Financial Daily from THE HINDU group of publications
Monday, Mar 25, 2002
Logistics - Shipping
Columns - Off the cuff
The Dubai Ports Authority: Creating competitive advantage
MANY people credit the foundation of Dubai's success to the vision of its late ruler, Sheik Rashid. In keeping with its ancient tradition as a key port in the Gulf region, Sheik Rashid in 1969, gave instructions for a four-berth deep-water harbour to be constructed near the mouth of the creek at Dubai. To find enough rock to build the 5 km breakwater, a new road was built, 30 km into the desert. Then the far-sighted ruler gave instructions for a further 11 berths to be added. The far-seeing visions of great men provide the foundations of today's achievements.
Mina (Port) Rashid (25 15' 33" N and 55 16' 09" E) was completed in 1972. The Royal Mail vessel, `Sirdhana', was the first commercial vessel to call. The port's location near to the city centre, its all-new infrastructure and Dubai's thriving business community made it an instant success. By 1978, the berths were increased to 35, including five berths large and deep enough to handle the largest container vessels. Even in the early years, from 1969 to 1972 and 1978, Dubai was focussed on creating productive capacity, anticipating the direction of growth (containerisation), and providing a cutting edge technology and service. A hallmark of leadership and success.
In 1976, Sheik Rashid gave instructions for the construction of the world's largest man-made harbour at Jebel Ali. Thirty five 35 km South-West of Dubai has its port control tower 24 59' 04"N and 55 02' 09 E. When completed in 1979, Jebel Ali port ranked alongside the Great Wall of China and the Hoover Dam, as the only three man-made objects that could be seem from space.
The Dubai Ports Authority focusses on staying one step ahead of competition by satisfying consumer needs. This is achieved through a dual strategy of investing in the latest IT systems, in the state-of-the-art port handling equipment and upgrading the scale and scope of service to the customers. DPA has invested in the most advanced cranes in the world. The current handling equipment in the Jebel Ali Port includes 16 gantry cranes, 12 of which are post-Panamax and super post-Panamax cranes capable of handling the most modern container ships in operation.
The Jebel Ali Free Zone was built around the Jebel Ali Port. The port is the most modern and technologically advanced port in the region and the largest man made port in the world. Jebel Ali is one of the two major terminals operated by the Dubai Ports Authority, the other being Port Rashid in Dubai City. Over 150 shipping lines call on these ports including feeder lines from Iran, Africa, and the Indian sub-continent.
Developments in shipping
As shipbuilders re-think design, DPA plans for the possibility of handling the larger vessels required to cope with the ever-increasing international container traffic.
The world of shipping is changing at an amazing pace. Container vessels claim the pride of place in the oceans today, after an era of dominance of the seas by the VLCC's (very large crude carriers). Take the case of the Carsten Maersk, flying the Danish flag. She is all of 1138', longer than all ultra large supertankers, carrying 7,100 TEU (twenty foot equivalent) and 140' wide at mid-ship. That is 17 containers wide, 14 containers deep over the keel. Stacked end-to-end, the containers would stretch for 27 miles. A massive, Samsung 12-cylinder engine that drives a single 30' propeller powers the 115,000 DWT vessel. The cylinders are so wide that two men climb in side by side for inspections! She cruises at 25 knots, and if her engines cut off, the momentum would keep her coasting for 5 miles. The largest vessel now afloat has a capacity of 6,600 TEU's, much too big for the Panama Canal to handle. The maximum capacity the canal can take is 4400 TEUs.
These new behemoths of the oceans quarter the world on two axes. Cross Pacific on the Hong Kong to Long Beach, California route, and north-south connecting Asia and north Europe through the Suez. The US East Coast ports, as yet, lack the capacity to receive these titans. They draw 48' when fully loaded and guzzle five tonnes of fuel each hour at 19 knots. The fuel consumption rises dramatically to 10-tonnes/hour at 25 knots. The sheer size and load capacity make for efficiency, the charge for 1 TEU on the HK Long Beach run having dropped from $2,700 to $1,800.
Size has kept growing on the premise that on very large vessels of greater than $100 million cost, the operating costs do not rise in line with capacity. These gains come primarily from automation. These vessels are strewn with control computers and over 8,000 sensors.
The DPA infrastructure
The interlink between the Jebel Ali Free Zone and DPA is crucial to the success of the total operation. There are 67 berths alongside 15 km of quayside catering to container and general cargo operations. In addition, ample storage facilities include 42,500 cu. m. Lloyds-approved cold store, capable of storing 7,000 tonnes of frozen and perishable commodities; 47,000 cu. m. temperature and humidity-controlled store for semi-perishable goods; and vast corner and open areas for the storage of dry bulk and general cargo.
To keep abreast of the latest global trends in electronic data interchange, DPA has pioneered an electronic manifest system working with the shipping fraternity and related government departments, DPA developed its own system as a part of an ambitious plan for paperless cargo clearance in the near future.
Customer-driven service ensures that DPA listens to customer needs and responds by providing superior handling and storage capabilities. These range from cold and cool store facilities, to purpose-built berth for the import of bulk aluminum oxide. There are also expanded tanker jetties to handle the requirements of petroleum and petrochemical products. A built-in over-capacity in container handling equipment gives DPA the flexibility to respond quickly and thus generate additional business.
Additionally, DPA's efficient commercial trucking department provides cost-effective and reliable transportation anywhere in the UAE.
