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29 March 2024

UAE logistics market to cross $1bn in 2015

Published
By Staff

The total logistics market in the UAE is expected to grow at 8 per cent per annum between 2009 and 2015 to reach about $10.06 billion in 2015, according to a White Paper prepared by consultancy firm Frost & Sullivan.

The country is expected to witness a remarkable surge in import and export trade levels in the coming four-five years as recovery from the global recession is expected to drive the freight forwarding market as well as the overall logistics market, the report said.

Significant growth opportunities exist in the areas such as logistics infrastructure development, integrated global supply chain solutions, multimodal transport and specialized warehousing services.

The increasing economic integration of GCC nations coupled with evolution of supporting logistics infrastructure are likely to result in progressive fortunes for the UAE logistics industry.

Transportation practices in the UAE are likely to change with the upcoming transport infrastructure developments by the governments including the upcoming GCC-wide railway network with dedicated freight lines. The road networks across the Emirates are also expected to be transformed into freight lines. Both these forms of freight line networks are expected to be operational after 2012-2013, and are most likely to drive down the transportation times and costs to a commendable extent.

Warehousing practices are also expected to improve with improving logistics infrastructure, the report said.

“The highly appreciated GCC Customs Union introduction in 2003, which is considered a key step in a broad process of regional economic integration in Gulf, facilitates free movement of goods across GCC nations. While majority of GCC made goods are permitted in this category, goods imported into GCC also qualify for this free movement after payment of a single tariff of 5 per cent at the point of entry. If the abolition of customs duty altogether and replacement with local sales taxes as expected by business community is realized, the scenario is likely to lead to a new era of regional economic and industrial growth,” the report said.

With the UAE being the primary entry point for goods into GCC market, the logistics industry in the UAE is only likely to scale to new heights with an improving domestic economy and increasing regional economic integration.