DHL-Aramco joint venture ASMO seeks to shape tomorrow’s supply chain

By Emre Basaran

DAMMAM, Saudi Arabia (AA) – German logistics company DHL and Saudi state-owned petroleum and natural gas company Aramco joined forces on Monday to form a joint venture.

At a ceremony in the eastern Saudi city of Dammam, the new joint venture called ASMO (Advanced Supply Management Operations) was revealed as a new procurement and logistics services hub. Among those at the ceremony were ASMO Chair Salem Al Huraish; Wail A. Al Jaafari, executive vice president of technical services at Aramco; and Oscar de Bok, DHL Supply Chain CEO.

The joint company aims to further streamline supply chain processes in a sustainable and efficient way, said executives from the companies involved.

“ASMO is envisioned to meet the growing demand for more sustainable and efficient supply chain services in Saudi Arabia, while at the same time reflecting the expanding market potential of the region as a global trade gateway for the energy, chemical, and industrial sectors,” said a post-ceremony press release.

“In a world challenged by supply shortages, logistics disruptions, and rising costs, ASMO is poised to emerge as a regional supply chain hub, covering supply chain services from procurement to logistics, warehousing, and even a B2B e-marketplace for customers,” it added.

Hendrik Venter, the CEO of DHL Supply Chain in Europe, the Middle East, and Africa, gave an exclusive interview to Anadolu on the new venture’s aims and ambitions.

“Three-and-a-half years ago, senior management from Aramco and DHL got together and discussed using Aramco's ecosystem, specifically their technology and technological expertise in the fuel technologies combined with DHL as the global logistics leader,” he said.

Venter said Saudi Arabia’s goal of becoming a logistics hub also contributed to the founding of the joint venture.

He stressed that they want to provide small, medium and local companies, in addition to global customers, “the opportunity to have access to vetted and qualified suppliers with ethically sourced products.”

“With that, these companies will have access to procurement efficiencies, in addition to an end-to-end supply chain management service. By having more efficient and effective procurement practices, they can do away with unnecessary excess stocks, freeing up capital so that they can focus on their own businesses,” Venter added, pledging that a more streamlined supply chain will “also drive down carbon emissions.”

“ASMO will be focusing on energy, but also on the chemical and the industrial sectors. We will also focus on spare parts, including valves, pipes, bolts, and anything else whose supply chain can be more streamlined, thus resulting in an improvement in carbon emissions,” he added.

“This will be a significant overlap in the products which these companies use. So, if you can combine all of that volume and scale, you provide better procurement practices for everybody,” he stressed.

“If you want to reduce greenhouse gases, you need to buy less,” the CEO underlined.

“You need to buy efficiently and effectively the right product that will then reduce the need for returns – and it can help circular economies. So that's where the procurement comes in handy,” he added.

“Then together, once you have acquired – very effectively and efficiently – what you need, there's also a very effective supply chain delivering it to you. So, by leveraging the scale of all the companies in the sector and between these two big companies, Aramco and DHL, we can make sure that we have more effective and efficient transportation,” Venter also said.

The executive also stressed the significance of “backhaul kilometers,” adding that trucks should return to their point of origin fully loaded so that energy efficiency and workload is optimized in the best way possible.

The new joint venture is aimed at “filling the trucks better, making sure that we don't have empty backhaul kilometers, using technology so the trucks drive the shortest route of the most optimal times of delivery to take waste out of the equation,” Venter added.

“Then we can also make sure that we use the latest and best technologies, but also the best equipment,” he said, adding that the efficiency and effectiveness will lead to “less kilometers being driven.”

DHL will “close down some of the older non-carbon-neutral facilities,” Venter said, adding that they will “build a number of very large distribution centers or campuses and those will be carbon-neutral facilities,” thereby “making sure they have zero carbon emissions.”

“The aspiration of ASMO, in terms of sustainability, is 100% aligned with what DHL wants to do, but also what Aramco wants to do,” the CEO added.

- Use of AI crucial

Venter also said that advanced technologies, especially artificial intelligence (AI), will play a pivotal role in the operations of ASMO.

“ASMO will certainly use a tremendous amount of data, capabilities of AI, robotics and other technologies,” he said.

“If we can use the data more effectively, we can improve forecasting, we can improve anticipation and planning and it could therefore have benefits in terms of sustainability and effectiveness of end-to-end supply chain management,” Venter said.

“We will also use automation and robotics,” he added, saying that “robotics will work alongside humans, which will have added value.”

“We will use technology and robotics to do repetitive tasks, heavy lifting, and potentially dangerous activities. Those will be done by technology and robotics while the human aspect will continue to add value,” he said.

“I don't think you can run the two without one another, but the robotics will be there to assist the humans in working more efficiently, effectively and in a safer manner.”

Venter also said that ASMO aims to “go beyond Saudi Arabia into the wider Middle East and North Africa region.”

“This is a massive undertaking. It has taken us three-and-a-half years to get here. Now we need to start operating in a controlled manner,” he added.

- DHL eyes further growth in Türkiye

The executive also stressed that Türkiye is one of the most important countries for the German logistics firm, and that it is looking to grow its operations there.

Saying that Türkiye would “definitely be” considered as a procurement operations hub, Venter added that the DHL already has a “very strong” presence in the country.

“The DHL Group is very, very present in Türkiye. It is one of our fastest-growing countries,” he said.

“We have 27 facilities in supply chain there at the moment. We employ more than 2,000 people,” he said.