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UAE Logistics Expected to be Driven by Freight Forwarding and Warehousing Segments: Ken Research
Highlights
Freight Forwarding Market has dominated the overall logistics market of UAE over the past five years. It has accounted for a majority revenue share throughout the period 2009-2014. The freight forwarding industry has witnessed the surfacing of a number of players, both national as well as global, in the recent years.
New Delhi: Freight Forwarding Market has dominated the overall logistics market of UAE over the past five years. It has accounted for a majority revenue share throughout the period 2009-2014. The freight forwarding industry has witnessed the surfacing of a number of players, both national as well as global, in the recent years.
GAC has been the market’s leader and has accounted for a substantial share in the overall freight forwarding revenues during 2014. Other major players include Danzas AEI, Aramex and Panalpina. UAE freight forwarding market has grown at a CAGR of 9% over the period 2009-2014.
Warehousing has been the second biggest segment in the services mix of UAE logistics market over the period 2009-2014. The share of warehousing in the overall service mix has increased from 2009 to 16% in 2014. Continual investment by the government in development of logistics infrastructure including completion of Dubai Maritime City in 2012 supported by entry of several global players in the market have been the main reasons behind the increase in the share of the warehousing segment over the past five years.
Logistic hubs such as Kizad Logistics Park, Dubai Logistics City and others have attracted investments from several global and domestic players. Numerous companies including Aramex, Agility, Keuhne+Nagel and many others have opened their warehouses in these locations over the period 2009-2014. On the other hand, value added services such as packaging, sorting and others have accounted for a minute share in the UAE logistics market in 2014. Small and low cost nature of these services has justified its minimal share in the overall logistics market over the period 2009-2014.
Industrial/Retail has been the biggest contributor towards the warehousing industry of the revenue attributed towards it during 2014. CFS/ICD warehousing has been the second biggest segment in the warehousing industry. Cold storage completes this warehousing segmentation with the contribution of 26% towards the total revenue of the industry in 2014.
There has been continual incline in rental rates of warehouses in UAE owing to a general shortage of quality supply over the period 2009-2014. Demand for quality warehousing has been outstripping supply over the past five years.
In short term outlook (2015-2017), the warehousing market is projected to grow at a fast rate due investments by various global and domestic companies in Dubai Logistics City. Innovation in warehousing technology and entry of numerous new international and domestic players will drive down the utility cost of warehousing which would further enhance the market revenues in the long term outlook.
The report titled “UAE Logistics Market Outlook to 2019” provides detailed overview on the Logistics Market and helps readers to identify the ongoing trends in the industry and anticipated growth in future depending upon changing industry dynamics in coming years. The report will help industry consultants, logistics and freight forwarding companies and other stakeholders to align their market centric strategies according to ongoing and expected trends in the future.
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