COMBINING EXPERTS IN THE FIELD WITH LOCAL SAUDI TALENT

Saudi Arabia 2021 | TRANSPORT | VIP INTERVIEW

TBY talks to Mohammed Al-Bayati, CEO of NAQEL Express, on international growth plans, new technologies, and workforce localization.

Could you tell us about your company's philosophy?

Our philosophy is all about delivering end-to-end, one-stop logistics services for our customers in Saudi Arabia and rest of the Middle East. This is accomplished through our three divisions—express, e-commerce, and logistics solutions. We started in 1993, adopted the name NAQEL in 2005, and established ourselves as the leading domestic express logistics company offering door-to-door delivery of shipments greater than 30kgs. After receiving a courier license in Saudi Arabia in 2014, we established our e-commerce division, offering home delivery services for online retail companies around the world for shipments less than 30kgs. Following that, we started to expand in GCC countries and received licenses to operate in neighboring countries. In addition to China, the UK, and the US, we now have licenses for Bahrain, the UAE, Egypt, and Jordan. We are working on getting licenses for other GCC countries as well. We are witnessing a market trend where customers are switching toward online shopping to fulfill their needs as opposed to visiting physical retail stores. Our e-commerce division has reflected significantly higher than the market growth of around 25%. In 2018, we have established logistics solutions division offering industry-specific solutions including warehousing and 3PL services. NAQEL is currently operating across the entire logistics value chain, including freight forwarding to port handling, customs clearance, road transportation, warehousing, and final-mile distribution. Our philosophy revolves around the “C.A.R.E." principals. This means we focus on competent, accountable, respectable, and engaged employees delivering logistics with care for our valued customers. When it comes to competence, we have a training center here. We had started a program called future leaders program around six years ago. It originally focused on hiring engineers and trying to develop them as logistics managers. Currently, we have more than 120 engineers across the country. We spend almost 3% of our revenue in training and developing our employees.

Do you plan on expanding more internationally, and how do you plan to strengthen your presence as the Saudi government puts more weight into logistics?

After we received the courier license in 2014, we have set-up a fully fledged gateway and bonded clearance facilities at Dammam airport in 2015. We opened a new gateway in the Riyadh Airport in 2019 and similar gateway facilities have been set-up in Jeddah airport this year. These are part of our expansion efforts. From our gateway, we can re-export to other countries and quickly clear goods into Saudi Arabia. The Saudi Industrial Development Fund is also supporting by giving loans to logistics companies to start building desired logistics facilities and meet the ongoing logistics needs of the Kingdom. There has been a number of initiatives by the government under the umbrella of vison 2030 aimed at improving our global competitiveness and logistics ranking as measured by the World Bank, namely the Logistics Performance Index (LPI). We are strengthening our market leadership in the Middle East while connecting the three continents of Asia, Europe, and Africa in line with government's vision 2030 imperatives. We aim to further strengthen our logistics foot-prints in these continents.

How do you integrate new technological developments and operate on the big data front?

This is one of the areas we are putting a lot of effort. For example, we are trying to implement data-driven decision making in delivery route planning and optimization. This can improve our driver efficiency by as much as 30-40%. When it comes to the last mile, we have more than 1,000 drivers operating in this area, and a 30% increase in efficiency is equivalent to the salary of nearly 300 drivers. We are using AI technology that has been partially developed in-house and outside of NAQEL. We can take into account all the relevant factors and come to an optimal delivery solution. 70% of our e-commerce market is cash-on-delivery, and in this area there is a high return percentage because the customer still has the chance to change his or her mind. We are leveraging on our customer data to analyze their behavior and implement interactive solutions that will further improve our overall service offering.

How is the localization of the workforce going?

We are combining experts in the field with local Saudi talent. We are in the platinum category when it comes to Saudization. We have more than 1,800 Saudis working at NAQEL out of over 5,000 total employees, or a Saudization rate of 36-37%. In addition to respecting our customers and employees, we respect our owners by making the right choices. We have a nice environment that attracts Saudis to join our workforce, and they have a clear and attractive career path. We also build professional value in them. We also now have more than 250 female employees working at NAQEL. We have a childcare center in order to help them to smoothly transition into the work environment and meet their potential. We want to develop female employees, but in order to do that you must create a culture that supports them. We have built a culture of company-wide employee development, and it is now much easier for us to expand. The entire logistics industry is growing in Saudi Arabia, and that means that we can really take advantage of the professional development of our employees. The vision of Saudi Arabia is to become a logistics hub and to connect three continents, which is the perfect environment for us to develop our workforce and expand our business.