Iraq Freight and Logistics Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

Iraq Freight and Logistics Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The size of the Iraq freight and logistics market is estimated around USD 4.64 billion in the current year and is anticipated to register a CAGR of over 4.5% during the forecast period.

• The Transport Ministry and the Construction & Housing Ministry are both in charge of managing Iraq's transportation infrastructure. The Transport Ministry is responsible for the port, railroad, and airport infrastructure, while the Construction & Housing Ministry is in charge of the road network. Coordination between two ministries is required to create an integrated transport infrastructure, which would be a challenging task even without the additional complexity of differing political allegiances between the heads of various sectors of both organizations.
• The Construction & Housing Ministry is aware that a national transportation strategy should be integrated with network enhancements for the roads. Both a significant rural dirt road network and more than 44,000 kilometers of paved motorways can be found in Iraq. The principal surface transportation links connecting Iraq to its neighbours are the highway and bridge systems. An efficient road system encourages domestic trade while supporting tourists and connecting the nation's population centres to key services.
• As Iraqi Airways continues to maintain its elderly fleet, the country's civil aviation industry is advancing toward ICAS compliance. The goal of the Iraqi Civil Aviation Authority (ICAA) is to develop an organisation of aviation professionals committed to excellence on the ground and in the air that is results-based and value-driven. To provide a competitive alternative to other Middle Eastern ports and even the Suez Canal, Iraq's grandiose plans for its future mega-port would rely on overload transhipment to Turkey, which would be provided by state-owned Iraqi Republic Railways (IRR).
• The Italian engineering services firm PEG is anticipated to provide feasibility studies and drawings for the "dry canal," a network of roads and rail lines connecting the new port with Turkey, by the end of this year, according to the Iraqi transport ministry. On the southernmost tip of Iraq's al-Faw peninsula, where the Shatt al-Arab waterway empties into the Persian Gulf, there has long been talking of building a massive port.

Iraq's e-commerce sector has grown rapidly in recent years. The industry has evolved from a niche dominated by technologically savvy individuals to a mainstream service for the average Iraqi consumer. According to a Think Bank Iraq survey, 57% of Iraqi internet users shopped online at least once. This has increased interest from Iraqi industry leaders and investors, with e-commerce platforms such as Miswag securing millions in funding rounds and Orisdi securing funding and partnership deals with Iraq's largest private TV network, Al Sharqiya. As Iraqi entrepreneurs and visionaries push the boundaries and bring new ideas and innovation to the country, e-commerce services can be expected to play a more significant role in Iraq's retail and logistics sectors.

The World Trade Organization (WTO) defines e-commerce as "the electronic production, distribution, marketing, sales, or delivery of goods and services." In 2021, 75% of the Iraqi population had internet access, and 61.4% used social media platforms. The internet made it possible to communicate with retailers from any location and at any time. This created a demand for retailers to adapt to the constantly changing needs of the Iraqi customer, who went from being limited to a few items at specific shops to a variety of brands not limited by Iraq's borders.

The Iraqi e-commerce market is expanding, with an expected revenue of USD 3.815 billion in 2021, as per Statista. This study aims to discover the 'path to purchase among Iraqi consumers, from product discovery to online search, to ordering and providing feedback. According to industry experts, more than three-quarters (79.35%) of respondents have shopped online in the last three months, with 61.22% placing 1-3 orders and spend between USD 50 and USD 100. When it comes to Iraqis shopping online, such figures show high demand and promising prospects.

China's Belt and Road Initiative (BRI), launched in 2013, is divided into two parts: the "Silk Road Economic Belt" (SREB), which connects Central Asia, Iran, Turkey, and eventually Europe, and the "Maritime Silk Road" (MSR), which begins in the South China Sea and extends through the Malacca Strait, the Indian Ocean, the Red Sea, and the Mediterranean Sea. BRI policy goals include improving communication between governments, implementing hard and soft infrastructure, strengthening cultural ties through academic exchanges, tourism, and other activities, and promoting regional cooperation and integration. Hard infrastructure entails the construction of transportation and logistics hubs, ports, energy plants, refineries, and power grids, among other things. Soft infrastructure refers to the development of regulatory standards, trade agreements, and so on.

Iraq received the most construction-related investment in the West Asian region in 2021, with USD 10.5 billion for financing a variety of projects ranging from energy and aviation infrastructure to green energy capabilities to the road and school construction. The purpose of this commentary is to investigate China's investment in Iraq and the goals of its intensive engagement with the Arab state. It would also try to identify the issues with BRI-related engagement in Iraq.

The freight and logistics market in Iraq is fragmented, with a mix of international and local companies. Among the country's major players are Al-Rashed United Shipping Services, Guangzhou International, Zarawa Company, Move One Logistics, Crown Logistics Ltd., and many more. International players are investing in the infrastructure of the country to strengthen international freight as well as logistics within the country. Startups are emerging in the country providing technical support and innovative solutions to logisitcs firms.

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support