What Scholten did next
16 / 06 / 2015
I had been working there for four and a half years and it was an interesting journey,” says Peter Scholten of his decision to move on as vice president commercial for Saudia Cargo.
“It allowed me to help Saudia get on the map – in the time I was there its business doubled and it became recognised as a key player in the market. But my family lives in Dubai and I was commuting all the time, so the price I was paying was quite high. So it was time to move on.
”The move has taken Scholten right back to his roots: twenty years ago, before his time with Saudia and a 15 year career with Martinair, he worked for Dutch forwarder Road Air, now part of Rhenus. His new role is as chief executive officer of UAE-based forwarder, Fast Logistic Solutions Group (FLSG).
If the company name is not so familiar, it may be because it was only created in January this year as a holding company for several more established UAE forwarding names. One is Fast Forward Cargo and the other is First Priority Cargo. “Someone told me that combined, we are the biggest forwarder in the UAE,” Scholten says. “But we are very much under the radar in terms of public spotlight, and my role is to take things further.
”The core business of FLSG is one that probably also falls under the radar of many in global logistics: trader business from Africa. This sees buyers from the continent come to the UAE, source everything from ketchup to textiles and mobile phones to second hand cars, most of it made in India and China, and then ship it back to Africa.
FLSG’s role is to transport the goods and to give the traders a secure place from which to collect their goods in their home countries.
Nigeria and Chad are two places from which FLSG gets particularly large amounts of business, but it has branches all over the continent – some of them in places even experienced air cargo professionals might not have heard of – Enugu in Nigeria, Bukavu in Congo and Kitwe in Zambia, for example.
The company also has branches in the better known cities in these countries: Lagos, Kano, Goma, Lubumbashi, Lusaka, as well as in Dar es Salaam, Khartoum, Bujumbura, Nairobi, N’djamena and others.
This is a market that is growing all the time and almost certainly cutting into growth on traditional air lanes, such as Europe-Africa. “With Chinese investment in Africa, the continent is looking more to the east than to the north and west,” says Scholten. “Exports from Europe to Africa are stagnating while those from Asia to Africa are growing.”
All of this has echoes of the “shop tourism” of the 1990s, when traders from former Soviet republics travelled in large numbers to Dubai and Sharjah to buy western goods. One wonders if in time the African traders might not become more adventurous and start travelling to China direct to make their purchases.
Scholten says some already do, and to serve these FLSG set up its own warehouse and office in Guangzhou two years ago, followed last year by branches in Mumbai, Hyderabad and Mangalore in India (another ultimate source of the trader cargo).
But Scholten says that 80 percent of what FLSG ships is still purchased in the UAE and there are solid reasons why that is unlikely to change any time soon. “What I hear from clients is that it is much more difficult for them to do business in China – fewer Chinese speak English and it is hard to deal with Chinese script. It is much easier and pleasanter to do business in Dubai where everyone speaks English.
“There is also a bigger variety of goods there — and the logistics are well organised. There is lots of capacity in both air and sea freight. Dubai traders are also very reliable — you get exactly what you ordered here. So though there are significant movements from China, and we would like to grow our business there, I don’t think business from Dubai will go away.
”The goods being purchased in Dubai have generally arrived by sea, but how they are then moved on to Africa depends on geography. Naturally for traders from East Africa, seafreight can be an attractive option.
But for West African markets sea transit times are considerable and in all markets logistics get a lot harder – and less secure – once anything moves away from the coasts. “To get to N’djamena in Chad by plane takes five to six hours, but by sea and land it takes 50 days, and there are challenges on the road,” Scholten points out. “So they often choose to go by air because then they know the goods will get there.
”In all, FLSG moved 45,000 tonnes of airfreight last year and 20,000 teu (20ft container equivalents) – roughly 300,000 tonnes of cargo – by sea. Business is expanding rapidly – the group saw increases of 40 per cent last year and expects 25-30 per cent this year. “From country to country there are the usual ups and downs – for example Nigeria is experiencing some issues at present with its general election – but in general this business is continuing to grow,” says Scholten.
Carriers that FLSG uses on the airfreight side include Saudia, Emirates, Etihad, Kenyan Airways and Ethiopian. Quite a lot of cargo goes on scheduled freighter services, but the forwarder also organises plenty of charters. Many of the flights go from Sharjah, though with Emirates having now moved its freighter operations to Dubai World Central (DWC) more is moving through that airport too.
In fact, FLSG is about to start construction on a 12,000 sq m facility at DWC, which should be ready in the summer of 2016. That will be in addition to the 22,000 sq m of warehousing that the company already has across the UAE, where it is present at eleven locations.
For the future, FLSG is looking to extend its trader concept to other African countries, with South Africa, Kenya and Cameroon under consideration. It also wants to build its business out of India and China. “These are both still basically start-ups and so we want to put more focus on them and do some sales campaigns,” Scholten says.
“Not all the clients who use us in the UAE also use us in India and China, so we want to change that.
”In addition, the company is expanding into the corporate logistics market – it has just signed an agreement to this end with Liberty Logistics, a logistics provider in Sharjah, with operations due to start in May in facilities in Jebel Ali Freezone and Dubai Cargo Village.
Scholten would also like to use the FLSG branch network to provide general sales agent (GSA) representation to airlines, an area of activity the company is not yet involved in.
Getting a presence in Europe is a target too, though this will probably be through a partnership. Scholten explains that though Asia-Africa is the growth market, Europe remains an important source of cargo for the continent. “Since we are a strong player in Africa it seems the logical next step,” he says. ■