Logistics Industry Analysis

Topics: United Arab Emirates, Logistics, Supply chain management Pages: 7 (2503 words) Published: April 11, 2013
This report will analyze the Supply Chain and Logistics Industry in the United Arab Emirates during the last five years. The tools and techniques used for this analysis shall be PESTEL and PORTER’S 5 forces. Further this report shall discuss about the Industry type based on the competition existing in the market and its current phase in the Industry cycle. This report shall be considering the Industrial study conducted by major players in the Supply Chain and Logistics Industry in UAE and Logistics Reports issued by various government departments and other Logistics companies existing in the market, to discuss the critical success factors and identify the strategic groups existing. Industry Sector:

Supply Chain and Logistics industry plays a crucial role in a country’s foreign competiveness due to the increase in globalization. This service sector can be divided to 5 sub-sectors: * Air and express delivery services: Firms offer time sensitive door-to-door services of packages ranging from documents to valuables. * Freight rail: Large quantities of huge cargos and other products are transported over long/short distances via rail networks. * Trucking: Road transportation of cargo provided by motor vehicles over short/long distances. * Maritime: Terminals, carriers and transportation of cargo and passengers via water bodies. * Logistics services: Management of to and fro transportation, warehouse storage, logistics network design, procurement, support services etc. Supply Chain and Logistics industry in the GCC has shown tremendous improvement in the past 5 years. The revenue from Supply Chain and Logistics industries show an abrupt rise from $ 18 billion in 2008 to $ 26.9 billion in 2012 as projected by the industry experts from various MNC’s such as Frost & Sullivan, of which $ 9 billion was contributed by the United Arab Emirates. United Arab Emirates is one among the rising stars in the global logistics market and among the GCC countries due to its prime geographical location and immense government involvement to improve the infrastructure in the country. Dubai being the Logistics hub of UAE has the Jebal Ali Port and Free zone under DP world, which is among the top 10 container ports worldwide. Almost 75% of the trade movements in UAE are through Dubai. PESTEL ANALYSIS

PESTEL is used to analyze all those forces in macro environment which influence strategies. It considers the Political, Economic, Social, Technological, Environmental and Legal factors. It helps to be in line with the forces of change while setting your strategies. PESTEL analysis in this context will help us understand the main factors that drive the Supply chain and logistics industry in the UAE. Political:

Dubai being the logistic hub and business centre of UAE, has framed policies favoring the growth in the industry. Its low logistical and operational cost clubbed with outstanding infrastructure, international outlook and liberal government policies have attracted investors in a considerable way. Dubai also has one of the lowest average logistics cost in the world. DP world, the leading container port operator in the region, introduces strong international growth strategies continuously to meet the needs of the growing economy. Supply Chain & Logistics Group is a major initiative by the Dubai Chamber of Commerce and Industry, to promote the cause of the mentioned in the economy. SCMG is a non-profit organization at its 8th year that offers education, training, seminars and networking events for the industrial professionals and corporations on a global basis. Economic:

UAE economy is one among the fastest economies in the world. The UAE government announced their strategy for the upcoming years in 2007. This outlines the activities and ambitions of the future, where the UAE government has their major focus in promoting the logistics sector, e.g. Abu Dhabi Economic Vision 2030 and Dubai Strategy Plan 2015....
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