UAE Logistics and Freight Forwarding Industry Resilient Amidst Challenges, Poised for Strong Growth

The UAE logistics market grew at a CAGR of 2.1% during 2017-2020 however year 2020 witnessed biggest slump in last one decade by recording -3.5% decline in revenue. The COVID-19 pandemic impacted overall supply chain operations in the UAE. Nevertheless, region is witnessing continuous improvement in its road and rail network and already have strong maritime and air transport that is predicted to produce strong results for the Logistics industry.

UAE is known for its seaports capacity and the country has two of the top 50 container ports in the world, with Dubai ranking among the top ten, according to the World Shipping Council. Moreover, the UAE's seaports account for 61% of cargo bound for GCC countries. Apart from oil ports, the UAE has 12 commercial trading ports. It has 310 berths and an 80 million tones cargo capacity.

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◙ Freight Forwarding Witnessing High Demand
Over the last few years, the freight forwarding market has seen enormous expansion. The segment witnessed growth between 2015 and 2019, due to the country's rising retail and FMCG industries. The top-ranking of logistics businesses in the UAE in the Gulf area is projected to be driven by the logistics sector in UAE service integration.

◙ UAE 3PL Market Performance
The 3PL market in the United Arab Emirates was valued at USD 4.87 billion in 2019 and is expected to register a compounded growth rate of 11.57% during the forecast period. Though third party logistics sector grew moderately till 2016 but from 2017 onwards with the participation of major players in the sector and expansion of global trade, mainly non-oil trade has given boost to the 3Pl market.

◙ Major Growth Drivers
Diversification Plan
The UAE logistic sector is witnessing enormous developments because of diversification plans, accession of regional trade & export restrictions, further expansion & up-gradation of the logistic industry in Dubai.

◙ Demand from Pharmaceuticals
Dubai International Airport handles around 2 million tons of cargo annually, an increase of over 4% from the previous year, while Abu Dhabi Airport handles around 850,000 tons in the same period. To meet the increased demand for pharmaceutical items, Emirates, one of Dubai's major logistics companies, has opened a new facility for pharmaceuticals at Dubai Airport. Cold-chain services are projected to enhance the UAE logistics sector soon.

◙ Rising Trade
As the UAE connects the western and eastern hemispheres, the country's trade volumes have increased dramatically in recent years. Dubai's foreign trade in the first quarter of 2021 totalled DHS 354.4 billion, an increase of 10% from DHS 323 billion in the same quarter of 2020 which increased by 5% from Q1 2021.

◙ Market Segmentation by Mode of Logistics
► Sea freight has generally dominated the freight movement category, contributing the largest percentage of overall revenues in the freight forwarding business
► Air freight has been the second major segment in the freight forwarding market of UAE that account for more than 32% of the market share in freight forwarding market of the region.
► Land freight is mostly engaged in the domestic movement of commodities from one location to the other, and it serves as a support element for the movement of shipments from the port.

◙ Market Segmentation by Domestic and International
International freight account for the giant share of the market however domestic market showed a spark in demand after the virus outburst that led to seal in borders for almost a quarters while due to work from home and travel restrictions demand for food products and pharmaceuticals rose in domestic markets therefore till Q3 2020, freight forwarding sector benefitted with rise in domestic freight movements.

Scope of the Study
Report titled "UAE Logistics and Freight Forwarding Industry COVID-19 Impact and Outlook to 2025" provides a holistic perspective of past, present and future market performance. The study comprises of market dynamics which offers an understanding of the industry trends, driving forces, major challenges hampering the growth and also an analysis of the future opportunities which will help market players to leverage untapped business potential. It is imperative to understand the future expected performance of the industry, which has been detailed in the report.

◙ EPTD Analysis: The report study country's economy, its political environment, technological overview and demographic profile. The report deep dives into various parameters including road, rail, air and sea port infrastructure. It helps to gain insights on UAE positioning in global logistics index along with detailed discussion on performance of country's economy. Report also decodes warehousing market.

◙ COVID-19 Impact Assessment: Industry assessment has been done basis COVID-19 impact in 2020 and in coming years over trade.

◙ Market Assessment: The report discuss industry segments covering Domestic and International market, industry segmentation by Function (Freight forwarding, Warehousing and VAS) and further deep dive to understand Express delivery market, and its sub segments and also 3PL has been discussed in the report.

◙ Competitive Landscape: This section cover company profile and mergers and acquisitions covering

◙ Key players including:
Deutsche Post DHL Group; United Parcel Service Inc; CEVA Logistics; Agility Logistics; Gulf Agency Company; Al-Futtaim Logistics LLC-UAE; ARAMEX International LLC

◙ Key Questions Answered
► What is the present scenario of logistics in UAE region as compared to the pre-COVID-19 period and how industry is shaping up after the virus outbreak?
► What are the major driving forces that helped the industry to grow in past and impact over future performance?
► How market is positioned for Express delivery services and what is the scope in the near future?
► How market is positioned for 3PL services and what is the scope of development in near future?
► What is the impact of novel coronavirus over the UAE logistics and freight forwarding industry including all modes of transportation?
► What is the status of foreign direct investment in the region?
► What is the contribution of E-commerce in the logistics industry and mainly in 2020?
► What are the key challenges present I the industry and what driving forces shaping up future demand?
► Who are the leading players in the industry and what is their financial status?

Find out more:- https://www.makreo.com/report/uae-logistics-and-freight-forwarding-industry-covid-19-impact-and-outlook-to-2025

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