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The Logic of Qatar’s Logistics Ambitions

Qatar

The Logic of Qatar’s Logistics Ambitions

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.

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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.

Qatar Trade Summit

Qatar Trade Summit: Innovation and Disruption Revolutionising the Logistics Industry in Qatar.

Valuable insights into the future of Qatar’s Trade and investments sector aligned with logistics and supply chain in the region will be showcased at the exclusive Qatar Trade Summit scheduled to take place from 25th to 27th November 2019 in Doha, Qatar, The summit is Qatar’s only event focusing on the nation’s economic diversification plans and progress with strategic plans on becoming the regions logistics hub. 

The summit will strive to examine the nation’s potential on becoming the region’s economic powerhouse via 3 days of deliberations on sea ports development, Shipping and Air Cargo industry, future of logistics and supply chain as well as a final day dedicated to engage in interactive sessions on Qatar’s trade and investment prospects. Attending delegates and partners will get a first-hand knowledge of Qatar’s logistics and supply chain industry, the planned development of sea ports to support regional growth, the influence of shipping air cargo and the free zones in opening up opportunities for regional and foreign companies to invest and do business in Qatar” stated Allan Martin, Communications Director, Qatar Trade Summit. 

All aspects of the shipping industry, port development, air cargo, supply chain and logistics and trade and investments will be discussed at this summit. The event will engage the entire ecosystem of the logistics business in Qatar focusing on procurement, forwarding, planning, new business, infrastructure and investments. The theme of the summit is to explore the scale of innovation and disruption which is revolutionizing the logistics industry in Qatar and the nation’s keen intent on diversifying into a thriving economy prior to the prestigious FIFA 2022 football world cup taking place in Qatar. Qatar Trade Summit will directly impact a comprehensive range of sectors in the region and will cover solutions and products to uplift these sectors. The areas covered will be Ship building, Port management, Port Infrastructure development, Air Cargo expansion, Logistics and supply chain solutions and the investments and business opportunities in Qatar. 

The summit’s profile includes key dignitaries such as H.E. Akbar Al Baker, Group CEO, Qatar Airways, Capt. Abdulla Al-Khanji, CEO, Mwani Qatar, Qatar, Mr. Abdulrahman Essa Al-Mannai, President & CEO, MILAHA, Qatar, Mr. Lim Meng Hui, CEO, Qatar Free Zones Authority (QFZA), Mr. James Baker, Editor, Lloyd’s List Containers, UK, Mr. Glyn Hughes, Global Head of IATA Cargo, Switzerland, Mr. Turhan Özen, Chief Cargo Officer, Turkish Airlines, Mr. Amadou Diallo, CEO, DHL Global Forwarding, Middle East & Africa, Mr. Bertrand Maltaverne, Solutions Consultant, Ivalua, Austria, Mr. Fikret Ersoy, MD, BDP International, Middle East, Turkey & Africa from Qatar and across the globe who will be presenting at the conference and the summit will also host some of the world’s best solution providers and also invite attendees from leading government and private entities from Qatar. 

The Qatar Trade Summit will also feature one of the most exhaustive and inclusive knowledge sessions seen at a national summit. The conference will include 19 topics spread across 4 sessions, and two key workshops all scheduled over 3 days of high level networking and interaction. Qatar Trade Summit will assist in realising Qatar’s ambitions to become the logistics and trade leader in the Middle East. 

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About Organizer: © Qatar Trade Summit | Allan Martin | Email: info@qatartradesummit.com | allan@qatartradesummit.com | UK Tel: +44 20 3807 8492 | India Mobile: +91 96061 70760 Qatar Contact: Saf | Tel: +974 33834548 | +974 66947607 | saf@apexqatar.com LinkedIn: Qatar Trade Summit | twitter: @tradeqatar 

balloons

HELIUM SHORTAGE BURSTING MORE THAN BALLOONS

From birthday parties to baby showers and the Macy’s Thanksgiving Day parade, balloons are a staple when it comes to party decor and celebrations.

Created by British inventor Michael Faraday in 1824, rubber balloons were first manufactured in the United States in 1907. The rubber balloon was followed by the introduction of the twistable balloon animal in the late 1930s and shiny foil balloons in the 1970s.

More recently, air-filled lettered and numbered balloons are making a big splash. While these trendy balloon displays look good on Instagram, there’s another reason party store retailers promote them. They don’t require a critical ingredient the world is running short on: helium.

