BILL OF LADING

Lebanon 2013 | TRANSPORT | INTERVIEW

TBY talks to Raymond Rizk, CEO Lebanon of Agility Logistics, on the dynamics of the local transport industry and the need to improve export-import efficiency.

Raymond Rizk
BIOGRAPHY
Raymond Rizk has acquired considerable and diverse management experience in multi-faceted business activities for over 20 years in the Middle East region. He has proven expertise in general management, project management, sales and marketing, operations, and business development. He has fostered solid connections through relationship building with extensive contacts in airlines and shipping lines in the region.

What have been the milestones for Agility Lebanon over the past two years?

In terms of development, the recent economic situation that the country and the region have experienced, as well as the war in Syria, has significantly affected us. The company and the logistics sector as a whole are involved in various industries as clients. They range from food and machinery to heavy industry and pharmaceutical companies; we have highly diversified our logistical operations. Aside from warehousing, we also offer ocean freight, airfreight, and overland transportation services. Land freight has definitely been negatively impacted by the events in Syria over the past two years. And while we have clearance at all borders, ports, and airports, as well as having warehousing and local distribution networks, all of these were affected to some extent. Some transportation modes, such as ocean freight, increased dramatically due to the difficulties experienced with land freight. On the warehousing side, at the beginning of 2013, business volume was somewhat lower than usual, although demand has subsequently increased in 2Q2013. At the beginning of 2013, we signed a 17-year lease contract for a large state-of-the-art warehouse, in a deal valued over $25 million. This was one of our major developments and investments. The space we are talking about has a capacity of around 45,000 cubic meters. Even though our current occupancy rate is 110% of our present capacity, we are the biggest in Lebanon in terms of warehousing and we have increased our capacity by 35%, which is high for a country such as Lebanon. We perceive this as a prudent move given how we perceive our partners and clients in the market. We view our clients as partners.

How would you classify your fleet?

It is a mix. We have frozen, chilled, and dry vehicles that cover more than 6,000 points of sale in Lebanon. There is basically no area we don't go to, regardless of the client size. We deliver to small market shops as well as to hypermarkets and five-stars hotels.

What sectors represent the greatest growth potential for Agility Lebanon?

There is definitely always potential in food, which is continuously growing. In contrast, we haven't seen much growth in electronics over the past two years, and we assume more of the same for the near future. This is the feedback that we are receiving both from our clients and the market.

What are the strengths and weaknesses of Lebanon's logistics sector?

A major weakness is the lack of proper infrastructure. We also suffer from endemic irregularity. The latter, however, is also the case throughout the region and elsewhere in the world. If the rate is at 5%, it is manageable, but if it is a 105%, it is not acceptable and, unfortunately, this is precisely the case here. Every country has some degree of corruption, but in Lebanon unfortunately you cannot move unless you know somebody, who knows somebody else. We suffer because, as a global company, we have to comply with and cater to all these means, while following the letter of the law ourselves. This means that it sometimes takes us a little longer to deliver than others.

What can be done to improve the logistics sector?

It must be privatized. Our expectation of what the government can do to help, or support us, is very low. This preference not to count on any government help underpins our success. And while we do meet with the administration, it is merely a political formality, and obligation. Whenever we talk about infrastructure, we look ahead to a more advanced country and compare ourselves to it. We could achieve this, but any progress is indexed to the ministries, government, and corruption levels. Unless someone invests billions of their own money, we cannot get any contracts.

What are your most frequent inbound routes?

We are largely an import country. For every 100 shipments, we export about five or 10. There is a small percentage of imports that is then re-exported. There is definitely a part of the wine and the food sectors that we export to, as well as small industries. We have many import routes mainly from Italy in this regard. In the EU, the top three countries are Germany, Italy, and France. In Asia, it is China. This is where our focus is: Europe, Asia, and then the US. The rest of the world does feature, but the numbers are smaller.