In the Right Mode


THE VISION Much of the credit for Dubai’s international success is due to the achievement of the Emirate in developing and marketing itself successfully as the principal transportation and logistics […]


Much of the credit for Dubai’s international success is due to the achievement of the Emirate in developing and marketing itself successfully as the principal transportation and logistics hub in the GCC, if not the entire Middle East, North Africa, and South Asia region. The Emirate has leveraged its geographic position to be the transit point connecting Eastern and Western markets and metropolises, while integrating its port, rail, road, aviation, warehousing, and free zone infrastructure.

All of this is commensurate with the vision for development put forth by the Ruler of Dubai and UAE Vice-President, HH Sheikh Mohammed Bin Rashid Al Maktoum. Among the main facilitators of his strategy in recent years within the government of Dubai has been the Emirate’s Road and Transport Authority (RTA), formedin November 2005 under the stewardship of Board Chairman and Executive Director Mattar Mohammed Al Tayer. Meanwhile, on the aviation side of the transportation sector, government-owned Dubai Airports has been overseeing infrastructure development in the wake of increasing traffic and fleet and route expansion from Dubai’s domestic airlines, Emirates, and flydubai.

Dubai is showing no signs of slowing its transportation and logistics infrastructure growth, with the Emirate’s 2012 budget allocating 41% of total public expenditure to roads, transportation, civil aviation, airports, and tourism—or $3.6 billion of $8.78 billion in total public spending.


The planned centerpiece of Dubai’s aviation sector is the new Al Maktoum International Airport, located within the logistics hub of Dubai World Central (DWC), as well as Dubai International Airport. Already the fourth largest airport in the world, according to Dubai Airports CEO Paul Griffiths, Dubai International is undergoing a $7.8 billion expansion that aims to increase its capacity from 60 million to 90 million passengers annually by 2018. Al Maktoum, for its part, is slated to be one of the largest airports in the world upon completion, spread over an area of 68 square kilometers and able to transit 160 million passengers annually and 12 million tons of cargo. Within the DWC complex Dubai Logistics City, DWC Commercial City, and DWC Aviation city are also under development. “Dubai’s geocentric location, high-caliber infrastructure, quality home airlines, and an aviation model that features a liberal regulatory and tax-free business environment and close coordination and collaboration within the sector are the key factors in our growth story,” says Griffiths, who is responsible for the operations and development of both DIA and the DWC. “Thanks to Dubai’s open skies policy, the airport is connected to more than 220 destinations across six continents through 150 airlines, and continues to attract more airlines. It is a model that is paying big dividends.” He adds that aviation directly and indirectly contributes more than 250,000 jobs and $22 billion to the economy of Dubai, representing some 19% the Emirate’s total employment and 28% of its $80 billion GDP; by 2020, these numbers are set to jump, with the aviation sector set to make up 22% of total employment and 32% of GDP in Dubai.

“The combination of a successful tourism industry, Dubai’s proximity to the emerging economies of the East, and the Emirate’s established role as a trading hub linking economies in the Far East, Europe, Africa, and North America, will drive growth and further consolidate Dubai’s status as a global center for trade, tourism, and commerce,” says Griffiths. “The success of Dubai’s flagship carrier Emirates, which is among the world’s fastest growing airlines, and the meteoric rise of our low-cost carrier flydubai—the two biggest contributors to passenger and cargo traffic at Dubai International—will also remain a major factor in our future growth story.”

The DWC also opened to cargo flights in June 2010 and is now a regular stop for 36 airlines, according to Griffiths, who adds that in its first year of operations volumes totaled 90,000 tons. The most significant percentage traffic growth during 2011 was seen on routes linking Dubai to Eastern Europe (81%), Russia and the CIS (30.5%), the GCC (26.5%), and North America (16.1%).

“Since the beginning, Dubai Airport has applied an open-skies policy. The main obstacle was in persuading the other operators to adopt it,” says Mohammed A. Ahli, Director General of the Dubai Civil Aviation Authority, noting that Bahrain has signed on, and Dubai has inked agreements with most European countries. “We have something even more with the US; the ‘Seventh Freedom’ has allowed cargo carriers to travel without returning to their point of origin. This means companies can do business and travel on. This is very good for Federal Express [FedEx] and DHL; they are both coming to Dubai without going back to the US.”

Ahli adds that open-skies agreements are in place with “almost all” Pacific and Asian airline groups and “nearly two-thirds” of African countries. “We are fourth in terms of carrying international passengers,” he says. “We hope that by the year 2020, Dubai will be the number one aviation capital of the world—second place is not acceptable.”


