The Gulf is a bridge between Europe and Asia – logistics will be a big part of its future

The GCC region has the strategic advantage of being a bridge between Europe and Asia with air links and seaports, such as Jebel Ali Port in Dubai, above, that are continually improving their offeringShow more

Quick advancements in technology and supply-chain transformations have led organisations around the world to restructure their operations to increase agility and move with the times. The Gulf region is no exception. And while we have witnessed fast growth in infrastructure to meet the demands of the logistics sectors, there is more that can be done. There are, after all, opportunities to create a significant impact given the Gulf’s location and global business ties.

According to research published by Marmore Mena Intelligence in 2022, industrials and logistics have been identified as core drivers of economic diversification in the Gulf region, which has taken on a pivotal role in the circulation of commodities around the globe. The report also noted that more than 60 per cent of the total expenditure on ports in the Middle East is in the GCC.

The GCC region has the strategic advantage of being a bridge between Europe and Asia, and it offers modern cities that have grown into international business hubs, with both seaports and airports that are continually improving their offerings based on growing demand and interest. Further, governments have been investing heavily in infrastructure and technology to support regional and global trade.

The highly anticipated GCC railway project is moving forward under the leadership of the GCC Rail Authority, a body that was established last year and will be responsible for the rail network starting operations over the coming years.

The region has also made great strides in sustainability and renewable energy, and can grow green logistics, especially with solar power, considering the abundance of sunlight our nations receive.

We must strike while the iron is hot and use our existing and upcoming infrastructures. According to Statista, an online platform that specialises in data gathering, the global logistics industry was valued at $10.4 trillion in 2022 and is expected to grow to $14 trillion in 2028.

Projected industry growth, paired with strategic geographical advantages, and ongoing efforts to improve infrastructure and adapt technologies set the stage for logistics sectors in the GCC to be key drivers for economic growth in the future.

The adoption of artificial intelligence is also increasing within the region, which will no doubt transform the logistics sector through advanced data collection and analyses that will help develop better customer experiences, efficient management of resources, optimal use of resources and automation in warehouses and processes in general.

Logistics is a dynamic area. There are several trends and technological advancements that could redefine the industry and its operations, including cloud-based systems, autonomous vehicles, 3D-printing, real-time tracking and analytics, blockchain, machine learning and robotics.

The world is moving rapidly and in order to keep up and continue to attract foreign direct investment, the GCC region must stay abreast of these trends.

There are many opportunities for aspiring and established entrepreneurs across the region to enter and expand into the logistics sector, actively engage with existing industry players, employ synergistic and innovative approaches, and help the development of the logistics sectors to reach its full potential.

One of the most profitable areas in this industry is third-party logistics, with cost to entry being a significant barrier for entrepreneurs. Regional banks can exploit interest in the area and support entry and expansion into third-party services through incentivised borrowing rates.

Further, governments and leaders in the areas of transport, logistics and technology must collaborate to form cross-border consortiums and strategic international partnerships to enhance the region’s position as a global centre for trade.

The GCC region will also benefit from widespread campaigns that engage with the youth and educate them about the crucial role of the logistics sector in economic development, opportunities for employment, entrepreneurship and mentorship that help pave the path towards growth and stability in coming years.

While the logistics sectors in the GCC have the potential to play an important role in positioning the region as a hub for innovation, we cannot forget that advancements and the adoption of the newest trends and technologies will also support various industries locally. Transport and logistics can be the deciding factors in the success or failure of a business, so they are extremely important areas of focus going forward.

GCC nations have a number of strengths, opportunities and projects in the pipeline that could unlock a new era of economic growth, where the transport and logistics sectors are instrumental in concreting the region’s position as a uniquely equipped, dynamic centre for global trade. Now it is in the hands of citizens, entrepreneurs, industry leaders and governments to remain united in this vision for synergistic results that would lead our nations into a more secure and prosperous future.