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UAE Top Logistics Hub in the Gulf
Abdul Basit / 16 January 2010
DUBAI — The World Bank has placed the UAE as the best performing trade logistics service-provider in the Gulf region. According to its Logistics Performance Index (LPI) survey, conducted every two years, the UAE scored 3.63 points, ranking 24 among 155 countries across the world, and leaving other Gulf countries far behind.
The World Bank’s LPI survey ranked Bahrain 32, Kuwait 36, Qatar 55 and Oman at 60. Saudi Arabia, the largest economy in the region stood at 40, according to the survey titled: ‘Connecting to Compete.’
Located halfway between the time zones of London and Hong Kong, goods can travel non-stop from the UAE to the entire world, including reaching a market of 4 billion people within an eight-hour flight, the survey said. Germany and Singapore receive the highest ratings in the 2010 Logistics Performance Index (LPI) with scores over 4.08, while Somalia ranks last with a score of 1.34.
The World Bank said that trade logistics performance is directly linked with important economic outcomes, such as trade expansion, diversification of exports, and growth. The World Bank conducts the LPI survey every two years. The core approach remains the same as in 2007. Having an LPI lower by one point—such as 2.5 rather than 3.5—implies two to four additional days for moving imports and exports between the port and a company’s warehouse.
The LPI is a multidimensional assessment of logistics performance, rated on a scale from one (worst) to five (best).
International trade is moved by a network of increasingly global logistics operators who deal with a number of functions in the international supply chains: ocean shipping, air freight, land transport, warehousing, and third party logistics.
Globalization has made the demand for logistics services more sophisticated, pushing for integration and diversification of services to help operate uninterrupted supply chains. Better logistics performance is strongly associated with trade expansion, export diversification, ability to attract foreign direct investments, and economic growth. In other words, trade logistics matter.
The logistics sector in the Middle East and North Africa is expected to experience high growth over the next few years to reach $27 billion in 2012, from the present $18 billion, as a result of rising foreign investment and government policies favouring expansion, according to a separate report.
Last year Dubai’s Jebel Ali Free Zone, or Jafza, and the Dubai Aviation City Corporation have joined forces to form one of the largest multi-modal logistics platforms in the world. The partnership will create “The Dubai Logistics Corridor”, a transport and logistics corridor linking sea, land and air and bringing together for the first time in the Middle East.
The opening of Al Maktoum International Airport, part of Dubai World Central development, in June 2010 will significantly increase Dubai’s trade, industrial and logistics capacity. It is estimated that as a result of this agreement, the DWC will have 400,000-square metre offices, 1,000,000-square metre warehouses, plots for build to suit 24,000,000 square metre and 10,000 on site residential units.
The agreement is the first step in delivering upon the Government of Dubai’s commitment to become the logistic and trade hub of the region by developing and implementing the infrastructure and systems required for seamless transition of goods between sea, land and air.
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|Opinion & Analysis|