The two main commercial ports servicing Dubai are Port Rashid and Port Jebel Ali, with the latter being the world’s largest man-made harbor and the flagship port of government-owned DP World, the world’s third largest port operator. “To date, we are operating more than 60 marine terminals around the world with a global team of 30,000 personnel,” says Sultan Ahmed Bin Sulayem, Chairman of DP World, noting that the company’s volumes in 2011 in the UAE region hit 13 million 20-foot equivalent units (TEUs), while globally DP World moved 54.7 million TEUs last year. Jebel Ali witnessed strong growth and handled 3.2 million TEUs in the first three months of 2012 alone—an 8.5% increase over the same period last year.

“It was clear from listening to our customers that growth in demand would mean Jebel Ali would soon be under considerable capacity,” he said. “It was this that led us to announce plans last year to add 1 million TEUs to Terminal 2 to take its capacity to 6 million TEUs, and to develop a new terminal, Terminal 3, an investment of $850 million, with the capacity for 4 million TEUs. Together they will take Jebel Ali’s total capacity to 19 million TEUs by 2014.”

“In addition, the Dubai Logistics Corridor [DLC], which opened in 2010, is a positive force for growth,” he says. “It is one of the world’s largest sea-land-air transit bridges, with integrated customs and security facilities. Al Maktoum International Airport is just 20 minutes away from Jebel Ali Port, providing the supply chain sector with one of the most efficient multimodal platforms anywhere.”


In November 2011, the RTA announced that in the last six years it had invested some $16.3 billion in roads, traffic alleviation, and public transportation projects, with some 90% of those developments having been completed. Altogether these projects have increased the road network 29% from 2005 to 2010, from 8,715 kilometers to 11,209 kilometers, and the number of bridges rose from 108 to 319.

In December 2011, Dubai’s Ruler, HH Sheikh Mohammed bin Rashid Al Maktoum, approved a further five-year, five-stage, $272 million plan to expand Dubai’s internal road networks, which is intended to address the road infrastructure needs arising from expanding urban development.

Facilitating better inter-emirate connections, the Department of Transportation of Abu Dhabi announced in the first quarter of 2012 that it was opening tenders for local and international firms to construct the new $545 million, 62 kilometer, E311 motorway linking Abu Dhabi and Dubai. It will be a four-lane highway running parallel to the original and is meant to relieve pressure between the UAE’s two largest cities.

The Etihad Rail project (formerly know as the Union Rail Company) is expected to connect Abu Dhabi and Dubai in 2016—and the rest of the Emirates by 2018. The $11 billion venture is the largest rail project in the Middle East, with some 1,200 kilometers of track slated to carry both passengers and freight at speeds of up to 200 kilometers per hour. Phase I of the project aims to connect the Musaffah industrial area and Khalifa Port with Jebel Ali Free Zone (Jafza), while the second phase will extend close to 510 kilometers to link Abu Dhabi to Jebel Ali and Dubai city.

Etihad Rail is also set to hook into the planned GCC-wide rail network—with links to Saudi Arabia at Ghweifat and Oman at Al Ain and Buraimi—to facilitate travel and trade through the region. Long-range projections peg total capacity at 16 million passengers and 110 million tons of cargo by 2030. “Once complete, the project will redefine logistics and transport in the region, providing a safe, efficient, sustainable network that links all corners of the UAE, and eventually, the UAE to the wider GCC,” said Etihad Rail in a statement.


“The Dubai Trade platform that has been developed here in the UAE is the most amazing tool I’ve seen and it can compete with any other in the world,” says Tom Nauwelaerts, Managing Director at Al-Futtaim Logistics. “The ease of doing business, establishing a company, and conducting highly automated transactions are some of Dubai’s best features. This, in combination with the infrastructure, the access to a wide talent pool, and the fact that basically any shipping line makes a call to the Dubai ports, make it an unbeatable logistics hub.”

He notes that the transport market is registering considerable growth, “but there are some doubts on the longer-term growth, as very few people can really estimate today the impact that the Etihad rail project will have. This project will undoubtedly shake-up the entire road transportation sector, and provide us with new unseen business opportunities.”

John Gould, CEO of the Middle East, North Africa, and Central Asia region for CEVA Logistics, concurs that Dubai has world-class transport infrastructure, “which is one of its main strengths,” he says. “Jebel Ali Port, Dubai World Central, and Dubai International Airport provide the ability for a logistics company like ours to be a true air and maritime transport hub through its storage capacities to greater regions like India, Africa, and Central Asia.” He adds that Jafza is an ideal location for receiving and storing retail products that are then redistributed to larger markets. “If the UAE’s government continues to provide such facilitates, we will continue growing in these areas,” says Gould, noting that the company will likely have invested $100 million in new warehouse area within two years. “There is a great seaport, a great airport, a great airline, open-sky agreements, and great road infrastructure. It is easier to do business here in comparison to Central Asia and North Africa.”