Logistics firms notice growth

DUBAI — The logistics and supply chain management industry in the UAE is witnessing remarkable growth with companies spending 10 to 15 per cent of their revenues on logistics activities, according to a survey.

By Moushumi Das Chaudhury

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Published: Tue 5 Jul 2005, 10:26 AM

Last updated: Thu 2 Apr 2015, 4:36 PM

The main reason for this growth is the booming economy, affluent market as the economy is dependent on imported goods from various countries which has increased the factory-to-consumer lead times, according to a report by Emirates Industrial Bank.

The report also states that the global logistics expenditures is slightly less than $4 trillion accounting for a substantial part of global GDP.

A senior official from a company offering freight forwarding and logistics solutions told Khaleej Times, “Most of the UAE business houses which are engaged in the domestic market usually have in-house warehousing, logistics and distribution services but there is so much demand that they opt for outsourcing from various logistics companies."

He also added: "The logistics companies offer comprehensive services which includes dedicated warehouses, various modes of transportation as well as other value added services."

According to sources, Dubai Airport Free Zone (DAFZA) provides tremendous facilities to the logistics industry through excellent air cargo networking and efficient handling through the Free zone logistics centre. Dafza is also considered as one of the vital links in the supply chain and logistics industry as it is mainly used for distribution of products in the region with 20 companies providing logistics and freight solutions.

Apart from this, companies dealing in import and export of IT products, cosmetics, pharmaceuticals are all having their logistical activities in the free zone. Moreover, the customs department based in the free zone facilities quick custom clearance with their online services which makes the free zone more attractive to its consumers.

Analysts believe that the logistics and supply chain industry is the only industry which works tirelessly towards integrating the economies of the world. Globalisation will lead to increased demand of Logistics services and the UAE will also see the rise in logistics services as it has positioned well to take advantage of increasing demand as a third country facilitating the freight of goods helped by its excellent infrastructure, ideal location, airports and free zones.

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