DUBAI - The UAE logistics market is expected to witness steady growth this year with revenues reaching $7.5 billion, according to a new study.
It is likely to witness consistent growth of around 8-9 per cent every year during the period 2010-2020 and reach revenues of about $16 billion by 2020, according to a Frost & Sullivan study.
With strong recovery in the global trade volumes, as well as a steadily-growing domestic market, the logistics sector in the UAE is set to witness impressive growth in the next decade.
The UAE logistics market recorded revenues of about $7.03 billion in 2010, witnessing a growth of about 10.7 per cent over the previous year, Frost & Sullivan Transportation & Logistics Program Manager Srinath Manda said.
Factors such as a strategic location between the Eastern and Western hemispheres, focused development of logistics infrastructure, and recovery in regional and global trade, among others, contributed significantly to this growth.
The total logistics spend, or total logistics market size, in the UAE represents approximately 2.5 per cent of the country’s total GDP. However, it represents about 6.4 per cent of the services GDP.
Being located near the high growth economies of India and China, the UAE imports about 60 per cent of its products from these countries, mostly transiting through Dubai’s borders.
In addition, Dubai acts as a major transshipment hub for rapidly-growing cargoes, from Asian and Far East nations, bound for European and American markets. The air and sea volumes from India, China, and other key manufacturing bases in Asia and the Far East witnessed an increase in 2010 driving the transshipment and the air-sea market in the Middle East, especially the Emirates.
The UAE government’s huge investments in infrastructure and logistics projects are likely to retain the nation’s position as a key logistics hub in the Middle East.
The Government of Dubai is making significant investments in the upcoming Dubai Logistics City. It is likely to be the world’s largest integrated logistics platform providing multi-modal transportation, logistics, and other value-added services.