Maersk to double UAE operational capacity with new distribution complex in Dubai South

The location was chosen due to its proximity to Al Maktoum International Airport and Jebel Ali port

Christopher Cook, managing director of Maersk UAE, and Mohsen Ahmad, chief executive of Dubai South's Logistics District, at the signing of the agreement. Photo: Maersk

Maersk Kanoo UAE, a unit of the world's second-largest container line, has signed an agreement with Dubai South to open a new warehousing and distribution complex that will double its operational capacity in the Emirates.

The location of the new 15,000-square-metre Maersk Integrated Logistics Centre DWC was chosen due to its proximity to Al Maktoum International Airport and Jebel Ali port, Maersk said on Thursday.

The complex, which is Maersk's second in the UAE after the opening of a 10,000-square-metre facility at Jebel Ali Free Zone earlier this year, will be operational later this month, the company said, without disclosing the value of the project.

Dubai South will “spare no effort” to reinforce the emirate's status as a global trade and logistics centre, said Mohsen Ahmad, chief executive of Dubai South's Logistics District.

“Our mandate at Dubai South is to attract top international players to the Logistics District, with the aim of boosting the sector and diversifying the emirate’s economy, in line with various government initiatives and strategies,” he said.

The UAE's logistics and warehousing sector is a crucial component of its economy, as the nation is a major centre for large trade flows.

The Emirates' non-oil trade surged 17 per cent annually to about Dh1.05 trillion ($286.73 billion) in the first half of 2022 — the first time it exceeded Dh1tn, according to government data released last month.

The UAE was ranked among the top three logistics centres in emerging markets, behind China and India, as the country continues to boost its digital infrastructure and develop its business environment, according to a survey by logistics company Agility.

The country connects Asia to Africa and Europe, making it an attractive destination for investment in the sector.

In June, Amazon opened its largest delivery station in Abu Dhabi. The 4,700-square-metre centre — the company's second-largest in the UAE — provides same-day and one-day delivery services to its customers in the capital.

Maersk said the Dubai South complex will allow the Copenhagen-based company to operate a hybrid model of a bonded and non-bonded warehouse, or storage spaces, where duty on goods has not been paid or has been paid, respectively.

It will also act as a fulfilment centre for end-to-end e-commerce solutions, which would cater to the rapidly-expanding industry in the country.

The UAE's e-commerce sector is forecast to grow 60 per cent to more than $8bn by 2025 from 2021, according to Euromonitor International.

The Maersk complex will also support the company's existing services, including ocean shipping, landside transport and customs clearance, the company said.

“This will allow us to further build on our air-sea hub operation, which has become increasingly important, while also satisfying the right balance between speed and cost with tremendous flexibility,” said Christopher Cook, managing director of Maersk UAE.

Spanning 145 square kilometres, Dubai South is the emirate's largest single urban master development, which is being built upon an aviation and logistics ecosystem, complemented by multi-modal air, land and sea transport infrastructure.

Maersk's new development in the UAE is its latest investment in the region. In November, the company, announced plans to invest $136m in an integrated logistics park at Saudi Arabia's Jeddah Islamic Port over a 25-year period to help the kingdom to boost its exports.