Green logistics fuel economic growth in Kuwait

Kuwait

Makram Raad, country manager for DHL Express in Kuwait, talks to the The Energy Year about investments in sustainable transportation technologies and how the company helps local businesses grow at home and abroad. DHL Express is a global logistics company that provides international shipping, warehousing and distribution services.

Can you give us an overview of DHL Express’s local footprint?
We have been active in Kuwait since 1979. The country represents a key market for the Group’s strategy because it is well positioned to be a transit point for the business activities of many companies and industrial players.
The Group has an important footprint here, being present as DHL Express and as DHL Global Forwarding. DHL Express employs more than 300 of what we call Certified International Specialists in Kuwait and we are the market leader for transportation and logistics, with a fleet of almost 100 vehicles between light and heavy trucks.
We have around 12 aircraft in the GCC. They are based in Bahrain, which is our hub, but one of them lands in Kuwait every day, connecting the country to the world and vice versa.

How does DHL Express help the country diversify its economy and what is the company’s contribution to Kuwait Vision 2035?
The way we look at Kuwait Vision 2035 is always progressively, trying to support the development of the market as much as possible with our services. The economy in Kuwait is massively dependent on oil and the 2035 agenda is part of a common trend throughout the region, where governments are utilising income from the oil and gas sector to build and strengthen other industrial segments in order to reduce the risks attached to relying too much on a single source of revenue.
Our contribution is to facilitate the trade activities of Kuwaiti companies, making it easier for them to open up to foreign markets, which serves the purpose of what the Kuwaiti government is trying to achieve.

What is your assessment of the domestic business framework and the appetite that investors have for ventures in Kuwait?
In economies such as Kuwait’s, higher oil prices equate to more investment, as we have experienced in 2023, which was the first time in several years that the country recorded a fiscal surplus. This automatically helps cash circulate in the economy, allowing companies to spend and invest domestically, and it helps attract more FDI to the country.
As we like to say, we are the barometer of the market: whenever there are fluctuations, positive or negative, they are reflected in our trade volumes.
The IMF is forecasting a GDP increase of more than 3% in 2024, so our volumes should theoretically increase as well.
Ultimately, Kuwait presents many opportunities for businesses to thrive, presenting investors with high security and safety levels, and one of the wealthiest environments in the world. Our role will be to foster connectivity and help penetrate boundaries, allowing local products to enter the global supply chain, which will in turn help investors consider Kuwait as their home ground.

What is the company doing to support local products and SMEs?
This year, our major focus is on SMEs, a key pillar of our strategy in Kuwait. We were among the first ones to recognise how important these players are, and to build solid bases for what will come next in the country’s development. DHL Express has been promoting several programmes to support SMEs in different ways, not only from a logistics perspective, but also by looking at building an ecosystem that can help them launch their businesses.
We pride ourselves on being consultants to our customers and to our partners. We advise them on their business and their strategies, not solely on transportation. Our client base is quite diversified, so we are fortunate to have experience in different industries. I’m talking about GFPS [global financial and professional services], healthcare, retail – retail is a big one here in the country. This helps us learn and replicate solutions across our wide and multifaceted client portfolio.
In brief, our mission is to help local businesses launch products in the region and globally, help them reach new markets, increase their revenue streams and spread the authenticity of Kuwaiti products around the world.

Can you walk us through DHL Express’s commitment to sustainability and ESG practices globally and in Kuwait?
We aim to be net zero by 2050 and reduce the company’s emissions by 30% by 2030. In September 2022, we successfully completed the maiden flight of Alice, the first-ever fully electric commuter plane, designed to make aviation a sustainable and affordable solution for regional travel and cargo transport. Although it’s still in early stages in terms of travelling distance and load capacity, it represents a turning point for a new era in aviation.
In our business, the biggest share of emissions comes from aviation. That’s why we entered into two of the largest-ever SAF [sustainable aviation fuel] deals, under which BP and Neste have committed to supply DHL Express until 2026​.
We’re investing USD 7 billion in green technologies. That’s massive. We’re talking about almost 800 million litres already purchased. We’re the first in our industry to recognise this as an area of development and take action.
Kuwait was one of our pilot countries in the region for the introduction of SAF and we’re launching our first hybrid vehicle now. The infrastructure to support electric vehicles is not yet developed, but it is getting there, with a big push from K-companies to introduce more charging stations across the territory.

Can you walk us through your initiatives to improve delivery efficiency through digitalisation?
DHL has already embarked on its digitalisation journey. We launched our first fully automated and intelligent urban drone delivery service back in 2019, and we are focussing our investment on innovations that have potential to solve real business problems and exploit new opportunities.
For example, DHL already uses augmented reality in warehouses to drive efficiencies in picking. Warehouse robots are improving picking times and supporting employees in repetitive tasks such as packaging. Robotic process automation is taking over selected back-office functions; new sensors are providing our customers with real-time information about the location and condition of their goods, using IoT.

How do you assess the potential of Kuwait, and how would you describe DHL Express’s business approach in the country?
I see massive potential in Kuwait. The reason is that all of the pillars that you require for an economy to grow are already here. For example, Kuwait has one of the strongest and most stable currencies in the world. The strategy that the government has put in place, together with Vision 2035, bring all the necessary components to make the local economy thrive.
At DHL Express, we consider ourselves part of this strategy, and we have a duty towards the local community to help it grow. To describe our approach, we can say that we perform “glocally”: thinking globally and acting locally with the ultimate aim of connecting people and improving their lives.

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