Logistics set to see higher demand

The opportunity to save costs through outsourcing logistical services is an attractive one for companies. (EB FILE)

The logistics sector in the UAE is expected to see a higher demand this year compared to 2009, according to logistics experts.

“There was a definite decline in the logistics sector in 2009, not only in the UAE, but also in the region and globally, due to the effects of the financial crisis. However, this was the case in many sectors, not just logistics, and as the economy begins to recover I think we can expect to see a definite increase in demand compared with 2009,” Matthew Derrick, General Manager of Sharjah-based Momentum Logistics told Emirates Business.

He said companies are now looking to focus on their core business. “As a result, the opportunity to save costs through outsourcing logistical services is an attractive one. Therefore we believe this approach will contribute to an increase in demand,” he said.

Brent Pearson, Managing Partner, Centre Point Logistics, Dubai, said: “Dubai’s logistics market is saturated but Dubai and the UAE continues to be the logistics hub of the region. Dubai already has significant advantages because it’s investing and continues to invest heavily in logistics infrastructure.”

However, logistics players believe although the logistics industry within the UAE is developing rapidly, there are still challenges facing the industry, particularly in the transportation sector.

“One of the main challenges in the UAE is the restrictions placed on trucks using roads, according to which they are only allowed to use certain roads at certain times or, in some cases, not at all. This significantly reduces the utilisation of resources; drivers and equipment and thus is driving up the cost of distribution,” he said.

Another area for improvement is through enhancing the quality of trucks operating on the roads with the priority being on health and safety, he said.

“Border crossings within the GCC can still be time-consuming and at times frustrating. Although improvements are being made, there is still scope for further improvement,” he said.

“There is also no doubt that awareness is a key barrier. However, many firms have started to realise the full complexity of the supply chains and exactly what benefits an effective supply chain can bring to their business. The importance of streamlining and properly managing these supply chains is becoming more evident, he said.

 

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