Logistics on the Path of Growth in 2021

The logistics industry that is estimated at AED 220000 million, is seemingly to spearhead the growth in the GCC area owing to outstanding infrastructure, technological progress as well as favorable government policies. The Gulf Cooperation Council Governments will keep on emphasizing the progress of logistics infrastructure to keep up economic growth in the future. 

Experts reveal that the logistics industry in the GCC area is on the track for growth path after going through certain short-lived disruptions owing to the global disease outbreak in 2020. Industry analysts and specialists after referring to the Frost & Sullivan report stated that the GCC area’s logistics industry will maintain an even growth trend from 2021 to 2025 owing to the infrastructure advancement, thriving e-commerce, and a rise in cross-border trade, giving an edge to each of the Logistics Company in Dubai. 

The region’s logistics industry is changing quickly owing to the increasing non-oil field contribution to the Gross Domestic Product, development of infrastructure, the advent of free trade zones, industrial parks as well as improved trade cooperation in the area. As per the report, the logistics industry is likely to grow by 4.3% in between five years. 

Also according to the report, the GCC government has initiated policy measures to lower their reliance on oil exports through reinforcing economic diversification schemes, tax reforms, bettering the economic, financial, and socio-political conditions of the region, boosting investment in food security and promoting participation by the private sector. 

The report mentions that pandemic-related disruptions like movement restrictions, curfews, and a decline in customs clearance led to a remarkable decline in the previous year. But, it mentioned that the digital transformation schemes will have an important role to play in the flourishing of the logistics industry in the GCC area. 

And governments emphasizing digitizing and rising contributions of know-how to economic sectors, the introduction of the fifth generation of the mobile network backed by numerous strategies connected to AI and network security are likely to help the revolutionization of the logistics industry, as per the report. 

Cross-border Trade 

The report also mentions that the GCC area’s geographical location on domestic commerce has simplified its emphasis on the advancement of every logistics company in Dubai for local as well as transit freight. The GCC governments give utmost precedence to the expansion of free zones to improve online purchasing as well as transboundary commerce. 

Total permits sent out to the e-commerce division is increasing owing to the behavioural change in the e-commerce as well as key focus change to the advancement of e-commerce areas in the GCC areas. 

It is said that the logistics industry of the United Arab Emirates is of considerable importance, comprising about 13% of the overall monetary value of every finished goods and service made within the borders of the United Arab Emirates. 

Since we are getting around the corner of EXPO 2021 and with Dubai’s Industrial Strategy 2030, the supply chain and logistics sector can likely bolster all the more. 

Infrastructure Development 

The specialists accented on the fact that the GCC governments will keep on concentrating on the advancement of logistics infrastructure to keep up economic growth in the upcoming months. The logistics sector of the United Arab Emirates, which is estimated at AED 220000 million, is expected to lead the advancement in the area because of outstanding infrastructure, technology progress, and favourable government policies. 

The report mentions that PIDPs in various GCC countries can likely enhance geographical connectivity. Such ports include Khalifa Port in the United Arab Emirates, Jizan Port in Saudi, Duqm Port in Oman and Mubarak Al Kabeer Port in Kuwait. And one of the biggest integrated logistics areas in the region will be the Al Khomra Logistics Zone. 

Shailesh Dash, the Founder, and CEO of Al Masah Capital Limited (AMCL), stated that the logistics sector in the United Arab Emirates is prepared for phenomenal growth at short notice without being affected by a health crisis and further unusual occurrences in the previous year. 

The pandemic and the resulting increase in online purchasing sales in the period of lockdown have quickened the growth of the industry. With a rapid increase in demand keeps on rising, the United Arab Emirates has portrayed a steel resolve to improving its logistical capacity. Most importantly, its emphasis on adopting digital technologies to have worth within the supply chain has advantageously directed UAE to make use of new circumstances in new paths. 

In the months to come, vaccine distribution drives are expected to fuel more push towards increasing the cold chain capabilities of the United Arab Emirates. 

Mr Shailesh says:” At present, we look for logistics companies in Dubai’s last-mile efficiencies, improve partnership, and improve the usage of Artificial Intelligence or expert systems in logistics. It will lead to more quick supply chains, beyond boosting impending growth which the sector is about to see in the present year and past that.”

Back on Track  

It is said that the starting of the global epidemic led to an immense disruption to the logistics sector. In the earlier phase of lockdown all around, cargo transport by every logistics company in Dubai totally ceased all around the globe. Following the first few months, everything began to go back to some kind of usualness. Considering the current year, it’s said that the main driver will be online purchasing that keeps on showing immense traction, supply chain working out and implementation will be crucial in receiving agricultural and other natural products from fields to the market. 

All around the globe, the purchasing power is likely to become better since it had an effect on the owing to the loss of employment. With the likelihood of more jobs, shopping by customers will increase, offering a boost to every economy and in that way greater possibilities for the logistics sector. 

Yet another field in which logistics is turning out to be vital is Vaccine distribution. More trends becoming popular and will bring about a change in the current year will be strategies where the manufacturer sells its products straight to consumers from their web store as well as to the retailer. This is likely to lower incompetency, lower costs and quicken the procedure of reaching the products straight to the customers and retailers. 

One other trend to pay attention to is the B2C, B2B, and C2C online trade. Such e-commerce will be better with bigger trade blocs, making businesses extending throughout the globe smoothly. Serious disruptions to e-commerce occurred in the course of this period owing to the latest trade policies and trade conflicts. This is expected to have a peculiar point of view in the current year with alterations in trade treaties with a new administration in the United States and a new trade policy of Regional Comprehensive Economic Partnership endorsed in the Asia Pacific area in the previous year. This will portend a good or bad outcome for the logistics sector all around the globe. 

About Us

DDU Express is the leading and best logistics company in Dubai. Led by a bunch of experts in the Logistics and shipping industry, DDU Express spares no effort to keep up quality all around our company, and with our competent personnel, we will meet and surpass the hoped-for quality in performance set by our clientele. DDU has the apt assets and network to cater to every sort of logistics and freight service, based on your bespoke necessities.