Helium is far bigger than balloons

We all know helium’s use in balloons. Less well known are helium’s more serious roles in the functioning of an array of products including MRI machines, the processing of semiconductors chips, scuba tanks and even rocket engines. Liquid helium is inert and has the lowest boiling point of all liquid gasses, making it a critical ingredient for scientific experiments. Helium is so important it was listed as one of 35 mineral commodities deemed critical to the economic and national security of the United States.

Heliums many different uses

An elusive gas

Helium is a bit of an enigma. Although it’s the second-most abundant element in the universe, helium is a finite resource on Earth — meaning it is non-renewable and we could run out of it someday. Helium is so light that is rises into space, so we can only recover it when it’s trapped in rocks below the earth’s crust where it mixes with natural gas.

There’s only a tiny amount of helium found concentrated in natural gas fields (anything greater than 0.3 percent is considered good). Helium is extracted as a byproduct during natural gas production where crude helium is separated from natural gas using a cryogenic distillation method and then refined for commercial use. The liquid helium must be transported and shipped around the world in specially-designed International Organization for Standardization (ISO) tankers that are triple-walled and sealed.

Most helium comes from just three places

The helium supply chain is concentrated primarily in three places. Seventy-five percent of the world’s helium comes from Texas, Wyoming and Qatar.

The United States has been the world’s dominant producer of helium for nearly 100 years, starting with the launch of the Federal Helium Reserve (FHR) in 1925. The FHR is in charge of the conservation and sale of federally owned helium. The Bureau of Land Management manages a helium storage reservoir, an enrichment plant and pipeline system in Amarillo, Texas. The Amarillo plant alone has the capacity to provide 40 percent of U.S. domestic helium demand and 30 percent of global helium demand.

But the U.S. government has been gradually selling off its helium supplies in Texas and will fully deplete its reserves by 2021. This plan started in 1996 with the Helium Privatization Act, which mandated that the U.S. government sell off its helium reserves by 2013 because the FHR had stockpiled over one billion cubic meters of helium and was $1.3 billion in debt.

The original deadline was extended by the Helium Stewardship Act of 2013 which President Obama signed to stop the impending helium shortage and continue selling helium from the FHR until 2021. The HSA created an auction system to gradually auction off the FHR’s helium reserves to private bidders. The fifth and final auction was held last year.

Helium history timeline

Global trade in helium

With the U.S. government exiting the helium business, one nation in particular has stepped in to supply the world’s helium: Qatar. Qatar is the world’s second-largest helium producer behind the United States, producing 28 percent of the world’s helium supply in 2018. Other countries that produce helium include Algeria, Australia, Canada, China, Poland and Russia.
Qatar helium supply chain imports

Qatar is the top source for U.S. helium imports, supplying 80 percent of U.S. helium imports last year. But relying on Qatar for helium imports has its downsides. In 2017, the country was embargoed by four of its neighbors – Saudi Arabia, Egypt, Bahrain and the United Arab Emirates. Its helium plants were temporarily shuttered as a result and the world lost access to one-fourth of its helium supply overnight.

Qatar’s helium plants have since come back online but the ongoing embargo calls into question the reliability of Qatar as a stable source of helium imports.

Helium shortage bursting balloons everywhere

With all of the uncertainty in the helium supply chain and so few sources available, pricing has been volatile and shortages over the last ten years have been common.

Party supply stores have taken a hit. Party City recently announced it was planning to close 45 stores this year and that helium shortages were negatively impacting balloon sales. Things may be looking up for the retailer which said they’ve secured a new helium source that should keep them afloat in the gas for the next 2.5 years. However, they do still recommend switching to air-filled party balloon displays due to the global helium shortage.

While your party balloons may be safe for now, the long-term stability of trade in helium is still up in the air. The United States could soon go from helium exporter to importer as FHR reserves deflate. And prices are likely to increase until more helium sources come online in places like Russia, Canada and possibly even Tanzania to meet global demand.

One thing is for sure, while party balloons may have short lifespan before deflating — MRIs, semiconductors and rockets are here to stay. A stable helium supply chain is the only way to keep the party going for our critical medical, scientific and defense fields.

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Lauren Kyger

Lauren Kyger is Associate Editor for TradeVistas. Prior to joining TradeVistas, she was a Research Associate at the Hinrich Foundation focused on international trade issues. She is a Hinrich Foundation Global Trade Leader Scholar alumna, earning her Master’s degree in Global Business Journalism from Tsinghua University in Beijing. She received her Bachelor’s degree from the Walter Cronkite School of Journalism and Mass Communication at Arizona State University.

This article originally appeared on TradeVistas.org. Republished with permission.