Scholars' Insight

Empowering Halal Supply Chains for Sustainable Growth and Global Impact

Narrated by Zeiad A. A. Aghwan
Edited by M. Sirojuddin Amin
Summary. The global demand for halal products has surged, driven by both Muslim and non-Muslim consumers, with Muslims spending over $2 trillion in various sectors in 2019 alone. Halal food leads this demand, anticipated to grow annually by 3.5%. The significant Muslim population growth, expected to reach 2.2 billion by 2030, underscores this trend, with major markets in the Middle East, North Africa, South Asia, and the Gulf, and notable production in non-Muslim countries. This growth spotlighted the need for halal logistics, ensuring products remain pure and compliant with Islamic law throughout the supply chain, despite facing challenges like expert shortages, standardization issues, inadequate infrastructure, and low demand. Zeiad A. A. Aghwan proposes enhancing halal logistics through a global certification authority, specialized training, infrastructure development, advanced technologies like blockchain, strategic marketing, and collaborative partnerships. However, these initiatives face challenges such as resistance to standardization due to diverse halal interpretations and the need for substantial investment in infrastructure and technology adoption, highlighting the importance of a coordinated approach to foster halal logistics growth efficiently.
Over the past ten years, the global demand for halal products has seen a significant rise among both Muslim and non-Muslim populations. According to the 2021 State of the Global Islamic Economy Report, Muslims spent over $2 trillion in 2019 on sectors like food, pharmaceuticals, cosmetics, fashion, travel, and entertainment. Halal food is the biggest sector, with spending reaching $1.17 trillion in 2019, and it's expected to grow by 3.5% annually for the next five years. The growing Muslim population, which is projected to rise from 1.8 billion in 2012 to 2.2 billion by 2030 and make up 30% of the global population by 2050, plays a significant role in this increase. Interestingly, the largest markets for halal products are in the Middle East, North Africa, South Asia, and Gulf countries, yet the top producers of halal food include non-Muslim countries like Brazil, Australia, New Zealand, and France.
The rising interest in halal products has brought attention to the need for halal logistics in the supply chain, which includes the transportation and storage of these goods. However, the concept of halal logistics is still relatively new. Halal logistics involves ensuring that the handling, storage, transportation, and delivery of products comply with Islamic laws, keeping them pure and suitable for Muslim use throughout the entire supply chain. This requires strict procedures and certifications to maintain the halal status of products from their origin to the end consumer, covering all logistics aspects such as warehousing and handling.
Halal logistics guarantee the success of a halal industry, where the success of this industry depends on the ability of logistics service management to ensure the integrity of halal products. All products must comply with sharia law which states that products are safe, harmless, and healthy from their origin to the hands of consumers.
Halal logistics faces several challenges that impact its efficiency and integrity. Firstly, there's a noticeable shortage of experts who specialize in Shariah-compliant logistics, despite a wealth of knowledge in halal food sciences and legislation within Brunei. This lack of skilled professionals in logistics, similar to issues found in humanitarian and green logistics sectors, means that critical services such as transportation, warehousing, packaging, and order processing may not meet the required standards for halal compliance. Secondly, the halal logistics sector struggles with standardization and certification. Without universally accepted guidelines, it's challenging to ensure the halal status of logistics operations, risking contamination of the halal supply chain. The absence of an internationally recognized standard leads to unclear guidelines and inconsistencies in operations. Thirdly, the infrastructure for halal logistics, including specialized transport carriers, warehouses, storage units, and terminal ports, is insufficient. Even in Brunei, where there has been significant investment to expand and modify ports and airports, the infrastructure still falls short of meeting the needs for halal logistics. Lastly, the demand for halal logistics services is currently low among both consumers and businesses, which diminishes the urgency to develop this sector. This lack of demand may stem from the perception that all products are halal unless stated otherwise, and a focus on product certification over logistical considerations within the supply chain.
Zeiad A. A. Aghwan presents his innovative idea to accelerate the growth of halal logistics at an international seminar held at the Faculty of Economics and Business, Universitas Islam Malang. Firstly, he suggests the establishment of a global halal certification authority to ensure uniform standards and practices worldwide. Secondly, he advocates for the development of specialized training programs for logistics professionals in shariah-compliant operations to address the expert deficiency. Thirdly, Aghwan proposes the enhancement of infrastructure with dedicated halal logistics facilities, including transportation, warehousing, and distribution networks, to meet the specific needs of halal supply chains. Fourthly, he recommends implementing advanced technology solutions, such as blockchain, to ensure traceability and integrity of halal products throughout the logistics process. Fifthly, Aghwan emphasizes the importance of strategic marketing campaigns to increase awareness and demand for halal logistics services among consumers and businesses alike. Lastly, he calls for collaborative partnerships between governments, industry stakeholders, and international organizations to foster a supportive ecosystem for halal logistics growth, ensuring that these measures are integrated cohesively to propel the sector forward efficiently and sustainably.
