Introducing transportation concepts as key
leverage for increasing the value of logistics'
infrastructure for LSPs
Workshop Presentation at Kick Off Meeting
February 8th/9th of 2010
Abu Dhabi / UAE
Forum Workshop – Transportation Concepts
Workshop Agenda
Topics
Time
Responsible
1.
Personal introduction and outlining of
workshop details
09:00 a.m.
All
2.
Dornier's workshop presentation
09:30 a.m.
Empere, Luebke
3.
Group work with participants
10:30 a.m.
All
4.
Presentation of group results and closing
of workshop
11:30 a.m.
Group leaders
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 2 of XX
Forum Workshop – Transportation Concepts
Content of Dornier workshop presentation
1.
How does Dornier rate Logistics on a global scale?
2.
How does Dornier experience Logistics in the region?
3.
Which role do transportation concepts play for Logistics in the region?
4.
How do real life transportation projects look like?
5.
Where do we go from here?
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 3 of XX
Forum Workshop – Transportation Concepts
Global and regional trends in the Logistics’ industry (1/4)
 Worldwide trade and supply markets extension result in changes of goods flows
and transport corridors used
 Trade pattern origins and destinations changed through increased globalization,
e.g. Europe, USA and Japan are sourcing from China and India
 Global container volumes are expected to double again in the coming 10 years
 3 billion new consumers in Asia - becoming the global manufacturing hub change transportation demand and service requirements
 Logistics is a global business – so is competition
 Continuous market consolidation, resulting in less but larger international logistics
service providers
 Logistics is increasingly becoming a vital key industry with independent rules and
development mechanisms (No. 4 industry in Germany)
 Logistics industry possesses high differentiation potential and is driven by
technology, know-how, experience and assets
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 4 of XX
Forum Workshop – Transportation Concepts
Global and regional trends in the Logistics’ industry (2/4)
 International transport container traffic and intermodal transport will continue to
increase
 The growing economic development will lead to higher import and export
volumes of consumer goods
 Middle East attempts to become a strategic location for global logistics
 Main corner stones have been set and are being developed aggressively
 Global development in logistics offers a key and fast growing opportunity
especially in the Middle East region
 Ports and inland modes are already congested not only because larger vessels
are increasingly congesting US, Far East and European ports
 Lack of sufficient, modern Terminal infrastructure, however, time lines for
developing new ports and infrastructure are long
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 5 of XX
Forum Workshop – Transportation Concepts
Global and regional trends in the Logistics’ industry (3/4)
1980s
 GCC was
established in
1981
 Middle East
markets major
import
markets
 Low GDP due
to low oil
prices and a
fully oildependent
economy
1990s
2000s
 Establishment
of Pan Arab
Free Trade
Area in 1997
 Important
transshipment
location
 First steps of
promoting
trade and
industry to
minimize
reliance on oil
 KSA and UAE driving
economic growth in GCC
region
 Professionalizing
bagales to professional
retail markets
 New airports, seaports,
Free Trade Zones
 Import for sea-air traffic
 Economic growth due to
rising oil price
 International logistics
providers go ME and ME
providers go global
Future
 Ongoing development of
shipping companies from
simple carriers to door-to-door
operators
 Import of project cargo
 Industry acknowledgement of
transportation and logistics
activities as a core corporate
process that has to be
managed professionally
 Increased willingness of the
industry to outsource supply
chain services
 Change from passive driven to
active driving economy
 Increased railway activity
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 6 of XX
Forum Workshop – Transportation Concepts
Global and regional trends in the Logistics’ industry (4/4)
1980s
1990s
Container shipping
crises. Merges and
Acquisitions, change
of shipping lines from
maritime haulagers
to carriers
haulage/door-to-door
services
Introduction of
Containerization and
intermodal transport.
First mergers
Fragmented market
structure for all
Logistics services.
Containerization
increasingly replaces
general cargo
shipping on global
level
Logistics
development in ME
driven by imports
from oversea
shipping
Consolidation of
number of service
providers
Introduction of
container trading
patterns
2000s
Integration of
individual logistics
services towards
global SCM
Carriers haulage
arrives in Middle
East, first attempts of
intermodal transport
Global merges in
land and maritime
logistics, providers,
contract logistics and
fulfillment
For the very first
time, ME chances
from driven region to
driving region while
developing global
turntable strategies.
