Analysis: Sustainable supply chain in the Middle Eastby Ahmad Lala on Nov 12, 2012
Global Research institute APMG-International announced last month that the UAE alone is using 225 per cent more energy than Europe.
“In fact,” said Alan Harpham, chairman of APMG-International: “The UAE’s per capita footprint of 9.5 hectares is four times more than the global per person 2.1 hectares availability.”
He added that the UAE must step up management of its ecological footprint, in response to research which revealed that the equivalent of 6.5 planets would be needed to regenerate resources and absorb carbon emissions, if everyone on the globe lived like the average Middle Eastern resident. “With international arrivals to the Middle East expected to reach 68.5 million by 2020, carbon footprint management is key in generating projects that create an effective presence within the UAE to ensure ecological, economic and social success,” said Harpham.
However, for the region’s logistics companies, reforms are already in place, with many of the global firms doing their part for sustainability. One of those companies is Kuwait-based Agility. Agility’s senior manager for corporate social responsibility, Frank Clary, agrees with this view.
“The short answer is yes, for global organisations,” says Clary. “Global organisations, like Agility, operating in many different markets, are legally compliant. In addition to that, most global logistics organisations are working with global consumer products goods. We have a lot of customers that are dealing with consumer products goods and their priorites now are different from those they had twenty or thirty years ago.
“There’s always room to do more, but I think that by and large global organisations, like Agility, are doing all that they can for the environment.
However, Clary says that the problem may lie with smaller logistics firms. Most of the world’s logistics operations are, after all, performed by smaller organisations. “Smaller organisations don’t seem to be doing as well as they should,” he says. “I don’t think it’s because they don’t want to, I think it’s because there’s a lack of awareness. There seems to be a lack of incentive for them to upgrade their fleets and reduce their emissions and so on.
Clary adds that more customer pressure would force logistics companies to reassess their operations. This in turn would lead to a more sustainable industry. “We often think of the logistics organisations as being the driver of incentives or the government, but there’s a third party and that is consumers and the end users of products,” he says.
“If you can build awareness, then those consumers can demand different environmental practices from the organisations that are producing products and supply chain organisations that are managing the delivery of those products to market.
“If you look in places like Africa or the Middle East and some places in Asia, there’s no real drive from consumers to say, ‘I want to know what the environmental impact of my purchasing decisions is, so I can give my input to the producers of these products, and tell them I’m happy or not happy with the amount of CO2 or emissions that are associated with it.
“This would, in turn, encourage producers of products to try to work with the supply chain providers to improve their environmental performance. Then you actually end up with a flow downwards towards smaller organisations.
“Most logistics operations are performed by smaller organisations. So, without the consumer pressure and the regulatory pressure on the producers of goods, it can be nebulous. There’s no real incentive for small organisations to improve their environmental performance if their peers are not doing the same thing.
“You actually have to allocate some resources to this.
“You might achieve novel savings on the back hand, but unfortunately small organisations don’t always have the ability to understand that holding off a little bit, making some innovative solutions and putting them in place might actually result in improving quality of service and reducing cost.
“So it takes awareness at the consumer level, awareness at the small operator level and encouragement for the producers of goods to tell the logistics and supply chain organisations that these are the levels of service quality that are required.”
United Arab Emirates
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