From its infrastructure that includes world-class roads, ports and airports to its central location, free trade policies and more—Dubai has emerged as a leading hub for trade and logistics
Geographically, Dubai’s location—a prime spot between the East and West—makes it a favourable site to connect and service the two corners of the world by road, air and sea. Besides that, its logistics facilities and infrastructure coupled with low costs, free-trade policies and agreements, and increasing investments and trade links, make the city a profitable gateway for entities. In fact, the logistics industry is said to contribute to about 14 per cent of UAE’s GDP and this figure is only expected to increase over time.
Eye on infrastructure
Its interlinked highways that connect Dubai locally and to other countries, and its airports to seaports, make transporting goods a fast, profitable and efficient process here. The city’s road network includes a customs bonded road between Jebel Ali Port and Dubai World Central that covers the Al Maktoum International Airport.
In fact, the Jebel Ali Port is the largest port in the Middle East and the 10th largest port in the world. It has the capacity to handle 19.3 million TEU and serves key markets like the Indian subcontinent, Africa and the Gulf. Many companies have set up their base here to cater to the Middle East market by leveraging the connectivity provided by Jebel Ali Port.
The port is operated by logistics company DP World, which is credited with moving about 10 per cent of global trade. By applying the latest in technology and innovations, the company offers global supply chain solutions for port-centric and cargo logistics, maritime services and marinas and free trade zones. The company has also invested in Hyperloop technology, a super-fast cargo system that will help in the seamless and efficient movement of goods. DP World’s port at Jebel Ali offers logistical access to the Middle East, African and South Asia (MEASA) region and has helped establish the city as a hub for re-exports. It easily integrates into the free zone and customs bonded road, rail and air infrastructure for further connectivity.
Dubai is also considered to be a leading shipping hub. This is relevant given that in the maritime industry, container logistics and dry bulk cargo handling are rapidly growing segments, and the government is investing significantly to boost this development.
The emirate is also developing free zones to improve its logistics services and offerings. One example of this is the Jebel Ali Free Zone (Jafza), which is considered a logistics hub with a total space of 3.85 million sq. m. that includes warehouse space (92,100 sq. m.) and office space (2,300 sq. m.). Its unique sea-land-air logistics corridor in a single customs bonded area helps to fasten the movement of cargo from sea to air without any customs checks. Maersk Kanoo UAE recently inaugurated its first Integrated Logistics Centre in Jafza whilst DHL launched the region’s first electric vehicle (EV) and battery logistics hub here.
Passport to trade
A key initiative that is reinforcing Dubai’s position as a hub for logistics and trade is the World Logistics Passport (WLP). A first-of-its-kind inclusive freight loyalty programme under the Dubai Silk Road strategy, it will remove trade barriers, and enhance existing trade routes and create new ones whilst strengthening global supply chains—all in a bid to improve and facilitate trade between countries. It offers various operational and financial advantages and benefits like fast-tracking cargo movement to advancing cargo information and reducing administrative costs. Covering the expanse of the entire trade network—from logistics to freight and trade finance—and connecting governments to service providers, it is opening doors to more trading opportunities between emerging markets. It is also easing the movement of goods between various countries and manufacturing hubs around the world thereby saving cost and time. Thanks to this programme, partner countries can avail DP World’s existing global network comprising ports and economic parks along with Emirate Group’s global Dnata and SkyCargo networks.
Dubai International Airport is one of the busiest airports in the world connecting the city to about 240 destinations worldwide. Dubai World Central (DWC) in the south of the city is set to become the airport of the future; once completed, it will have the capacity to handle more than 160 million passengers and 12 million tonnes of cargo annually. Dubai also boasts of the airfreight division of the Emirates Group, Emirates SkyCargo, which is the world’s largest cargo airline. It flies to about 50 dedicated freight locations and transports essential supplies, thereby facilitating global trade through its multi-airport hub, Emirates SkyCentral, in Dubai.
With increasing investments in infrastructure, rail development and expansion coupled with FDI, the logistics industry is expected to keep pace with the expanding trade opportunities. The demand for raw materials is likely to grow thereby boosting the need for logistics and warehousing needs.
Disclaimer: This article is a part of featured content series on Business in Dubai