Company Profile: Al-Futtaim Logistics

Established in the 1980s, Al-Futtaim Logistics has become a regional provider of world-class supply chain solutions with a truly global reach, which has been obtained through strategic alliances with partners across the world.

Al-Futtaim Logistics offers a full range of supply chain management solutions, which extend to freight management and customs brokerage, warehouse and inventory management, domestic and international transportation and value-added services, such as packing, labelling, re-packing, supplier and PO management.

With this portfolio of services, Al-Futtaim Logistics specialises in several key sectors, including Automotive, Retail and FMCG, High Tech, Industrial and Humanitarian Aid. “We believe in continuous improvement, which is demonstrated through our vision of being the best in Service, Quality and Efficiency,” states Tom Nauwelaerts, Head of Al-Futtaim Logistics. “Today, we are recognised by the logistics sector and wider business community as one of the leading logistics service providers in the region, winning various trophies at the Middle East Logistics Awards (MELA) and being nominated in other industry-related ceremonies, such as the Supply Chain and Transport Awards (SCATA) in Dubai.”

As a member of the Al-Futtaim Group, the company started as a small warehouse for the group’s products around 29 years ago, and has developed over the years into one of the largest logistics service providers in the UAE, servicing both the Al-Futtaim Group companies and large 3rd party customers in the market. More than 700 people are currently employed by the company, which operates several warehouse facilities, totalling 2 million square feet, together with a transport fleet of over 200 vehicles.

“By servicing a clientele of Al-Futtaim Group customers and 3rd party accounts, Al-Futtaim Logistics has been able to grow and develop critical mass in all of its services and operations, whilst keeping a strong focus on quality of service,” continues Nauwelaerts.

Growing so strongly, especially in the past few years, has posed many challenges. Keeping pace with the extraordinary market growth of logistics in the UAE, several companies including Al-Futtaim Logistics had to cope with massive resource and infrastructure issues. “During the past year, where growth has been moderate, we have taken this unique opportunity to catch up and get ready for the next level of growth in the UAE,” explains Nauwelaerts. “We have re-organised our company structure and re-aligned our capacity and underlying infrastructure. A lot of effort has gone into finding new ways of further minimising our costs and increasing the efficiency of our operations.”

Nauwelaerts is a strong believer that the logistics business is all about having the right people. As a consequence, he has focused on making sure the company attracts and retains the best people in the market. “In particular, training and development is considered as essential to enhancing customer satisfaction and efficiency of our operations. In addition, Al-Futtaim Logistics has been developing along three main axes, being the build of new warehousing, the expansion of our in-house transport fleet, and the establishment into new geographical regions where the wider Al-Futtaim Group has grown in the past years.”

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As the cost of labour will continue to increase, Al-Futtaim Logistics has a clear strategy to provide a greater deal of technology and automation in its operations. This will lead to increased efficiencies and eventually result in a lower cost of service. “As such, when we were evaluating our warehousing infrastructure options, we took the opportunity to dramatically increase the use of advanced IT technology and automation solutions,” says Nauwelaerts. “By the end of 2010, we will complete the building of our new retail warehouse, which will enable us to leapfrog into the future world of Dubai logistics and take our services to the next level.”

The forthcoming warehouse has been designed to accommodate the main Al-Futtaim Group and 3rd party customers, providing space of up to 120,000 pallet positions. In order to enhance productivity, this new facility will be climate controlled and will maximise the use of “Green” technology to reduce the company’s carbon footprint.

“Since we have such a huge amount of experience in handling the complexities of retail and high tech logistics, through our Group customers such as Panasonic, IKEA, Intersport, M&S, Toys’R Us and Ace Hardware, we are convinced that we have the right competencies to leverage in the 3rd party market,” continues Nauwelaerts. “By building such a large new state-of-the-art facility, we are sure that we will be able to provide a leading cost effective and compelling warehousing services solution to the market.”

Al-Futtaim Logistics has recently brought its transportation business for containers and tautliners in-house. This new business direction follows the cancellation of most third-party transportation contracts for domestic transportation. “We purchased a large fleet of tractor heads from Hino and Volvo, both Al-Futtaim Group companies, including customised container flatbeds, box-vans and taut-liner trailers from established transport equipment providers in the market,” says Nauwelaerts.

Shifting the fleet in-house is a measure of confidence in the company’s ability to gain fresh business initiatives during these difficult times, when many logistics companies have adopted a more cautious approach towards their development plans. “By upgrading and expanding the transport fleet, we will be able to fully take advantage of premium segments of the transport logistics markets.”

Although Al-Futtaim Logistics is considered a leader in the UAE market, it has recognised the need to grow geographically and enter into new markets. According to Nauwelaerts, the reasons for this are two-fold.

“As logistics service providers with a global footprint are establishing themselves in the Middle East region, we see this as a potential threat we need to cope with in regard to our 3rd party customers, who may prefer the use of regional or global logistics players in their business model. On the other hand, we see this trend also as a huge opportunity; therefore we will expand further in that direction,” he explains.

“Also, since the Al-Futtaim Group has grown in a phenomenal way and expanded into new markets, going from Egypt all the way to Sri Lanka and Singapore, our portfolio of logistics service providers has become increasingly complex and fragmented,” concludes Nauwelaerts. “Therefore, we will provide a base network of own logistics infrastructures through Al-Futtaim Logistics in our key markets, hence being able to leverage our experience and obtain synergy effects. In order to keep the pace, we are looking at targeted acquisitions for increasing our geographical reach in logistics. That way, we envision ourselves to becoming a strong diversified regional logistics player with a solid backbone in Automotive and Retail logistics.”
 

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