the world’s first truly integrated multi-modal logistics platform with all transpor-
tation modes, logistics and value-added services, such as product manufacturing and assem-
bly in a single-bonded free zone environment.

2. DUBAI INTERNATIONAL AIRPORT (DIA)

Dubai International Airport is a very significant one both in terms of passenger and cargo
movements. The total number of uplifted, discharged and transit passengers was 34.35 mil-
lion in 2007. The number of passengers increased 19.3 per cent from the previous year. DIA
was the world’s fastest growing airport in 2007. In the first quarter of 2008 the number of pas-
sengers was 9.34 million. There was an increase of 15.1 % from the first quarter of 2007.

The amount of uplifted and discharged cargo was 1 513 133 tons in 2007. Cargo movements
increased 8.0 per cent from previous year. In the first quarter of 2008 cargo was uplifted and
discharged 399 718 tons. Cargo movements increased 10.1 per cent from the previous year.

There were 260 530 aircraft movements at DIA in 2007. 215 917 of these were scheduled
commercial flights, 36 382 non-scheduled commercial flights and 8 231 military flights. Aircraft
movements increased 9.8 per cent from 2006.

Aviation policy in Dubai is made by the Dubai Executive Council and Dubai Civil Aviation Au-
thority. Dubai Civil Aviation Authority is also responsible for regulation of aviation.

Dubai International Airport is managed by government-owned Dubai Airports Company which

is also responsible for the operations of Al Maktoum International Airport. Dubai Airports
Company is building a new passenger terminal, Terminal 3, which will be exclusively for the
local Emirates Airline. The new terminal will likely open in early fall 2008. DIA’s capacity will
increase to 75 million passengers annually.

Dubai Airports Company has a division called Dubai International Airport Cargo Gateway
(former Cargo Village) which functions and has facilities in the area of DIA. Besides, the Air-
ports Company has a separate unit called Dubai Airport Free Zone Authority which is respon-
sible for operations in the Free Zone next to Cargo Gateway. The Free Zone Authority has its
own CEO.

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 There are eight cargo handling facilities in DIA Cargo Gateway and Free Zone. In the former
area there is, firstly, Cargo Mega Terminal (CMT), which is dedicated to Emirates SkyCargo
(owned by Dubai government). The cargo handling capacity of CMT is 1.2 million tons per
year. The capacity of Emirates Cargo Centre (also dedicated to Emirates) is 0.4 million tons.
Freight Gate 1 (former Main Cargo Terminal) has a capacity of 0.4 million tons a year. Freight
Gate 2, also known as Express Handling Centre, is dedicated to courier & express cargo and
used by courier companies. Its capacity is 0.050 million tons. Dubai Flower Centre is meant
for flowers and perishables. Flower centre handles 0.150 million tons of goods per year.

DIA Free Zone has Freight Gates 3 and 4 the combined capacity of which is 0.150 million tons
and Freight Gate 5 which has a capacity of 0.375 million tons per year. All these seven facili-
ties surrounding the Dubai International Airport have a combined capacity of 2.725 million
tons per annum. This sum and all figures for individual facilities are unofficial estimates given
by the Vice President of Dnata Cargo, Mr. K. K. Jaganathan. They are not official figures from
Dubai Airports Company. In addition to these seven facilities, there is a terminal for valuables.

Cargo handling capacity will not grow anymore at DIA. However, total capacity in Dubai will
increase tremendously, thanks to facilities in the coming Al Maktoum Airport.

Dnata Cargo, part of Dubai government-owned Dnata Group, operates facilities not operated
by Emirates Skycargo. Dnata Cargo handled 550 000 tons of cargo in 2007. The amount grew
10 per cent from 2006. Throughput will likely increase 7–8 per cent a year in the next years.
Dubai International Airport cargo handling capacity will suffice till 2012; then Dnata operations
move to Al Maktoum Airport.

Dnata Group also covers Dnata Ground Handling which is the sole ground and passenger
handling agent at Dubai Airport. To cope with the rapid growth of Dubai Airport, Dnata Ground
Handling is split into three major business units: Airport Operations Emirates (EK), Airport
Operations Other Airlines (OAL), and Airport Operations Terminal 2 & Freighter Handling.