Import market
dominated by
shipping line
haulage, however,
following classical
market structures
and on-carriage
organized by
forwarders and
agencies
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 7 of XX
Forum Workshop – Transportation Concepts
Service portfolio of LSPs in the Middle East is being broadened gradually
Supply chain
Logistics integration level
Procurement
Requirement planning
Global LSPs
Europe
today
Supply chain
management
(e.g. DB
Schenker)
Global LSPs
Middle East
tomorrow
VAS
Production planning
Warehousing
Packing / Distribution
Transportation
Intermodal transport
Global LSPs
Middle East
today
Railway transport
Land transport
Air/Ocean transport
2005
2010
2015
2020
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 8 of XX
Forum Workshop – Transportation Concepts
Global LSPs based in Europe are more and more facing high quality regional market players
Global
DB Schenker
K&N
Panalpina
Agility
> 1‘‘€
Playing
field
GAC
System service
Kanoo
provider
(3PL)
Namma
DP
World
Freight Aramex
>250‘€
forwarders
System
integrators
Al
(4PL)
Majdouie
DHL
~500‘€
MML
Al
Futtaim
ATCO
Regional
Transport
Four
Winds S.A.
Orient
Company
Bubble size = revenue indicator
high
Low
Portfolio
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 9 of XX
Forum Workshop – Transportation Concepts
Freight volume flows in ME require transportation concepts focusing on
intermodality as well as road transportation concepts
Modal split of all imports/exports
Air; 0.87%
Road; 4.03%
Rail; 0.10%
Sea; 95.00%
Source: Dornier Consulting GmbH
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 10 of XX
Forum Workshop – Transportation Concepts
Global Logistics in the Middle East - a typical supply chain
Supplier:
Overseas
Hub 1:
Dubai
Hub 2:
Abu Dhabi
Consignee:
Seaport
Steel
Factory 1
Bulk
storage
Sea transport
Constr.
Site 1
Bulk
storage
Road transport
Constr.
Site 2
Road transport
Constr.
Site n
Cement
Factory
I
F
->Short-distance truck
I
F
-> Long-distance/heavy truck
I
I
F
-> Logistics infrastructure
I
-> Information
F
F
-> Financing
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 11 of XX
Forum Workshop – Transportation Concepts
Key Performance Indicators (KPIs) from a logistics point of view
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 12 of XX
Forum Workshop – Transportation Concepts
Reaching the goals set for KPIs requires an integrated approach
Comprehensive transportation concept
Framework conditions:
Transportation
network
Security
level
 Standardization
 Rules & regulation
 Training & education
 Law enforcement
 General safety & security
Delivery
concept
Vehicle
specifications
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 13 of XX
Forum Workshop – Transportation Concepts
Cargo defines the ideal transportation mix…
Road
Pros
 Cost-effective for short
distances (regional)
 Time-effective for long
distances
 Flexibility




Cons
Rail
 Dependant on weather
and traffic situation
 Limited capacity
 Limitations for
dangerous goods
 Danger of accidents
 Side tracks necessary
 Costs for special
vehicles
 Inflexibility
 Traffic counts
 Transport modeling
 Junction capacity analysis
Heavy cargo capacity
Timetables
Low failure rate
Ability to transport
dangerous goods
Sea
Air
 Heavy cargo capacity
 Very high loading
capacity
 Availability of special
vehicles (dangerous
goods, etc.)
