Oman proves integration is key to growth in logistics

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Oman proves that logistics integration is key to growth

18 Oct 2018 Muscat

In an in-depth interview on the company’s website, Abdulrahman Salin Al Hatmi CEO of ASYAD – Oman’s leading logistics group and host of the IRU World Congress – explains the advantages of a national integrated logistics sector and his unique vision for trade development in Oman.

 

What is ASYAD’s mandate and vision as Oman’s leading logistics group and what has been achieved in pursuance of these objectives?

ASYAD has two primary mandates; the first is to maximise returns on the government’s investment in ports, freezones and transport companies. Secondly, ASYAD is responsible for executing the Sultanate of Oman Logistics Strategy 2040 (SOLS), with the vision to build a competitive logistics sector as an instrumental contributor to the national GDP.

SOLS’ vision will be achieved through facilitating trade and enhancing regulations; building world-class infrastructure; leveraging technology as a disruptive enabler and building human capacity and skills, which will not only attract business and investors, but will also improve the sector’s ranking in global indices such as the Logistics Performance Index (LPI).

We are on a roadmap to build awareness about the logistics industry in the country and we are achieving our goals. For instance, in 2013-14, logistics was not a familiar industry in Oman, today there is a deeper understanding about logistics by our stakeholders and the public at large. This is a reflection of the success of our efforts from building the sector to creating awareness about it. 

Other areas where we have made notable progress is in trade facilitation.

We have introduced a one-stop shop solution for cargo joint-inspections to ensure faster clearance by gathering government agencies to work under one umbrella.

We have also developed a risk management system which will noticeably reduce the 100 per cent inspection of cargo and clear goods based on their risk profile. Our target is to minimise the rate of inspection to 10 per cent. However, our eventual goal is to achieve the global benchmark of 2 per cent. This initiative will boost the number of uninspected goods from trusted partners who manufacture, ship or buy these goods.

Moreover, we recently started working on pre-clearance process that allows traders to clear their goods before arrival. In 2018, we were able to pre-clear 14 per cent of the imported shipments and we aim to increase that rate. We also work with an inclusive mindset; we regularly encourage the business community to discuss possible improvements, raise issues and propose solutions to improve the performance of the sector.

 

Various ports and freezones have been brought under ASYAD. How is this helping in creating an integrated logistics strategy?

We have three major ports in Sohar, Salalah and Duqm; each has its own unique offering and selling proposition. Before introducing the ASYAD umbrella, each port was marketing its services independently - missing out on the opportunity of joining forces to offer a more comprehensive value proposition, deliver a full-suite solution and cater to different needs of the market. Today, ASYAD team is working on a business plan to identify the value proposition of each port. Our role is to harness collective integration, connectivity and positive competitiveness among Omani ports. We aim to turn our logistics assets into attractive opportunities for investors, to secure trade volumes for the industry and to maintain business growth.

It is also worth mentioning that ASYAD is the delivery unit on behalf of the Ministry of Transport and Communications for implementing the outcomes of the logistics labs as a part of the Tanfeedh programme. 

 

On the freight side, Oman Rail Company, Oman Shipping Company, Oman Drydock Company are under ASYAD’s purview. How is this leading to better coordination and solutions?

We have a two-pronged plan – one, is to integrate the current portfolio of services including Oman Shipping, Oman Rail – in the future – and the trucking business, which will support assets and companies run by the private sector. This integration will result in providing our customers with an all-encompassing solution, making it more convenient and more efficient for them to do business in The Sultanate.

ASYAD also has a mission to grow and acquire business internationally by offering our services in logistics and freight outside Oman.

Thus, we are studying the possibility of buying freight-oriented companies to complement our operations and solidify our competitive advantage.

 

Can you give us a brief on The Sultanate of Oman Logistics Strategy 2040 (SOLS)?

We have been working on SOLS for four years now and we have delivered on our planned milestones for the period. For example, our rank on the LPI was 59 when we started and now we are at 43 – an improvement of 16 positions. Such a jump is not possible without the multi-layered plan we have designed and started implementing, from modifying regulations and procedures; to streamlining operations and governance; and to harnessing connectivity and integration of our logistics assets.

On the job creation front, the sector had 30,000 jobs when we started implementing our strategy. Today we have 84,000 jobs.

We have created 54,000 over the last four years. However, we still need to address the Omanisation ratio in the sector, standing at 15 per cent as an overall percentage in the sector today. However, Omanis occupy 40 per cent of the logistics jobs in the middle and senior level positions. This is primarily due to the nature of the sector, as the logistic labor market is dominated by low-skilled jobs, such as truck drivers and the like. Such issues will be addressed by using technology, elevating the sector’s quality and safety to make our industry more attractive for Omanis and conducting awareness campaigns in schools to educate juniors about the sector, which we have launched and is progressing well.

We are also witnessing the introduction of logistics as a programme in educational institutions and universities – another evidence that logistics is being considered an important sector by the academic and educational community.

 

How is ASYAD bringing in new efficiencies and better governance standards in Oman’s logistics sector?

We had two choices at ASYAD – one, we could have been a passive investor or shareholder and let the companies run themselves; the other was to become a strategic investor, i.e. demand that their strategy is aligned with the country’s strategy. This meant that sometimes we had to be more intrusive and hands-on, and that was the model that we have adopted. In fact, we had to slightly adjust the governance structure of our companies to ensure that we are part of their business plans, strategy and KPIs. 

We ask our companies to submit their plans to measure their goals and efforts to maximise shareholder value. The companies that are incurring losses must design and submit to us their turnaround strategy and roadmap, and we support them to return to profitability. A good indication of the progress we have made thus far is the improvement of the EBIDTA of several our companies in the last two years.

Turnaround is a journey that requires planning and time.

We expect several of our companies to become profitable in the next three to five years.

 

ASYAD is organising the IRU World Congress in Muscat on November 6-8, 2018 along with IRU. What can attendees look forward from the conference?

The IRU World Congress brings business and government leaders together to network, debate and solve the world’s road transport and trade challenges. With rapidly evolving road transport markets facing disruption and with challenging times for trade, it is imperative for the private and public sector to come together. The congress is hosted by ASYAD under the umbrella of the Ministry of Transport & Communications and organised by IRU. With this year’s congress theme being ‘innovation on the move: leading the transformation of transport and trade’, the congress allows leaders to discuss and point out the future of transport and trade.

This unique platform will facilitate better solutions on some of the industry’s most pressing issues including the technology revolution, trading, the transportation workforce urban mobility and future fuels.

It is a part of our branding initiative to showcase Oman as a destination for logistics and investment; how the country is adopting best practices in terms of logistics and transportation and how Oman is becoming more efficient in moving cargo around. 

Abdulrahman bin Salim Al Hatmi

Group Chief Executive ASYAD

Abdulrahman bin Salim Al Hatmi has 24 years’ experience in achieving business growth within startup and rapid-change environments.

He played a key role in the development of Oman’s National Logistics Strategy 2040 and is now pioneering its implementation. He also led the inception of ASYAD Group which currently comprises 15 operating companies spanning three major Ports with their associated Freezones, Oman Shipping, Oman Post, Oman Dry Dock, transport companies including Oman Rail (also created by Abdulrahman and now a regionally recognised brand), as well as other logistics support entities.

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