UAE logistics sector to earn $7.03b in 2010

The UAE’s logistics market is set to record revenues of $7.03 billion in 2010, and is estimated to reach $9.40 billion in 2014, a new report reckons.

New analysis from Frost & Sullivan, finds that freight forwarding segment contributes to about 63 per cent of these revenues, representing $4.42 billion in 2010. Transportation, warehousing and value added logistics segments together account for the remaining share of market revenues.

“Being located near India and China, the high growth economies, UAE imports about 60 per cent of its products from these countries, mostly transiting through the Dubai borders,” says Frost & Sullivan Transportation & Logistics Program Manager Srinath Manda. “Thus, UAE has a unique advantage over the other Middle Eastern countries and has been able to establish itself as a centre for trans-continental trade.”

The UAE government’s huge investments in infrastructure and logistics projects are likely to retain the nation’s position as a key logistics hub in the Middle East, the report says.

The Government of Dubai is making significant investments in the upcoming Dubai Logistics City (DLC), it adds. “It [DLC] is likely to be the world’s largest integrated logistics platform providing multi-modal transportation, logistics, and other value-added services. This is the government’s first initiative to make Dubai the fastest, most agile logistics platform in the global supply chain,” the report says.

The expansion of Jebel Ali Port and Hamriyah Free Zone are also part of the government’s strategies to attract business to drive the economy of the UAE. The gradual revival of the regional and international trades between Eastern and Western hemispheres post the global economic slowdown is resulting in an increase in the volumes of cargo routed in and out of the UAE, thereby driving its logistics market.

“Lagging infrastructure development in the rest of the emirates except Dubai is restraining progress in the logistics industry,” says Srinath. “The other emirates have failed to keep pace with Dubai in infrastructure development, due to lack of needed focus by their governments, thus restricting the scope of comprehensive logistics services beyond Dubai.”

In the past few years, Ras-Al-Khaimah (RAK) has also started focusing on developing robust logistics infrastructure to measure up to Dubai’s standards. In addition, the Abu Dhabi Government is also undertaking major efforts to develop the logistics infrastructure in the Emirate, including the setting up of the Khalifa Port and Industrial Zone, a prestigious multipurpose facility that encompasses a port, industrial zone, special economic zone, free zone, technology zone, and logistics zone.

These recent infrastructure development initiatives by the other emirates will provide elbow grease to Dubai’s initiatives and amplify the UAE’s strength as the nerve centre for logistics in the Middle East in the long term.

Situated at the crossroads of the Asia-Europe and Asia-Africa trade routes, the UAE is at a vantage position for conducting trade between countries in the Eastern and Western hemispheres.

Geographic positioning has proved to be a major advantage for the logistics industry in the UAE. Good accessibility by air, sea, and land has enabled the UAE to gain prominence in terms of transport and global logistics, with burgeoning trade volumes in both regional and global trades.
 

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