 Very time-effective
 Easy packaging
 Dependant on weather
(storm, ice, fog)
 Inflexibility
 High costs
 Limitations for
dangerous goods
 Parking demand
 External/Internal road network
 Other traffic (except T&L)
 Mitigation measures
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 14 of XX
Forum Workshop – Transportation Concepts
…however the realities of the region limit the feasible options
Road
Rail
Sea
Air
E.g.: LoRoCo
E.g.: UAE Rail
E.g.: Red Sea Ferry
E.g.: Saudi Airlines
 xxx
 xxx
 xxx
 xxx
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 15 of XX
Forum Workshop – Transportation Concepts
Puzzle piece 2: Security level
Transportation as starting point for security
Explosion Events
 The larger the vehicle, the larger the explosive
device that could be hidden aboard, and the
longer the time required for security checking
 The worst case is a large articulated vehicle
which could carry an explosive device up to 40
tons. Such vehicles can be and are usually
prevented by their size from entering standard
public parking facilities
 The next is ordinary trucks which could carry
an explosive device up to 10 tons. They can be
prevented by a height bar (usually 3m) from
entering standard public parking facilities
 Utility vehicles could carry an explosive device
of 6 tons, a 4x4 passenger car 1 ton, a saloon
car a box or large package 150kg, and on a
person or in a briefcase up to 30kg
 In explosion events, distance is a crucial factor
since the blast force decays inversely with the
square of the distance from the device, e.g. if
the device is 10m from an object the blast force
would be 1/100th of what it would be at 1m
 Confined spaces provide ideal conditions for
causing damage to a structure because the
“contained” pressure from the blast will be
much higher than in the open air. Survival of
the building structure is the ultimate issue for
security. This highlights the importance of
preventing explosive devices from entering
covered parking facilities, particularly
basements and other closed structures. Vents
through the ceilings of parking stations may be
used to reduce blast pressure if open to
unpopulated areas above ground level
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 16 of XX
Forum Workshop – Transportation Concepts
Puzzle piece 3: Delivery concept
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 17 of XX
Forum Workshop – Transportation Concepts
Puzzle piece 4: Vehicle specifications
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 18 of XX
Forum Workshop – Transportation Concepts
Vehicle Specifications have a significant impact on intermodal potentials
 Vehicle standards in the GCC are
 Intermodal solutions (IMS) could
especially required if intermodal solutions
especially contribute to improve the
are planned for the future
land bridge
 Intermodal solutions road-rail could
 Besides that innovations of IMS
especially help to solve feeder and
could leverage industrial business
distribution problems from and to the main
opportunities in the region
ports
 Moving the line haul part of long distance
transport to rail could contribute to diminish
the problem of availability of skilled drivers
 Long-term innovation of the interfaces will
be required to improve competitiveness and
acceptance of intermodal solutions – as on
the road solutions are required that focus
on a selected group of containments to
reduce complexity and costs
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 19 of XX
Forum Workshop – Transportation Concepts
CASE STUDY: CHINA (Longer combination vehicles)
Parameter values for the case study
Effects of LCVs regarding, CO2, diesel fuel,
transport costs and traveled kilometers.
Source: UNESCAP working paper P/07/02
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 20 of XX
Forum Workshop – Transportation Concepts
Transport vehicles in the Middle East
 Mostly 2x4 Truck tractor with tandem semi-trailer
 Similar vehicles to KSA with exception of DP World who
have road train of 2 x 40ft containers!
 No proper legislation is in place
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 21 of XX
Forum Workshop – Transportation Concepts
Transport vehicles in North America and Europe
18.75 m and a total weight of 44 tons
25.25 m and a total weight of 60 tons
 USA transport limited by GVM and the use
of long cab truck tractors
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 22 of XX
Forum Workshop – Transportation Concepts
Transport Vehicle in Australia and South Africa
 Road trains 53m long (however not used in cities)
 22 Meter, GVM 56,000 KG, (net payload of 36-40 tons)
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 23 of XX
Forum Workshop – Transportation Concepts
Dornier’s transportation project experiences in the region (INPUT LÜBKE)
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 24 of XX
Forum Workshop – Transportation Concepts
Conclusion 1 – Developments in the region have formed specific strengths & weaknesses
Strengths of the Middle East
 Xxx
 Xxx
 Xxx
Weaknesses of the Middle East
 Xxx
 Xxx
 Xxx
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 25 of XX
Forum Workshop – Transportation Concepts
Conclusion 2 – Europe’s highly integrated logistics’ services hold numerous opportunities and threats
Opportunities in the logistics’ industry
 Xxx
 Xxx
 Xxx
Threats posed by logistics’ industry
 Xxx
 Xxx
 Xxx
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 26 of XX
Forum Workshop – Transportation Concepts
Key Essential
Path to an integrated Logistics industry in
the Middle East places some obstacles...
...so how do we overcome them?
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 27 of XX
Forum Workshop – Transportation Concepts
Having carefully listened to the presentation…
GROUP 1:
 …which key opportunities do you see for LSPs in the region?
 …what are improvement challenges that have to be tackled by LSPs?
GROUP 2:
 …what are business challenges that have to be tackled by LSPs?
 …which risk management measures definitely have to be initiated by LSPs?
