22 January 2015

Allied in Driving Growth

Dubai strengthens its position as one of the leading logistics hubs, Allied Transport is doing its part to keep goods moving.

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At the crossroads of Europe, Asia and Africa, Dubai’s unrivalled strategic location and a robust logistics infrastructure has long made it a pivotal trading hub.

A recent report by research company Frost & Sullivan indicated that the total logistics market in the UAE in 2013 was estimated to have reached USD23.4 billion, with that figure likely to increase by over 15 per cent to USD27 billion by this year.

Major developments such as the expansion of Jebel Ali Port and Jebel Ali Free Zone (JAFZA) together with Dubai World Central (DWC), home to Al Maktoum International Airport and Logistics City, will only serve to further improve the UAE’s standing as a major international logistics hub.

Established in 1974, Allied Transport has played a major role in the country’s logistics sector.

The company’s inception coincided with the growth of Dubai as a major city when a series of major construction projects were under way.

The land freight company started by transporting building materials to support Dubai’s development. Now serving the entire GCC, Levant, other Middle East countries as well as North Africa, Allied Transport’s focus has moved from transporting general cargo to much more specialised cargo.

“Our growth has been driven by focusing on niche markets such as FMCG, pharmaceuticals, IT and telecoms,” explains CEO, Ali Khalifa Beyat.

“Much of the cargo that we transport is highly sensitive and demands specialist handling such as maintaining a consistent temperature throughout the journey.”

The company has taken the decision to focus purely on land transport by playing an important role in the Hub-and-Spoke model to minimise distribution costs and not to diversify into air and sea freight.

“We focus on our strengths and that allows us to provide comprehensive and feasible haulage solutions for our customers,” he adds.

“That quality is achieved through a combination of the best human resource available, quality equipment, Integrated Management Systems and advanced technology.”

While the drive for quality has helped Allied Transport achieve a consistent annual growth rate of 25 per cent to 30 per cent over the past three years, it was effective management during the recession that put the company in a strong position to capitalise on the economic recovery.

Many logistics companies in the UAE did not survive the downturn but according to the CEO, Allied Transport was not only able to increase its market share but also strengthened its relationships with its customers.

“In what was a challenging time for everyone in the region, we worked very hard to streamline our costs so we could pass on those savings to our customers to remain competitive.

“We also looked at other innovations such as new routes and increasing the size of our equipment so we could offer larger capacity at the same cost.

“All of this put us in a strong position when the recession ended as customers stayed loyal to us and we were able to further grow our business.”

A significant milestone for the company is winning a long-term contract with Emirates SkyCargo to provide road feeder services between Dubai International Airport and Al Maktoum Airport – where Emirates’ freighter fleet is now based and to other airports within UAE and in the region.

“This is a very significant project for the Middle East, the two airports connect all the freight in the UAE and together make up the largest cargo and distribution centre in the region,” says Ali Khalifa.

“The trucking of cargo between the airports is a critical part of Emirates SkyCargo’s operation. We’re very proud to be able to provide this service carrying sensitive cargo and ensuring it is delivered on time, in the right condition and under high security.”

Allied Transport has been successful in meeting the demands of the contract – including providing a dedicated fleet size of 50 tractor units and custom-built Aviation Trailers – thanks in part to an asset financing solution from HSBC which has proved to be one of the factors that ensured successSBHvwhichwlld.

“In line with its business strategy, HSBC has shown a real understanding of our needs when it comes to financing solutions,” he adds.

For Aditya Coondoo, the company’s Relationship Manager at HSBC, being involved in discussions at an early stage has allowed the bank to provide the best possible funding solutions for Allied Transport.

“The company showed real confidence in us by involving us in preliminary strategic meetings to discuss the various options that we could offer. This allowed us to anticipate their funding requirements so we could help them continue their expansion and acquire a new fleet.”

As Allied Transport strives for further growth in 2015 and beyond, it is looking to expand its existing business in the Kingdom of Saudi Arabia from the Eastern Side (Dammam to Riyadh to Jeddah) taking advantage of major sectors there such as FMCG, Tele-communication, IT and Pharma care.

With other plans in the pipeline such as ensuring trucks return from deliveries with at least 40 per cent backload, and possible expansion of its land freight services into Europe, it is exciting times ahead for Allied Transport.

Disclaimer: This article is not intended to constitute any advice or an offer. Any forecasts or projections are indicative only. HSBC or any of its affiliates accepts no liability, whether express or implied, arising out of or incidental to contents forming part of the article.

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