How logistics changed Middle East’s stature
Sector to play key role in region’s continued progress
As far as the logistics and transportation industry goes, it plays a significantly important role in the development and urbanisation of the Middle East. Some of the most urbanised cities such as Dubai, Abu Dhabi, Riyadh and Jeddah, among others, have grown rapidly due to a well-developed logistics ecosystem. Any developing country has to take its logistics system seriously and the GCC was always a step ahead since it plays a major role in the economy of countries in the region.
If we just look into land transportation, which is approximately a $9 billion market in the GCC, the development of superior road networks, infrastructure and customs along with government regulations to make possible seamless movement across the borders have been instrumental in the urbanization of many of these countries. The long and well-developed road networks have ensured a smooth ride when these heavy cargos are being transported.
Governments recognise logistics as an opportunity for their nations and top businesses to forge a profitable relationship. For example, further development of a strong logistics sector is a key goal for Saudi Arabia’s 2030 vision. For as long as logistics became prominent globally, Middle East nations have been a part of it; they are a mainstay in the history of the industry.
Historically, trade and commerce have been embedded in the DNA of this region. Countries here were big-time importers of consumer items that needed transportation everywhere and the excellent and substantial road networks developed over a short span of time did a world of good for the course.
Coverage used to be an issue but over the years logistics companies have expanded their reach and can now boast of deliveries even to remote areas like in small towns in deserts. Today manufactures, traders and distributors all need seamless transportation.
The logistics sector has also gone through its own set of innovation in terms of streamlining the effectiveness of the receiving, storage, staging, sending out functions and customs clearance.
The next wave of innovation will come from streamlining the logistics system with the help of technology. Although the adoption of technology will not be 100 per cent anytime soon, there remains a significant opportunity to digitise the industry. The goal is to enhance efficiency, consistency, transparency and reliability in the transportation and logistics ecosystem. Providing transporters with increased asset utilisation and providing shippers with flexibility, improved service levels, real-time updates, accelerated delivery, optimised direct and indirect costs and enhanced simplicity add value to the overall logistics ecosystem. Data analytics by which data-driven decision-making will enhance the overall efficiency in the market will play a key role going forward.
Exciting times are expected for the logistics and transportation industries going forward in the Middle East. The continued rapid pace of urbanisation, which is almost a guarantee with all the development and infrastructure building in the works right now, and with the pace of such developments and growth, logistics will sure play an important role in facilitating that. There has been a strong support from governments and authorities to help bring the innovation in this sector.
Land transportation market thriving in the GCC region $9B