Third-party logistics revenue in the Middle East 2017

This statistic illustrates the market size of third-party logistics (3PL) in the Middle East between 2013 and 2017. In 2017, the Middle Eastern third-party logistics market generated revenue to the value of 42.2 billion US dollars.

Global overview of logistics and automation

In recent years, logistics and warehousing processes all over the world have been experiencing fundamental changes. Innovative solutions and smart technologies are being implemented to improve supply chain integration. The warehouse automation market reached about 15 billion U.S. dollars in 2019 with expectations to double in size to above 30 billion U.S. dollars by 2026. The increasing demand by e-commerce and e-retail by shoppers after the COVID-19 pandemic in 2020 serves as a great opportunity to invest in developing the logistics market. The importance of warehousing operations during those times encouraged a focus on automation of logistics. Automation of warehouses increases efficiency and profitability while solving barriers such as labor costs and shortages. The number of logistics robots is expected to increase from 75 thousand in 2019 to almost 260 thousand by 2023. Warehouse cloud computing and storage technology had the highest global adoption rate, while inventory and network optimization tools were expected to have the highest adoption rate by supply chain firms during the next two years.

MENA logistics and automation

The current transformations in the logistics sector in the Middle East and North Africa (MENA) region aim to increase productivity and cost-efficiency. The food producer Almarai in Saudi Arabia reached an agreement to automate its distribution logistics. While in the United Arab Emirates (UAE), Dubai Customs launched an awareness campaign about the importance of smart warehouse management systems (WMS) to more than 21 thousand companies. The warehouse automation market in the region was expected to reach a value of 1.6 billion U.S. dollars by 2025. The growth in e-commerce is the main driver for warehouse automation. More than 40 percent of respondents in a survey in Saudi Arabia and UAE stated that fast delivery is one of the main factors influencing their choice of online shopping platforms. Warehouse automation helps speed up tasks such as order fulfillment, packaging, and shipping processes. However, until post the COVID-19 pandemic in 2020, warehouse automation levels remained relatively low. In Saudi Arabia, warehouses were automated only up to 25 percent. This leaves a huge future potential investment opportunity for the region.