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Innovation and quality pay off for Aramex

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Innovation and quality pay off for Aramex

September 1, 2009 by PLA Editor

Aramex’s founder, Fadi Ghandour put it directly: “While the global economic slowdown continued to affect our revenue growth in this period (revenues fell by eight per cent), we maintained focus on operational cost efficiency and customisation capabilities to better adapt to customers’ changing business needs. This has enabled us to further improve our gross profit margins, control costs, and report an excellent netincome growth.”

He went on to add that Aramex continued “to see, and benefit from, an accelerated trend among companies across the Gulf region towards outsourcing logistics services”. Therefore, it was the ideal time for “steady geographic expansion in key emerging countries, mainly in Africa and Central Asia, which we believe are underserved. We also remain committed to invest further in developing our logistics infrastructure across the GCC and the Levant.” That’s Fadi Ghandour. Clear in his vision anda seeker of opportunities.

Established in 1982, Aramex has created a place for itself. Spread out worldwide, the company has been mentioned by economist Thomas L. Friedman in his book The World Is Flat because it had been able to derive the maximum benefit from “the flatteningof the world”.

A climate of collaboration
Ghandour took advantage of the liberal climate which enabled him to compete globally and collaborate with others. What started off as an express wholesaler for express delivery companies like FedEx, Airborne Express and others with DHL as its main competitor, Aramex today provides a gamut of services from express, logistics, freight forwarding and domestic distribution to mail-order catalogue services and mail forwarding services.

Way back in 1990, Ghandour realised that he would not be able to expand alone. So, he helped set up the Overseas Express Carriers (OEC) network with Airborne Express: a number of express companies joined hands to form an international delivery network which enabled its members to face the competition posed by larger companies.

The OEC was disbanded in 2003 when DHL took over Airborne Express, Aramex’s main partner. Ghandour took over the OEC and relaunched it as the Global Distribution Alliance (GDA), a global alliance of 40 express companies with combined revenues of US$7.5 billion. The network has more than 12,000 offices, 33,000 vehicles and 66,000 employees around the globe. Aramex leads the alliance and its home-developed shipment management runs the systems of the GDA partners.

Other than the challenge of countering the global express majors, Aramex has always been committed to a sustainable business model. That strategy has been paying off in the economic crisis. Ghandour stresses innovation and technology, but above all believes in delivering a consistently high standard of services to his clients.

With his clear vision, he has been able to not just look at opportunities, but seize them. Witness the recent regional cargo agreement with the Sharjah-basedlow-cost carrier Air Arabia. The carrier is huge in the Middle East and India wasalso the attraction for Aramex.

It signed a deal which has opened Air Arabia’s cargo facility at Sharjah International Airport for Aramex. A sorting hub for express shipments will be set up at the cargo facility. In addition, the tie-up will help Aramex to get its courier shipments from flights faster.

Knowledge and innovation
Ghandour has been keenly interested in building his institution and he believes that it is best to build knowledge workers rather than employees. So, the training process is a continuous one in Aramex prompting its staff to act as creative solution providers.

Perhaps, more important is the emphasis on innovation in the company: it could mean finding a faster way to keep track of consignments or a better way to keep in touch with customers. According to a staffer, whether the ideas are small or big, they keep coming all the time.

As part of the innovation process, Aramex recently joined the IATA’s Cargo 2000 initiative aiming to improve the process of managing shipments in a paperless environment. As one of the major players in the Middle East, Aramex is on the same playing field as other companies like GAC Logistics, Qatar Airways and Etihad Crystal Cargo.

Joining Cargo 2000 only emphasised further, the company’s “commitment to enhance operational efficiency and quality of customer service,” according to Safwan Tannir, chief freight officer, Aramex. The new system will enable Aramex “to measure our performance against global industry standards, be more agile in our service and proactive in communicating and responding to our clients needs,” Tannir said.

The vision to remain ahead sent Ghandour and Aramex on an acquisition spree in 2008. The company started looking closely at China and Southeast Asia. According to Reuters, Ghandour wanted to take over companies with annual revenue in the range of US$50- 100 million. The Aramex boss was quoted as saying that the low prices were appealing and as for the global recession, he said: “We haven’t felt it at all, certainly not in this region.”

Institution-building apart, Ghandour has not forgotten his corporate social responsibility. Last year, he rebranded Aramex to reflect the essence of Aramex as it is today. Topping the list in the rebranding objective was the emphasis on Corporate Social Responsibility. In an interview with FW Magazine, he maintained that the company’s most valuable asset and resource were the employees: they are the ones that innovate, customize and create solutions for customers, he said.

“They embodied the spirit of entrepreneurship, innovation and beating the odds, transforming challenges to opportunities, and they are the ones that made Aramex what it is today. Being true to our essence, believing that human capital is the most important resource known to man is what guided us to invest in communities, education, sports, entrepreneurship, and others.”

At the World Economic Forum on Middle East held in May this year in Jordan, Aramex brought an exhibition of the work of three female Iranian artists, Gilda Barimani, Nasrin Mahmoodi Nobar and Mavash Soheili. The company shipped nine works of art from Iran to Jordan and emphasized its commitment to the development of art and culture.

Other Topics: Air & Cargo Services, air cargo, Air Cargo Asia, air cargo freight, Air Forwarding, air freight, Air Freight Asia, Air Freight Logistics, air freighter, air freighting, Air Logistics Asia, Air Shipping Asia, airlines cargo, airways cargo, Aramex, asia cargo news, cargo aviation, DHL, Fadi Ghandour, global transportation, international delivery network, logistics services

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