MEED: Global trade has gone from boom to bust since Danzas Regional Hub opened. How has the downturn affected your business?

Stefan Fallet: When we planned the new Jebel Ali Free Zone (Jafza) facility, even existing customers were waiting in line for space to become available. Such was market demand that there was nearly no warehouse space to rent in Dubai. But demand has now peaked and the industry has undergone radical change.

The logistics industry has seen a return to old-fashioned values. And that’s not necessarily bad

Demand from construction has fallen in particular. Previously, with the uncertainty of the downturn, key decisions were delayed and many of our customers focused on consolidation and restructuring, rather than on expanding their supply chain. Now, however, we see that many customers are gearing up for growth.

How have your customers’ needs changed?

The global downturn has changed the business climate and consumer behaviours. Business models created during the boom are no longer valid. The emphasis has shifted from needing access to space to demand for reliable and credible service quality and operational levels.

In that sense, the logistics industry has seen a return to old-fashioned values. And that’s not necessarily bad for the market.

The fact that the customer is now more demanding and service-focused can only boost Dubai’s reputation as a logistics hub.

What is Danzas AEI Emirates’ growth strategy in the short to medium term?

Companies engaged in a wide variety of commodities are starting to plan a foothold in the emerging African and Middle East markets. They are reluctant to commit to investment of their own, particularly when capacity is available for rent. This allows new market entrants to outsource their distribution needs to specialist logistics providers like us.

As we are part of DHL Global Forwarding, we have the infrastructure in these markets and are in a position to target our existing base of global customers and potential customers, who want to expand into these emerging markets.

What do you expect to be the key drivers of growth?

We anticipate growing demand for cross-docking between modes of transport, and for value-added services and customisation of goods to local market requirements. In particular, we want to bolster our sea-air capability. Goods shipped in from the Far East can unload at Jebel Ali for onward dispatch by air to markets across Europe and Africa. Because DHL Global Forwarding has made a strategic decision to open its own bases across these emerging markets, Danzas AEI Emirates can offer market access based on global standards of service.

Are you targeting any particular industry segments for growth?

Strategically, we maintain a strong focus on the electronics, manufacturing and retail industries, but we see new opportunity from life sciences. To succeed in this new segment requires cool-chain expertise throughout the supply chain. Jafza, as a free zone, is one of the few regional players able to offer this.

Logistics companies need to be able to run a stable environment at every stage of the supply chain, to minimise opportunities for contamination such as temperature changes or exposure to sunlight. We operate two facilities in Dubai that meet life-science industry standards and see an opportunity to build our market share as more and more life-sciences companies enter the market.

Jafza’s free zone status allows us to handle sensitive products destined for non-UAE markets and to access Dubai World Central’s new airport to boost our volumes of perishable products.

What are your priorities for the local market?

Our general strategy is to improve quality and customer focus to ensure that the way we work locally matches exactly the standards that the Deutsche Post group maintains in other parts of the world. Quality cannot be neglected. The logistics company that gets it right first time is the company that gains future volume.