Logistics ME

< PreviousFEATURE | GREEN TRANSPORT 20www.logis tic smiddleeas t .comJULY 2025 | LOGISTICS MIDDLE EAST as a global hub for green hydrogen development. For logistics players operating across borders or managing heavier ﬂ eets, the rise of hydrogen infrastructure could off er a scalable, low-emission alternative in the not-too-distant future. INFRASTRUCTURE-DRIVEN INVESTMENT As EV chargers and hydrogen hubs continue to expand, the ripple eff ects are being felt well beyond refuelling. Infrastructure is increasingly inﬂ uencing how ﬂ eet operators evaluate long-term vehicle investments, route design, and competitive positioning. In this new reality, access to clean fueling points is becoming just as important as vehicle specs or driver availability. This shift is prompting a deeper integration between energy infrastructure planning and logistics ﬂ eet strategy. Where operators once made procurement decisions based on payload and mileage alone, they are now mapping those criteria against the availability of clean energy along their networks. Routes that intersect with fast-charging stations or hydrogen depots are gaining preference, particularly for companies aiming to reduce Scope 1 and Scope 3 emissions in line with client or regulatory expectations. For example, an urban delivery company in Dubai may now factor in proximity to EV charging hubs when selecting distribution centres or planning shift patterns. Similarly, a heavy-goods operator exploring hydrogen truck pilots might evaluate the viability of long-haul routes based on emerging hydrogen corridors between Abu Dhabi, Riyadh, and NEOM. What’s more, access to clean fuel infrastructure is starting to inﬂ uence contract negotiations. Large shippers and multinationals are increasingly embedding sustainability performance into their logistics tenders. Operators that can demonstrate reduced emissions through the use of certiﬁ ed renewable energy or hydrogen refuelling, as some EV charging stations now enable through renewable energy certiﬁ cates, are already seeing a competitive edge in bidding processes. Investors are watching, too. Private equity ﬁ rms, infrastructure funds and logistics conglomerates are all beginning to scrutinise the fuel and energy strategies of the companies they acquire or partner with. Clean energy access is being treated as a forward-looking asset, not a side consideration. THE ROLE OF DIGITAL Clean infrastructure is no longer just about hardware, but about intelligence. Increasingly, EV and hydrogen systems are being integrated with digital platforms that allow for predictive maintenance, dynamic pricing, load balancing, and real-time route optimisation. This shift is being driven by the adoption of AI and IoT technologies that connect fuel demand with operational behaviour. ADNOC Distribution, for instance, has deployed AI systems that help optimise energy delivery and manage station traffi c. ADNOC Distribution is a key part of the UAE’s Net Zero 2050 strategy “No matter how advanced an electric truck or hydrogen powered vehicle is, it won’t get far without reliable fueling infrastructure” LOG_July0225_18-21_Green Logistics Feature_13654033.indd 2002/07/2025 17:20GREEN TRANSPORT | FEATURE 21www.logis tic smiddleeas t .comLOGISTICS MIDDLE EAST | JULY 2025 NEOM is positioning itself as a global hub for green hydrogen development For logistics operators, this means fueling data can now be integrated into ﬂ eet management software, enhancing planning accuracy and energy effi ciency. These digital layers turn what used to be a static fuel stop into a responsive, data-rich component of the supply chain. This is the kind of infrastructure that not only supports sustainability goals but also adds competitive value through operational intelligence. PREPARING FOR A DECARBONISED FUTURE With infrastructure expanding at a rapid pace, logistics operators in the Middle East now face a strategic window. Electriﬁ cation and alternative fuel adoption require preparation. This means assessing which routes could beneﬁ t from electric vehicles, especially for urban deliveries where short distances and frequent stops align well with battery technology. It means staying informed about hydrogen developments and engaging with partners that are piloting this technology. It also means initiating conversations with fuel providers who are actively building clean energy networks to understand how future expansions could ﬁ t into your operational footprint. More broadly, this is a chance for companies to get ahead on ESG performance. Whether bidding for government contracts or competing in retail and FMCG logistics, having a decarbonisation strategy backed by real infrastructure can strengthen your value proposition. The Middle East has often been seen as a late adopter of clean transport, but that perception is rapidly shifting. With ADNOC, ENOC, and other regional giants rolling out EV and hydrogen solutions, the region is creating a blueprint for low-emission logistics at scale. 