Under starter’s orders
We had the pleasure of meeting Robert Mills, an Englishman from Yorkshire who has been handling business development at Bahrain International Airport for the past three and a half years, at Tiaca’s Air Cargo Forum in Paris. BIA is one of the important pieces in the great logistics mosaic of the Gulf. Mills knows the Middle East well, having worked for DHL in Iran, Syria, Yemen and Bahrain for 15 years.
You’ve got around quite a bit, haven’t you, Mr Mills, especially in the Middle East. What makes Bahrain special?
Bahrain is an 780 sqkm island. Our closest geographical and economic neighbour is Saudi Arabia, 22 km to the west and to which we’re connected by a causeway. Every year, approximately 8 million visitors use it. If you add the 8.9 million passengers that land at BIA every year, then the enormous significance of our big neighbour becomes clear. Locals and foreigners, tourists and business people all enjoy one of the most liberal socio-political climates of all the states in the Cooperation Council for the Arab States of the Gulf (CCASG, originally GCC).
What does this mean for logistics firms?
Investors in Bahrain can acquire 100% ownership in various sectors, with operating costs much lower than elsewhere in the region. Customs formalities and commercial activities are also very liberal, and the government is very supportive and cooperative.
What differentiates Bahrain’s economic structure from those of its neighbours?
The oil and gas industry still plays an important role; however, banking, tourism, manufacturing and logistics are also some of the developing sectors. With regards to aviation and transportation, DHL Express established its Middle East and Africa hub in Bahrain over 40 years ago.
DP DHL has been a big fish in a small pond for more than 40 years now – and has benefited from having its Mena hub in Bahrain. Its two most important markets, Saudi Arabia and the UAE, are both near.
How has airfreight fared over the years?
The beginning of this century was characterised by strong growth, especially in imports, and certain commodities, such as perishables. The trend has stabilised over the last five years. Even though Bahrain is placed in the middle of several large hubs, we now benefit from their proximity.
Can you give us any figures?
Well, they’re relative. Dubai handles over 2 million t of airfreight each year, we come to just under 300,000 t. We can’t and don’t want to compare ourselves with our neighbours. We have to remain realistic and flexible. Yesterday there was a debate here on “the super hubs of the future.” I believe that huge facilities handling masses of low-priced goods requiring consolidation in hub-and-spoke models already exist in the region.
One level below that I envisage central secondary hubs at the regional level, such as BIA, which will become ever more important in the future. These will be smart hubs for e-commerce and high-value commodities – nimble and flexible, instead of cumbersome and continuously threatened by congestion. These ancillary hubs should prepare for the challenges of the future today, that is to say set up small, high-performance logistics centres that can spring into action when the starting signal is given.
Your catchment area is much bigger than Bahrain, with its 1.3 million inhabitants.
Yes, approximately 60% and growing of our cargo and mail volumes are in transit. Thanks to the country’s liberal economic approach to trading and its geographical position within the GCC we’re now in a position to expand our reach. Online B2C business is also a factor and as an example, we have 32 million active Saudi consumers sitting next door, within a 45 minute drive. I think within a short period of time Bahrain and potentially some of the smaller regional MEA airports will become successful regional niche players.
What are your concrete plans to this end?
We’re currently building a new passenger terminal that will multiply the volumes in the passenger and the cargo segment immensely, plus put Bahrain back on the map as a regional hub of choice. To give you an idea of size the new terminal, you could fit Old Trafford football stadium in it three times, as its total footprint is 207,000 sqm.
On the logistics and cargo development side we’re expanding the DHL footprint to allow for future growth, and are building a “Pharma Village” on a 20,000 sqm plot. We’re enabling Gulf Air to expand its core services and are also looking at providing facilities for e-commerce companies and other forwarders that feel attracted by our strategic development plans through to 2030.
What are the market shares in your hub?
DHL handles 50% of our air mail and air cargo, followed by Gulf Air and its strong regional network (12%). Emirates and Qatar come joint third with 5% each, and the remainder is split between 30 airlines. We have to expand, as our clients are very active.