United Arab Emirates Third-Party Logistics (3PL) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

United Arab Emirates Third-Party Logistics (3PL) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The size of United Arab Emirates Third-Party Logistics Market is USD 5.86 billion in the current year and is anticipated to register a CAGR of over 9.5% during the forecast period.

• United Arab Emirates (UAE) Third-Party Logistics (3PL) Market was severely affected by COVID-19 as the supply chain was severely disrupted due to lockdowns and restrictions worldwide.
• The government of the UAE is supporting the 3PL and logistics market through various initiatives, policies, and investment benefits to allure the players to invest in the country and extend logistics services to consumers.
• E-commerce has also emerged as a major trend in the country, driving the market. There has been a rise in the volume of sales through e-commerce; local vendors, retailers, wholesalers, as well as manufacturing units, are focusing on online channels to increase their sales.
• Furthermore, the introduction of automated material handling equipment, as well as the growing popularity of GPS-enabled and RFID-based devices, is increasing the demand for logistic services. Furthermore, the UAE government's increasing investments in modernizing existing seaports, distribution centers, free zones, and freight terminals, among other things, are catalyzing the demand for logistic services.
• In line with this, the growing integration of logistics with numerous advanced technologies, such as AI, IoT, blockchain, and so on, is boosting the country's market growth. The growing adoption of technologies for Third-Party Logistics (3PL) logistics services will continue to drive the UAE logistics market growth in the coming years.
• E-commerce has been one of the major driving factors of the Third-Party Logistics (3PL) Market in the UAE. According to Statista data, the UAE's e-commerce spending as a percentage of GDP has increased by 1.10% since 2021, and e-commerce is expected to account for 7.0% of total retail spending in the current year. E-commerce has fundamentally altered the UAE's commercial landscape.
• However, with the various opportunities provided by the UAE government, particularly for startups, this is simple. The UAE government is also undertaking initiatives to promote trade and economic diversification through free trade agreements, changes in foreign ownership rules for certain sectors, and the development of free zones near airports and seaports, to attract foreign investors to set up manufacturing industries in the UAE.

In 2022, the UAE will have the fastest-growing e-commerce industry in the world as global online sales continue to experience a meteoric rise. The Philippines tops Statista's list of the top 10 countries where people are most likely to buy on their mobile devices, with 70% of all e-commerce transactions taking place on a mobile device. South Korea and Argentina are the second and third fastest-growing e-commerce markets in the world, respectively, after the United Arab Emirates. South Korea is ranked third with 66 percent, closely followed by China in second place with 69 percent.

It is obvious why the UAE ranks first in the analysis given that its 1,448,471,400-strong online population is predicted to increase its e-commerce spending by an extra 22.32%. E-commerce spending in the nation has grown by 1.10% since just last year, and by 2022 it will account for 7% of all retail spending. The second and third fastest-expanding e-commerce markets for 2022 are South Korea and Argentina, respectively.

A top official highlighted the accomplishments of the Ministry of Industry and Advanced Technology, stating that the industrial sector of the UAE added over AED180 billion (USD 49 billion) to the country's national GDP and that exports reached AED174 billion (USD 47.37 billion) in 2022. (MoIAT). Over AED 180 billion is expected to have been contributed by the industrial industry. In 2022, MoIAT granted 263 new licenses for industrial production, a 20% increase over 2021, and the national In-Country Value (ICV) program was successful in reinvesting AED 53 billion, a 25% increase, into the economy.

To assess their compatibility with its strategic sectors and estimate the volume of their imports, MoIAT performed a feasibility study for 47 products intended for local manufacturing. To entice prospective investors in high-priority industrial sectors, the results were presented on the Make it in the Emirates platform. Additionally, the platform included several significant statements that provide incentives for manufacturers.

The market is highly competitive and partially fragmented with a large number of local and international players such as DHL Supply Chain, Al Hilal Transporting and Contracting Company and RAK Logistics, actively competing for market share. The technological integration in the logistics sector is high, leading to the increasing dependence of logistics companies on digital players in the market. With the overall logistics infrastructure in the country developing rapidly the competition within the industry is expected to be powered.

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