Logistics and Shipping Industry in UAE Strategic Directions Update 2018
Global economy depends on industrial and logistics industries and infrastructure always a big challenge across the globe for every industry, so is for shipping and logistics. In UAE region a massive development is already established with strong and sound infrastructure to cater the global and regional needs.
UAE remained a hub for trade in the region, in UAE the other challenge is also to maintaining cost and doing business with advantage of infrastructure.
Global crisis in recent days, resulting in lowering the buyer’s buying capacity and thus lowering the ordering globally. Slowing down in outbound sales, boosting the concept of warehousing, thus the demand for storage has been increased.
Challenges at patch of hard time made companies to outsource their logistics operations, right-source and arise of temporary arrangements in terms of long-term contracts is on the cards and it is widening the need of 3PL (3rd party logistics) in the region.
Progressing UAE-China Bilateral Logistics Trade Agreements
The New Agreements of UAE with China
The logistics and shipping market of Dubai in collaboration with UAE’s agriculture, livestock & fisheries is going to see a strategic improvement after cooperation agreement with China. There are wide-ranging updates in this area like a few mentioned below.
Shipping of Agriculture Items Multiple MOUs Between China And UAE
The UAE and China have approved two memorandums of understanding (MoU) to
support agricultural cooperation and mutually build a trade relations conductive for shipping of agricultural, livestock and fishery items.
Modern Agriculture Logistics Support Cooperation
The UAE and China will support cooperation in latest agriculture, for example, enhancing storage and warehousing techniques, hydroponics and basic agriculture, apply modern agricultural techniques, especially in the water system and in utilizing treated water for farming.
Establishment Of Wholesale Market
UAE-China has also agreed for a wholesale market for support of agriculture and logistics support facilities like warehousing and stocking elements with the organizations as the principal stakeholders and the administrations playing a key role.
VISION OF DUBAI AUTONOMOUS MODE BY 2030
Directed by ruler of UAE, His Highness Shaikh Mohammed Bin Rashed Al Maktoum, the Dubai Future Foundation related to Dubai’s Roads and Transport Authority Launched the ‘Dubai Autonomous Transportation Strategy’. The technique intends to change 25% of the total transportation in Dubai to autonomous mode by 2030, performing millions of day trips and saving billions of Arab Emirate Dirhams.
The strategy includes the launch of ‘Dubai World Autonomous Transportation Challenge’ as a worldwide Request for proposal to enable the world’s most inventive global companies, academia and research centers to test the most recent advances in this technology by giving transportation arrangements and situations that are realistic and customized for the avenues of Dubai in general and UAE in particular.
Logistics Industry Gaining Momentum
The logistics market of Dubai in collaboration with UAE’s new industries is going to see a strategic improvement after growing new startups of companies. Growth of networking and technology use within the industry is helping shipping & logistics sector grow manifold.
The UAE’s logistics area is gaining force with startups culture
Startups of new businesses open their shops offering latest solutions and services , following constant shipment, beating turn around time for deliveries and thus bring ever-growing benchmark speedy services in the industry with innovations in diverse spheres of trade & transport.
Existing logistics players and new businesses
The challenge currently remains in what capacity will the current players face competition from new businesses.
We should be prepared with:
- Latest technology
- New innovations in diverse industries
- Integration with global systems
- Leading inventive experimentation
Air Transport New Dimensions and Industry Status
Existing huge volume cargo Airports of the region
Dubai International Airport handles 20 lac tons of cargo with the growth of 4% increase volume annually.
Abu Dhabi Airport managed around 850,000 tons of cargo in the same period. UAE’s top 2 Airports will spend heavy amounts to enhance one the already best facilities in next few years.
Best Companies playing role in growing UAE’s Air Logistics
Emirates, a top logistics company in Dubai launched another office for pharmaceuticals at Dubai Airport to fulfill the developing interest for pharma items. Soon, the cold-chain administrations are expected to support the logistics business in the UAE.
Best Air Freight Companies Of UAE
The best air freight cargo organizations Etihad and Emirates will play a big role in the UAE logistics industry over the coming couple of years.
Inefficiencies and Market Gaps For Modern Logistics in UAE
Logistics and Transportation in the Middle Eastern region is still working in traditional ways. The market is extremely divided with a lot of wasteful aspects that exists currently.
Expansive clients/shippers who have regular transportation requirements
They are locked in with the fleet owners/transporters with long-term contracts.
On the other hand, Companies that don’t have steady transportation needs struggle to locate the right transporters to move their goods.
Servicing Fleet Owners
Owners are attached to servicing their long-term clients and don’t have a decent view of other job requirements (different organizations, new organizations and specially temporary opportunities).
Independent drivers either have multiple employments on hand or none at some random point in time.
UAE Investing into the global logistics companies.
UAE based Gulf Islamic Investments (GII), acquired Amazon’s logistics focus on a region of almost one million square feet for $144 million.
The $144 million affair sums up GII’s total investments in the European market to $500 million, expanding the value of the organization’s investment portfolio to more than $1.3 billion. Having global presence and investments will help UAE shipping and logistics industry in diversification and transformation from regional to global player, although there were some setbacks like the DP World’s unsuccessful bid to operate American ports, but the future is bright for private sector for mergers and acquisitions as these are the norms of global corporations.
UAE’s logistics sector is expanding into the neighbouring region: African logistics infrastructure
Agreements with African countries has helped Dubai logistics firms to provide and improve the logistic facilities serving as a hub to transporting goods for landlocked African countries
DP World Expanding into the African Landlocked Market
Dubai logistic Industry as of now has a sea terminal work in progress in Somaliland’s Berbera, which would probably give a connection to the arranged office in Ethiopia.
UAE gets first position in Middle East and North African Region’s Logistic Industry
UAE’s logistics industry has been officially awarded highest position in the Middle East and North African region for quality of base facilities.
UAE ranks highest for quality of base facilities in the MENA region
- The exchange between the U.A.E and the African market has seen an expansion of 11.8%, making the nation one of the most grounded developing exchange paths outside of North Africa.
- Different nations that were exceedingly positioned in the nature of framework incorporate Bahrain, Oman, and Saudi Arabia, positioning fifth, 6th and seventh individually.
The Future Of UAE Logistics Depends On Smart Technology & Leading Innovation
The distinct and dispersed issues explained in whole of above directions of market suggest that there needs to be dire change in older traditional ways of doing business which has many inefficiencies pointed out
Following new Smart Transportation technologies are going to have huge impact on transport and shipping business, just like the Uber has done it with the cab service business model.
- AI based cloud computing and smart predictive analytics logistics software
- Mobility computing and tracking enhanced technology
- Machine learning and IoT sensor based devices for better smart logistic services
- Ad hoc smart tech-logistics services instead of traditional long term contractual services
Future lies in not just expansion of infrastructure but also with most effective use of these quality facilities that needs to be offered to the buyers in futuristic and exemplary innovate way that Dubai is fond of surprising the World for.