A new market research report titled “Middle East and Africa Freight and Logistics Market – (2023 – 2028) by Mordor Intelligence expects the market to register a CAGR of 6% in the next half-decade.
The economy is highly dependent on mining, which represents a third of the GDP. Morocco is a stable partner. Meanwhile, Egypt and Algeria have the highest production values. However, they are known for their little international interaction and lack of developed logistics corridors, notes the report.
African logistics companies are going beyond megacities and are looking to connect Africa’s rural communities to regional supply chains. While megacities are attracting millions of young Africans, Africa’s population remains predominantly rural.
Some of the trends driving the growth of the Middle East and Africa Freight and Logistics Market:
- The Middle East and African region are projected to grow significantly, with the Middle East witnessing significant growth annually in terms of air transport.
- Cargo volumes are estimated to double in most countries of the region. At such levels, several challenges and opportunities arise.
- In the Middle East, the vast number of significant airport capital expansion programs are led by demand coming from the growth of domiciled carriers.
- However, there is also geographic proximity to major source markets, such as the Indian subcontinent and intercontinental traffic flows and the MENA regional travel.
- Airports in the Gulf have led this trend, with Dubai, Abu Dhabi, Bahrain, Doha, Muscat, and Jeddah investing billions of dollars in infrastructure and focusing on improving the passenger experience.
This investment is due to the close symbiotic relationships the airports have with domiciled carriers such as Emirates Airlines, Etihad Airways, Qatar Airways, and Saudi Arabian Airlines, which enable most stakeholders in the value chain to work together and develop an end-to-end experience, serving the industry and the respective local economies.
E-commerce is driving the logistics industry:
The e-commerce industry across the Middle East is growing rapidly due to the high levels of internet penetration and the rising GDP of many countries, including Bahrain and Saudi Arabia.
While many of the Middle East’s imports have historically come from China, an increasing number of shoppers in the region are also buying from different markets. Across the Middle East, Amazon and eBay are used just as frequently (and sometimes more) as the local sites, such as Cobone, Souq, and Sukar.
The purchasing power of the Middle Eastern region comes largely from an extremely young population. In Saudi Arabia, over 55% of the population is under 30 years. Young, digital-savvy shoppers are driving smartphone use in the region to over 65% and internet penetration to over 90% in the United Arab Emirates, Bahrain, and Qatar. As a result, e-commerce is growing steadily.
