Oman Third-Party Logistics (3PL) Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

The Oman Third-Party Logistics (3PL) Market size is estimated at USD 0.66 billion in 2023, and is expected to reach USD 1.03 billion by 2028, growing at a CAGR of 9.34% during the forecast period (2023-2028).

Over the years, the logistics industry in Oman has played an important role in expanding inbound investment, non-oil exports, and the country's competitiveness.

Key Highlights

• Oman benefits from being placed on the strategic axis of the Indian Ocean and the Arabian Gulf, which gives easy trade connections and quick transit time to the world's most appealing and growing markets. In terms of transportation, Oman is on key international shipping routes and within two weeks of most major ports, attracting numerous players to the country. With multiple active foreign and domestic firms in the market, the freight forwarding business dominates the logistics industry in Oman.
• Because it has an FTA with the US and is part of the Ishqabad trade corridor, Oman's logistics industry has become more important in the GCC. Furthermore, the nation is a member of the European Free Trade Association (GCC) and Singapore's GCC and is now negotiating FTAs with the EU, China, New Zealand, and Australia.

Oman Third-Party Logistics Market Trends

Investments on infrastructure and latest technology for upgrading ports, airport facilities, new road links

All seven commercial ports in Oman are state-owned. Deep-water ports may be found in Sohar in the north, Duqm in the center of the country's coastline, and Salalah in the south. All three deep-water ports connect to 86 ports in 40 different countries through joint ventures between the government and foreign commercial enterprises operating under concessions. Duqm, an important port town on the Indian Ocean halfway between Muscat and Salalah, is Oman's flagship development project. In July 2021, Asyad built its first new ship in Duqm's dry dock, which also provides ship repair and maintenance services. Saudi Arabia is considering establishing an industrial zone near Duqm. The Duqm refinery project offers opportunities in transportation and logistics. Oman's two developed ports, Sohar and Salalah, provide substantial prospects as well.

The proposed GCC railway, a USD 15.5 billion project that will connect the six nations with a network of 2172 kilometers of track, will handle up to 29 million tons of the 61 million tons transferred within the area yearly across all forms of transport.

Improving the efficiency of connection between Oman and other countries

Oman's strategic location on the Strait of Hormuz, as well as its deep-water ports in the Gulf of Oman and the Indian Ocean beyond the Strait, are key selling points as its logistical infrastructure expands and communication improves. Oman looks to be emerging from budget limitations that forced it to postpone many significant infrastructure projects in 2022. The Duqm Special Economic Zone Authority and the Port of Duqm are aggressively seeking international investment to assist with development financing. Duqm requires infrastructure development in sewage treatment, drainage, water desalination, power plants, buildings, communications services, and landscaping in addition to the huge variety of construction projects. Another important priority for domestic and regional growth is road construction. The government plans to complete a new road across the Empty Quarter in December 2021, linking Riyadh to Muscat and other key Omani towns, including Duqm and other Omani ports.

The Omani government is collaborating with the Asian Infrastructure Investment Bank (AIIB) on a commercial terminal and operational zone development project worth USD 349 million to improve transport efficiency, strengthen logistics, facilitate mineral exports, and reduce supply chain delivery time and costs for the various industries in the Duqm Special Economic Zone and its broader hinterland.

Oman Third-Party Logistics Industry Overview

The market is fairly concentrated, with a large number of local and a few international players such as Sultan Bin Soud Ahmed Al, DHL, Kunooz Logistics Global, Premier Logistics Muscat, and Al Madina Logistics Company as its key players. The economic growth forecast for Oman's 3PL services indicates that they are likely to continue to be one of the sultanate’s leading sources of growth. The effective strategies such as SOLS 2040 and Tanfeedh, initiated by the government, have accelerated the essential changes to the business environment by addressing hard and soft infrastructure. Initiatives like the new PPP authority and FDI law are expected to motor the investments needed in order to pump the sector’s ample potential. The developments in the warehousing sector and the implementation of automatic systems in the sector are also aiding in its growth, not only in terms of volume but also in efficiency, producing minimum waste, carbon, and time.

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