UAE transport infrastructure investments has crossed AED100 Billion between 2006-2018. The investments focused on development of rail network, expansion of airports and sea ports, technologically advanced infrastructure such as Hyperloop, active participation in the China's belt which is expected to boost the logistics sector of the economy.
UAE government initiatives to promote trade and economic diversification through EXPO 2020, free trade agreements, change in foreign ownership rule for some sectors and development of free zones near airports and seaports are expected to allure foreign investors to set up manufacturing industries in UAE.
UAE E-Commerce market is expected to grow by 23% annually between 2019 – 2022 because of economic diversification, increasing digitalization, expected rise in manufacturing industries and rising purchasing power of the population in UAE.
Impact of EXPO 2020: UAE government initiative to launch EXPO 2020 is to induce economic diversification in the economy which is targeted to reduce economy's dependence on oil sectors for growth. It is a platform for small and medium enterprises to get investments. It is expected to attract 25+ million visitors in UAE in the first six months from October 2020 and expected to add USD 23.4 Billion between 2015 –2021 and USD 32.94 Billion by 2031 in the economy.
Initiation of Rail Network: UAE government is developing rail network of 1200 km to connect seaports, major transportation hubs, distribution centers, free zone areas, major warehousing areas and freight terminals. Rail development to GCC countries is expected to accelerate the growth of logistics market of UAE due to its strategic geographical position and better connectivity.
Increase in Government Initiatives: UAE Government initiatives such as Dubai IOT strategy, Dubai Block Chain strategy, Introduction of drones for last mile delivery, UAE National AI program, Smart Dubai 2021, Dubai 3D printing Strategy, Dubai Data Initiatives and National Innovation Strategy will revolutionize the logistics and warehousing market of UAE. The growth of the logistics market would rely on the adoption of technologically advanced mechanisms and trained professionals.
Philippines Logistics Market has witnessed an average CAGR during 2014-19 due to favorable laws from CTAP, Investments in Bridges to promote Inter-island transportation through RORO, and development of ports both by the government and with Public-Private Partnerships. The Current logistics cost comprise 27.16 % of sales in the Philippines which is very high in comparison to other SEA countries. The influx of foreign players, increasing consolidation, Green freight policies by the Government, and investing in innovative technologies has stimulated the growth in the market.
Indonesia logistics and warehousing market displayed a consistent growth during the period 2013 to 2018. The growing E-commerce sector and rising demand for express and third-party logistics (3PL) in the country were witnessed to drive the Indonesia logistics market. In addition to this, Indonesia was ranked at 71st position in the LPI index of World Bank in 2016 but moved up to 60th position in 2018, also indicating a positive outlook for the industry. The market has increased owing to high domestic consumption and the efforts of the government to boost infrastructure. The investments in infrastructure and technology have impacted the Indonesia logistics market positively. The government also launched over 15 regulatory reforms to reduce red tape and improve inter-ministerial coordination in the country.
The Chinese Logistics Market was observed to be in growth stage during the period of 2015-2020 owing to the expanding manufacturing & retail sector, increasing disposable income, growing number of investments and increasing value of exports and imports in the country. The China Logistics Industry has grown at a CAGR of 5.4% on the basis of revenue. The market is booming owing to increasing infrastructure investment, rising digital innovations and growing logistic demand in China. The freight forwarding sector is the leading segment towards the revenues of the logistics industry, followed by courier & parcel activities and warehousing. Value Added services also contribute a significant proportion to the overall logistics market in China.
The market showcased a volatile growth trajectory. Dry logistics revenue declined at a CAGR of single digit CAGR during 2015-2019 due to oil price shock further leading to an economic slowdown during 2016-2017 period. Saudi Arabia is located at the crossroads of significant international trade route that connects Asia, Europe and Africa. This strategic location provides the Kingdom with a unique advantage over other nations thus, enabling it to become a leading regional logistics hub. In April of 2016, Saudi Arabia announced its Vision 2030 which includes transforming the Kingdom into a preferred logistics hub. It is making continuous efforts to make imports and exports processes more streamlined. Additionally, government is restructuring the regulations and structures logistics sector government and opening the way for market liberalization and private sector participation. Expansion of industrial cities continues to offer opportunities for foreign investors towards developing the non-oil manufacturing base, warehousing & logistics segments. For instance, Pfizer opened a manufacturing facility in the King Abdullah Economic City in the year 2017. Non-oil manufacturing growth is facilitated by launch of National Industrial Development and Logistics Program (NIDLP) in Jan 2019 by KSA government. Various companies are investing in Special bulk trucks and heavy lift movements to diversify their Revenue streams and Operations. For instance, Bahri launched new dry-bulk carrier 'Sara' & increased their total fleet of dry-bulk carriers to 6 ships in KSA.
Turkey logistics and warehousing market displayed a consistent growth during the period 2013 to 2018. The growth in the automotive exports coupled with rising e-commerce sector was witnessed to drive the Turkey logistics market. The country also has a robust manufacturing sector that contributes to almost 25% of the country's GDP and provides the boost to the logistics industry in Turkey. In addition to this, the implementation of Vision 2023 and Logistics Master Plan 2023 by the government also indicates a positive outlook for the industry. The market has increased owing to high domestic consumption and the efforts of government to boost infrastructure. The investments in infrastructure and technology have impacted Turkey logistics market positively.