Saudi-Arabia–based logistics major Almajdouie Logistics is incessantly working to steer the company to growth, both in terms of service offerings and regional reach. This despite the limited new opportunities emerging from the unfavourable economic conditions in the logistics industry.

“The past year was not very propitious economically in the GCC. This trend has unfortunately carried across into 2017 as well, bringing limited new opportunities to the logistics industry. However, thanks to our service quality and focused approach, we have succeeded in maintaining and renewing our major contracts and securing several new ones,” Oussama Abba, general manager – Middle East Operations, Almajdouie Logistics Company told Gulf Industry magazine in an exclusive interview.

The Dammam-based company earlier this year launched its own strategic initiative – Accelerate 2020 – a strategic plan under which it underwent complete structural and operational reforms to counter the volatile economic conditions in the region, Abba said.

Accelerating the plan, the company has also launched new services and is putting considerable investment into developing its people across the company’s portfolio, with the support of some of the industry’s finest leaders that have recently joined its leadership team.

“As Almajdouie Logistics continuously invests in assets, infrastructure and developing our people, there will be important news in the coming months as we further develop our network and footprint across the region, as part of our Accelerate 2020 strategic programme,” he added.

At the same time, the company is making efforts to expand its sales abroad and expand its footprint in the Middle East and North Africa (Mena) region.

“Expanding our footprint within the Mena region is key to the company›s development and sustainability in an extremely competitive environment. As a result, we have been fully operational in all GCC countries since the second quarter of this year, and look forward to further expansion in the course of next year,” Abba revealed.

CONSOLIDATED POSITION

One of the great success stories in the Mena region, Almajdouie’s services cover a wide spectrum of end-to-end logistics solutions encompassing local and cross-border transportation, warehousing, distribution, terminals handling, freight forwarding, in-house customs clearance, and projects logistics.

The company has been involved with the logistics market in Saudi Arabia for the past 52 years and has supported the national economic players, and actively participated in the infrastructural developments through its projects logistics services.

Abba: exceeding customers’ expectations

“We have successfully grown our presence in the kingdom and consolidated our leadership position, which we plan to sustain as we move forward,” said a proud Abba.

The company caters to diverse industries including oil and gas, petrochemical, infrastructure, utilities and fast moving consumer goods (FMCG). Some 60 per cent of its business comes from handling logistics for the petrochemical and oil and gas industries, 20 per cent for FMCG and 20 per cent from others.

“Almajdouie Logistics continues to support its large customer base by providing reliable, innovative, and bespoke solutions adhering to the highest quality and safety standards,” said Abba and added: “Our work is executed to the highest international quality and safety standards.”

SUCCESSFUL PARTNERSHIPS

The company, which celebrated its golden jubilee in 2015, has one of the largest transportation fleets in the Middle East, terminals in key areas in Saudi Arabia and joint ventures and strategic partnerships with experienced international firms.

Almajdouie Logistics is an asset-based company, operating an advanced vehicles fleet of over 7,000 trucks and trailers, 2 million sq m of terminals and warehousing space, 400 axle lines of conventional and self-propelled modular transportation, which supports the distribution of an average of 1.6 million tonnes of goods, as well as the processing of 2 million tonnes of freight both locally and internationally on a yearly basis.

“Our leaders’ visionary approach towards building expertise in various facets of logistics have led to the adoption of global partnerships to develop savoir-faire and competencies not available within our organisation,” Abba said.

This approach shaped up in the form of various partnerships with international companies in various specialised fields of logistics, including:

• Its partnership with Sinotrans, the fifth largest logistics provider globally has delivered two companies:  MaxX Logistics, headquartered in Jebel Ali (UAE) that offers 3PL service, freight forwarding and customs clearance, and Sinotrans Almajdouie Middle East (SMME), a joint venture since 2010 which provides door-to-door logistics service to clients, with a focus on project logistics activities.

• Rabigh Petrochemical Logistics (RPL), based in Rabigh, is a joint venture with Sumitomo Warehouse Company of Japan which offers integrated logistics solutions to PetroRabigh, the petrochemicals plant in Rabigh.

• Almajdouie De Rijke Logistics (MDR), which is a joint venture with De Rijke Group that specialises in providing on-site logistics services to the petrochemical industry, and is currently a market leader in Saudi Arabia. MDR recently celebrated a milestone by completing 10 million Safe Man-Hours (operation without any lost time injury) in all the MDR operated projects in Saudi Arabia.

• Star Marine Services, a joint venture with Marine Services Co Ltd & Associates offers provision and operation of tugboats, pilot boats and mooring boats, as well as provision of towage, pilotage, mooring and vessel traffic control services in the ports of Jeddah and Rabigh.

• Almajdouie Alkazemi Transportation Co, established in 2010, is a joint venture with AlKazemi Group that offers project logistics services in Kuwait. 

PRODUCT INNOVATIONS

The company has recently announced the launch of its automotive logistics service. “Our operations have already started in Saudi Arabia with a single site, and we are looking at expanding this further during 2018. We are currently offering multimodal transport optimisation, PDI, storage, and delivery,” Abba said.

For the requirement of a new major petrochemical project in Saudi Arabia, the company has introduced a 100 per cent Saudi made Hopper. This customised, state-of-the-art aluminium hopper – manufactured by Almajdouie Steel Industries – is able to handle 400,000 tonnes of fertiliser products a month, beating all the previous records registered within the industry using conventional transportation methods.

The company has also recently completed the revamp of its integrated information system with the implementation of new ERP capabilities. “This improvement will provide all customers with complete visibility about their goods movements, enabling them to reduce freight costs, optimise service levels, and improve their processes’ efficiency,” he added.

OPTIMISM

Commenting on the challenges the company faces, Abba pointed out that the recent unstable economic conditions in the region have adversely affected the speed and scale of delivering projects. This situation has also impacted the growth pace and volumes of investment in the logistics and trade sectors.

“As a result of the economic downturn, customers are placing additional pressure on suppliers to reduce their operational costs. This constant push-pull process has driven a logistics’ market behavioural change, and we now observe larger market fragmentation. This is due to the fact that customers are leaning towards more economical solutions, to the benefit of market disturbers, mainly aggregators. Furthermore, customers are becoming more insistent on real-time visibility for their consignments and access to real-time data and reporting. This trend is gaining momentum and looks set to become commonplace as we move into 2018 and beyond,” he said.

Recent changes in the reformation of regulatory frameworks – especially the modernisation of customs clearance processes – will have a significant effect on the way companies do business. Furthermore, the simplification of investment opportunity/procedures, and support programmes for SMEs will have a knock on effect, he opined.

Despite the latest economic troubles, Abba exuded optimism: “We always work to exceed our customers’ expectations and the market has appreciated our efforts.”

This year alone, Almajdouie Logistics bagged the ‘2017 Domestic Logistics Service Provider of the Year, KSA’ award from Frost & Sullivan; was named `Supplier of the Year’ in the GCC-wide and national category at the MEED Quality Awards for Projects; and scooped ‘Bespoke Logistic Project of the Year› at the Logistics Middle East Awards.

Logistics Middle East Magazine has also ranked its CEO Baheej Al Biqawi among the top 10 most influential logistics executives in the Middle East for the second consecutive year.