220 ADNOC Distribution have made large-scale infrastructure rollouts, installing this amount of fast and super-fast EV chargers across the UAE LOG_July0225_18-21_Green Logistics Feature_13654033.indd 2102/07/2025 17:20REPORT | GREEN SHIPPING 22www.logis tic smiddleeas t .comJULY 2025 | LOGISTICS MIDDLE EAST WHAT GOOD IS A GREENER ENGINE IF THE SHIP SAILS The world’s biggest, newest ships were built to lower emissions, but 2024 proved that poor utilisation and high speeds can undo all that innovation LOG_July0225_22-25_Report-Green Shipping_13654237.indd 2202/07/2025 16:02GREEN SHIPPING | REPORT 23www.logis tic smiddleeas t .comLOGISTICS MIDDLE EAST | JULY 2025 Once seen as the saviour of global trade, mega-container ships are raising red ﬂ ags. New data reveals a concerning trend: the largest vessels in the ﬂ eet are emitting more carbon than ever, not just because of longer routes. When the industry ﬁ rst embraced vessels over 20,000 TEU, the rationale was simple: more cargo per trip equals fewer emissions per container. Bigger ships meant fewer sailings, better economies of scale, and a greener future for ocean freight. But 2024 delivered a wake-up call that challenges that logic’s very core. New analysis from Xeneta and Marine Benchmark shows that emissions from the largest container ships rose by 35% last year, despite a far more modest 16.6% increase in the amount of transport work done by those vessels. These ﬁ ndings spotlight a growing imbalance and suggest that scale is no longer a guaranteed path to sustainability. THE RED SEA DISRUPTION 2024 was an unusual year for global shipping. In late 2023, the escalation of disruptions in the Red Sea forced most carriers to reroute vessels around the Cape of Good Hope, an alternate route that added thousands of kilometres to typical Asia–Europe and Asia–Gulf trades. This detour alone increased emissions across all vessel types. Total carbon emissions from global container shipping soared to 240.6 million tonnes, breaking the previous record of 218.5 million tonnes set in 2021. But what’s striking is that the biggest ships, those once expected to be the most effi cient, performed the worst. While the additional sailing distance explains the overall emissions increase, it does not account for the disproportionate rise from vessels over 20,000 TEU. SPEED AND SPACE: TWO EFFICIENCY KILLERS So, what went wrong? First: sailing speed. In 2024, mega-ships saw an average speed increase of 5%, reversing years of gradual slow steaming practices. With fuel consumption rising exponentially with speed, this alone had a major impact on emissions. Second: underutilisation. The biggest ships sailed with far more unused capacity. According to the data, utilisation for these vessels fell by nearly 10 percentage points compared to 2023. The reasons are structural. While demand on fronthaul trades grew 9.5%, backhaul demand barely moved, growing only 0.9%. The result? Vast ships returning half-empty from destinations like Europe and North America to Asia. These two dynamics, higher speeds and lower ﬁ ll rates, created a perfect storm. Ships designed to operate at full capacity, at moderate speeds, were now burning more fuel to move fewer containers, a carbon effi ciency disaster. THE MEGA-SHIP PARADOX There’s a paradox here. The largest ships in the global ﬂ eet are also among the newest and most fuel-effi cient on paper. Their engines are cleaner, their hull designs sleeker, and many are dual-fuel capable. LOG_July0225_22-25_Report-Green Shipping_13654237.indd 2302/07/2025 16:02REPORT | GREEN SHIPPING 24 www.logis tic smiddleeas t .comJULY 2025 | LOGISTICS MIDDLE EAST However, none of that matters when operating conditions undermine these advantages. While less modern, smaller ships between 8,000 and 12,000 TEU showed better proportional performance. Despite an 8% year-on-year increase in emissions, their output remained more aligned with cargo volume growth, in part due to better utilisation and stable sailing speeds. The implication is clear: newer doesn’t