Insight: How the Big 4 of Abu Dhabi have Created an Emerging Logistics Giant
With the sixth largest oil reserves in the world Abu Dhabi has traditionally relied largely on its oil trade. In the last decade or so however, the Emirate has taken significant steps to diversify its economy by setting up hubs for manufacturing, technology, transport and logistics.
This economic transition has been powered by the 'Big 4' business groups of Abu Dhabi: The AD Ports Group, Eithad Aviation Group, KEZAD Group and Etihad Rail.
These organisations have made mega investments in transport and logistics to create world-class ports, airports, railways and industrial/logistics zones.
In this report we take a look at recent projects and initiatives within Abu Dhabi that are not only fuelling growth for the Emirate but also driving it to emerge as a global powerhouse in shipping, aviation and logistics while facilitating regional and world trade.
Transition to non-oil economy
According to a just released report by Statistics Centre – Abu Dhabi, growth of Abu Dhabi's Gross Domestic Product in the first quarter of 2023 at 3.9% is at nine-year high. This is "driven by the robust performance of non-oil economic activities in the emirate."
His Excellency Ahmed Jasim Al Zaabi, Chairman of the Abu Dhabi Department of Economic Development (ADDED), said: "Abu Dhabi is committed to strengthening its economic scene by achieving a strong, stable, smart and sustainable knowledge-economy.
"The non-oil activities have been experiencing strong growth rates of non-oil sectors and share of its contribution to the total GDP is 52.8%, despite mounting challenges in the global landscape."
AD Ports Group
One major engine that has turbo-charged Abu Dhabi's growth is the Abu Dhabi Ports Group.
With a variety of major investments in business clusters including ports, logistics, free zones, maritime and digital technology, the group has radically transformed Abu Dhabi's shipping, logistics and industrial landscape.
AD Ports Group Signs 50-Year Container Terminal Deal with Karachi Port Trust
In a partnership signed a few days ago, Abu Dhabi Ports and Premier Marine are bringing dry docking and ship repair facilities in a major way to Abu Dhabi, which is a first for the emirate.
Captain Mohamed Juma Al Shamisi, Managing Director and Group CEO, AD Ports Group said: “The addition of drydock services is a strategic move aimed at driving growth and enhancing the company's competitive position in the market.
"AD Ports Group’s extensive experience in the port and marine logistics industry, combined with its commitment to innovation and excellence, make it well-positioned to succeed in this new venture."
On its tenth anniversary, Abu Dhabi's Khalifa Port inaugurated a US$1 billion expansion of port and marine logistics services along its South Quay that will include the above mentioned drydocks facility.
In other new developments, on the shipping front, AD Ports Group has signed an agreement with Aramex to develop an NVOCC enterprise that will provide tailored solutions to all freight-forwarding industry players by enhancing and developing shipping connectivity across the GCC, Indian and African markets.
The group has also announced plans this year to expand its fleet with the purchase of five new bulk carriers and three crude oil tankers.
Meanwhile, AD Ports Group's digital arm Maqta Gateway has been working tirelessly to provide innovative technology solutions to facilitate smooth flow of goods across Abu Dhabi's ports and terminals.
This month Maqta Gateway has signed a service level agreement with the General Administration of Customs – Abu Dhabi and the Abu Dhabi Department of Economic Development (ADDED).
The agreement aims to provide single window digital customs services through Maqta's Advanced Trade and Logistics Platform (ATLP), specifically for the inspection and clearance services unit.
Dr Noura Al Dhaheri, CEO of Digital Cluster – AD Ports Group and Maqta Gateway, said: "ATLP is a competitive digital trading environment which connects various government departments, private entities, and control procedures across ports and borders, serving as the primary trade gateway to Abu Dhabi."
Etihad Aviation Group
Since its first flight in 2003, Etihad Aviation has moved at jet speed rapidly transforming from a small regional carrier to the acclaimed global aviation company that it is today.
As part of the HOPE Consortium Etihad Cargo played a stellar role in global and regional vaccine and medical supplies distribution saving countless lives and helping millions to deal better with the challenges of the corona virus pandemic.