INSTRUCTIONS:
 Please use the following template
 Provide detailed statements
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 28 of XX
Forum Workshop – Transportation Concepts
Our approach to create a comprehensive workshop result
Industry factors
Regional Factors
SWOT-Analysis
Strengths
Weaknesses
Opportunities
Key
Opportunities
Improvement
Challenges
Threats
Business
Challenges
Risk
Management
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 29 of XX
Forum Workshop – Transportation Concepts
Template for GROUP 1
Key opportunities
 Xxx
 Xxx
 Xxx
Improvement challenges
 Xxx
 Xxx
 Xxx
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 30 of XX
Forum Workshop – Transportation Concepts
Template for GROUP 2
Business challenges
 Xxx
 Xxx
 Xxx
Risk management
 Xxx
 Xxx
 Xxx
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 31 of XX
Forum Workshop – Transportation Concepts
Dornier Consulting says “Thank You”
Dauaride EMPERE
Senior Consultant
+49 (0) 151 52 630 110
Dauaride.Empere@
Dornier-Consulting.com
Michael Luebke
UAE Country Director
+971 50 812 24 79
Michael.Luebke@
Dornier-Consulting.com
UAE Address:
Dornier Consulting GmbH
Khalifa Street, Liberty Tower
P.O.Box 48327
Abu Dhabi
United Arab Emirates
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 32 of XX
Forum Workshop – Transportation Concepts
Back-up
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 33 of XX
The competition
is investing significantly
in the
Forum
Workshop – Transportation
Concepts
Middle East market
Competitive environment
Global players
Agility
Has made the biggest impact through the acquisition of forwarder GeoLogistics and the deal
with the supply of the US troops in Iraq
Al Futtaim/Exel
Offers full range of supply chain solutions that include warehousing and distribution, road
transportation, sea and airfreight forwarding; also comprehensive range of VAS
Aramex
Revealed that is was negotiating to acquire companies in UK (Priority Airfreight + Twoway
Vanguard) and in US
GAC
GAC Group consists of GAC Shipping, GAC Logistics and GAC Marine; the GAC Logistics
Park is the largest facility in the Middle East spreading over 125,000 m 2 with over 125,000
pallet positions
DP World
Large port management operations company; dominant in the region; P&O services
P&O ferries; Terminal at Jebel Ali Free Zone
DHL
Possesses 3.2 m square feet operations and have invested significantly in the region
Kuehne&Nagel
Regional turnover is 140 m US$; K+N used to operate through a JV company
Panalpina
In 2006, three regional oil companies extended their contracts with Panalpina for the
provision of logistics services in Saudi Arabia and Qatar, while two global computer and
semiconductor manufacturers chose the Group as their distribution partner in UAE
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 34 of XX
The competition
is investing significantly
in the
Forum
Workshop – Transportation
Concepts
Middle East market
Competitive environment
Regional players
Orient Company
Provides national and international customers with international freight forwarding services
that range from transportation, import and export by air, sea and land to customs clearance,
domestic distribution, turnkey jobs, as well as industrial projects.
Four Winds S.A.
Specialized in design and management of local and international transportation, freight
forwarding and customs clearance services
ATCO
Is the largest specialist company in the KSA transportation and logistics sector; offers onestop transportation and logistics services on a domestic and international basis.
MML
Offers freight forwarding services – domestic & international, Air/Sea/Land; Shipping &
NVOCC Agency, chartering as well as container terminal operations
Namma
Handles total movement of cargo from worldwide locations for Saudi Chevron Petrochemical
Co., Gulfguard, Saudi Crane, Middle East Power Company, Middle East Battery, Saudi Bea
Fasteners and many other companies
Kanoo
Offers shipping, airline cargo GSA’s, door-to-door air & sea cargo, customs clearance &
transportation, packing and house removal services, project cargo handling, exhibition
services, international freight forwarding
Al Majdouie
ALMAJDOUIE Logistics & Distribution provides SCM solutions and 3PL; ALMAJDOUIE Heavy
lift transport & engineering is a leader in heavy lifting and transport not only in Middle East
and generally maintaining a market share of over 50%
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 35 of XX
Forum Workshop – Transportation Concepts
Backup Transition of World Exports
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 36 of XX
Forum Workshop – Transportation Concepts
Backup Transition of World Exports
Source: http://socialisteconomicbulletin.blogspot.com/2008/12/rise-of-asia-in-particular-china-in.html
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 37 of XX
Forum Workshop – Transportation Concepts
Backup Doubling of container volumes by 2020 despite downturn

Even allowing for the current downturn in global trade, and the first potential decline in container traffic ever
in the more than three decades since the inception of wide‐scale containerization, current projections call
for world‐wide container volumes to double by the year 2020.