At Dubai Ports, advanced cargo handling equipment provides an efficient service to LCL (less than container load, as against FCL (full container load) consolidators. Efficient un-stuffing and cross-stuffing for onward carriers is an attractive and growing service to consignees and shippers. An efficient port next door and the extensive services of a large network of shipping lines ensure that freight rates are maintained at extremely competitive levels while, at the same time, access to regional and international markets is quick and simple.
Commercial Trucking Department provides a cost-effective service for container and general cargo from Port Rashid and Jebel Ali terminals to anywhere in the UAE. This is a 24-hours a day, 365 days a year operation with a modern fleet of 40 trucks, 146 trailers and a variety of other equipment to satisfy customer's requirement.
Tanker facilities: The first tanker berth was added to Jebel Ali terminal in 1996 and a new berth commissioned in 1997. The Jebel Ali berth can take ships of 120,000 tones dead weight with overall length of 275 m and a draft of 14 m. Container repairs: Each terminal has a well-equipped container repair yard where maintenance is carried out to IICL standards and approved by Bureau Veritas and the American Bureau of Shipping. Both yards can take all types of containers in their paint and blast shop facilities for their hot and cold works. Steam cleaning and chemical washing is also available. Combined, the yards have a storage capacity for more than 2,000 units and all container owners and operators have access to the facilities.
Dedicated aluminium handling berth: One of the world's largest aluminium smelters is operated at Jebel Ali by Dubai Aluminium (Dubal). The company imports raw material via its own dedicated berth at Jebel Ali terminal and exports high-quality ingots to major markets around the world. A $500-million expansion, which doubled the plant capacity, was completed recently.
The DPA has ample storage space at competitive rates for medium and long-term storage. Specialised storage is also available for sensitive commodities such as synthetic resins, heat-sensitive laminates, glass, and paper in various stages of refinement.
Cold and cool storage: The largest Lloyd's approved cold store in West Asia is situated 30 m from the quayside. Manned 24 hours a day by the DPA trained staff and equipped with sophisticated temperature control systems, it offers space for 10,000 tonnees of frozen foods and perishables. Both racked and open rooms are available with temperature range of 29C to +13C. All inventory and delivery procedures are fully computerised.
Vehicles: Berthing facilities for Ro-Ro vessels and pure car carriers at both terminals are complemented by the large space available for both short and long-term storage of cars, busses and construction vehicles imported for both local and re-export markets.
Sea-air cargo: The modern expressway system linking Jebel Ali terminal and Dubai International airport's cargo village, makes the air-sea option very attractive, especially for perishables or time-sensitive cargos. Transit from ship to aircraft is achieved in as little as four hours.
IT in modern port management
Modern ports demand the latest IT systems. DPA has the best systems in the world, in addition to developing its own solutions, to enable rapid container movement The custom-designed Container Terminal Management System (CTMS) supplies full details of vessel arrivals and departures as well as crane bookings and container movements. CTMS features an integrated inter-port transfer capability between the two terminals. With a dual back up system linked by 35 km of fibre optic cable between Jebel Ali and Port Rashid terminals. CTMS manages the information for the operations department to assist loading, discharging and clearance of containers. CTMS supplies data for the Synchronous Planning and Real-time Control System (SPARCS), which produces a graphic tracking display of container movements anywhere in the terminals, with the capacity for loading and discharging in minutes. This means that a vessel can be loaded and discharged simultaneously, thereby providing flexibility and cutting time by as much as 24 hours compared with other ports.
DPA is leading in the implementation of advanced computer systems. The prime objective is to improve services in advance of customer demand.
DPA has the flexibility to adapt software to specific customer needs and the expertise to create packages to keep clients abreast of EDI advances. DPA operates two data centers, one at Jebel Ali and one at Port Rashid, 35 km apart.
High-speed communication lines connect them and each is a back up for the other. The computer system allows the central processors to access a shared, common set of databases.
DPA's Manifest and Documentation System (MDS) was the first of its kind in West Asia when it went online in 1996. Its function is to provide customers better service and control, especially in LCL and General Cargo. It now handles 99 per cent of data. To handle Pinpoint Cargo Tracking, the computerisation of the Container Freight Station (CFS) operations is under way; as is a supporting Mobile Data Terminal (MDT) system. Benefits of CFS will include tracking of consignments from receipts to delivery, quick response to queries, better turn around time and relay of information via the MDS to enable fast and accurate document clearance. A new sophisticated control system for cargo handling equipment is also planned, to increase efficiency of movement around the port.
In 2000, DPA launched Tejari.com an e business site and MyDPA a portal site for customers. Sure steps to make their services more transparent, more efficient and customer friendly.
Key growth figures
The principle commodities handled are timber, steel, cotton, minerals, vehicles, wheat bran, sugar, bagged rice, and project cargo along with specialized cargo such as frozen and chilled food stuffs and various construction materials.
In 2000, over 120 shipping lines used the terminal. 10,944 vessels, including 4,914 container vessels, called in at Port Rashid or Jebel Ali.
Through DPA global management contracts, DPA now manages Beirut and Jeddah ports. DPA's ISO 9002 certification is a recognition of its being the best port in West Asia and one of the leading ports in the world. Undoubtedly, more will benefit from their expertise into the future. In 2000, the DPA received the award for the best government department.
They understand that the key to creating competitive advantage is a hot focus on customer needs. Their success serves to further burnish the brand image that `Dubai delivers.'
(The author is a Bangalore-based consultant and writer.)
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