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The UAE logistics sector is poised for growth

The UAE logistics sector is poised for growth



GES building on its success

Industrial and overall economic development in the UAE is boosting the logistics sector giving sector players unprecedented opportunities for a slice of the action

March 2015

An efficient and sophisticated logistics system is normally attributed as a fundamental driving force behind any country’s tremendous economic growth. An adequate modern distribution structure and economic prosperity are intricately linked to each other in such a way that an industry cannot develop and advance without logistics, says Mustapha Kawam, Globe Express Services (GES) managing director for the Gulf states.

“This is especially true in today’s globalised and interconnected world highly defined by increased cross-border trade. It is not surprising, therefore, that most wealthy nations have the most vibrant logistics markets,” Kawam said.   

Some of the countries with advanced logistics are located in the GCC and are led by the UAE. The country’s logistics value is projected to reach Dh99 billion ($26.95 billion) this year amidst its continuous huge investments into modern infrastructure such as airports, railways, ports and roads.

Dubai’s logistics market is expected to further grow alongside the emirate’s projected 4.5 per cent economic increase this year. 
 
Freight forwarding services took the lion’s share of the UAE’s total logistics revenues of about 62 per cent last year. It was followed by transportation (18 per cent), warehousing (16 per cent), and value-added logistics services (4 per cent). The country’s goods distribution system is expected to constantly evolve to meet the demands of companies – especially those of industrial and trading firms.

Three years from now, an industry report shows, the Emirates’ logistics will contribute 11.7 per cent to the national economy. As the country’s economy grows at a steady pace, goods distribution will flourish and prosper alongside it.

Kawam: UAE, a leader in advanced logistics

Kawam: UAE, a leader in advanced logistics

GES is one such leading international provider of supply chain solutions that is thriving in the local industry today.

“We had a very successful year in 2014, highlighted by our being awarded the prestigious Platinum Award by Maersk Line, the world’s largest ocean carrier and the most reliable container shipping company, for the third time in a row; it is given to the best-performing logistics providers and top customers of Maersk Line,” said Kawam. “During the same year, we also announced the signing of a Memorandum of Understanding (MoU) with Etihad Rail, the developer and operator of the UAE’s national railway, enabling the company to network a myriad of opportunities and ultimately giving us a more sustainable and cost-efficient way of moving goods. It is worth noting that we recently announced that our UAE operations recorded a seven per cent gross revenue increase in 2014 compared to the previous year.”

GES manages 58 corporate offices and 1,050 employees worldwide with nearly one third of them working in the Middle East.

The company complements the UAE’s steady economic growth by combining its core products of air freight, ocean freight and logistics services together to ensure tailor-made and end-to-end solutions to its clients. Its other world-class services include customs clearance, warehousing and consolidation, project and heavy cargo services, and supply chain consulting.

Kawam said: “We are excited about the immense potentials that the vibrant local and regional sectors are offering. The UAE’s logistics sector is poised for a growth spurred by the huge amount of infrastructural and commercial projects either underway or in the pipeline. The growth is expected to be worth Dh37 billion by the end of 2015, and will hit a record of Dh53 billion in revenues in the next decade, according to Frost & Sullivan. There is no doubt that Dubai has positioned itself as the Middle East’s trade and logistics hub, catering to a regional population of more than 2 billion people. The emirate’s foreign trade surged to Dh679 billion in the first half of 2013, recording a remarkable 16 per cent growth over the same period in 2012.

“The local market’s phenomenal growth complements the expansion of the entire Middle Eastern business where international cargo demand is expected to increase 4.9 per cent by 2016. Another industry report produced by Transport Intelligence shows that the regional freight forwarding sector will expand 7.8 per cent annually until 2017. All these positive indicators signal that the entire region led by the UAE is poised for more significant growth in the future.

“Our goals here at GES remain directed towards maintaining our success and trying our best to build on it. We have started out this year by establishing three new additional offices in France in a bid to provide full end-to-end supply chain solutions from and to the European country.”

The recently opened offices in Le Havre, Bordeaux and Marseille will pave the way for the company to further extend its network in Europe, bring its cutting-edge services to a wider market – such as the Gulf region – and ensure real-time shipment monitoring, GES says. GES Le Havre, Bordeaux and Marseille offer new capabilities in in-bound and out-bound sea and air freight, customs clearance, and warehousing services for all types of commodities. They handle a wide range of shipments including exports to China, Africa, Chile, Brazil, Russia, the US and Canada, serving  various sectors such as furniture, retail, healthcare, aerospace, packaging, fashion and other luxury-related segments including bags and watches.  

“We also plan to strengthen our market position in the Gulf by adding new services to our portfolio and aim to retain our operations excellence towards existing and potential clients. Also, investing in progressive technology for the logistics market will be on our agenda for 2015,”he added.

 

 

 

 




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