World‐wide container volumes may have fallen by 20% or more during the first months of 2009 as
compared with last year, but the fact is that there are still ports in the developing world where limited
capacity is still very much a significant and current problem, or that sufficiently modern ports and terminals
simply do not even yet exist which can accommodate any moderately‐sized modern cargo vessels,
containerized or otherwise, let alone the latest generation giants. Current World Bank analysis calls for a
decline in world trade volume of ‐2.1% for this year, before rebounding to a projected 6% growth in 2010.

The World Trade Organization foresees a 9% drop on manufactured export this year, though‐ significantly‐
with a smaller decrease among the developing economies. While global GDP has been forecast to expand
by only 0.9% in 2009, the anticipated economic growth of the Developing World is still 4.5%, with
sub‐Saharan Africa projected for 4.6% growth this year, and 5.8% in 2010. According to the most recent
WTO data for 2008, Africa continues to experience significant growth in both exports and imports. Exports
increased 29% to $561 billion, and imports rose to $466 billion, 27% higher than in 2007. This reflects
increases in basic commodity and mineral exports, but also a surge in imported consumer goods from an
increasingly important African trading partner: China. Africa will continue to see economic and trade
growth, and the interest of shipping lines and the global and local port and terminal developers and
operators who serve them.
http://www.apmterminals.com/uploadedFiles/corporate/Media_Center/Speeches/090404%20World%20Bank%20Transport%20Speech.pdf
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 38 of XX
Forum Workshop – Transportation Concepts
Backup Logistics Sector Germany
 Weighing in just behind trade and the automotive industry, logistics is the third largest sector
in Germany, employing some 2.6 million persons. Annual turnover of 166 billion € is earned
throughout the industry, representing approximately 7% of German gross domestic product.
 The logistics sector also displays far-aboveaverage growth. Around 15 billion € are invested
in logistics real estate, technologies and qualification measures each year.
http://www.kompetenzcluster.org/fileadmin/vdidaten/Logistik/Fakten/Germany-Logistics-Hub.pdf
Stand 2005
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 39 of XX
Forum Workshop – Transportation Concepts
Backup Challenges in the MENA Region
 Although the region is not as dependent on the international economy as are other areas of
the world, Middle Eastern agriculture and manufacturing are the main providers of job
opportunities and have still become less competitive because of the increasing pressure to
export goods to the global markets at lower prices. At the same time, inflation is running
above 10% in much of the area due to rises in commodity prices. Inflation is also being driven
upward because the currencies of many of the countries in the Arab region are pegged to the
US dollar.
 Before the financial downturn, the large inflow of foreign exchange into the nations of the
region, whether from oil or aid, resulted in a sharp appreciation of domestic currencies. Now,
with the US dollar depreciating, the region's Central Banks are forced to keep interest rates
below the rate of inflation. With a prolonged global financial downturn, consumer price
inflation in food and oil will not be offset through higher revenues from food and oil
production. Although price increases in commodities would benefit some producers and
investors, wages are not increasing fast enough to match the rising costs of food, fuel and
rents, and this will have a continuing impact on poor areas.
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 40 of XX
Forum Workshop – Transportation Concepts
Backup Challenges in the MENA Region
 These combined factors are increasing the social and economic disparity in the region
between a super-rich sector, a lower middle class and an impoverished sector. With the
recent drop in the price of oil to below $70 a barrel, along with the loss of Arab investments in
world stock markets, the level of revenue coming into the region from trade and foreign direct
investment is dropping. A prolonged slowdown in the international economy will also cause
remittances, job creation, tourism and foreign aid to decline and unemployment to increase,
particularly among the youth. The economic downturn will also slow the flow of educated
Arab workers into jobs in the oil sector.
 Before the global financial crisis, the region benefited whether oil prices were high or low,
since the region has both oil producers and consumers. But Middle East producers and
consumers are now likely to suffer from either higher or lower oil prices as the financial crisis
spreads -- because of the sustained drop in foreign investment coming into the region, as
well as the volatility of regional currency values due to the region's monetary pegs to the
American dollar which is gradually deflating. Even if oil prices were to rise to their previous
high levels of July 2008, this would place a heavy burden on the unemployed and poor as
well as the wealthier social sectors because of their reduced purchasing power.
http://the-stars.ch/public/uploads/Al%20Ghurair_speech.pdf
Global Logistics Forum Presentation – Michael LUEBKE and Dauaride EMPERE / February 8th/9th of 2010 / Page 41 of XX