The global logistics industry has experienced significant growth in recent years, with the market projected to reach over $12 trillion by 2027, growing at a CAGR of around 6%. This growth has been driven by increased e-commerce, increasing global trade, and the need for more efficient supply chain management. Logistics companies are increasingly adopting emerging technologies like blockchain to address industry challenges, which can enhance transparency, traceability, and efficiency across the supply chain.
According to a recent ADQ study, the Middle Eastern logistics industry has experienced significant growth in recent years, with the market projected to be worth more than $35.9 billion by 2030 in KSA alone ($29.3 billion in UAE and $13.5 billion in Qatar). This growth has been driven by factors such as increased trade, e-commerce, and infrastructure development. The region's strategic location, connecting Europe, Asia, and Africa, has made it a crucial hub for global supply chains. However, the industry faces efficiency, transparency, and security challenges, which have prompted logistics players to explore innovative solutions like blockchain technology.

Adoption of blockchain in logistics
The logistics and supply chain industry rapidly adopts blockchain technology globally, enhancing transparency, traceability, and efficiency. In the United States, major players like FedEx, UPS, and Walmart have implemented blockchain solutions, with a Gartner study revealing that 45% of U.S. logistics companies plan to adopt blockchain by 2025. Similarly, the UK and Europe are integrating blockchain into logistics, exemplified by the Port of Rotterdam's partnership with IBM to create a blockchain platform. This partnership will enable real-time logistics tracking by recording every transaction and movement of goods on an immutable digital ledger, providing transparency, security, and accountability across the supply chain for the Port of Rotterdam. It will also reduce administrative complexities by automating processes like payments and approvals through smart contracts, eliminating intermediaries, and streamlining customs clearance. This leads to faster, more efficient, and cost-effective operations for the Port of Rotterdam.
The EU also promotes blockchain through initiatives like the EU Blockchain Observatory and Forum, aiming to improve supply chain management across various sectors. Providing a platform for collaboration, research, and policy development helps companies implement blockchain solutions that reduce fraud, streamline processes, and foster real-time data sharing. This leads to more efficient, cost-effective, and reliable supply chains throughout the EU.

Logistics and supply chain players in the Middle East are increasingly adopting blockchain technology to address the industry's challenges and enhance efficiency. Multiple stakeholders, including governments, customers, and logistics providers, are involved in the adoption of blockchain in the region. Governments, such as Dubai, have launched initiatives like the Dubai Blockchain Strategy to promote blockchain adoption in various sectors, including logistics, aiming to transform Dubai into a blockchain-powered city by 2030.

Middle Eastern companies can enhance efficiency, transparency, and competitiveness by learning from global successes. Integrating blockchain with emerging technologies like IoT and AI can improve supply chain visibility and decision-making. A study by MDPI found that blockchain adoption can reduce operational costs by 25% for Saudi logistics companies.
UAE-based DP World has implemented a blockchain platform that cuts shipping document processing time by 90%. Additionally, Dubai Customs reported a 50% reduction in shipment tracking time after implementing a blockchain system. Qatar's government initiative, the Qatar Blockchain Platform, aims for end-to-end visibility of supply chain movements, allowing real-time tracking of goods. This transparency fosters trust among stakeholders, improving accountability and efficiency.
By embracing these innovations, Middle Eastern logistics companies can solidify their global leadership and meet the industry's evolving demands.

A case for caution and regulation
While blockchain technology offers significant benefits for logistics in the Middle East, its implementation faces challenges. A study by Appsierra found that 40% of logistics companies globally cite legacy system integration as a significant hurdle to adoption. This requires substantial investments in technology upgrades and workforce training, which can deter smaller providers.
Additionally, a report by Dektry highlighted that 35% of logistics companies in the region struggle with the lack of standardised protocols, making collaboration difficult. Establishing common standards is crucial for the widespread adoption of blockchain in the Middle Eastern logistics industry.
Government initiatives like the Dubai Blockchain Strategy and the Qatar Blockchain Platform promote blockchain adoption, offering financial incentives and technical support.
The Dubai Blockchain Strategy aims to position Dubai as a global leader in blockchain technology, focusing on enhancing government efficiency and customer service. Key features include integrating blockchain across various government services to streamline processes, improve transparency, and reduce operational costs. This initiative also sets a regulatory framework that fosters innovation while ensuring data security and privacy. By encouraging collaboration between public and private sectors, the strategy is expected to accelerate the development of blockchain applications, making Dubai a hub for technological advancement in the region.
The Qatar Blockchain Platform aims to enhance the country's digital landscape through a comprehensive regulatory framework established by the Qatar Financial Centre (QFC). This framework emphasises the tokenisation of real-world assets, ensuring secure and transparent operations while aligning with international standards. By allowing 100% foreign ownership and a competitive corporate tax rate, Qatar is positioning itself as a hub for digital finance innovation. The initiative encourages collaboration among various stakeholders and is designed to attract global businesses, thereby strengthening the region's competitiveness in the digital economy
Final thoughts
Logistics companies in Saudi Arabia, the UAE, and Qatar can prepare for blockchain adoption by learning from early adopters like DP World and Dubai Customs, which have shown how blockchain enhances supply chain transparency and efficiency.
To prepare for blockchain disruption, logistics players in the Middle East should adopt this 5-step process:
- First, invest in blockchain technology and integrate it into existing systems to enhance transparency, traceability, and efficiency.
- Second, collaborate with tech firms to develop customised blockchain solutions tailored to their specific needs.
- Third, train their workforce in blockchain applications to ensure smooth implementation and operation.
- Fourth, partnerships should be established with other stakeholders in the supply chain to create a unified blockchain network.
- Fifth, continuously monitor technological advancements and regulatory changes to stay ahead of the curve and maintain competitive advantage.
About the Authors:
Mustafa Fahim, CFA works as Manager, Advisory at ValuStrat's Riyadh office. He has 7+ years of experience working in investment banking, corporate finance and tech roles at reputed organizations in the MENAP region.
Khurram Merchant, CFA is Managing Director, Advisory and leads ValuStrat's Advisory division. Over his 10+ years with ValuStrat, he has worked with hundreds of ValuStrat's most reputable clients, including public sector entities, ministries, conglomerates, corporates, real estate developers, financial institutions and SMEs.
Sources: Statista, GII Research, Mordor Intelligence, Maersk, Blue Wave Consulting, The Insight Partners, Markets and Markets, IndustryARC, Appsiera, Dektry, Tachyon, SBT, Logistics Middle East, The Member Company