always mean greener, especially if logistics realities don’t align with vessel design. RETHINKING FLEET STRATEGY All of this points to a deeper question: Is the mega-ship era peaking? For years, carriers have raced to deploy ever-larger vessels, driven by slot-cost economics and port partnerships designed to handle these giants. However, with global trade patterns shifting and demand growth uneven across trade lanes, agility may soon trump capacity. Smaller vessels off er more ﬂ exibility. They can adapt to port rotations, localisation trends, and variable demand on backhaul routes. More importantly, when operated effi ciently, they may outperform their larger peers in emissions-per-container. That’s a strategic consideration for both carriers and shippers as the industry braces for tightening environmental regulations. IMO COMPLIANCE: THE CLOCK IS TICKING The shipping industry is approaching a regulatory turning point that could signiﬁ cantly reshape operations and competitiveness across the sector. In October 2025, the International Maritime Organization (IMO) is expected to ﬁ nalise a new set of emissions rules that will impose ﬁ nancial penalties starting in 2028 for vessels failing to cut their fuel intensity. This metric, measured on a well-to-wake basis, tracks the full lifecycle emissions of marine fuels and compares them to a 2008 benchmark year. In 2024, ships designed to operate at full capacity, at moderate speeds, were now burning more fuel to move fewer containers 35% Emissions from the largest container ships rose by this amount last year LOG_July0225_22-25_Report-Green Shipping_13654237.indd 2403/07/2025 14:04GREEN SHIPPING | REPORT 25 www.logis tic smiddleeas t .comLOGISTICS MIDDLE EAST | JULY 2025 Arsenio Dominguez, Secretary-General, IMO The framework is structured around two compliance tiers. Tier 1 requires ships to achieve a 4% reduction in carbon intensity, and failure to meet this target will result in a penalty of $380 for every ton of carbon dioxide emitted above the established limit. Tier 2 is more ambitious, mandating a 17% reduction in carbon intensity. However, it allows operators greater ﬂ exibility through mechanisms such as purchasing or banking emission credits to meet their targets. These measures off er a transitional cushion, but the direction of travel is clear: decarbonisation is no longer optional. What makes these rules particularly pressing is their progressive nature. The targets are not static. They will become increasingly stringent, with a goal of achieving a 65% reduction in carbon intensity by 2040. For shipping companies, particularly those operating mega-ships that are already grappling with underutilisation and issues like speed creep, these penalties could represent a major operational cost. Delaying action could prove signiﬁ cantly more expensive than proactively adapting. For industry leaders, this is more than a compliance challenge; it’s a strategic imperative. Companies must begin recalibrating their ﬂ eets and operations now, not only to avoid penalties but also to maintain a competitive edge in a carbon-constrained global market. The countdown has begun, and the cost of inaction will only increase with time. WHAT CAN SHIPPERS DO? However, this shift isn’t just the carrier’s problem. Shippers have a role too. As contract negotiations approach, moving beyond price and transit time alone is time. Carbon effi ciency should be part of the equation. As Xeneta’s emissions index reveals, some carriers already outperform others on the same lanes. For shippers comparing two carriers with similar rates and services, asking for emissions performance data could tip the scales. There’s also the broader procurement strategy to consider: can sea rather than air move more cargo? Can ﬂ exible delivery timelines be aligned with slower, greener sailings? These small shifts can have major ripple eff ects, both ﬁ nancially and environmentally. TIME TO SHRINK THE SIZE OBSESSION? The biggest container ships may still dominate the horizon, but their halo is fading. In an era where effi ciency is being redeﬁ ned not by size but by smart operation, the industry needs to rethink its obsession with scale. Mega-ships aren’t going away. But they might go from assets to liabilities if matched with the right trade ﬂ ows, utilisation rates, and regulatory awareness. For carriers, ﬂ eet managers, and shippers alike, 2024 was a lesson in why bigger isn’t always better, and how smaller ships are still in fact useful. 