All mentioned cargo facilities that are not dedicated to Emirates are used by all airlines.

3. CARGO FACILITIES OF DIA IN DETAIL

Cargo Mega Terminal in Cargo Gateway

As said above, Cargo Mega Terminal is dedicated to Emirates SkyCargo. Annual throughput
is 1.2 million tons. Cargo processing area is 43 600 m2. There are four modules and two lev-
els (floors) of processing. The first module is for temperature sensitive goods. It offers both
flexibility and strict processes.

There are facilities to handle all kind of cargo: perishable, live animals (AVI), valuable (VAL),
human remains (HUM), radioactive (RRY), general cargo, intact ULDs and intact ULDs with
perishable cargo.

In CMT there are 10 000 warehouse pallets which are not typical eurosize but approximately 2
times eurosize. They can carry 2 tons at the same time. The number of 10 feet Unit Load De-
vices is 2482. Besides, there are 18 other ULDs, and 200 more coming in 2008.

The number of workstations for cargo breakdown and build up is 133. There are flexible and
also some fixed workstations. (Workstation is a place where people work on containers.)
Storage is managed through Pallet & Container Handling System (PCHS) and Automated
Storage & Retrieval system (ASRS).

Total number of truck docks for loose cargo is 46, number of truck docks for perishable cargo
is 12, and number of truck docks for general cargo is 25. Number of airside ULD entry and
exit gates is 78. That is, 78 flights can be handled at the same time.

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 Freight Gate 1 in Cargo Gateway

Operated by Dnata Cargo, Freight Gate 1 provides extensive general and specialised storage
areas. The automated handling system and fleet of railed and free-running vehicles ensure
that cargo is quickly and safely stored and retrieved. The gate features a well-equipped spe-
cial storage area, ETV Systems, a number of build up and breakdown stations, TVs, hydrau-
lic-powered truck docks, and Sea Air docks.

Freight Gate 2 in Cargo Gateway

One of the few purpose-built express handling centres in the world to meet the increasing
demand of operators, Freight Gate 2 is the first of its kind in the Middle East region. The facil-
ity occupies an area of 4000 m2, housing Dnata counters, customs and Police Units, in addi-
tion to individual office and warehouse spaces offered to Express and Mail companies. The
gate is designed to handle approximately 3.1 million express and mail parcels.

Freight Gate 2 is able to deal with highly temperature-sensitive shipments. Perishable prod-
ucts are transported using refrigerated "cool dollies" to maintain the temperatures during the
short handling process between the aircraft and the cargo terminals. Sophisticated electronic
temperature probes are placed inside the ULDs during transportation to continuously monitor
the temperature. These probes record actual temperatures and upload the information to
Dnata's computer systems, providing customers access to the shipment temperature
throughout the ground handling process.

Freight Gate 3 in Dubai Airport Free Zone

Freight Gate 3 is located in the Dubai Airport Free Zone (DAFZA). It is a dedicated freighter
terminal for charter operators, and offers flexible, cost-effective handling options, as well as an
efficient link between the Free Zone and Dnata’s main cargo terminal in the Cargo Gateway.

The gate is located on a 26 000 square metre site which includes a docking area capable of
handling up to 50 trucks. It has been designated the Free Zone Authority’s community service
provider to act as a conduit for cargo between the aircraft and their own storage areas. Freight
Gate 3 will also provide a link to other terminals such as the Dnata Cargo Terminals and the
Emirates Cargo Centre. Some 200 square metres in the facility is dedicated to specialised
storage facilities including cooler, freezer, vulnerable and valuable storage rooms.

Freight Gate 3 is the only terminal in the region to offer tailor-made services to charter opera-
tors at competitive rates, provide a provision for tenancy and self-handling privileges, and an
option for premium services – all under one roof.

Freight Gate 4 in Dubai Airport Free Zone

The Freight Gate 4 self-handling facility offers comprehensive warehousing and distribution
services to freight handling business. The terminal provides an environment where freight
forwarders and charter operations can lease office and storage space, providing for their total
logistics operations.

