Industry veteran Michael Proffitt has a vision to develop a highly efficient platform for the logistics and supply chain community in Dubai.
Dubai Logistics City (DLC), when complete, will be the world’s first truly integrated logistics and multi-modal transport hub, with a major impact on future air cargo growth.
“Air cargo growth in the Middle East is the highest among all other regions in the world, 9.5 per cent in 2007,” says DLC CEO Michael Proffitt, “and is expected to go back to its earlier double digit growth in coming years.”
“DLC’s phase one, which will start operations by end of this year, has already been substantially leased out and every major global player has either expressed interest or leased land within DLC – an expression of faith in its value proposition.”
Michael Proffitt points to DLC’s ability to link the port and the airport in one customs bonded environment as one of the project’s unique features.
“Dubai has been developing its role as a hub for many years but the new airport and DLC will take this to a new level,” he says.
“As the new global logistics hub, Dubai will have two key roles — as a transit point and for stockholding for regional distribution.”
“Forwarders and logistics companies will be able to develop their facilities alongside the major airport in the region with easy and quick access to the major port which is only 10 kms away,” Proffitt says.
“They’ll have the opportunity to build up and break down pallets and ulds in their own premises and function alongside an airport which has clearly been designed with air cargo in mind and will deliver a highly efficient solution.”
Proffitt, a UK national originally qualified as an accountant but his ambitions lay in general management.
“After obtaining my MBA from Cranfield University, I worked for 16 years for the Ocean Group based in Liverpool,” he recalls.
“In that time I ran a shipping company based in Hamburg, Germany, a fuel distribution company based in the UK and finally I was CEO of McGregor Cory, the logistics company of the Ocean Group.”
“When I was approached by Danzas, I was able to become fully involved in global supply chains, which was my greatest interest,” Proffitt says.
“I joined the Danzas Board responsible for logistics and later, when Danzas was acquired by Deutsche Post, I held a number of logistics related positions including quite a bit of work on mergers and acquisitions.”
Proffitt says he was initially drawn to the DLC project because of its sheer scale and vision.
DLC is a core component of the $33 billion Dubai World Central (DWC), a 140 square kilometre urban aviation community which is being built 40 kilometres from Dubai International Airport, and which will become the largest international airport in the world.
Twice the size of Hong Kong Island, DWC creates a new benchmark in urban planning and destination living.
It’s designed to support Dubai’s aviation, tourism, commercial and logistics requirements until 2050.
Eventually home to 900,000 people, DWC will be a true ‘city-within-a-city’ representing one of the most important developments in the history of the United Arab Emirates.
“Along with DLC, the adjacent Al Maktoum International Airport forms a major portion of Dubai World Central,” Proffitt explains.
“The development of the new airport and the airport city were focused on 2050 and beyond — a truly visionary strategy.”
When complete, Al Maktoum Airport is set to be the world’s biggest passenger and cargo hub, with a capacity of 150 million passengers and more than 12 million tonnes of cargo annually.”
“This new airport has already captured global attention and adds to DLC’s value proposition of turn around lead times of less than four hours in sea-air cargo,” he adds.
“Interestingly, the cargo part of the airport received a key focus and as a consequence we will have one of the best and most efficient cargo/logistics operations in the world.”
“Also, the proximity of the Jebel Ali Port, now the 7th largest container port in the world, means that the port and the new airport will be linked in one common bonded environment offering Free Zone status.”
According to Proffitt, the focus on Dubai as the new global logistics hub comes at the right time.
“Manufacturing has been moving to low cost countries in the Far East and that means supply chains are becoming longer and more complex,” he says.
“At the same time product life cycles are getting shorter and customer demands are becoming more stringent.”
“We defined the “regional” catchment for Dubai as a four hour flying time which covers South-East Europe, CIS, Indian sub-Continent, Middle East and Africa — a population of nearly 2 billion people with increasing spending power.”
“A global hub needs the density of flights and shipping services covering a wide range of destinations,” Proffitt adds “This Dubai has, with the largest port and airport in the region.”
In the early part of the project Proffitt says his role required developing the value proposition of DLC and testing it among the various logistics and supply chain community players.
“We also had to review other developments in order to ensure best practice and to avoid some of the shortcomings of other projects,” he admits.
“Once the master plan for Dubai Logistics City had been formed we had to decide on the phasing of the project and take the opportunity to local, regional and international markets.”
“At the same time, we met with potential customers to review their requirements and business plans for DLC,” he says.
“The focus now is on entering into contracts with customers so that they can start building their facilities and ensuring that we deliver an effective and efficient platform for our customers.”
Proffitt, who will present the DLC’s unique multi-modal logistics proposition to major air cargo operators in August, will address the future for air cargo in the region, with a focus on DLC’s global and regional supply chain management services.
“I see our role as making sure that the supply chain and logistics community are fully aware of what is being developed in Dubai, in Dubai World Central and in Dubai Logistics City,” he says.
“We have a very strong demand for space and we are very focused on ensuring that we get the right companies with the right profile in DLC”
“The choice of whether to have an operation in Dubai, the size and the location is then down to the individual companies,” Proffitt says.
“The value proposition of Dubai as the new global logistics hub is now well accepted within the international community so it is then for each company to review their requirements and for us to meet with them and to decide whether they fit the DLC profile.”
Over 40 per cent of DLC’s 25 square kilometre leasable land has been reserved. The contract logistics and forwarding areas will be completed by 2010 and 2012 respectively.
“DLC’s lease prices are appreciating every year as demand to be within a hub that caters to a massive two billion people within three to fours hours flying time in the CIS, South-East Europe, the Indian Sub-continent and Africa, increases,” Proffitt enthuses.
“With Dubai World Central and Al Maktoum International Airport fully operational by 2015, Dubai Logistics City will offer unrivalled centralised logistics services for Asian and Western businesses looking for supply chain initiatives.”