<\/p>\n
You can also listen to this podcast on iono.fm here.<\/p>\n
JEREMY MAGGS: The fallout from the Middle East conflict is now rippling through global supply chains and is exposing just how dependent many multinationals have become on a handful of highly concentrated hubs like Dubai, for instance.<\/p>\n
What was once seen as a model of efficiency is now looking like a single point of failure with rerouting, rising costs and operational risk all back on the table.<\/p>\n
Joining me now is Andre Scholle, who is vice president and head of region India, Turkey, Middle East and Africa at the global logistics network ZF Aftermarket. I want to talk about whether this is a short-term disruption or a fundamental reset, possibly, in how global logistics is being restructured.<\/p>\n
Andre, a very warm welcome to you. Do you think companies have maybe in the immediate past, become too complacent about relying on hubs like Dubai?<\/p>\n
ANDRE SCHOLLE: Thanks for having me, Jeremy. I think that\u2019s the million-dollar question.<\/p>\n
I think the business model of Dubai has proven to be a very successful one and Dubai itself not being very dependent on oil, has made its own business model, together with logistics, a very successful one.<\/p>\n
Now with this situation, the question arises obviously, is that sustainable or is it because it\u2019s disrupted at the moment, how quickly and how strongly will Dubai be able to come back. Looking at the potential of Dubai and looking at the model that they have, I still have very high hopes in Dubai coming back.<\/p>\n
JEREMY MAGGS: It\u2019s all a question of timing though, Andre, and as you rightly point out, we just don\u2019t know at this point whether it\u2019s a temporary disruption or possibly, and more concerning, whether it\u2019s a structural shift in global supply chains. But again, probably too early to discern that.<\/p>\n
ANDRE SCHOLLE: Correct. What we can say and what we can see is that, and trying to paint that picture a bit from my regional responsibility and not necessarily only from a global point of view, but if you look at the aftermarket demand that we have in the region of the Middle East, the demand is strong.<\/p>\n
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The car park is quite strong and quite significant. So from a demand point of view, the region will play a role.<\/p>\n
The question is, rather, will that gate into the Middle East, which Dubai was, be sustainable or not, or will there be other gates that are opening?<\/p>\n
But I do not have a slight doubt that the Middle East itself will remain a very important business area.<\/p>\n
\u00a0JEREMY MAGGS: I want to talk about the impact on African markets in just a moment, but do you think we globally are already seeing cost pressure feeding through to business and consumers?<\/p>\n
ANDRE SCHOLLE: We do see cost pressure, partially, especially when we look at lubricants, for example, because you look at the oil price and you look at some other materials like aluminium or something like that, and you see an impact on the prices of these raw materials.<\/p>\n
That will obviously also affect the parts pricing and the prices on the materials that are shipped. That is visible. The rest so far is logistics.<\/p>\n
JEREMY MAGGS: How exposed, Andre, do you think African markets then are to this kind of disruption?<\/p>\n
ANDRE SCHOLLE: They are affected because the African market, especially if you look at the East African countries, they are very closely linked to the Middle East and especially to the harbour in Dubai.<\/p>\n
So there is an exposure, but it\u2019s not the only lifeline that the African continent has, which is the good news.<\/p>\n
At the end of the day, it also gives Africa a certain flexibility on probably developing other hubs and other connections.<\/p>\n
JEREMY MAGGS: Well, let me talk about that, and it\u2019s not the first time that this conversation has happened, certainly in South Africa. But do you think this country is in a position to maybe develop itself as an alternative regional hub?<\/p>\n
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ANDRE SCHOLLE: I certainly hope so for South Africa. If you look at our location in South Africa, our hopes that we have for South Africa and our company, ZF Aftermarket, we are counting on that.<\/p>\n
Actually, we tried to establish a regional hub concept that also includes South Africa as a centre of gravity.<\/p>\n
If it could turn out as a facilitator, it would help us a lot because the potential in South Africa and not only in South Africa, but also in the role of South Africa as a centre of gravity for the surrounding markets and for the whole continent, the potential is there, and I\u2019m counting on that potential.<\/p>\n
JEREMY MAGGS: Of course, all contingent on whether Transnet, the state ports and logistics company, can improve its operational efficiency.<\/p>\n
ANDRE SCHOLLE: Obviously, and not only in South Africa, as I mentioned, but also, South Africa compared to many other surrounding markets has better stability when it comes to doing business.<\/p>\n
It depends a bit on the stability development of the surrounding markets as well, if the complete Southern African region might develop into such a hub.<\/p>\n
But I think the potential and the opportunity definitely is there and probably now also the hunger for the nations involved, seeing that they need to be a bit more independent from the Middle East than they used to be in the last couple of years.<\/p>\n
\u00a0JEREMY MAGGS: How difficult is it for companies to reroute their supply chains, though, even if we do see the emergence of decentralised logistics networks.<\/p>\n
ANDRE SCHOLLE: I think it\u2019s not too difficult. What is always difficult is to build up and build down facilities. Rerouting supply chains is not difficult, it\u2019s a question of cost obviously in the in the beginning, but just rerouting is not the main issue.<\/p>\n
JEREMY MAGGS: I\u2019m going to leave it there. Andre Scholle, thank you very much indeed, from ZF Aftermarket. I appreciate your time today.<\/p>\n
#Africa #gain #global #logistics #rethink #Middle #East #reliance<\/p>\n","protected":false},"excerpt":{"rendered":"
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