The Freight and Logistics Market in UAE is valued at USD 19. 65 billion in 2020 and is expected to reach USD 31. 41 billion in 2026 growing at a CAGR of 8. 41% through the forecast period. The UAE freight and logistics market has been growing steadily, mainly driven by the consistent and fast growth of e-commerce across the region and rising international trade.
New York, Oct. 28, 2021 (GLOBE NEWSWIRE) -- Reportlinker.com announces the release of the report "United Arab Emirates Freight and Logistics Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)" - https://www.reportlinker.com/p06039483/?utm_source=GNW
The COVID-19 pandemic impacted overall supply chain operations in the UAE, with road freight due to sealing of borders and air freight due to flight cancellation being the major sufferers. Moreover, companies have been struggling with employee infections and have been forced to move to a remote working setup, at least for non-operational staff. The industry is gradually recovering from the transport restrictions. Going forward, pharmaceutical logistics will play an important part in the distribution of the COVID-19 vaccine, once it is ready and is hence, expected to lead vertical market growth in the future.
Dubai’s strategic location between Asia and Europe, serves both the East and the West, providing optimum trading conditions for the Emirate. To facilitate the trade and e-commerce market, Dubai has implemented initiatives for the development of its infrastructure and technology, to implement a well-integrated transport system and excellent logistics infrastructure. According to the Federal Competitiveness and Statistics Authority, the logistics sector in the country is expected to contribute 8% to the UAE economy by 2021, up from the current 5.4% listed by the official UAE government portal.
In recent years and despite economic headwinds swirling around the Arabian Gulf, the logistics sector continues to occupy the fast lane. The logistics arena outperforms other major industries, but it is now rightly-regarded as a crucial enabler in the country’s economic diversification efforts.
Key Market Trends
Growing E-Commerce in United Arab Emirates
The United Arab Emirates is making rapid strides as the fastest growing e-commerce market in the Middle East and North Africa (MENA), according to a joint study by Dubai Economy and global payments technology company Visa, which ranks first in Forbes list of World’s Best Regarded Companies.
Growth in e-commerce comes as digital becomes the future in the United Arab Emirates. High internet usage, accompanied by smartphone penetration is one of the primary driving forces of growth in the e-commerce market in the United Arab Emirates.
A significant advancement in digital technology has led to a dramatic increase in active mobile internet users in the country. The mobile phone penetration in the country is at a world-record high of 210.9%. UAE residents are among the top 10 globally when it comes to spending time on the internet and social media, averaging seven hours and 54 minutes daily.
The government has implemented a number of initiatives to support it, such as the wage protection system. Moreover, a digital, lean, connected “paperless, cashless government, driven by cutting-edge, disruptive technologies, defining the government of the future now,” is part of the Smart Dubai 2021 initiative.
COVID-19 is boosting the UAE ecommerce business as consumers change their shopping behavior by opting to buy online rather than shopping at physical stores. This extensive growth of e-commerce is driving the investments in e-commerce logistics related infrastructure and technology to support the growth of the e-commerce.
Growing Pharmaceutical Industry in UAE Driving Logistics
In the past decade, Pharma Industries have been a focus of UAE’s business development.
With the recent approval of the Dubai Silk Road Strategy and existing outstanding logistics infrastructure, the UAE is fast turning into a source market in the supply chain, manufacturing and exporting pharmaceuticals to high-demand markets such as Africa and Asia.
To achieve sustainable growth for the healthcare and pharmaceutical industry the U.A.E. government has adopted a series of long-term plans. The Dubai Industrial Strategy 2030 and the Abu Dhabi vision 2030, consider the pharmaceutical industry as one of the main sub-sectors to develop with its future growth prospects, export potential, and mid-term to long-term economic impact. A key long-term focus for the UAE government has been to reduce its reliance on imported pharmaceuticals.
One huge incentive for international companies looking to expand is the ease of doing business. This is something that the UAE excels in. To increase their infrastructure the UAE has created several free zones across the country that are now hubs for the pharmaceutical industry. These include Dubai Healthcare City, Dubai Science Park and Jebel Ali Free Zone.
In Oct 2021, Solidifying its position as a global leader in the field of handling and storage of pharmaceutical products and vaccines across all temperature ranges, Abu Dhabi Ports’ Logistics, a subsidiary of AD Ports Group, has been awarded the coveted Good Distribution Practice (GDP) accreditation by one of the world’s leading testing, inspection, and certification bodies.
The award was issued by Bureau Veritas, which certified AD Ports’ advanced pharmaceutical cold and ultra-cold storage facility in the Khalifa Industrial Zone Abu Dhabi (KIZAD) and its related logistical services, against both European Union and World Health Organisation (WHO) guidelines. The announcement marks the first instance a UAE organisation has secured accreditation for both standards and is one of the few in the Middle East to hold that distinction.
The United Arab Emirates freight and logistics market is competitive and fragmented with many international and local players actively competing for market share. DHL, Aramex, Al-Futtaim Logistics are some of the leading players in the market. The technology integration in the logistics sector is high and the emergence of digital players in the pool is increasing. Ecommerce growth has also helped in the emergence of digital players in the region. With the overall logistics infrastructure in the country developing rapidly the rivalry within the industry is expected to be fueled further.
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