2028 The IMO is expected to finalise a new set of emissions rules that will impose financial penalties by this year LOG_July0225_22-25_Report-Green Shipping_13654237.indd 2503/07/2025 14:05PARTNER CONTENT | DEMATIC 26 www.logis tic smiddleeas t .comJULY 2025 | LOGISTICS MIDDLE EAST As retail and e-commerce operations race to keep pace with rising customer expectations, automation has shifted from a futuristic option to an essential pillar of modern logistics. According to Mithun Perinchery, Head of Sales for the Middle East, Turkey and Africa at Dematic, today’s retailers face unprecedented operational complexity and only advanced, integrated automation can solve it. “The evolving customer expectations are fundamentally transforming the retail and e-commerce supply chain,” he comments. “Today’s consumers demand instant product availability, rapid and accurate delivery, aff ordability, and hassle-free returns across both physical and digital channels.” AUTOMATION HAS BECOME IMPERATIVE In a world where fast, seamless service is expected, logistics has become a critical competitive diff erentiator. “Automation has become a strategic WHY THE MIDDLE EAST IS READY FOR A RETAIL AUTOMATION REVOLUTION Dematic’s Mithun Perinchery explains how automation is unlocking new opportunities for retailers “Ultimately, automation is no longer optional. It’s a strategic necessity for retailers aiming to thrive in a fast-paced, customer centric market” imperative for modern retail supply chains due to the rapidly evolving expectations of today’s consumers and the increasing complexity of fulﬁ lment operations,” Perinchery says. Retailers must now manage broader assortments, respond to seasonal spikes and deliver effi ciently despite space constraints and labour shortages. “Customers now demand fast, accurate, and aff ordable delivery across multiple channels, whether shopping in-store or online, and they expect seamless returns,” he adds. “Meeting these expectations consistently requires a level of speed, precision, and ﬂ exibility that manual processes alone can no longer provide.” The cost of failing to modernise is high. “Retailers are also facing signiﬁ cant operational challenges, including labour shortages, rising costs, and limited warehouse space, especially in urban areas where proximity to customers is essential for fast delivery,” he notes. As a result, leading retailers are turning to technologies such as Dematic’s Multishuttle, AutoStore, and Autonomous Mobile Robots (AMRs). “Goods-to-Person technologies are enabling businesses to dramatically increase productivity, accuracy, and storage density while reducing labour dependency and operational costs.” REAL-WORLD RESULTS Dematic’s automation solutions are already transforming fulﬁ lment operations globally across retail and e-commerce. One example is the premium apparel brand AS Colour in New Zealand. “AS Colour implemented our system and saw a 344% increase in throughput per worker, along with improvements in accuracy and energy effi ciency.” According to AS Colour’s Managing Director Lawrence Railton, “The Multishuttle GTP system has been a game changer for our business, and we’ve actually seen a big increase in sales in New Zealand as a result of having it in place because our customers see how fast and accurately we get their orders to them.” Dematic also deployed AutoStore for Benetton Group in Italy. “The system uses mobile robots to retrieve items from a dense grid of bins, signiﬁ cantly reducing the need for manual travel and increasing picking effi ciency.” Another major success story is Radial Europe, which services brands such as Mithun Perinchery of Dematic LOG_July0225_26-27_Dematic Advertorial_13650977.indd 2602/07/2025 15:57DEMATIC | PARTNER CONTENT 27 www.logis tic smiddleeas t .comLOGISTICS MIDDLE EAST | JULY 2025 Calvin Klein, Tommy Hilﬁ ger, and Gymshark. “Radial deployed a Dematic Bin-to-Picker AMR system consisting of 300 robots delivering products automatically to pickers,” he says. “This solution has quadrupled picking speeds and improved accuracy, all within a reduced warehouse footprint.” THE AI AND DIGITAL TWIN REVOLUTION Beyond robotics, Dematic is now integrating advanced technology to create predictive, adaptive systems. “At the core of all these technologies is Dematic’s intelligent software platform, which includes our Warehouse Execution System and Warehouse Control System. These systems provide real-time visibility, traceability, and seamless integration with our clients’ enterprise software.” One of the most