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During COVID-19, with lockdown being implemented worldwide, the United Arab Emirates has also witnessed a negative impact on its logistics market but is expected to recover quickly by 2021

·4-min read

The United Arab Emirates is ranked 11th in terms of being a logistics-friendly country––ahead of its middle-eastern counterparts, Saudi Arabia and Oman. 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, April 19, 2021 (GLOBE NEWSWIRE) -- announces the release of the report "United Arab Emirates Freight And Logistics Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)" -

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.

Demand in the industrial and logistics sector over the course of 2019 has been driven by the manufacturing, technology, general trading, food and beverage, engineering and construction, and oil and gas sectors. On average, these sectors accounted for up to 64% of demand over the course of 2019.

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.

During COVID-19, with lockdown being implemented worldwide, the United Arab Emirates has also witnessed a negative impact on its logistics market but is expected to recover quickly by 2021.

Key Market Trends
Growing Pharmaceutical Industry in UAE Driving Logistics

The pharmaceutical sector in the MENA has witnessed tremendous growth over the last few years and is projected to reach around USD 60 billion by 2025, with USD 1.2-billion allocated for the healthcare system in the 2019 budget. The UAE is leading the growth with over USD 1.2 billion funneled into the healthcare system in the 2019 budget, on top of substantial funds allotted in the USD 540 million innovation fund. 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.

Improving Maritime Transportation Sector in Dubai

In Dubai, the maritime transport sector is of great importance to the economy of the Emirate due to the great openness of the Emirate to international trade through is access to the Gulf. The sector provides a high-quality infrastructure that consists of ports, logistic services, and storage.

There are three main ports that serve Dubai: Jebel Ali Free Zone Port, Mina Rashid, and Mina Al Hamriya, in addition to traditional piers along the Dubai Creek.

The United Arab Emirates comprises seven emirates – Dubai remains the major maritime center, but other emirates also make their own important contribution to the shipping industry. The United Arab Emirates benefits from its vital geographic location connecting the Red Sea, East Africa, and the Indian subcontinent.

In July 2019, the UAE Cabinet issued a resolution identifying the list of activities in which up to 100% foreign ownership of local companies is permitted. The list includes various sectors, such as agriculture, construction, manufacturing, and transportation. It includes the following maritime activities: sea and coastal water cargo transportation, internal waterways cargo transportation, chartering of commercial vessels, piloting and towage of vessels, and marine towage of speedboats and marine bicycles.

Competitive Landscape
The United Arab Emirates freight and logistics market is competitive and fragmented with many international and local players actively competing for market share. 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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