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Lighthouse - May, 2021.

BETTER TIMES AHEAD FOR UAE LOGISTICS

The upward trend of the logistics industry of the UAE reveals that it is on a rebound with increased economic activity, especially in the field of eCommerce, as a result of the COVID-19 pandemic.

Ecommerce has come to rule the roost as people resorted to online shopping with the lockdowns imposed due to the pandemic. Geoff Walsh, country manager at DHL Express UAE, said logistics has, and always will remain, a necessity for trade and commerce to endure. Despite the industry’s initial shock in the first few months of the pandemic spread, “our industry was a vital service provider” during these times. The eCommerce sector has seen an unprecedented rise in the level of online sales.

Logistics Sector Spurs Economic Growth in the UAE

Latest research points that the e-commerce market in the MENA region surpassed $15 billion at 35 percent CAGR in 2020. The global retail e-commerce sales are expected to hit an all-time high of $50 billion by 2025. Ecommerce will pave the path for this upward trend, and it is indeed a time to make the most of this opportunity. Logistics players need to expand their operations and capture the untapped potential of cross-border eCommerce.

With the logistics sector contributing to nearly 13% of the UAE’s total gross domestic product (GDP), this sector is a substantial contributor to the nation’s economy. Geoff Walsh emphasized, “As we get closer to EXPO 2021, and with the UAE’s 2030 industrial plans in place, the logistics and supply chain segment is expected to strengthen even further”.

The airline and tourism sectors will also be the other positive drivers of economic growth with the travel and tourism sector’s restarting. UAE has started the travel and tourism business-related activity earlier than the counterparts in the GCC region. Increased cargo outflows and tourist inflow will kickstart the economy and take it forward.

“We are also seeing accelerated development in new technologies being introduced in the logistics industry, in the likes of data analytics, Artificial Intelligence (AI), robotics, Internet of Things (IoT), and Cloud services. As the pandemic transforms the future of work and business, the speed of innovation in our industry will be crucial to manage customer expectations,” he added.

Rising from the COVID Conundrum

Like every other business segment, the logistics sector was heavily impacted due to the economic crisis spawned by the COVID-19 pandemic. It required immense vigor to course unchartered territory as logistic companies scrambled to get essential supplies channels moving in the face of transport disruptions, limited cargo capacity, delayed connections, and broken trade links. With airports closed down and borders shut, providing seamless and timely deliveries was the biggest challenge for logistic and supply chain providers. But logistic companies managed to stay resilient and even saw a steep increase in cross-border e-commerce volumes in the UAE and other GCC markets.

UAE – The Hub of Connectivity

UAE stands among the top nations in the world for the infrastructure for connectivity and ICT. According to the latest DHL Global Connectedness Index 2020, the UAE emerged as one of the top five most globally connected countries in the world, on the same rank as the Netherlands, Singapore, Belgium, and Ireland. The DHL Global Connectedness Index 2020 tracks international flows of trade, capital, information, and people across 169 countries and territories, he said

The UAE also features among the most attractive ICT markets in the Middle East driven by digitalization initiatives and aided by the increased adoption of leading technologies such as Cloud, big data analytics, internet of things, and artificial intelligence.

UAE’s robust and highly resilient infrastructure and ICT network have enabled the nation to maintain its critical links to the global arena while COVID-19 derailed business and life worldwide.

A Season of Great Change

The pandemic has also ushered in a season of great change, with many learnings from navigating the disruptions of the global supply chain. Like most business verticals, the logistics industry is also in a flux state with several new trends that are predicted to remain while new ones are constantly evolving with the changing global business climate.

The question that is at the top of every logistics company is how one anticipates and plans for what consumers and businesses will do next to be better able to support customers and ensure speedy, seamless delivery is not impacted. There has been a significant shift in the B2C, and B2B landscape with the new wave of users, and companies need to re-align investments to match future trends.

As remote working models become the norm, companies need to ensure that they are closer to where their customers are and make themselves present in areas closer to the target locations. Digitization, investment in air networks, increasing courier and customer service capacity, and innovating last-mile delivery methods will become a primary focus for logistic companies.

Companies also need to analyze their reliance and spend on partner airlines and continue maximizing their fleet usage.

The UAE is poised to position itself as a global logistics hub in tune with the nation’s economic vision.

Logistics Giants like DHL are committed to investments in the UAE and the wider MENA region to support their clients and provide exceptional customer experience.

Source: www.khaleejtimes.com

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