Dubai—If your country is located at the crossroads of Asia, Africa and Europe, with easy access to a potential market of almost two billion consumers, then logistics should definitely be at the top of your development goals.
This is exactly what the UAE, a gateway to some of the world’s most progressive markets, has done: leverage its strategic geography as an agent for business and economic growth, with logistics as an underpinning function. Today, the World Bank ranks the UAE the Gulf’s top trade logistics service provider; the local logistics market is poised to grow between eight and nine per cent annually until 2020 and eventually generate $16 billion in revenues in the next decade.
Aside from its advantageous geography, the UAE is also focused on economic diversification and is undertaking massive infrastructural projects such as Dubai World Central, the world’s first purpose-built ‘aerotropolis,’ and the Khalifa Port in Abu Dhabi. These can sustain the UAE’s status as the region’s primary logistics hub.
Moreover, emirates such as Dubai, Sharjah and Abu Dhabi have first-mover advantages over neighbouring countries, which are exploring their logistics potential more closely. The UAE has already established itself as a centre for trans-continental trade and can thus constantly leverage its global status.
One area worth investigating, though, is that most manufacturing players have only tradingoperations in the UAE, resulting in a logistics sector that is skewed towards freight forwarding. There are strong growth opportunities beyond this segment worthy of further investigation.
Local logistics players should not be lulled into complacency, though: there are several challenges we need to work on to ensure that we continue to build on our successes and sustain our market leadership.—Agencies
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