The UAE logistics industry was valued at a market size of USD 30 billion in 2023. The growth is driven by the expanding pharmaceutical and e-commerce sectors, alongside advancements in technology and government initiatives enhancing infrastructure, particularly in freight forwarding, warehousing, and CEP segments.
Key players in the UAE logistics market include Aramex, Emirates Post, DHL Express, FedEx, and UPS. These companies are pivotal due to their extensive networks, both domestically and internationally, and their ability to provide comprehensive logistics solutions, including express delivery, freight forwarding, and warehousing services.
In 2023, Al-Futtaim Group launched its Aerospace Logistics division in the UAE. This new division is focused on providing specialized logistics services to the aerospace sector, including the handling and transportation of aircraft parts and components. Additionally, the group announced its commitment to delivering 50 percent of new energy vehicles and installing 10 percent of the charging stations in the UAE by 2030, demonstrating its focus on sustainability and innovation in the logistics sector.
Dubai continues to dominate the UAE logistics market, accounting for major market share in 2023. The city's strategic location, world-class infrastructure, and comprehensive free trade zones, such as Jebel Ali Free Zone (JAFZA), make it the preferred logistics hub for regional and international companies. Dubai's logistics market is further bolstered by its strong air and sea connectivity, with Dubai International Airport and Jebel Ali Port being among the busiest cargo hubs in the world.
By End User: The UAE Logistics market is segmented by end user into retail, oil & gas, pharma, E-commerce and others. In 2023, retail sector dominthe market due to the surge in e-commerce activities and the presence of major international and regional retail brands. Increased consumer demand for fast delivery services and the expansion of retail networks in the UAE drive significant growth in logistics services, particularly in warehousing and last-mile delivery.
By Region: The UAE Logistics market is segmented by region into North, South, East and West UAE. In 2023, the North region is the dominant segment in market. This dominance is primarily due to the presence of major logistics hubs like Dubai and Sharjah, which have extensive port and airport facilities, free trade zones, and well-developed infrastructure that facilitate high volumes of cargo handling and efficient logistics operations.
Allied Transport: Allied Transport, a leader in the MENA region for land transport, won the "Most Inspiring Road Transport Company" award at the TLME inspiration awards in Dubai in 2023. This recognition highlights their innovative approach and dedication to the logistics sector. They also partnered with Kuehne + Nagel for domestic and cross-border FTL deliveries, leveraging their extensive transport fleet to meet growing customer demands.
Development of Logistics Hubs: The expansion and development of logistics and warehousing hubs, such as JAFZA and KEZAD, are critical drivers of growth. These hubs cater to the increasing demand for logistics services, driven by the UAE's position as a key trade hub, and are crucial in supporting the country's growing e-commerce and manufacturing sectors.
Growth in Pharma and Manufacturing: The growing pharmaceutical and manufacturing industries in the UAE, supported by significant investments like AED 10 billion by the Abu Dhabi government, are driving the demand for specialized logistics services. This investment aims to more than double the manufacturing sector, increasing the need for efficient supply chain and distribution networks.
Shortage of Labor Force: The UAE logistics market is grappling with a critical shortage of skilled labor and resources. This scarcity has driven up operational costs, leading to project delays and hindering market growth. The problem is further exacerbated by budget constraints that limit access to essential financing and training programs, making it difficult for businesses to overcome the labor shortage.
Jebel Ali Free Zone (JAFZA) Logistics Park: Dubais Jebel Ali Free Zone (JAFZA) has completed the first phase of its logistics park, spanning over 500,000 square feet with temperature-controlled warehouses and office space. The second phase, slated for completion in early 2025, will add an additional 250,000 square feet, further enhancing the storage capacity and infrastructure to support logistics activities in the region.
Expansion of Cargo Capabilities at Sharjah Airport: The development plans at Sharjah Airport, including the expansion of cargo terminals and increasing freight volume capacity by 30-50%, will transform the airport into a premier international cargo hub. This expansion will meet the growing demand for logistics services in the region, further boosting the UAE's position as a key logistics center.
Key players in the UAE logistics market include Aramex, Emirates Post, DHL Express, FedEx, and UPS. These companies are pivotal due to their extensive networks, both domestically and internationally, and their ability to provide comprehensive logistics solutions, including express delivery, freight forwarding, and warehousing services.
In 2023, Al-Futtaim Group launched its Aerospace Logistics division in the UAE. This new division is focused on providing specialized logistics services to the aerospace sector, including the handling and transportation of aircraft parts and components. Additionally, the group announced its commitment to delivering 50 percent of new energy vehicles and installing 10 percent of the charging stations in the UAE by 2030, demonstrating its focus on sustainability and innovation in the logistics sector.
Dubai continues to dominate the UAE logistics market, accounting for major market share in 2023. The city's strategic location, world-class infrastructure, and comprehensive free trade zones, such as Jebel Ali Free Zone (JAFZA), make it the preferred logistics hub for regional and international companies. Dubai's logistics market is further bolstered by its strong air and sea connectivity, with Dubai International Airport and Jebel Ali Port being among the busiest cargo hubs in the world.
