Outlook: UAE, GCC logistics industry set to rebound after pandemic downturn

      Published on Friday, 1 January , 2021      651 Views     
Outlook: UAE, GCC logistics industry set to rebound after pandemic downturn

The logistics industry in the UAE and in other parts of the Gulf Cooperation Council (GCC) region has weathered the coronavirus pandemic well and is poised to return to positive growth path in the later part of 2021,

an industry source has said.

“I believe that the industry is about to boom. Even if you consider the vaccine distribution which will be [a] one-of-its-kind challenge and [requires] massive coordinated effort for the logistics industry. We estimate that it would take until Q3 2021 for the industry to reach where it was in 2019,” said Janardan Dalmia, founder and CEO of Trukkin, a techno-logistics company that caters to the transportation needs in the logistics sector.

Companies in the logistics sector, which are considered an important part of global value chains, went through a very rough patch during the early months of the outbreak.

The global lockdowns, quarantine requirements and other strict precautionary measures made it very challenging for logistics companies to ensure goods are delivered to customers on time. Cargoes were backlogged at container ports, manufacturers didn’t get the components and materials that they need, and ultimately, shelves were not restocked in a timely manner.

“As with any industry, the logistics industry in the GCC and the UAE region also went through some turbulence during the peak pandemic months,“ said Dalmia.

“Unexpected and sudden shutdowns that inhibit movement, restrictions on the movement of certain goods and overnight changes to policies of governments in their efforts to control the pandemic were the major challenges faced by the industry,” Dalmia told.

“Another challenge was the inability of people to be at work, and at the same time, it was important for us to ensure that we keep the supply of essential goods running to keep shelves stocked and that manufacturers are not hit with losses due to disruptions in their own supply chain requirements,” he added.

Highly resilient

Several months into the pandemic and the industry is already bouncing back from the slump, as consumption has picked up following the reopening of economies around the world.

“The logistics industry has proven itself to be highly resilient and important during the pandemic and is already showing signs of recovery,” said Dalmia.

“In general, most of the transportation industry is highly reliant on shippers. This makes the growth of the logistics and transportation industry dependent on the recovery of other industry verticals,” he said.

However, while the market is anticipated to grow at a compound annual growth rate (CAGR) of 5 percent until 2024, Dalmia said, “much relies on the growth and health of the industry in the region”.

“I think we are about to turn the corner on the COVID situation in the next three to four months with positive updates coming about the availability of vaccines.”

Headquartered in Dubai, Trukkin provides a platform that makes it easier for players in the logistics industry, including transporters, shippers, brokers and truck drivers, to operate.

While the industry is showing signs of recovery, it is expected to encounter some challenges.

We believe that the industry is heading towards a growth phase, but the growth path will be turbulent. With cases in our region now stabilising, governments are pegging their hopes on a vaccine and so are we. Although we think that this disease will never really go away completely and sporadic cases might spring up here or there, just like they do in the case of the Ebola virus, but it will largely be contained by Q3 2021 and the world will move on to a better tomorrow.

How to weather the crisis

When asked what it takes for companies to survive life-changing events like COVID-19, Dalmia said that adaptability, efficiency and a reliance on technology can help companies steer growth.

“As we did at Trukkin, our key survival was our adaptability and business continuity planning built into our vision that helped us succeed, persevere and even witness growth in the pandemic. It reiterated the beauty of our business model, complemented with scalability.”

“We were not shy of being agile and switching and adapting as per the market needs. Planning, adapting and accepting technology as an enabler are the three main pillars that can help a business survive,” said Dalmia.

(Reporting by Cleofe Maceda

Category Business, Gulf News | 2021/01/01 latest update at 1:00 PM
Source : Zawya | Photocredit : Google
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