Working hand in hand with the transport and logistics firms across the country, ValuStrat has been providing pragmatic, actionable advice across a broad range of areas including growth strategies, concession bids, network submissions. Our expertise analysis and commercial insight enables our clients to pursue ever greater value from their operations while addressing challenges including regulatory and competitive pressures, funding constraints and new revenue opportunities.
GCC’s Logistics sector is estimated at around USD 35 billion, of which three major economies, namely Saudi Arabia, UAE and Oman account for around 85 per cent share. Oil & Gas, Infrastructure and Trading industry segments are the leading contributors for the logistics sector in the region. In the GCC, the domestic services segment (inland transportation and warehousing) of the logistics market is dominated by local players, while the international service segment (freight forwarding and international transportation by air / ocean) is dominated by multinational players such as DHL, TNT and Agility.
The industry is foreseen to witness greater growth with the government spending on infrastructure development of rail transport network (initially for public transportation and later to be used for cargo transportation too), which will soon be realized as the best mode of transport for the largely traded commodities such as chemicals, petrochemicals, etc. The focus on development of Free Trade Zones (FTZ or Free Economic Zones) by the GCC nations has been a major drive for their non-oil economic growth, which has had a profound impact on the logistics sector. This has resulted in a significant proliferation of multinational organizations setting up their continent level distribution centres (for air and sea modes) in the GCC nations, with a positive impact on the logistics services market. Further development of domestic manufacturing industries, spearheaded by Saudi Arabia is likely to impact and drive the logistics sector and development of cargo specific sea ports (spearheaded by the UAE and Jebel Ali port) has resulted in making GCC the logistics hub for Europe – Asia trade activities.
The logistics sector in the GCC is on a definite growth trajectory and is witnessing all the right mega trends that are likely to enhance the region’s prominence as a logistics hub. While development of exclusive cargo ports and FTZs is enhancing the region’s potential for international trade related logistics, development of rail transport mode for cargo and promotion of domestic manufacturing activities would result in growth of the integrated supply chain services business.