Doha: The Qatar Investment Promotion Agency (IPA) and the Qatar Free Zones Authority (QFZ) asserted Qatar’s prestigious position in the global logistics sector, which had a market value of USD 10.41 trillion in 2023 and is expected to rise to more than USD 18 trillion by 2030, reflecting its importance and enormous growth potential.
In a joint article, the IPA and QFZ shed light on the initiatives undertaken by Qatar to enhance its lead in the global logistics services sector, particularly its efforts to integrate artificial intelligence. They also highlighted the global status of this vital sector and the opportunities and challenges affecting its growth.
CEO of the IPA Sheikh Ali bin Walid Al-Thani, and the CEO of the QFZ HE Sheikh Mohammed bin Hamad bin Faisal Al-Thani, stated in the joint article that Qatar is at the forefront of global efforts to promote innovation and progress. According to the Agility Emerging Markets Logistics Index 2024, Qatar ranks seventh globally in logistics efficiency and seco
nd in the region in terms of technology access according to the Network Readiness Index 2023.
The joint article pointed out that the QFZ, which is a key enabler of the logistics sector in the country, undertakes numerous initiatives to support growth in this sector. The authority hosts four of the world’s top ten logistics companies and continues to integrate new technologies such as artificial intelligence in the logistics services sector. It is also developing new facilities, including new regional distribution centers, which contribute to enhancing Qatar’s logistics infrastructure and attracting new entrants to the market, thus strengthening the country’s position and leadership in the global logistics services sector.
Titled “Five trends: Disrupting or Driving Logistics Growth,” the article analyzed the current state of the global logistics sector, noting the varying levels of response among countries to these opportunities and challenges.
It also identified five trends shaping the future of the logist
ics sector. The first is the expansion of artificial intelligence and e-commerce. The demand for faster, more efficient and cost-effective logistics solutions continues to rise, driving e-commerce as one of the leading adopters of artificial intelligence (AI). This trend is particularly relevant in Qatar, which boasts the top ranking for Data and Infrastructure for AI readiness in the GCC region according to the 2023 AI Readiness Index. Through sophisticated algorithms and machine learning techniques, AI enables e-commerce platforms to analyse vast volumes of data, anticipate consumer needs, optimise pricing strategies and logistics, and tailor product recommendations, enhancing customer satisfaction and loyalty. Given this transformative influence, AI is expected to reach $12.87 billion by 2026 in the logistics market, according to the Gitnux Market Data Report 20245. Industry giants like Amazon and DHL are integrating AI into their operations, to drive innovation and elevate customer experiences in the ever
-evolving realm of e-commerce.
The Second Trend is Sustainability. With sustainability concerns looming large, logistics enterprises are adopting eco-friendly practices and embracing zero-carbon shipping solutions to mitigate environmental impact. Emerging trends in sustainable logistics, including adopting alternative fuels, electric vehicles and carbon offset programmes, shed light on sustainable transportation with zero-carbon shipping becoming more accessible. According to DHL, the transportation industry accounted for 24 percent of global greenhouse gas emissions in 2023, which has also committed to reducing its logistics-related emissions to net zero by the year 20506. This shift towards sustainable supply chains is not just about reducing environmental impact; it is also about enhancing efficiency, saving costs and enabling resilience in an ever-changing world.
On the third trend; “Bridging talent gap: addressing the need for skilled labour”, the article said that as experienced professionals retire
and skilled labour becomes scarcer, logistics companies, in collaboration with their local governments, face the challenge of attracting, retaining and upskilling talent. According to a survey conducted by MHI and Deloitte, 57 percent of survey respondents report difficulties in hiring and retaining qualified workers. Hence, governments worldwide are implementing multifaceted strategies to foster talent development and bridge workforce gaps. In Qatar, Jusour (Qatar Manpower Solutions Co.) recently launched the Mustaqel programme, which is designed to invograte the nation’s labour market by attracting entrepreneurs, unique talents and skilled professionals from across the world to Qatar. The programme offers unique benefits and a renewable five-year residency permit, enticing individuals to contribute their expertise to Qatar’s workforce.
The article pointed out that the fourth trend is related to Re-Near-shoring strategies. The disruptions caused by global crises and geopolitical tensions have prompted many
companies to reassess their offshoring strategies. In 2024, the trend towards localisation and regionalisation of supply chains is gaining momentum. By bringing production and distribution closer to end markets, companies aim to reduce dependency on distant suppliers, mitigate geopolitical risks and enhance responsiveness to changing consumer preferences. Globally, over half (57 percent) of the companies surveyed by QIMA reported that nearshoring is a key part of their supply chain strategy in 2023 and beyond. Re/near-shoring strategies not only offer logistical advantages such as shorter lead times and reduced transportation costs but also support job creation and economic growth in local communities.
the fifth trend is the ‘Geopolitical shifts’. Geopolitical events can shape both short-term and long-term strategic implications on shipping rates, trade flows and global supply chains. The surge in trade tensions between the United States and China since 2018 significantly impacted global logistics, with tari
ffs affecting over USD 700 billion in goods in 2019 alone, according to the World Trade Organization (WTO)7.
Additionally, the Russia-Ukraine War resulted in increased prices of commodities, increased freight charges, container shortages, lowered the availability of warehousing space and closure of several ports8. Similarly, the unrest in the Middle East, coupled with attacks on vessels transiting through the Suez Canal, has added to the existing challenges, decreasing Suez Canal transits by an estimated 42 percent compared to its peak according to UNCTAD9.
The search for alternative routes due to these factors results in longer cargo travel distances, rising trade costs and insurance premiums.
Returning to the pivotal question posed earlier regarding the current position of the logistics sector at this critical juncture, the response may diverge depending on the country in question. While some nations may perceive the prevailing trends as opportunities for growth, others may grapple with direct challenges
.
Globally, looking at the leading countries ranked by the World Bank’s Logistics Performance Index, namely Singapore, Germany and the Netherlands, it becomes evident that they prioritise innovation and collaboration. These nations leverage emerging technologies such as blockchain, Internet of Things (IoT) and AI to optimise supply chain operations and enhance efficiency. Furthermore, governments are forging partnerships with private sector stakeholders to foster innovation and address pressing challenges such as sustainability and digitalisation.
Source: Qatar News Agency
