UAE logistics sector to witness transformative growth

The UAE’s logistics sector will continue to log in steady growth numbers over the next few years, driven by a robust growth in the e-commerce market in the region.

Speaking to Khaleej Times, Taarek Hinedi, vice president of FedEx Express Middle East and Africa Operations, said that the logistics sector has always been adaptive, robust, and flexible. “The longer-term effects of the Covid-19 pandemic have encouraged suppliers to update and restructure their logistical model to keep up with the ever-changing market. The way people work and live fundamentally changed within a short timeframe, causing an increase in the pace of many projected logistics industry changes by several years to match this need.”

In a Standard Chartered poll, 73 per cent of UAE respondents stated that the pandemic has influenced them to think more positively about online shopping. With e-commerce accelerating stable and time-sensitive deliveries, an emphasis and focus on innovation around last mile delivery and same or next day service has transformed global transportation networks. The logistics industry in the GCC is rapidly evolving and adapting to the new normal by increasing their flexibility and infrastructure development.

Hinedi explained that the shift in trends by consumers and their spending behaviors since the onset of the Covid-19 pandemic have essentially made logistics an essential service provider for retail, healthcare, food supply, and many other industries.

“In order to adapt with the major changes in the market, logistics and supply chain companies have had to adjust their business model and services,” he said. “For example, increased reliance on cold chains and more electric vehicle deliveries are some of the most prominent adjustments. Additionally, online shopping has become part of the new normal for more people, which means consumer demand for services such as contactless deliveries and same or next day deliveries has increased significantly. In this environment, logistics and supply chain networks are critical to the success of businesses and retailers as they operate remotely or move to a greater share of trade in the digital space.”

Hinedi also revealed that the e-commerce sector has witnessed unprecedented growth in the UAE and the wider GCC region over the past year. A survey by Dubai Customs estimates that sales from e-commerce will rise by 23 per cent by 2022, reaching $27 billion. This points to a strong shift in consumer focus and in turn means that increased reliance on e-commerce is here to stay, even long after the pandemic is over.

The change in consumer expectations has rapidly accelerated the adoption of e-commerce as a retail platform and the need for a comprehensive logistics partner to move these goods, Hinedi said. “Customer experience has always been a top priority for FedEx Express. We understand the importance of strengthening connections between businesses and their customers. Our wide-ranging experience, including knowledge of the e-commerce sector and customs clearance requirements, helps ensure that online orders are fulfilled in a manner that meets consumers’ expectations, enabling e-commerce companies to fully concentrate on their business and customers.”

He added: “We have continued to operate our global network throughout the pandemic. We have the ability and flexibility to move aircraft around the world to keep commerce moving despite challenges from the pandemic. Over the last year, our global operations and the flexibility of our network allowed us to maintain critical supply chains and transport medical products, relief supplies and consumer goods around the world while air cargo capacity normally associated with passenger aircraft operations was highly constrained.”

rohma@khaleejtimes.com

Rohma Sadaqat

I am a reporter and sub-editor on the Business desk at Khaleej Times. I mainly cover and write articles on the UAE's retail, hospitality, travel, and tourism sectors.Originally from Lahore, I have been living in the UAE for more than 20 years. I graduated with a BA in Mass Communication, with a concentration in Journalism, and a double minor in History and International Studies from the American University of Sharjah.If you see me out and about on assignment in Dubai, feel free to stop me, say hello, and we can chat about the latest kitten videos on YouTube.