Danzas says freight volumes hold steady

One of the country's largest logistics providers said volumes were maintaining in spite of the downturn.

Powered by automated translation

One of the country's largest logistics providers says business is holding steady this year despite the economic downturn. However Danzas, part of the global DHL group, expects its Dubai revenues to fall just short of last year's US$350 million (Dh1.28 billion) despite lower transport rates. "We won't have growth, but we also won't have losses. It's a good result considering the economic situation," said Enver Moretti, the chief executive and president for emerging markets at DHL Global Forwarding. Mr Moretti's UAE freight forwarding and logistics business, which operates as Danzas only in the UAE, handles the logistics of blue-chip multinationals such as Boeing, Airbus, GM and Schlumberger from its 180,000 square metres of warehouse space in Dubai. The economic slowdown has cut global trade and slowed business among shippers, freight forwarders and the air cargo industry. In April, the IMF said world output would decline by 1.3 per cent this year and increase by only 1.9 per cent next year after making a "substantial downwards revision" from its January forecast. Danzas's vehicle logistics business, which includes moving vehicles and components, is down 20 per cent this year, while fashion and luxury has declined by 10 to 12 per cent. But other segments, measured in cubic metres of goods moved, would equal last year's performance, Mr Moretti said. This includes logistics for consumer goods, oil and gas equipment and other industrial projects. Fredrik Lindblad, the regional logistics manager at a rival firm, Aramex, said that while business had slowed since the economic turbulence began last year, companies were now beginning to think about importing supplies and requesting quotations. "People are starting to think about hiring," Mr Lindblad said. Mr Moretti said Danzas had just emerged from a "critical last 20 days", when the firm was forced to make some executives redundant over the handling of a multinational corporate client. The problems surrounded late deliveries for a US-based client in the UAE, he said. "We had difficulty with one account out of 6,000 accounts that we are managing," he said. "Everything is now back to normal." With some trade routes seeing slowing volumes, Danzas is focusing on emerging opportunities linking the UAE with China, India, Turkey and the African continent. "It is easier to supply companies in Africa from Dubai than from Europe," Mr Moretti said. The company is preparing for the next phase in Dubai's transport development, the Al Maktoum International Airport in Jebel Ali, which will have five runways and an estimated 150 million passengers a year. Through a dedicated motorway for freight lorries that will connect the airport with Jebel Ali port and free zone, Al Maktoum and its Logistics City sub-development will have a heavy emphasis on air cargo, with capacity for 12 million tonnes of freight per year. Al Maktoum airport is scheduled to open in the middle of next year. In 2006, Danzas was one of the first logistics firms to commit to the new airport, leasing a plot with 155,000 sq metres of space and an option of another 75,000. Within the same Al Maktoum development, Danzas also leased a plot area of 45,000 sq metres. Construction of some of those facilities had started recently, Mr Moretti said. igale@thenational.ae