Domino Effect: How Incremental Change Can Make Waves For Sustainable Logistics In The Middle East
In January, Sheikh Mohamed Bin Zayed Al Nahyan, President of the United Arab Emirates, declared 2023 the ‘Year of Sustainability‘: 12 months of initiatives, activities, and events to drive home the nation’s commitment to environmental and sustainable practices.
Similar initiatives have been seen throughout the Middle East in recent years. Sustainability remains a foundation of Saudi Arabia’s and Bahrain’s Vision 2030 programmes. Qatar, buoyed by the successful sustainability strategy for the last year’s FIFA World Cup, continues to drive innovations in sustainable technology. And Oman will transition to a net-zero carbon economy by 2050.
The prosperity of the region was founded on its oil and gas reserves. However, in recent years the Middle East has been looking to reduce its dependence on hydrocarbons by diversifying and working towards a future built on innovations, technology, renewable energy, and sustainability.
Meanwhile, its role in the wider supply chain continues to expand. Home to key shipping routes such as the Suez Canal and the Strait of Hormuz, the region’s geographical position and world-leading logistics facilities, ports and airports are critical in connecting Asia and Europe.
By nature, the global logistics and transport sector has a tremendous carbon output. According to a January 2023 report by the International Organisation for Standardisation, it contributes just over a third of global carbon emissions, the largest-emitting sector in many developed countries.
To meet global decarbonisation targets, every aspect of the logistics and supply chain industry must seriously review its carbon footprint. This means looking at warehouses and investing in digitalisation, automation and greener modes of transportation and freight methods.
Fredrik Nystrom, Vice President at GAC Group Middle East, tells us why third-party logistics partners must invest in sustainable technologies…
A Jewel In The Crown
That is precisely what GAC Group has been striving to achieve in its logistics operations. In 1993, it opened its first independent third-party distribution centre in Dubai. Located in the Jebel Ali Free Zone, the GAC Logistics Park has become a jewel in the company’s crown as one of the Middle East’s largest and most advanced centres.
Additionally, our facility in Dubai was a new concept for the Middle East at its launch. It was a bold step into the unknown but vital to tap into the potential of the region’s logistics market. We staked our claim to the Middle East market early and have continued to be one of the region’s leading players in contract logistics and warehousing. This is down to our drive to innovate, use technology to enhance our service offerings, and remain adaptable to ever-changing customer and market demands.
The development of the GAC Logistics Park laid the foundations for world-class warehousing and distribution capabilities to be replicated throughout the Middle East and beyond, in the Americas, Europe, Africa and Asia. In Dubai alone, GAC has five major distribution centres with a combined 116,000 m2 of facility space covering significant sectors, including fast-moving consumer goods, pharmaceuticals, fashion and automotive. To further expand its reach, the company opened dedicated contract logistics facilities with modern innovations and technology in Bahrain and Qatar, as well as in Indonesia, Malaysia, Singapore, Sri Lanka, and Thailand.
We have invested in digital platforms, including our bespoke warehouse management systems and advanced IT capabilities, to optimise operational efficiency while going paperless. We are committed to sustainability, and these investments enable us to stay on course. Apart from day-to-day operations, the buildings that comprise the region’s logistics landscape can become sustainable landmarks.
In December 2022, GAC Qatar opened its new 27,000 m2 multi-user contract logistics facility and office building in Ras Bufontas Free Zone featuring 40,000 pallet positions, temperature, and humidity-controlled chambers, dedicated value-added services space and mezzanine storage.
Sustainable materials, methods and techniques were used in its construction. The building was given Global Sustainability Assessment System (GSAS) certification and boasts several energy-saving features such as environmentally friendly controlled thermal insulation, thermal transmittance technology, advanced building management systems and LED lighting with motion sensors. Further, the facility is partly powered by solar energy and uses 100% recycled water from in-built storage building air coolers.
There are plans to further improve the facility with solar panels, a sanitary wastewater treatment plant for irrigation, and a plantation and irrigation system that requires low water consumption. GAC Qatar also invested in seven new fuel-efficient tractor heads last year to reduce its carbon footprint and a project to recover and reuse 85% of the wastewater generated from container cleaning at its inland container depot.
The site draws on the Group’s experience from constructing other regional centres. In Dubai, GAC installed nearly 21,000 solar panels on the rooftops of three of its contract logistics facilities, which produce enough clean energy to meet up to 93% of the site’s total needs – the equivalent of powering 20,000 households.
It also recycles more than 37 million litres of wastewater annually through two sewerage treatment plants at its facilities and is on its way to replacing all its conventional vehicles with electric vehicles, with the first two launched in October last year. Meanwhile, in Bahrain, GAC has installed 552 solar panels in its warehouse in Bahrain Investment Wharf in Al Hidd to generate approximately 300KW of energy to fully cover its total electricity needs.
As the Middle East deepens its commitment to sustainability, technology and innovation – third-party logistics partners must also, capitalise on burgeoning opportunities and ensure their practices are on the same path.
That does not just mean building eco-friendly warehouses from the ground up. Investing in small-scale sustainable technologies and projects, such as in-built solar panels and advanced warehouse management systems can significantly impact the broader carbon footprint of the logistics sector. At a time when becoming greener has never been more important, these types of investments are critical to long-term sustainable goals. As an old proverb says, ‘The best time to plant a tree was 20 years ago. The second-best time is now.’