Surpassing expectations the carrier crossed its operational targets for 2022 with a world-beating 80.5% on-time-performance (OTP) for freighter departures and 84.1% OTP for freighter arrivals.
Martin Drew, Senior Vice President – Global Sales & Cargo at Etihad Aviation Group said: "Exceeding OTP and DAP targets, which measure the carrier’s ability to deliver cargo at the agreed time and the punctuality of its freighter fleet against schedule demonstrates Etihad Cargo’s strong commitment to reliability."
Despite challenges in passenger traffic Etihad Cargo maintained a strong belly-to-freighter load factor, recording a 58% belly and 42% freighter load mix at the end of 2022.
The Abu Dhabi air cargo carrier has also taken digitalisation of operations to the next level with enhanced shipment tracking, automated dashboards, customised news feeds and look-to-book features that have resulted in 39.3% of bookings being made through its online booking portal.
Another core focus for Etihad Cargo has been sustainability and the carrier has launched several initiatives and programmes that will help its customers meet their sustainability targets and benefit the wider air cargo industry.
Etihad was the first Middle East carrier to the air cargo industry's first multi-sector sustainability verification programme, BlueSky.
Etihad Rail
In February this year, Etihad Rail announced the completion of the National Rail Network and commencement of commercial operations across the UAE. It's extensive UAE network with proposed interconnections to Oman and Saudi Arabia is greatly going to boost sustainable transport across the Middle East region.
Etihad Rail's fleet of the most modern freight trains in the region includes 38 locomotives, with a capacity of 60 million tonnes of goods annually, and more than 1,000 multi-purpose vehicles.
Major industry names like Borouge and Vale have already signed mega deals with Etihad Rail to move petrochemicals and iron ore respectively from production sites to ports.
DHL Global Forwarding and Etihad Rail have also set up an inter-modal logistics joint venture creating one of the largest collaborations within the Middle East region's transport industry.
Under the agreement DHL Global Forwarding will adopt rail as one of its primary modes of transportation to distribute goods throughout the UAE, via the railway network which links key industrial hubs.
At the signing of the partnership Gottfried Eymer, CEO of Etihad Rail Freight, said: “Etihad Rail is pleased to introduce further sustainable transport models within the UAE and continue to stimulate economic growth and sustained social development in the region.”
By all accounts Etihad Rail is well on its way to provide the much-needed sustainable cargo transport option for the UAE supply chain and this will also ease congestion on the UAE and GCC road networks while reducing pollution.
KEZAD Group
In November last year the AD Ports Group announced the integration of Khalifa Industrial Zone Abu Dhabi (KIZAD) and Specialised Economic Zones (ZonesCorp) into the newly formed KEZAD Group (Khalifa Economic Zones Abu Dhabi Group).
KEZAD now comprises 12 economic zones with a total area of 550 square kilometres, including 100 square kilometres designated as Free Zones that makes up 55% of the UAE’s industrial area.
With more than 1,800 clients from 17 industrial and economic sectors KEZAD Group caters to a range of key industries in Abu Dhabi.
Speaking at the launch of the consolidated group Mohamed Al Khadar Al Ahmad, CEO, KEZAD GROUP said: “KEZAD Group is now responsible for the largest integrated trade, logistics and industrial hub in the region and is the largest operator of purpose-built economic zones and workers residential cities in the United Arab Emirates.
"We will deploy this enhanced scale to fully support strategic industries and enable sustainable diversification and growth."
Mega Logistics Hub
It is not just the 'Big 4' mentioned above but also several medium and small enterprises that have been greatly enabled and facilitated by the transport, logistics and trade infrastructure now available in Abu Dhabi.
With its state-of-the-art ports, airports and terminals and a burgeoning industrial sector Abu Dhabi today has arrived at the high table of global trade and logistics.
And the far-sighted investments made by the Emirate's Leadership has well-positioned Abu Dhabi to grow even faster in the future to emerge as a giant not just in regional but global logistics.
