Experts affirmed their confidence in the performance of the logistics services market in the UAE this year, noting that the country’s speed in adopting technological developments to meet the challenges that emerged due to the changing global dynamics after the “Corona” pandemic, and the development of the e-commerce market in the country, made the UAE among the three most important service centers. logistics in emerging markets globally.
Various disruptions in supply chains have led to increased freight charges, shortages of containers, and shortages of storage space across countries. With the UAE being a hub for trans-shipment trade between Europe and Asia and despite the volatile global market conditions, the logistics services sector in the UAE is poised to grow by $31.4 billion in the period 2022-2026, at a compound annual growth rate of 8.4% in that period, according to « Report Linker.
More than two years after the start of the Corona pandemic, many supply chains in the world are still reeling from the effects of the pandemic. However, the logistics industry in the UAE recorded a growth rate of 6.44% year-on-year last year.
Dr. Shereen Nassar, Global Director of Logistics Studies and Supply Chain Management at Heriot-Watt University Dubai, said: “The logistics services market in the country is supported by growing e-commerce and technological advances, such as the wide spread of the Internet of Things (IoT), cloud computing, and blockchain. and artificial intelligence (AI) in logistics operations, infrastructure development, and the growing use of multimodal transport.”
She added: “Increased investments in infrastructure development have enhanced the competitiveness of the logistics services market. Moreover, attracting foreign investments related to Expo 2020 Dubai has led to the growth of the economy, and the intensification of the pace of growth of the regional logistics industry in 2022 ».
She explained that the acceleration of the transition to digital services, the shift of consumers to non-cash payments, the shift of major retailers to online platforms to increase sales, and the continued rise of online shopping in the country, are all factors that will contribute to the growth of the logistics services market in the country. According to a study issued in “GITEX Global 2022” by the Dubai Chamber of Commerce, the value of the e-commerce market in the UAE is expected to reach $ 9.2 billion in 2026, an increase of nearly 92% from 2021. With this exponential growth, e-commerce has boosted the industry Logistics services and provided it with the means to expand and diversify its operations.
Technology and Automation
Nassar stated that the focus on artificial intelligence and digitization, to replace traditional logistics operations, and the use of big data solutions in logistics services, has become critical in the post-pandemic world, as a large portion of consumers buy goods online. Big data allowed freight forwarders to collect the required data and analyze it in real time to obtain accurate results and better customer service. The acceleration of the use of robots and automation in warehouse management is also a major success factor in e-commerce and is making a significant impact in the world of logistics services in the region.
The use of blockchain technologies in logistics also provides innovative solutions based on improving the efficiency of logistics operations and making them safe and transparent by allowing monitoring of cargo shipments and improving visibility into their inventory levels.
Nassar stated that the increase in outsourcing of logistics services will be one of the main factors driving the growth of the logistics services market in the UAE in the coming years. She added, “Rapidly evolving technologies and innovations are likely to provide business opportunities in fleet modernization, warehousing and last-mile delivery solutions. With the growing popularity of e-commerce and increased deliveries, brands need to embrace the latest innovations in global supply chain trends to stay relevant. And 2023 will be a year of further growth and conscious decisions to build a better logistics market in the future.”
For his part, Soham Chokshi, co-founder and CEO of Shipsy, said: “The development of new-age technologies such as artificial intelligence, machine learning and automation in the UAE helps improve basic logistics operations and even the ability to measure space according to inventory needs to reduce shortcomings. It enables institutions and governments to implement and achieve their sustainability goals.
And he added, “For example, deficiencies in the ‘last mile’ are annoying to about 61% of transportation and logistics companies globally. For those in this industry, reducing the distance traveled is a key measure to ensure sustainable logistics operations. This is exactly what modern technologies provide and allow organizations to implement deliveries in the most efficient manner, reduce returns, enhance passenger and vehicle production, increase first-time delivery rates, etc., to lower the overall carbon footprint of delivery. While technology improves operations on the go, it also allows companies to proactively monitor and reduce the environmental impact of their shipping operations even before they begin and delivers all of this without affecting the customer experience or the company’s competitiveness.”
Dr Shereen Nassar, Global Director of Logistics Studies and Supply Chain Management at Heriot-Watt University Dubai reports that logistics companies are investing in research to develop autonomous delivery vehicles to address emerging concerns of driver shortages. As a result, autonomous vehicles and equipment have been a leading trend in the logistics and supply chain industry.
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