Globally networkedApril 20, 2017
TOGY talks to Amr Tantawy, country manager of DHL Express, about the logistics environment in Kuwait and the company’s work with the local oil and gas industry.
DHL is a global logistics company providing delivery, freight transportation, warehousing and distribution services. The company operates in more than 220 countries and employs about 340,000 people globally. DHL has been active in Kuwait since 1979. The company works with oil and gas clients through its international express and global forwarding divisions. It offers logistics services to all players in the hydrocarbons industry both onshore and offshore.
• On Customs clearance: “When it comes to Customs and ministries, we are trying to help by transferring the technology and experience we have in other countries. When we talk about Customs clearance, we have a pre-clearance system for shipments by linking flight manifests to Customs. Thus we can pre-clear the shipment and the Customs official can review and randomly inspect shipments. This speeds up the clearance and delivery process.”
• On low oil prices: “There have been some positive consequences of the drop of oil prices as DHL has aircraft flying daily to Kuwait, so the reduction in jet fuel prices was beneficial to DHL aviation. It also helped to reduce operational cost per move for our customers, so we can provide more competitive rates within the Kuwaiti market.”
Tantawy also discussed the New Kuwait 2035 vision and Kuwait’s diversification. Most TOGY interviews are published exclusively on our business intelligence platform TOGYiN, but you can find the full interview with Amr Tantawy below.
How does DHL support the oil and gas industry?
Kuwait’s economy is driven by oil and gas to a large extent. The oil and gas industry needs fast, secure, reliable and safe transportation. This might require shipping anything, starting from a document to a drill. Time is a very important factor in this industry as extending a site’s shutdown or delaying delivery of parts might cause the company to lose millions. Logistics providers must have the capacity to perform express transportation, clearance and delivery to better serve the oil industry.
DHL is serving the majority of oil and gas companies in Kuwait either through global agreements with American, European and Asian companies or local agreements with all oil and gas companies in Kuwait.
What is the energy industry’s share of DHL’s portfolio in Kuwait?
Kuwait is one of the biggest markets for DHL in the Middle East. As the economy is highly dependent on oil and gas, it represents an important share for DHL. DHL Express prefers to diversify its portfolio by not depending on one segment or one industry to reduce economic risk.
How did low oil prices affect the logistics sector?
Low oil and gas prices surely impact the logistics sector, as everyone aims to reduce costs and look for more economic modes of transportation. We were affected by the low oil prices, but not highly so as we are not dependent on only the oil and gas industry.
There have been some positive consequences of the drop of oil prices as DHL has aircraft flying daily to Kuwait, so the reduction in jet fuel prices was beneficial to DHL aviation. It also helped to reduce operational cost per move for our customers, so we can provide more competitive rates within the Kuwaiti market.
How competitive are logistics services providers in Kuwait?
Kuwait’s market is diverse and very competitive. All key players have a presence but DHL still has the biggest market share in the country. There are many players in the market but few have international networks that can serve their customers all over the world. They may have local presences in some countries but they use third parties in most of the world.
That is the key difference between DHL Express and others: the network which brings stability, quality and consistency to the service we provide. This is in addition to a motivated team, Customs clearance experts and speedy delivery.
What opportunities does the New Kuwait 2035 vision hold for DHL?
This year Kuwait has launched “New Kuwait 2035”: a development plan that represents the state’s promising economic future by 2035, a plan that aims at transforming Kuwait to a financial and commercial centre that attracts investments.
This vision aims at making Kuwait an attractive investment centre where the private sector leads economic activities, encourages competition and increases production efficiency amidst a supportive organisational system.
Kuwait, a member of <a href='https://theenergyyear.com/companies-institutions/opec/’>OPEC, suffers from reliance on oil, which [is responsible for] up to 90% of the state’s revenues. In the past few years, Kuwait witnessed a drop of oil prices leading to a deficit in the budget for the first time since 15 years.
This drop in prices pushed the government to launch a programme for economic reforms that is still subject to discussions at the government [level].
DHL’s investment plans are to have an integrated facility to consolidate, clear and serve land and air freight transportation under one roof. This should be a semi-automated facility to speed and secure handling of shipments. We are currently in negotiation with different authorities.
DHL Middle East has recently expanded investment with new facilities in Saudi Arabia, the Emirates [UAE] and Egypt. There are plans for further expansion in Qatar, Oman and Jordan.
What are some of the challenges that affect your business in Kuwait?
DHL always tries to work closely with officials. When it comes to Customs and ministries, we are trying to help by transferring the technology and experience we have in other countries. When we talk about Customs clearance, we have a pre-clearance system for shipments by linking flight manifests to Customs. Thus we can pre-clear the shipment and the Customs official can review and randomly inspect shipments. This speeds up the clearance and delivery process.
I would not say there are challenges. However, I would say there are opportunities. There are the normal ongoing day-to-day business activities happening not only in Kuwait but in all countries. As a global company, one of DHL’s missions is to exchange experience, develop society and create an effective business work environment through experience gained through a presence all over the globe.
For more information on DHL in Kuwait, see our business intelligence platform, TOGYiN.
TOGYiN features profiles on companies and institutions active in Kuwait’s oil and gas industry, and provides access to all our coverage and content, including our interviews with key players and industry leaders.
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