While Zeiad A. A. Aghwan's proposal for accelerating the growth of halal logistics presents a comprehensive and forward-thinking approach, several critical considerations and potential challenges warrant attention. Establishing a global halal certification authority, although beneficial for standardizing practices, may encounter resistance due to the diverse interpretations of halal compliance across different Islamic schools of thought and jurisdictions. This diversity could complicate the acceptance and implementation of a uniform global standard. Research into "Harmonizing Halal Certification Globally: Challenges and Solutions" could provide valuable insights into overcoming these obstacles. Specifically, the research could explore the feasibility and impact of creating an international accreditation body for halal logistics standards to ensure consistency and trust in halal supply chains globally.
The development of specialized training programs for logistics professionals highlights the importance of addressing the expert deficiency in the field. However, the effectiveness of these programs would depend significantly on their accessibility, affordability, and the ability to keep pace with evolving halal logistics practices and technologies. A study about optimizing halal logistics training: accessibility, costs, and curriculum evolution might shed light on how to enhance the impact of these educational initiatives.
Moreover, the proposal to enhance infrastructure with dedicated halal logistics facilities is ambitious and requires substantial investment. The feasibility of such an undertaking might be challenged by economic constraints, particularly in regions with limited financial resources. The study might also assess the economic viability of upgrading logistics infrastructure to accommodate halal requirements and examine effective marketing strategies to change public perception and increase demand for halal logistics services.
Integrating advanced technology solutions like blockchain for traceability raises questions about the digital divide and the readiness of all stakeholders within the halal supply chain to adopt such technologies. While blockchain offers a promising solution for ensuring the integrity of halal products, its implementation requires technical expertise, infrastructure, and a level of digital literacy that may not be uniformly available. The study about blockchain technology in halal logistics: bridging the digital divide would be pivotal in addressing these concerns.
Strategic marketing campaigns to increase awareness and demand for halal logistics services are crucial. However, these campaigns must be carefully designed to resonate with diverse consumer bases and business stakeholders, taking into account cultural sensitivities and varying levels of understanding about halal principles. The topic of crafting effective marketing strategies for halal logistics services could examine methods to enhance the appeal and reach of halal logistics.
Lastly, the call for collaborative partnerships to foster a supportive ecosystem for halal logistics growth is essential. Still, it necessitates a high degree of coordination and cooperation among various parties with potentially competing interests. The challenge lies in aligning these interests towards common goals and overcoming bureaucratic and regulatory hurdles that may impede collaboration. The study about the collaborative partnerships for halal logistics growth would be crucial in mapping out pathways to effective collaboration.
Scholars' Insight, a segment in Jema: Jurnal Ilmiah Bidang Akuntansi dan Manajemen from the Faculty of Economics and Business, University of Islam Malang, offers innovative research ideas from global scholars. It enriches insights in accounting and management, sharing collaborative findings and best practices. Readers gain inspiration for further research and a deeper understanding of current developments, fostering academic networks and cross-institutional collaborations.

An Assistant Professor, Deputy Director at Halalan Thayyiban Research Centre/Universiti Islam Sultan Sharif Ali, Brunei Darussalam. My current research interests on Halal Awareness, Halal Slaughter, Animal Welfare, Halal Food and non-Food Products, and Halal Services (Halal Logistics and Halal Supply Chain Management).
A distinguished Associate Professor at the Faculty of Economics and Business, University of Islam Malang, is internationally recognized in the field of Human Resources Management (HRM), holding the prestigious title of Certified Professional Human Capital Management. In addition to his academic responsibilities as a researcher and lecturer, He is deeply committed to addressing the pressing issue of climate crisis. As the Chief Operating Officer (COO) at CoffeCane, a company specializing in the production and supply of sugar cane and coffee beans, he spearheads initiatives grounded in green technology farming practices. Through his leadership, CoffeCane is dedicated to sustainable agricultural methods that minimize environmental impact while maximizing productivity.