Opinion



March 11, 2019,   2:51 PM

Top Logistics Ranking Calls For Greater Digitization Of UAE’s Logistics Sector

Amna Khaishgi

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supply chain

Image source: Shutterstock

The 2019 Agility Emerging Markets Logistics Index report was a breath of fresh air for the industry as it focused on competitiveness based on logistics strength and business fundamentals in which Gulf countries outperformed most others.

What it also highlighted, rather inadvertently, is the potential for growth that exists in the Gulf and wider Middle East region. Call it geographic dividend or first movers’ advantage, the region appears to be on the cusp of major upward trajectory.

The 10th annual ranking of 50 leading emerging markets not only put the UAE on top—for its business-friendly conditions and core strengths position—the country also ranked first in business fundamentals globally.

While even a rank outsider will consider this great going, the fundamentals beneath the bullish trends calls for factoring in several factors that can go the other way. Trade tensions, currency and interest rate volatility, and Brexit are the prominent ones.

Agility’s annual survey of over 500 supply chain industry professionals demonstrated that logistics executives are upbeat about the 2019 emerging markets growth outlook.

According to Elias Monem, CEO of Middle East & Africa for Agility Global Integrated Logistics, healthy competition among Gulf economies has helped put the entire region at the forefront of transformation.

“The strong performance of Gulf economies in the Index is the result of wise investment in logistics and transport infrastructure, concerted efforts to diversify, steady progress in streamlining regulation, and strategic development of digital capabilities,” said Monem in a statement released alongside the report.

The UAE continues to hold a position of strength in the logistics domain and businesses are indeed reaping its benefits even though they are mindful of the pitfalls ahead.

Swamy Kannappan, Group Head of Procurement at Danube Building Material, says that the geographical location and infrastructure make the UAE an ideal supply and re-distribution gateway.

“It offers huge growth potential for the operating logistics players. It is strategically located at the center of international trade, making it globally well positioned as an established transshipment hub,” he says.

According to Kannappan, challenges such as a decline in re-export to neighboring countries in the MENA region have been the outcome of globalization.

“Today, other nations in the region are following the UAE’s footprint, which encourages direct import to the MENA region. I believe, this is the biggest challenge that the UAE’s logistics industry is facing currently,” he says.

There are other players though who are eager for the industry to take rapid strides, especially in the area of digitization.

“We have been watching the UAE’s progress as a logistics hub and want greater focus on digitization, which has been our objective since the beginning,” said Sarfaraz Alam, Founder and CEO of Hashmove, which is leading a major digitization drive for the industry.

Alam highlighted the Agility report’s focus on the potential of emerging markets—which expanded by 4.7% in 2018 and is forecast by the IMF to expand 4.5% for 2019.

“Emerging markets—Gulf and Middle East region in particular—are going to be critical in the next phase of growth for the logistics industry,” Alam said.

According to him, these numbers only suggest what is possible in the present set of circumstances. “Just imagine what can be achieved with more digitalization and greater coordination among industry players,” said Alam.

Even though there are concerns related to major global and geopolitical uncertainties, the strength of the region’s logistics industry is set to hold it in good stead.

 



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