‘High rents, rising operational costs remain big challenges’

High rental rates and increasing operational costs have remained the main challenges faced by logistics companies in Qatar, a senior executive of Bin Yousef Cargo (BYC) has said.BYC general manager Jose Philip said operational cost has almost doubled compared with the figures three years back.“And because of the competition, we cannot increase our price, so the profit margins are eroding day by day,” he noted.Philip was speaking on the sidelines of the recent launching of Delight International Mover Qatar, a joint venture of BYC and UAE-based Delight International Mover.He also cited traffic congestions, parking, and limitations on heavy vehicles as big challenges to be addressed in operating locally.BYC used to make two to three deliveries a day but the company has reduced it to one, according to Philip. However, he said manpower cost has remained the same.“Apart from traffic, parking and heavy vehicles have lots of limitations, timings, so this is affecting our operations too,” he stressed.The company finds practical solutions to deal with these challenges such as using small trucks to deliver the items.Philip said the strategy may bypass the truck ban but they also need to hire two drivers instead of one.“Then the cost goes up and we cannot charge more because it is one delivery,” he pointed out. “Still we are charging something what we used to charge 10 years back.”Philip believes they will still face the same challenges in the next three to four years despite Qatar’s continuous development.“Maybe after that it will be something very smooth,” he said.Philip also cited warehousing and storage as usual problems in logistics since it is not easy to look for an area to build such facilities.He said choice of warehouse is also limited in Qatar. “We are only in Doha and we cannot put warehouses anywhere we like.” However, BYC was able to build another warehouse last year to add to the existing four and plans to build more in the coming years.Being a local company gives BYC an advantage, according to Philip.  “It is not like just somebody coming from any other country and opening a small office and after a few months spoiling things,” he stressed. “We have our own credibility and we have a commitment to the community here, so we have to keep it up.”With nearly 30 years operating, he noted that they have been for the long haul from the start.About competition, he said there are many new entrants but reputation had always been a plus factor.