Oman logistics opportunities & challenges mahmood sakhi albalushi - oman ports conference - 15 jan 2018 - upload

Oman Logistics Sector
Opportunities
and Challenges
Mahmood Sakhi Albalushi
CEO Al Madina Logistics Co.
CEO Muscat Container Depot (Inland Port)
Email: mahmoodsakhi@yahoo.com
CEO Muscat Container Depot (Inland Port)
Oman Ports Conference
15th January 2018

Logistics Sector Value Chain
Logistics Sector is strong as its weakest link
Opportunities Opportunities
Challenges
Mahmood Sakhi Albalushi Oman Ports Conference - 2018
Ports Infra &
Efficiency
Air Cargo Infra
& Efficiency
IT &
Communication
Infrastructure
Commercial
Regulations
Start up
Procedures
Human
Capital
Economic
& Industrial
Zones
Market
Efficiency

Oman – Comparative & Competitive Advantages
LOCATION :
Located on the Indian Ocean, center between
West & East, and North & South, on major
maritime and air cargo routes.
Great Infrastructure:
Deep Sea Ports, Int’l Airports, Road and Railway
Connectivity, IT Communication Infrastructure
Investment Friendly:
Free Market, Investment Friendly Regulations,
FTAs
Potential Investment Opportunities:
Logistics Services, Supply Chain Services,
Bonded Facilities, Distribution Centers, Sea, Air,
Land Connectivity, etc.

Macro-Environment
Global & Regional
Economic Outlook
Competitive
Advantage
Socio-Economic
Development
Fiscal
Framework
Oil & Gas
Social&
Sustainability
Themes
Economic
Sectors
Core
Diversific
ation
Enablers
ManufacturingLogistics Tourism Fisheries Mining
Financial Services
Education Healthcare
Utilities
Business Environment
Private Sector
Development/SMEs
Environment Protection, Sustainable
Development and Prevention of
Natural Disasters
Employment
Science, Technology
& Innovation
Regional
Development
ICT
Other Social
Development
Youth
Machinery of Government and E-Government
Oman’s 9th 5-Year Development Plan Diversification Outline

Market
• New Markets.
• Attract New FDIs.
• Leverage FTAs.
Human Capital
• Employment Legislations.
• Industry-academia Collaboration.
• Logistics as Career.
• Int’l Best Practices.
Technology
• Enhance IT Infrastructure
• Enhance IT Regulations
• Leverage Technology
Trade Facilitation
• Licensing Processes.
• Operational Processes
• Finance Mechanism & Trade Conduct.
• Economic & Free Zones, FTAs
Sultanate of Oman Logistics Strategy 2040 (SOLS2040)
Areas Need to be addressed again:
- Infrastructure
- Internet Speed & Cost
- Public Sector Efficiency
- Regulations
Source: SOLS2040

ASYAD (Oman Global Logistics Group-OGL)
OGL’S VISION & GOALS
• Top 10 Global Integrated Logistics Service Provider.
• Multimodal service provider through an integrated set of assets and capabilities.
• Leading in leveraging next-generation technologies (e.g. robotics, artificial intelligence).
• Enabling the development of the private logistics sector.
• Successful financially and able to attract private sector capital.
OGL’S VISION & GOALS
• Top 10 Global Integrated Logistics Service Provider.
• Multimodal service provider through an integrated set of assets and capabilities.
• Leading in leveraging next-generation technologies (e.g. robotics, artificial intelligence).
• Enabling the development of the private logistics sector.
• Successful financially and able to attract private sector capital.
ASYAD has two fold mandates:ASYAD has two fold mandates:
1) To develop Oman’s logistics capabilities
and execute SOLS 2040 to make Oman a
global logistics hub
1) To develop Oman’s logistics capabilities
and execute SOLS 2040 to make Oman a
global logistics hub
2) Improve the performance of the Group’s
companies (government owned logistics
companies
2) Improve the performance of the Group’s
companies (government owned logistics
companies
Oman Aviation GroupOman Global Logistics Group
ASYAD
Ministry of Transport & Communication
Setting policies, regulations and national strategies
Oman’s Logistics Spearhead
Is it Competing with Private Sector ?