The gate spans 10 000 square metres, with a 2300 square metre space dedicated to offices.
With direct access to airside by opening onto aircraft parking bays, this self-handling facility al-
lows quick turnaround of process, saving time and revenue costs.

Freight Gate 5 in Dubai Airport Free Zone

This fully automated air cargo terminal has an annual throughput capacity of 375 000 tons.
With 16 000 square metres of warehousing and 10 000 square metres of office space, Freight
Gate 5 houses a complete portfolio of import and export services. It also hosts Dubai’s first
fully-automated air cargo storage and retrieval system, for real-time information, speedy deliv-
ery, optimum utilisation of space, and the opportunity to benefit from transit time and cost re-
ductions. Elevated Transfer Vehicles (ETV) and truck docks provide a direct interface be-
tween landside and airside. This further enables speedy delivery of shipments to customers
and seamless dispatch of ULDs to aircraft.

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 Freight Gate 6 in Jebel Ali Free Zone (JAFZA)

Freight Gate 6 is an off-line cargo terminal of Dubai airport, located in the Jebel Ali Free Zone
(JAFZA or ZJF). Expanded to include most major airlines and over 5000 companies within the
Free Zone, Freight Gate 6 has an identical functionality to the award-winning Freight Gate 1.
This enables customers to dispatch and receive air cargo consignments virtually on their
doorstep. The resulting administration, time and cost savings add to the many benefits al-
ready enjoyed by Jebel Ali Free Zone companies.

Any consignment arriving at Dubai Airport showing ZJF as the point of either origin or destina-
tion is now treated as transit cargo and bypasses storage, acceptance or delivery procedures.
It is handled straight on or off the road feeder trucks to and from Freight Gate 6.

4. AL MAKTOUM INTERNATIONAL AIRPORT AND DUBAI LOGIS-

TICS CITY IN DUBAI WORLD CENTRAL

Dubai has been an important place for air cargo traffic and logistics for years thanks to DIA.
The new airport, Al Maktoum International, and its adjacent special areas (cities) in Dubai
World Central will strengthen the emirate’s position even further.

Dubai World Central is a huge development which comprises Al Maktoum International Air-
port, Dubai Logistics City, Aviation City, Commercial City, Residential City and Golf Resort.
DWC will be the world’s first truly integrated multi-modal logistics platform with all transporta-
tion modes, logistics and value-added services, such as product manufacturing and assembly
in a single-bonded free zone environment made up of Dubai Logistics City, Al Maktoum Inter-
national Airport and Jebel Ali Port.

Dubai World Central, Jebel Ali Port and Jebel Ali Free Zone

Al Maktoum International Airport

Source: Dubai World Central

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 DWC is an iconic development. There will hardly be a similar multi-modal logistics city in the
world. One could emerge in Shanghai or Guangzhou, but not in Europe or the USA where in-
frastructure is ready. The total infrastructure costs of DWC are 33 billion USD.

Land for DWC was set aside over 30 years ago for the construction of a second airport, so
this is not a recent development. DWC will cater to Dubai’s logistics, commercial, tourist and
aviation needs until 2050. With trade booming and Dubai being at the geographical cross-
roads between the East and the West, having the world’s 7th largest container port and the
region’s largest and busiest cargo and passenger airport, it was inevitable that Dubai reinvent
its logistics policy. Thus the idea of a multi-modal logistics centre as the port and the new air-
port are within 10 kilometres of each other enabling an effective sea-air logistics model.

The first runway of Al Maktoum International Airport was completed in 2007. Cargo transport
will start provisionally in January 2009. Passenger flights will begin in May or June 2009.
Cargo volumes will shift gradually from DIA to Al Maktoum. Emirates SkyCargo will stay at
DIA for a long time even though it will have operations at Al Maktoum as well. Al Maktoum will
also get new business, not just old fright operators from DIA.

