UAE has established itself as a top-notch logistics hub owing to its prime location on the global landscape over the period 2009-2014. Freight movement in UAE can be segmented on the basis of sea freight, air freight and land freight. UAE has 20 ports. Sea has been the most popular mode for carrying freight in and out of the country over the past five years. Jebel Ali Port has been the most major port in the country over the past five years. Jebel Ali Port contributed 68.3% of total Sea freight volume of UAE. Each city in UAE has an airport and is very well connected with each other via the air route. Number of airports in the country has inclined from 40 in 2009 to 45 in 2014.
The UAE logistics market can be segmented on the basis of services offered as part of the total logistics industry. There are 3 broad services conducted under the entire logistics package namely transportation, freight forwarding, warehousing and value added services (VALS) including 3PL. Freight has been the biggest segment among all the services in the UAE logistics sector over the past five years. Its share in the total service mix was 79.8% in 2014. Warehousing has been the second biggest segment in the services mix of UAE logistics market over the period 2009-2014.
UAE logistics market can be further segmented by Normal Logistics and Express Logistics. UAE has been segmented into seven emirates. Dubai has been the biggest contributor to the UAE logistics market with a contribution of 35.0% as of 2014. Abu Dhabi has been the second major city in UAE logistics market during 2014 with a Contribution of 22.0%.
Outsourcing of logistics to third party logistics service providers has been growing in UAE over the past five years. However, it is one of the growing markets which is expected to see significant growth over the period 2015-2019. In the year 2014, Al-Futtaim Logistics accounted for the higher share of the third party logistics market in the UAE.
The future prospects of the logistics industry in UAE look quite promising. The growth of the UAE logistics market is expected to accelerate over the forecasted period 2015- 2019 owing to continual development of logistics infrastructure in the country and expansion of foreign trade. Enhancement in trade volumes between Europe and Asia over the coming years will particularly amplify UAE’s logistics Revenues over the period 2009-2014.
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Ankur Gupta, Head Marketing & Communications
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