Put simply, logistics is a global mega-business. Its processes are time-sensitive, quality-centered, customer-driven and efficiency-bound. An array of functional, operational and legal instruments shape the flow of a genuinely 24-hour industry. In response, the powerhouses of the corporate logistics sector – some of whom have been around for centuries – have near-constantly adjusted and innovated business strategies to stay at the top of their industry, typically for the good of all stakeholders.
However, logistics is not only about companies and their business activities. Superior logistics capabilities have become an important strategic asset for states aspiring to play a more prominent role in an increasingly interconnected world. In this respect, China has become something of a role model. Beijing identified early in the country’s economic development the need for facilities capable of inserting its output into the global marketplace. Since then, China’s logistics know-how has evolved to the extent that newer infrastructure projects such as Ningbo Port are on a par with more established hubs like Singapore.
Most Gulf States have factored the buildup of logistics facilities into their respective National Visions. These programs focus on reducing reliance on energy exports as the primary source of national income and diversifying economies beyond the exploitation of natural resources. As things stand, however, some states more than others are in a better position to become major global logistics centers with facilities to match. These include Qatar, for at least three key reasons.
First, since the start of the 2017 blockade by several Gulf Cooperation Council (GCC) states and others, Qatar has held the moral high ground by not responding in kind. Rather than cutting off supplies to blockading states, Doha has continued to fulfill its contractual obligations. The country has also called on allies and international organizations to help resolve the dispute with its neighbors. In doing so, Qatar has sent a strong signal to multinational companies seeking effective logistical hubs that their businesses will not suffer in the face of ongoing regional tensions.
Second, the blockade has demonstrated Qatar’s remarkable ability to adjust supply chains rapidly to meet the needs of the state and its 3million+ citizens and residents. Prior to the crisis, several now-blockading countries accounted for over 90% of Qatar’s milk and dairy supplies. Imports of these products collapsed almost overnight. However, in the space of just 4-6 weeks, Doha had made up for this shortfall by sourcing almost 90% of its milk and dairy products from 20 countries. Qatar’s ability to diversify its global supplier base at breakneck pace would not have been possible without effective resilience planning and adaptive logistics capabilities.
Third, Qatar is not only determined to become a global trading hub but also to attract the type of foreign direct investment that will take its logistical capabilities to the next level. Such ambitions require a more intensive network of international partners collectively doing business in and out of Qatar with relative ease. To assist, a radical overhaul of customs processes and systems to support future growth in these areas is now underway. Streamlined legal frameworks are also widely expected to attract greater foreign interest in the country’s logistical capabilities.
Qatar’s recently-established free zones perfectly highlight the country’s logistical strategies in action. Located close to Hamad International Airport and Hamad Port, both are designed to attract companies seeking a stronger regional presence and infrastructure that serves trading routes between Asia and Europe. In keeping with free zones around the world, they also offer a range of benefits, including zero corporate tax, seamless administration, and unrestricted capital repatriation. However, financial (and related) incentives are by no means the only tactics employed to attract and retain business.
A defining feature of the most successful free zones is their ability to encourage innovation from the companies that make their facilities home. For example, DHL Express’s relocation to the airport free zone at Ras Bufontas will be accompanied by the development of a new product that brings express bulk logistics process capabilities to Qatar and upper Gulf region. In an effort to enhance maritime logistical capabilities, the second free zone at Hamad Port’s Um Alhoul will develop a chemical cluster to encourage innovative logistics approaches relevant to this important process industry.
Taken together, Qatar’s stealthy response to the blockade and determination to become a global logistics hub chimes with its historical reputation for accepting and taking calculated risks. When Doha decided to construct Ras Laffan Industrial City in order to exploit Qatar’s vast natural energy resources, it did so knowing that its development would irreversibly change the economic structure of the country. This required a level of courage that many larger countries remain unwilling to demonstrate on the global stage. The same rule of thumb also applies to Qatar’s determination to increase its global connectedness via high-quality logistics capabilities.
This ambition has not only had a profound impact upon Qatar’s economy but also its higher education sector. Academic programs in Logistics and Supply Chain Management (LSCM) are under development at several academic institutions across the country. Their emergence in turn reflects Qatar’s growing demand for expertise in the fields of logistical planning, strategic supply chain management and operational management. To this end, course offerings by Hamad Bin Khalifa University’s (HBKU) Division of Engineering Management and Decision Sciences (EMDS) are among the most advanced, with alumni already developing promising careers in the country’s burgeoning logistics sector.
Frank Himpel is a faculty member of the Engineering Management and Decision Sciences division at College of Science and Engineering at Hamad Bin Khalifa University in Qatar. Prior to moving to Qatar with his family in 2018, Frank served as a professor of business administration and logistics in Germany, where he also received his academic degrees. His research into aviation and air transportation management has taken him to several countries around the world.
This article is submitted by the HBKU Communications Directorate on behalf of the author. The views expressed are the author’s own and do not necessarily reflect the University’s official stance.
Hamad Bin Khalifa University (HBKU), a member of Qatar Foundation for Education, Science, and Community Development (QF), was founded in 2010 as a research-intensive university that acts as a catalyst for transformative change in Qatar and the region while having global impact. Located in Education City, HBKU is committed to building and cultivating human capacity through an enriching academic experience, innovative ecosystem, and unique partnerships. HBKU delivers multidisciplinary undergraduate and graduate degrees through its colleges, and provides opportunities for research and scholarship through its institutes and centers. For more information about HBKU, visit www.hbku.edu.qa.