UAE logistics market to reach $31.4bn by 2026 on e-commerce boost

Acceleration of online sales has triggered shift towards digitalisation in logistics sector, says ADQ report

Cargo containers in Jebel Ali Port in Dubai. The UAE was ranked among the top three logistics centres in emerging markets. Pawan Singh / The National

The UAE’s logistics market is predicted to grow at a compound annual growth rate of more than 8.4 per cent to reach $31.4 billion by 2026, according to Abu Dhabi's holding company ADQ.

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

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, minimise costs and foster transparency”, it added.

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

The Arab world’s second-largest economy ranked third after China and India in the Agility emerging markets logistics index that rates countries for overall competitiveness based on their logistics strengths, business climates and digital readiness.

The Covid-19 pandemic, which led to lockdowns around the world, accelerated the move to digital services as consumers switched to cashless payments and online shopping.

The UAE's e-commerce market is expected to be worth $9.2bn in 2026, up nearly 92 per cent from 2021, as online sales continue to soar in the country, according to a Dubai Chamber of Commerce study.

The study, based on data from Euromonitor, also projected that the share of e-commerce in total retail sales will reach 12.6 per cent by 2026.

The acceleration of e-commerce over the past two years has triggered a shift towards digitalisation in the logistics sector, ADQ said.

It has encouraged logistics companies to “prioritise optimal distribution through automation, internet of things, blockchain and new warehouse management procedures”, it added.

The ADQ paper identified five key drivers to boost the emergence of a data-driven interconnected global logistics network for a more secure supply chain. These include digitised customer interactions, improved operational efficiencies, enhanced data ecosystems, increased door-to-door business and public-private partnerships.

“With improved efficiency and resilience in the supply chain, tomorrow’s logistics industry will protect trade flows and facilitate the rapid movement of goods both consumers and industries rely on,” the paper said.

Established in 2018, ADQ's investments span key sectors, including energy and utilities, food and agriculture, health care and life sciences, and transport and logistics, among others.