Middle East logistics sector leaves the rest trailing

Based on an analysis by one of the world's top consultants, the Deutsche Post World Net subsidiary (DPWN) confidently announced that growth in the Middle East's share of the US$100 billion global market would outpace the rest of the world's.

The positive message was delivered at the beginning of the week during the IIR Supply Chain and Logistics Forum in Dubai by Duncan Watson, Regional Sales Director for DHL Middle East. In making his forecast Mr. Watson drew on a comprehensive analysis of the market DHL commissioned. He said: 'Although the Middle East's share of the global market is estimated to be quite low, it is growing significantly faster than in the rest of the world.

'This growth is being driven by a number of factors. Increased regional infrastructure investment on the back of higher oil revenues has boosted economic growth. Many companies, in their efforts to become regionally and globally competitive, are now looking aggressively at optimising their supply chains.

'We recently completed a detailed analysis of the Middle East logistics market, and the research indicates that a significant proportion remains in-sourced. This represents a huge opportunity for end-to-end logistics service providers such as DHL. In the past suppliers would show their commitment to their customers by showing them how well stocked their warehouses were. Today, the emphasis has shifted from how much is in the warehouse to how quickly and reliably it will be available to the end user.'

Mr. Watson believes the recent announcement of the expansion of the world-class multi-modal logistics centre in Jebel Ali Free Zone and the creation of an airport there will create the capacity to absorb a large proportion of this growth. However, the UAE is not alone in gearing up for this growth. Qatar has just announced a US$7 billion airport expansion, and Bahrain and Lebanon have also declared their intention to expand their logistics handling facilities.

With all of the new opportunities being created by this growth, it is inevitable that new players will be drawn into the regional logistics market, which could lead structural changes to the market. Mr. Watson said: 'We may see collaborative partnerships between the existing participants in the market to take advantage of clients' growing needs for a complete suite of logistics solutions.'

He added: 'The logistics industry in the Middle East is going places. In this region we currently have the most dynamic and exciting logistics market to work in.'