Dubai Logistics City

Dubai Logistics City will give a boost to economy as more businesses pour in due to the lib-
eral free zone regulations to set up business and quicker trade due to the unique multi-modal
approach enabling quick turnaround of goods and unlimited stockholding options.

There will be 16 air cargo terminals in DLC. The first one is under construction and as of
March 2008 was 77 per cent complete. This will cater to some 600 000 tonnes of cargo annu-
ally and will take considerable load of the existing DIA Cargo Gateway. The coming terminals
will be of varied sizes depending on demand. As and when demand necessitates, construc-
tion will continue, so it is not a question of race. The concept of DLC is to ensure that there
will never be any restraint on capacity in the future. The cargo handling capacity of DLC will
ultimately be over 12 million tons per year.

Dubai Logistics City Master Plan

Source: Dubai World Central

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 The cargo-handling facilities will all be of the highest international standards. Dubai Customs
are in the process of introducing e-customs.

Integrator plots are dedicated to DHL, FedEx and similar companies. Plots are custom desig-
nated and located directly at apron. Combination of air express, road express, road distribu-
tion, value added services and warehousing and other business are possible. Besides, self-
handling and own maintenance/facilities are possible. East (right in the picture) from integra-
tors will be Emirates SkyCargo terminals. East from Emirates will be general cargo terminals.

Shared forwarder warehouses will be built for flow through: there will be ramp on public side
and ramp on terminal side. Warehouse slots will be from 80 m2 to 1040 m2. Offices on upper
floor range from 57 m2 to 72 m2 modules. Public traffic is separated from professional traffic.
Pallets/ULDs can be built within the facility. Total maximal warehouse space will be over
50 000 m2 (net). Shared forwarder warehouses will be available in October 2008.

DLC has plots of land for forwarders’ own facilities: forwarders can build own facilities for mul-
timodal, multi-client or air freight business. Facilities can also be provided by DLC and leased
long-term. Plots are available from 5000 m2. Public and professional traffic is separated, and
pallets/ULDs can be built within the facility. Maximum total space will be 2 million m2 (net).

The number of warehouses in DLC is unavailable at the moment as DLC is still in negotiation
with several companies. The overall DLC project has seen over 150 companies having re-
served land already. Some companies have commenced construction of their warehouses
which will be operational by the end of 2008.

There are also plots of land for industrial and trade companies and contract logistics service
providers. These actors can build their own facilities or lease them from DLC on long-term ba-
sis. Plots are available from 3500 m2. Maximum total space will be 10 million m2 (net).

In addition, there will be so called light industrial units which are pre-built warehouse units of
500 and 1000 m2. They include office dedicated space. Front end is for customer contact and
administration. Back side has a dock and a ramp. Rental lease terms are flexible. Light indus-
trial units will be available in December 2008.

The cargo hub in Dubai World Central is called Al Maktoum Airport Cargo Gateway. This
gateway and Dubai International Airport Cargo Gateway will form Dubai Cargo City. This total-
ity is controlled by Dubai Airports Company.

All global, international and local transport/logistics companies have reserved place in DWC.
So far only the names of Aramex, Kuehne+ Nagel, Panalpina, Danzas and DHL Express can
be disclosed. Besides, plenty of companies using transport and logistics services will have
presence there. For example, Dell is setting up a supplier office in Dubai Logistics City.

When DLC is ready, there will work close to 150 000 people. DLC will build and manage the
DLC Staff Village which accommodates over 40 000 people. The Staff Village will mainly be
for blue-collar workers. The adjacent DWC Residential City with an eventual population of 250
000 will house the mid-income segment including white-collar workers. In total, Dubai World
Central will house between 900 000 and 1 million people when fully completed.

There are plenty of big projects in Dubai competing for competent staff. It is up to each indi-
vidual company to secure a sufficient amount of employees. DLC is only a platform. But it is
known for sure that companies will not start operations in DLC until they secure efficient and
reliable manpower.

