Digital drive to strengthen GCC logistics

The GCC countries have an opportunity to capture a sizeable chunk of the global transportation and logistics sector market, which is expected to be worth around US$12.8 trillion by 2025, by leveraging technologies such as artificial intelligence (AI), internet of Introduce things (IoT). and blockchain in logistical operations, according to industry experts.

Taarek Hinedi, vice president for the Middle East and Africa of FedEx Express, said that with the rapid changes brought about by technological advances, the region’s logistics industry needs to be at the forefront of digital innovation and new trends to help businesses help adapt to the changing digital demands of transformed sectors.

“Connected logistics is expected to become the industry standard as it enables timely and cost-effective shipment management. For example, GCC governments have ambitious plans to transform their economic base, promote sustainability and leverage their strategic location as a trade hub. In order to achieve these goals, it is important that the logistics sector makes a concerted effort to modernize and digitize,” said Hinedi.

According to Abu Dhabi holding company ADQ, the UAE’s logistics market is expected to grow at a compound annual growth rate (CAGR) of more than 8.4 percent, reaching US$31.4 billion by 2026.

The industry’s rapid growth offers many opportunities and investment prospects to accelerate digital capabilities in the UAE and boost economic competitiveness and sustainable growth in the region, ADQ said in a 2022 white paper.

This growth momentum can be further leveraged to “build a more resilient mobility and logistics sector,” driven by technologies such as “data analytics, automation and digital solutions to increase supply chain productivity, minimize costs and promote transparency,” she added .

According to a recent report by global research firm Technavio, the growth momentum of the logistics market in the UAE will accelerate at a CAGR of 6.84 percent until 2026. The report shows that the growth of the e-commerce sector is having a positive impact on the logistics industry. “As consumers spend less time going to stores and more time shopping online, their first direct interaction with the brand is to have the package delivered to their doorstep,” the report pointed out. “As digital transformation flourishes across the GCC region, change is a constant across all industries and all aspects of life, be it changing consumer needs, advances in technology or shifts in the competitive landscape. The 2022 GCC E-Performance Index highlights the remarkable performance of all GCC countries in five key global indicators; Technology, healthcare, food services, aviation and education are the result of this significant advance in digital transformation,” said Hinedi.

“The e-commerce sector in the GCC countries is expected to continue its upward trend and reach US$50 billion by 2025. However, new consumer demand patterns are emerging, with consumers now seeking convenience in more ways than one. A consumer survey by PWC found that fast and reliable delivery remains the second most important factor in purchasing decisions, after price,” Hinedi added.

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