UAE Logistics Market Segmentation
By Service Type: The UAE Logistics market is segmented by service type into freight forwarding, warehousing, value added services and express & parcel market. The Freight Forwarding segment is the dominant sector within the market in 2023. This segment's dominance is driven by the UAEs strategic position as a global trade hub, supporting extensive import and export activities. Its growth is bolstered by technological advancements and expanding infrastructure.By End User: The UAE Logistics market is segmented by end user into retail, oil & gas, pharma, E-commerce and others. In 2023, retail sector dominthe market due to the surge in e-commerce activities and the presence of major international and regional retail brands. Increased consumer demand for fast delivery services and the expansion of retail networks in the UAE drive significant growth in logistics services, particularly in warehousing and last-mile delivery.
By Region: The UAE Logistics market is segmented by region into North, South, East and West UAE. In 2023, the North region is the dominant segment in market. This dominance is primarily due to the presence of major logistics hubs like Dubai and Sharjah, which have extensive port and airport facilities, free trade zones, and well-developed infrastructure that facilitate high volumes of cargo handling and efficient logistics operations.
UAE Logistics Market Competitive Landscape
- Al Futtaim Logistics
- Allied Transport
- ATS World
- Avalon Transport
- CEVA Logistics
- Danzas AEI (Owned by DHL)
Allied Transport: Allied Transport, a leader in the MENA region for land transport, won the "Most Inspiring Road Transport Company" award at the TLME inspiration awards in Dubai in 2023. This recognition highlights their innovative approach and dedication to the logistics sector. They also partnered with Kuehne + Nagel for domestic and cross-border FTL deliveries, leveraging their extensive transport fleet to meet growing customer demands.
UAE Logistics Market Industry Analysis
UAE Logistics Market Growth Drivers
Technological Adoption: The introduction and adoption of advanced technologies like AI, blockchain, and IoT are significantly influencing the logistics sector in the UAE. These technologies enhance service offerings and operational efficiency, with innovations like 5G Smart Warehouses leading to faster and more reliable logistics processes, making the UAE a leader in smart logistics solutions.Development of Logistics Hubs: The expansion and development of logistics and warehousing hubs, such as JAFZA and KEZAD, are critical drivers of growth. These hubs cater to the increasing demand for logistics services, driven by the UAE's position as a key trade hub, and are crucial in supporting the country's growing e-commerce and manufacturing sectors.
Growth in Pharma and Manufacturing: The growing pharmaceutical and manufacturing industries in the UAE, supported by significant investments like AED 10 billion by the Abu Dhabi government, are driving the demand for specialized logistics services. This investment aims to more than double the manufacturing sector, increasing the need for efficient supply chain and distribution networks.
UAE Logistics Market Challenges
Compliance Issues: The UAE's logistics sector faces significant challenges due to the ever-evolving regulatory environment. Industries such as food and pharmaceuticals, which are subject to stringent regulations, encounter added layers of compliance obligations. This complexity makes it increasingly difficult for businesses to keep pace with the latest customs and trade rules, thereby intensifying operational challenges.Shortage of Labor Force: The UAE logistics market is grappling with a critical shortage of skilled labor and resources. This scarcity has driven up operational costs, leading to project delays and hindering market growth. The problem is further exacerbated by budget constraints that limit access to essential financing and training programs, making it difficult for businesses to overcome the labor shortage.
UAE Logistics Market Government Initiatives
Initiation of Rail Network: In 2023, Etihad Rail expanded its network by covering 900 km, connecting all seven emirates from Ghuweifat to Fujairah. This rail network is expected to accommodate 16 million passengers and transport 50 million tonnes of freight, significantly revolutionizing transportation within the UAE and improving the efficiency and capacity of the logistics sector.Jebel Ali Free Zone (JAFZA) Logistics Park: Dubais Jebel Ali Free Zone (JAFZA) has completed the first phase of its logistics park, spanning over 500,000 square feet with temperature-controlled warehouses and office space. The second phase, slated for completion in early 2025, will add an additional 250,000 square feet, further enhancing the storage capacity and infrastructure to support logistics activities in the region.
UAE Logistics Market Future Outlook
The UAE logistics market is expected to grow to USD 40 billion by 2028. Growth will be driven by the expansion of the e-commerce sector, increasing demand for pharmaceuticals, technological advancements, and government initiatives focused on improving infrastructure and logistics efficiency.Future Market Trends
Sustainability Initiatives: The UAE logistics market is increasingly focusing on sustainability, with companies adopting green logistics practices. This includes the use of electric vehicles, optimizing fuel efficiency, and reducing carbon emissions. Integrating sustainability into their operations will become a market trend.Expansion of Cargo Capabilities at Sharjah Airport: The development plans at Sharjah Airport, including the expansion of cargo terminals and increasing freight volume capacity by 30-50%, will transform the airport into a premier international cargo hub. This expansion will meet the growing demand for logistics services in the region, further boosting the UAE's position as a key logistics center.
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Table of Contents
1. UAE Country Overview and Import/Export Scenario
2. Infrastructure Scenario in UAE
3. UAE Logistics Market
4. UAE Freight Market
5. UAE Warehousing Market
6. UAE Express and E-Commerce Market
7. Competitive Scenario
9. Research Methodology
Companies Mentioned (Partial List)
A selection of companies mentioned in this report includes, but is not limited to:
- Danzas
- DB Schenker
- UPS
- Rhenus Logistics
- CEVA Logistics
- DHL
- Kuehne + Nagel
- DSV
- Expeditors
- Yusen Logistics
- Flexigistic
- NTDE Logistics
- GAC
- ATS Logistics
- Al-Futtaim Logistics
