Logistics in Middle East- 5 Trends that will Dominate the Market in 2021 and Beyond

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Created on March 30, 2021

Logistics in the Middle East was growing at a standard pace before the turbulent events of the coronavirus pandemic. But the year 2021 and beyond are expected to bring a promising future for this industry in the Gulf Cooperation Council region. The Frost and Sullivan report on logistics growth completely justifies this statement.

As per the report, the logistics industry in the Middle East will experience a steady growth in the next five years. E-commerce boom, infrastructure development, and spike in cross-border sales will be three key factors that will drive this growth. The logistics industry is projected to grow by 4.3% from 2020 to 2025.

The Frost and Sullivan report clearly depicts that the first half of the 2020, when COVID-19 hit the world and caused travel restrictions and lockdown, experienced a major slowdown in the logistics and supply chain world. Nevertheless, reliance on the digital platforms and government focusing on digitalization and increasing contributions of knowledge economic sectors are expected to fuel up the transformation of the logistics ecosystem.

Five trends that we can anticipate to see in 2021 and upcoming years

Reliance on local networking

COVID-19 impact and followed geographical restrictions have made one thing clear, nothing is certain. Businesses need to prepare beforehand to sustain and survive in such situations in future as well. Therefore, focus will be on local networking instead of overseas events. Besides, businesses will be seen tapping into the local market to launch new business or fulfill needs for the existing one. Adoption of new warehouse technologies could also be seen in the upcoming times.

E-commerce growth

The entire Middle East region is already experiencing a surge in the online orders or e-shopping. This trend might also rise further in the upcoming times. Therefore, this will make businesses improve their last-mile delivery operations to speed up deliveries. Besides, there will also be a need for systems to track orders and shipments in real-time to bring more transparency and avoid delays.

More focus on diversification of services

The future of logistics holds diversification of services, which means businesses will branch into new arenas to be ready for any future crisis. In fact, a few airlines, during the COVID-19, have also created a “passenger freighter network” to use passenger planes for cargo deliveries. The future will have more such diversifications.

Focus on AI and digitalization

Use of technologies like artificial intelligence and others will help to predict the market changes, consumer demands, weather patterns, container shortages, and other factors that can drive business growth. Besides use of AI, focus will also be on bringing digitization to the traditional logistics management processes.

AI-based trackers and tools will help organizations in real-time tracking and monitoring of the consignments or shipments. The technologies will help to make better business strategies

Logistics automation

To combat COVID-19 and bring efficiency in the processes, more businesses will opt for automation in their logistics operations. The main focus will be on a cloud-based logistics platform that can be customized as per the business needs. Automation will also help to speed up logistics operations to meet consumer demands, save a significant amount of cost, and cope with the changing trends.

To sum up, the year 2020 is definitely one of the worst years in the history of mankind; however, it led the businesses on the path of digitization, which they used to think is a choice not a need. 2021 and upcoming years are expected to be hopeful and promising for the businesses not just in the Gulf Cooperation Council but also in other parts of the world.

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