UAE, Saudi Arabia, Qatar rank among top emerging markets for logistics

PHOTO

The UAE, Saudi Arabia and Qatar continue to rank among the world’s top 10 emerging markets for logistics, improving or holding steady in key areas while neighbouring Oman, Bahrain and Kuwait have experienced a decline in their rankings.

Globally, the UAE secured the third position in the 15h annual Agility Emerging Markets Logistics Index, which ranked 50 markets around the world for overall competitiveness based on factors that make them attractive to logistics providers, freight forwarders, air and ocean carriers, distributors and investors.

The UAE, following China and India, maintained its rank from the previous year, as did Saudi Arabia at sixth place and Qatar at seventh. However, Oman slipped to the 15th position, Bahrain to 16th, and Kuwait to 21st.

The UAE’s freight and logistics market, estimated currently at $20.3 billion, is poised for a compound annual growth rate of 6.55 per cent to reach $27.51 billion by 2029, according to data for the 2023 & 2024 created by Mordor Intelligence Industry Reports.

Industry experts said the UAE logistics market has been growing steadily, mainly driven by the consistent and fast growth of e-commerce across the region and rising international trade. “Dubai’s strategic location between Asia and Europe serves the East and the West, providing optimum trading conditions for the emirate. To facilitate the trade and e-commerce market, Dubai has implemented initiatives to develop its infrastructure and technology to implement a well-integrated transport system and excellent logistics infrastructure.

“Despite economic disruptions in the Arabian Gulf, the logistics sector in the UAE continued to occupy the fast lane in recent years. Though the logistics sector outperforms other major industries, it is now a crucial enabler in the country’s economic diversification efforts,” industry analysts said.

Agility survey respondents highlighted the UAE and Saudi Arabia as leaders among the GCC countries in economic diversification, reducing reliance on oil and gas income. According to a survey of 830 logistics industry executives, the UAE claimed the top spot for best business fundamentals, with Saudi Arabia securing the third position in that category.

The survey indicated that further enhancements for small businesses and multinationals are crucial for driving continued diversification across all GCC countries. The UAE and Saudi Arabia consistently ranked in the top 10 in every category, while Qatar excelled in all categories except international logistics opportunities, where it stood at 20th. Bahrain's sole top 10 ranking was at eighth place for business fundamentals.

“Supply chain managers are still coming to terms with the political and economic instability characterising the post-Covid global economy. Geopolitical relationships are changing rapidly, and this is having a major impact on international trade and risk profiles. Businesses need to be alive to the opportunities and threats that exist in emerging markets and use data, such as that of the Agility Emerging Market Logistics Index, to inform agile decision-making,” said John Manners-Bell, chief executive of Ti.

Half of the surveyed logistics professionals anticipate a global recession in the coming year, a decrease from nearly 70 per cent the previous year. Executives cited battling higher costs, reducing dependence on sourcing from China, and planning increased investment in Africa despite perceived higher risks in emerging markets.

More than 63 per cent of respondents say their companies continue overhauling supply chains by spreading production to multiple locations or relocating it to home markets and nearby countries. China, the world’s leading producer, stands to be most affected: 37.4 per cent of industry professionals say they plan move production/sourcing out of China or reduce investment there.