Trade Facilitation: Bayan & AEO

Logistics Services Market Structure
5th Party
Logistics
(E-Business)
4th Party Logistics
(Logistics
Consultant/Coordinator)
3rd Party Logistics
(Asset-based & Freight Services)
2nd Party Logistics
(Transport/Warehouse Owner)
1st Party Logistics
(Producer/Supplier/Trader)
1st Party Logistics
(Producer/Supplier/Trader)
Challenges:
Market Sophistication.
Oil & Gas Projects
Regulations
Approvals
Urban Planning
IT Infra

Oman Logistics Market Structure & Opportunities
Source: AMLS & EY
Logistics Services: In-house or Outsourced
13%
87%
Primary Transportation
In-house
Outsourced
52%
48%
Secondary Transportation
In-house
Outsourced
63%37%
Warehousing
(but managed by firm itself)
Owned
Rented
97%
3%
3PL Storage & Distribution
In-house
3PL
Transportation from/to point of
entry to/from a warehouse.
Transportation from warehouse
to distribution network.
Warehouse for
commercial goods 3PL services

Oman – A Regional & Int’l Logistics Hub

Source: Logistics Management
49%
51%
53%
47%
10
%
90
%
12
%
88
%
26%
74%
71%
29%
Global Trade: Internal & External
Internal Trade External Trade

Major Logistics Clusters
Sohar:
Port,
Airport
Free Zone
Industrial Estate
Duqm:
Port,
Airport
Dry Dock,
Economic Zone,
Salalah:
Port,
Airport
Free Zone
Industrial Estate
Khazaen:
Logistics Hub
Ibri:
Logistics Hub
Musandam:
Free Zone
Mazyona:
Free Zone
Bruaimi
Free Zone
Current
Future
Muscat:
Airport
Inland Port
Tourism Port

Major Logistics Clusters
Sohar
Salalah
Duqm

Potential Investment Opportunities:
- Logistics Services,
- Supply Chain Services,
- Bonded Facilities,
- Distribution Centers,
- Oil Storage Farms,
- Air Cargo,
Special Economic Zones Free Trade & Industrial Zones Industrial EstatesLogistics Parks
Bonded WarehousesAir Cargo Hubs Distribution CentersDry PortsOil Storage Farms
Oman – Comparative & Competitive Advantages

GCC E-Commerce
5.3
19.8
0
5
10
15
20
25
2015 2020
GCC E-Commerce ($Billion)
Source: A.T. Kearney Analysis 2016
Saudi
33%
UAE
44%
Qatar
11%
Kuwait
8%
Oman
1%
Bahrain
3%
2015
Saudi
42%
UAE
38%
Qatar
10%
Kuwait
6%
Oman
2%
Bahrain
2%2020

Internet & E-Commerce
Internet of People

Air Cargo Growth
640
580 550
1,770
1,260
920
830
3,010
-
500
1,000
1,500
2,000
2,500
3,000
3,500
Standard-body
Conversions
Medium-widebody
Production
Large-widebody
Production
Total
Global Air Cargo Freighters Growth
2015 2035
70%
Source: Boeing Report 2017
38%
25%
11%
7%
5%
4% 10%
Middle East Air Cargo Partners
2,335,000 Tons
Europe
Asia Pacific
North America
South Asia
Middle East
Africa
Other
Oman should develop air cargo facilities, focus on Europe & Asia Pacific Routes

Ports: Triple-E Vessels: 21,500 containers
Are Oman’s Ports Ready Now and Properly Designed for Future Growth?

Competition: Regional Ports & Logistics Hubs
Source: AMLS Analysis
0
20
40
60
80
100
120
140
160
Ports Productivity (Containers Moves per Vessel)
2012 2013 2014
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
Ports TEUs Handled
2011 2012 2013 2014 2015 2016

Challenges of New Routes
Chinese One Road, One Belt
Is Oman connected to any of Chinese One Road, One Belt ?

Competition: Regional Ports & Logistics Hubs
Source: AMLS Analysis
Fast Growing New Competitive Ports in the Regions

Strategy for Growth: Tools to use
“Competitive Strategy is about different. It means deliberately choosing to
perform activities differently or to perform different activities than others to
deliver a unique mix of value.”
Michael Porter
Porter’s Generic Strategy

THANK YOU
CEO Muscat Container Depot (Dry Port)
CEO Muscat Container Depot (Dry Port)
Oman Ports Conference
15th January 2018

Oman logistics opportunities & challenges mahmood sakhi albalushi - oman ports conference - 15 jan 2018 - upload

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