Good connection from and to Dubai World Central

Connections from Dubai World Central to northern parts of Dubai, the port of Jebel Ali and
Abu Dhabi will be good. Major roads and rail infrastructure work is underway. DWC is working
closely with Dubai’s Roads and Transport Authority to develop connecting roads which will
ease traffic to and from the existing Dubai city centre 40 kilometres away. The purple line of
the Dubai Metro will connect Dubai International Airport and Al Maktoum International Airport
to enable easy transfer of passengers. There will be a bridge over the Emirates Road linking

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 the Port, JAFZA, DLC and the Airport. This bridge will not have any exit to Emirates Road and
therefore the integrity of the customs bond will be maintained. The bridge will enable speedy
movement of goods with a turnaround time for the sea/air business in ideal conditions ex-
pected to be as less as four hours.

Due to the customs-bonded nature of the area connecting Jebel Ali Port and Free Zone, DLC
and DWC Aviation City, trucks can move quickly and easily from the port to the airport. The
cargo terminals have airside access and are located right next to the first runway (which has
been completed).

Dubai is already a regional hub due high density of shipping and flights. When the new airport
and logistics city start functioning, it can be called a global hub like Singapore.

5. DHL OPERATIONS IN UAE

DHL has operated in Middle East since 1976. It has been present all the time for the last 32
years and has not left during wars. Jordan is an entry country to Middle East for DHL. There is
a new logistics facility next to airport in Amman. DHL serves the entire Gulf region. Besides, it
has 11 locations in Iraq.

Operations in Dubai started in 1996. Dubai is the commercial air hub for DHL in Middle East.
DHL has two divisions in UAE. Besides, its subsidiary Danzas, a forwarding company, has
two divisions. Logistics market in Dubai is big and DHL turnover has grown well. Dubai busi-
ness environment is liberal compared to e.g. Saudi Arabia.

Most goods coming to UAE arrive in Dubai. The emirate has the best airlift capacity in Middle
East. Besides, road network is good, which enables road & air combination. For DHL and its
customers Dubai is a great hub reaching Africa and Asia.

DHL has a facility at the Dubai International Airport, east from Terminal 2. The 3500 m2 air-
side facility handles 80 000 kg per day. It is TAPA-A certified for valuable goods like laptops.
DHL has its own customs which is open 24/7. In Dubai 99 per cent of deliveries are on time.

DHL has 120 000 m2 of warehousing in Dubai. Danzas has a 28 865 m2 facility in Jebel Ali
area. The latter will open a multipurpose logistics facility in August 2008. DHL Express has
leased 50 000 m2 in Dubai Logistics City. Danzas will have there a warehouse of 155 000 m2
and an option to extend.

DHL does not have own airplanes in UAE (only in Bahrain), because there are c. 100 com-
mercial flights a day in Dubai.

The company has over 600 network vehicles that go from country to country in Middle East.
There is land connection from Europe through Turkey to Gulf countries. On an average, there
are 35 international road movements per day. In one day 300 000 kg is transported.

There were 170 trucks in Dubai at the end of 2007. 55 more was got in the first quarter of
2008. DHL has box body and curtain side trailers, thanks to which goods go fast through cus-
toms. All vehicles have GPS tracking and mobile phones.

DHL has c. 500 employees in UAE. The company tries to hire locals, not just expatriates, but
this is difficult in UAE, because locals want to work mainly in government and government-
owned companies.

DHL has a group of network planning managers who advise companies how to best transport
cargo from A to B. DHL got ISO 14001 (Environment) as the first logistics company in Middle
East. According to DHL, air cargo handling will grow 16 per cent on an average in sectors
relevant for the company.

All big logistics operators are already in Dubai. The number of small players will most likely in-
crease but they give cargo to TNT or FedEx.

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6. SOURCES

Interview with Mr. Ramesh Mamidala, Manager Cargo Hub Development, Emirates SkyCargo

Interview with Mr. K. K. Jaganathan, Vice President of Dnata Cargo

Interview with Mr. Michael Proffitt, CEO of Dubai Logistics City

Interview with Mr. Syed Ejaz Ahmed, Director, Air Transport, Dubai Civil Aviation Authority

Interview with Mrs. Janet Jweihan, UAE Country Manager of DHL

Dnata Cargo web pages

Dubai World Central web pages

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