Agility bullish on the growth of the logistics sector in the Gulf region

The UAE and Saudi Arabia are ranked among the 10 most attractive emerging markets for logistics firms, according to Agility

Container ships at Jebel Ali Port. The UAE and Saudi Arabia are among the 10 most attractive emerging markets for logistics firms. AP

Kuwait-based Agility is bullish on the growth of the logistics sector in the Gulf region, which could benefit from rising cross-border trade, investment in infrastructure and a booming e-commerce sector.

“Gulf countries are pushing hard to diversify and integrate their economies by developing world-class infrastructure and creating fair, transparent conditions for business,” said Elias Monem, Agility Global Integrated Logistics chief executive for the Middle East & Africa.

“Good infrastructure and stable business conditions are areas of huge competitive advantage for the Gulf region. They will be key to recovering from the economic downturn brought on by the pandemic.”

The logistics sector was heavily impacted by the coronavirus pandemic, which disrupted trade and supply chains when it started spreading rampantly last year. But the industry has gradually emerged from its pandemic-induced troubles.

Regionally, major infrastructure projects like Etihad Rail that is currently underway in the UAE could help to improve domestic logistics opportunities, Agility said in a report.

The network, which connects Jebel Ali Port, Khalifa Port and the Port of Fujairah to industrial hubs in Abu Dhabi, Dubai and Ras Al Khaimah, could see as much as 60 million tonnes of freight move from sea and road to the rail network annually, the report said.

Other factors that could help the growth of the logistics industry in the region include cross-border trade reforms and an “explosive growth of the e-commerce market in the GCC”.

“E-commerce will reshape which businesses trade across borders, including creating new opportunities for small and medium enterprises, along with trade flows, warehouse demand in the region, and last mile delivery opportunities,” Mariam Al Foudery, group chief marketing officer of Agility, said.

The e-commerce sector has witnessed sharp growth in the last year as governments introduced movement restrictions to contain the spread of the coronavirus pandemic.

Trade facilitation reforms, including customs digitisation measures have the “potential to facilitate cross-border commerce, simplify and standardise the requirements of movement of goods between the countries", she said.

Agility on Tuesday also released the 12th edition of its Emerging Markets Logistics Index, which is compiled by research company Transport Intelligence.

The index ranks 50 countries across emerging markets based on their attractiveness to logistics companies, shipping lines, air freight carriers and distributors. It is based on a survey of 1,200 top industry executives and takes into account three sub-indices: business fundamentals; domestic logistics; and international logistics.

China, India and Indonesia topped the Index, while the UAE, Saudi Arabia and Qatar were ranked among the top 10.

In the area of business fundamentals, the UAE was ranked number 1 followed by Saudi Arabia at 3, Qatar at 4, Bahrain at 7, Oman at 8 and Kuwait at 11. China, India and Indonesia ranked the highest for domestic logistics, while China, India and Mexico are the top countries for international logistics.

Agility, listed on the Kuwait stock exchange as well as on the Dubai Financial Market, is a global logistics company with $5.2 billion in annual revenue.