groundbreaking advances is the use of digital twins. “A digital twin is a virtual replica of a warehouse that uses the same software as the physical environment,” Perinchery explains. “This allows businesses to simulate order ﬂ ows, test new strategies and predict potential issues before they occur.” The real power emerges when these simulations are combined with AI, “For example, it might identify that a speciﬁ c order cycle is about to fail before an order has even hit the ﬂ oor and recommend a solution in advance.” And this isn’t theoretical. “The technology already exists and is being explored in real-world settings,” Perinchery adds. “It has the potential to fundamentally change how businesses plan and operate, reducing risk and increasing adaptability.” As retailers face rising customer demands, cost pressures, and logistical complexity, Dematic is helping them shift from reactive to proactive supply chains. Perinchery puts it simply: “Ultimately, automation is no longer optional. It’s a strategic necessity for retailers aiming to thrive in a fast-paced, customer-centric market.” 344% The increase in throughput per worker experienced by AS Colour by using Dematic systems LOG_July0225_26-27_Dematic Advertorial_13650977.indd 2702/07/2025 15:57INTERVIEW | EMIRATES SHIPPING ASSOCIATION 28 www.logis tic smiddleeas t .comJULY 2025 | LOGISTICS MIDDLE EAST THE UAE IS BACKING COLLABORATION FOR SHIPPING DECARBONISATION The Emirates Shipping Association’s approach shows why collective action is the only viable path LOG_July0225_28-30_Interview-Emirates Shipping Association_13654871.indd 2802/07/2025 15:55EMIRATES SHIPPING ASSOCIATION | INTERVIEW 29 www.logis tic smiddleeas t .comLOGISTICS MIDDLE EAST | JULY 2025 As the maritime industry grapples with an urgent mandate to decarbonise, the UAE is carving out a strategic path, not just by adopting cleaner fuels but by creating the collaborative frameworks needed to make sustainable shipping a reality. Emirates Shipping Association is spearheading this eff ort, a platform uniting shipowners, regulators, suppliers and government bodies to tackle the industry’s most complex sustainability challenges together. “In this region, we know that decarbonising the shipping industry isn’t a simple task. It means building the right fuel infrastructure and making sure greener “The UAE’s maritime sector continues to move forward, and a big part of that comes down to collaboration and long-term thinking” fuels are both available and aff ordable,” says Anders Østergaard, Secretary General of Emirates Shipping Association and Group CEO of Monjasa. This pragmatic view underpins a growing network of initiatives that go far beyond regulatory compliance. From LNG bunkering to sustainability focused leadership programmes and international MoUs, the UAE’s maritime decarbonisation drive is as much about mindset as it is about metrics. A GREEN MARITIME ECOSYSTEM One of the clearest signals of the UAE’s sustainability ambition is Monjasa’s launch of Green Zeebrugge, the country’s ﬁ rst dedicated LNG bunker vessel. While LNG is often viewed as a transitional fuel, its role in enabling immediate emissions reduction cannot be overstated. “It’s a small but meaningful step towards off ering more sustainable fuel options, and we’re committed to encouraging more initiatives like this across the industry,” Østergaard explains. The Green Zeebrugge initiative is only part of the wider infrastructure evolution happening across the UAE. In Fujairah, one of the world’s top bunkering hubs, Vopak Horizon recently completed its ﬁ rst bio-bunker fuel supply operation using B24, a blend containing 24% fatty acid methyl esters. It’s a ﬁ rst for the region, and it signals that cleaner fuel blends are already moving from concept to application. PUBLIC AND PRIVATE SECTOR SYNERGY Emirates Shipping Association is not acting alone. In a landmark move back in 2023, the UAE Ministry of Energy and Infrastructure, in collaboration with global classiﬁ cation society DNV, announced the establishment of the Middle East’s ﬁ rst Maritime Decarbonisation Centre. The centre will serve as a regional hub for innovation, knowledge-sharing, and research into scalable, sustainable shipping practices. This public-private collaboration reﬂ ects a strategic shift: governments are no longer passive regulators Anders Østergaard, Secretary General of Emirates Shipping Association and Group CEO of Monjasa LOG_July0225_28-30_Interview-Emirates Shipping Association_13654871.indd 2902/07/2025 15:55Next >