UAE retailers charter ships amid supply disruptions — The National
Food retailers and manufacturers in the United Arab Emirates are changing their supply chains due to disruptions in maritime logistics linked to the war with Iran and the closure of the Strait of Hormuz. Companies are seeking closer suppliers, chartering vessels exclusively for their own deliveries and purchasing raw materials in advance, The National reports.
According to Shamin Sainulabdeen, director of private labels at Lulu Group International, sea deliveries in some cases took up to 70 days, creating a problem for goods with a short shelf life. He noted that about 80% of food products in the UAE are imported, so the chain is more actively seeking local partners and substitutes for goods that had previously been supplied mainly from Europe and North America.
Charter transportation
Lulu Group International has begun delivering cargo by chartered aircraft and vessels to the Gulf Cooperation Council countries where its stores operate. The company also charters vessels exclusively for its own deliveries from India, Thailand, China, Indonesia, Spain, Turkey and Italy.
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Sainulabdeen explained that previously, cargoes from different manufacturers were transported together, whereas now the retailer consolidates orders and arranges sea transportation independently. The company is also shifting procurement to Asian markets to reduce the distance to suppliers.
Raw material stocks and local production
Food producer United Foods, including of oil and ghee, has focused on placing advance orders for raw materials in large batches. The company's senior B2B manager, Mohamad Ziad Al Najjar, said that purchases were planned several months ahead, and the large batches received could last up to five months.
Al Ain Farms Group, in turn, focused on locally produced goods. The company's chairman, Tarek Al Hosani, said that the “made in the UAE” label has value for buyers who associate the country's products with market regulation, food security and health standards. Company representatives also noted the UAE government's support in resolving problems with obtaining goods.
