Logistics Business After COVID-19 in Dubai

25 Nov 2021   |  UAE

As the Middle East's gateway to the Arab, Asian, and African markets, Dubai's transportation and logistics industry has been receiving the gratitude of investments for its infrastructure and technology development.

Albeit the COVID-19 pandemic slowed several activities and posed challenges to most companies during the outbreak, corporate players and small businesses in the domain have rerouted their strategy to cope with the current situation.

UAE Logistic Challenges

UAE Logistic Challenges

Large players such as the MENA DHL Express released measures to navigate the global supply chain crisis by ensuring seamless delivery services despite the closing of airports and borders.

The contingency plan used was to integrate the company's global chains to continue operations and adapt to the condition by repurposing fleet capacities and reengineering operations.

As a result, the MENA DHL Express relied heavily on their freighter aircraft. It increased its flight frequencies, catering to the spike of e-commerce demand directly affecting the rising traffic of logistics.

The top regional players such as Emirates SkyCargo also similarly dedicated their freighter aircraft to cater to the logistics demand, delivering urgently required goods critical for the COVID-19 prevention and care approaches.

Aside from aircraft logistics players, FAMCO, HINO, and Toyota Material Handling also put extra measures to remain agile during volatile times. The aforementioned companies have put more people on mobile services vans to ensure the consumers were facilitated timely. Road-based logistics have been extremely pressured to cater to the demand from critical sectors such as FMCG and water distribution industries.

Digitization of UAE Logistics Market

The rising emergence of digitalization in Dubai's logistics industry has pushed the growth of logistics startups; among them was a digital freight forwarder called Qafila, one of the country's first digital freight forwarding service providers.

Qafila's success during the pandemic is a result of UAE's stimulus initiatives to ease vendors and suppliers to recover. Additionally, the UAE's free zones, such as DAFZA and JAFZA, also bring incentives for logistics businesses to operate during the global crisis.

The UAE's decision to remain its border open for businesses to capitalize on opportunities during the pandemic has since played a vital part in strengthening its competitive position as the global trade hub, encouraging investments in Dubai's multisector, including logistics as one of the highlighted dimensions.

As a result, the COVID-19 pandemic has brought more catalyzing benefits for logistics companies than downsides, boosting an exponential growth in the global shopping habit through e-commerce.

As the pandemic gradually eases, Dubai continues to invite companies looking to leverage the region's logistics infrastructure and provide technological advances to the landscape. The country is facilitating sandboxes for tech-enabled startups in the logistics industry to test drive their innovations and find the right network to bootstrap their business operations before going live.

The primary focus for technological enhancements in logistics companies involve greater automation through GPS tracking and tracing, online transaction system, warehouse software systems, and transportation management innovation revolving around robotics and drones.

Hopefully, the business sandboxes would introduce more digital startups in the logistics industry, eventually positioning Dubai as the preferred logistics hub across the MENA region.

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