Effect of Disruptive Trends on Dubai’s Transport and Logistics Industry
Since the early 2000s, Dubai has made a significant economic improvement with the help of its economic diversification initiatives. Dubai’s transportation and logistics industry have also changed notably with low logistical and operational costs and favorable government policies attracting investors from around the world, marking the region as a gateway to the Arab, Asian, and African markets. This is complemented by Dubai’s strategic location between Asia and Europe, serving both the East and the West, and providing optimum trading conditions for the Emirate. Dubai continuously invests in the development of its infrastructure and technology for a well-integrated transport system and excellent logistics infrastructure.
The UAE is ranked 11th in terms of being a logistics-friendly country - ahead of its middle-eastern counterparts, Saudi Arabia and Oman. Additionally, port automation activities, rail development, free zone developments, and connected infrastructure allows autonomy and acts in favor of Dubai.
With the outbreak of COVID-19, several logistics companies faced challenges such as supply-chain capacity constraints and governmental restrictions, which in turn, led to the suspension of key services in some routes, and freight capacity and cost pressure issues.
Improving process efficiency, meeting labor shortages, and reducing delivery times have been the crucial factors of success for the logistics companies in this region, as Dubai has emerged as a trans-shipment hub. With the emergence of digital technologies, innovative solutions are being adopted by service providers. On one hand, deploying warehouse robots, exoskeletons, collaborative robots, self-driving vehicles, and equipment helps service providers to reduce processing times, as robots handle the mundane time-consuming processes.
Automation has also proved useful during the pandemic and resulting lockdowns, as service providers with implemented automation technologies did not witness any major impact during the pandemic. However, shared warehouses with shared logistics assets, and transport capacity sharing will allow service providers to increases asset and capacity utilization rates, thereby reducing their logistics costs significantly.
This study analyses the key trends and its implications relating to Dubai’s logistics-related strategies–autonomous logistics, sharing economy, Logistics 5.0, intelligent digital assets, and sustainability. This research also identifies the potential disruptive impact of logistics on logistics segments such as transportation, warehousing, and supply chain solutions in Dubai until 2023.
Key Issues Addressed
- In the current economic environment, what opportunities lie ahead of the logistics market? What are the key drivers and trends?
- What are the key freight market and warehousing trends that are likely to shape the future of Dubai’s logistics industry and its segments?
- What are some of Dubai’s key strategies related to logistics and how does it help Dubai become a global destination?
- Given that the logistics industry is undergoing a major transformation, what are the disruptive trends impacting logistics in Dubai?
- With several improvement initiatives undertaken by the government, what are the key industry sectors that will benefit and how will it affect logistics?
