Supply Chain News / Economic Development

Middle East Emerging As Global Logistics Hub

The Middle East offers “extremely lucrative” opportunities for companies able to take advantage of the region’s emergence as a global logistics hub, said Essa Al-Saleh, president & CEO, Agility Global Integrated Logistics.

In a keynote speech to the Emerging Markets Logistics Conference in Dubai, Al-Saleh highlighted the performance of the Middle East in the 2014 Agility Emerging Markets Logistics Index. The region outperformed all others in favorability for business and trade in general. Qatar, UAE, Oman, Jordan, Saudi Arabia and Kuwait ranked highest out of 45 emerging markets countries in the key category of “market compatibility.”

“Against a background of a sluggish global economy, the Middle East continues to shine. The UAE is an attractive location for logistics investments based on ease of doing business, while Saudi Arabia’s strong economic and population growth have also made it a market ripe for investment,” Al-Saleh said. “Saudi Arabia continues to spend on infrastructure. It has been a star performer among emerging markets globally, taking third spot in the 2014 Index.”

Al-Saleh said Dubai has become a regional hub for business expanding into Africa. The UAE topped all other countries in the Index as having the best domestic and international transport infrastructure and best connections between the two. Logistics and trade professionals pointed to the UAE as the only Middle East market among the top ten emerging markets where they were likely to invest in the coming five years.

New data presented at the conference by Transport Intelligence (Ti) supported the healthy picture painted by Al-Saleh. Ti, the leading global, transport-focused research house, estimates that the contract logistics sector in the Middle East will expand 33 percent by 2017 – an average of 7.5 percent a year -- to €3.15 billion from €2.36 billion in 2013. Ti predicts that growth in freight forwarding in the Middle East will be even stronger -- 7.8 percent annually until 2017. As a share of the region’s international freight forwarding market, ocean freight is expected to grow to 57.8 percent in 2017, up from 55.2 percent last year.

The Middle East has emerged as a global logistics hub as countries, mainly on the Arabian Gulf, have built modern warehouses and transportation infrastructure, developed free zones, adopted “open skies” policies, simplified customs procedures and strengthened anti-corruption measures.

The Middle East is filling a gap for Africa, Central Asia, India and Pakistan, which have fast-growing consumer markets and local production but lack adequate transport infrastructure, storage and services. Gulf countries are able to act as gateways for goods coming from Asia, Europe or North America or as distribution points for goods moving within markets in the Middle East.

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