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Middle-East and Africa Freight and Logistics Market - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

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  • 120 Pages
  • August 2022
  • Region: Africa
  • Mordor Intelligence
  • ID: 5552644
The Middle-East and African freight and logistics market is estimated to record a CAGR of approximately 6% during the forecast period. During the past decade, globalization and technology created new opportunities for internationalization, boosting the supply chains and competitiveness in Africa. Currently, the most important countries in terms of logistics are Algeria, Angola, the Democratic Republic of Congo, Egypt, Ghana, Kenya, Mozambique, Nigeria, South Africa, and Tanzania. Some of them own key ports in the continent. For example, Barra owns Dande and Lobito in Angola, Lekki in Nigeria, Musoma in Tanzania, and Lamu in Kenya. The political instability of some countries is likely to make territorial integration inappropriate in the short term. Domestic markets are predominant in this zone since there is little interaction among regions, which has led to a stagnation in international trade. 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. 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.

Despite a sustained period of decline over the last few years, affected by a fall in oil prices and geopolitical strife, Middle-East and Africa is fast becoming a region of automotive and supply chain opportunity. Carmakers such as VW, Toyota, GM, Groupe PSA, and Mercedes-Benz are investing in the local assembly, ranging from North African countries, including Morocco, Algeria, and Egypt, to sub-Saharan markets, such as Rwanda, Ethiopia, Kenya, and Ghana. The region also has some notable logistics developments.

Key Market Trends

Development of Logistics Infrastructure

The Middle-East and African region is 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. For airports in Africa and the Middle-East, this presents a stellar opportunity to capitalize on the growth potential and prepare for change, keeping the airlines and consumers at the heart of development and how it serves the national interest.

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. This factor and a favorable regulatory environment and governments, which have understood and harnessed the value of aviation, have led to the development of airport hubs that are catering to some of the largest movements of passenger and cargo traffic globally.

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.

Like their global peers, airports in the Middle-East aspire to overcome project development challenges through effective stakeholder collaboration, capitalizing on digitization, the airport retail revolution, and non-aeronautical opportunities. In addition, they aim to create personalized experiences by offering guests a sense of place with enough capacity. Airport developers in the Middle-East are also striving to achieve green building credentials through international certifications and those developed by national programs while working toward ACI carbon accreditation.

E-commerce Driving the Logistics Industry

Digital adoption in MENA has not followed the path typically seen in other markets. As consumers move online, businesses usually follow suit, enabling a gradual development of the digital ecosystem in areas such as media and e-commerce. The MENA region’s experience has been different.

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.

Competitive Landscape

The Middle-East and African freight and logistics market is fragmented, with the presence of international and local players. The market is dominated by major international players like DHL, FedEx, and UPS. The market is expected to grow during the forecast period due to growing e-commerce and growing infrastructure in the region.

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Table of Contents

1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
4.1 Market Overview
4.2 Market Drivers
4.3 Market Restraints
4.4 Value Chain/Supply Chain Analysis
4.5 Porter's Five Forces Analysis
4.5.1 Threat of New Entrants
4.5.2 Bargaining Power of Buyers/Consumers
4.5.3 Bargaining Power of Suppliers
4.5.4 Threat of Substitute Products
4.5.5 Intensity of Competitive Rivalry
4.6 Impact of COVID-19 on the market
5.1 By Function
5.1.1 Freight Transport Road Water Air Rail
5.1.2 Freight Forwarding
5.1.3 Warehousing
5.1.4 Value-added Services and Other Functions
5.2 By End User
5.2.1 Manufacturing and Automotive
5.2.2 Oil and Gas, Mining, and Quarrying
5.2.3 Agriculture, Fishing, and Forestry
5.2.4 Construction
5.2.5 Distributive Trade (Wholesale and Retail Segments - FMCG Included)
5.2.6 Other End Users (Telecommunications and Pharmaceuticals)
5.3 By Country
5.3.1 United Arab Emirates
5.3.2 Saudi Arabia
5.3.3 Qatar
5.3.4 South Africa
5.3.5 Egypt
5.3.6 Morocco
5.3.7 Nigeria
5.3.8 Rest of Middle-East and Africa
6.1 Overview (Market Concentration and Major Players)
6.2 Company Profiles
6.2.1 DHL
6.2.2 FedEx
6.2.3 Kuehne + Nagel
6.2.4 United Parcel Service Inc.
6.2.5 RAK Logistics
6.2.6 Al-Futtaim Logistics
6.2.7 Agility Logistics
6.2.8 Saudi Transport & Investment Co. (Mubarrad)
6.2.9 Almajdouie Group
6.2.10 Ceva Logistics
6.2.11 Gulf Agency Company (GAC)
6.2.12 International Freight Group*

Companies Mentioned

A selection of companies mentioned in this report includes:

  • DHL
  • FedEx
  • Kuehne + Nagel
  • United Parcel Service Inc.
  • RAK Logistics
  • Al-Futtaim Logistics
  • Agility Logistics
  • Saudi Transport & Investment Co. (Mubarrad)
  • Almajdouie Group
  • Ceva Logistics
  • Gulf Agency Company (GAC)
  • International Freight Group*