The contract logistics services market in the Middle East expects to sustain a 6.9 per cent compound annual growth rate (CAGR) from 2011 to 2015, reaching a value of $3.7 billion from $3 billion in 2011, a report said.

The UAE, Qatar and Saudi Arabia will remain key growth catalysts for the contract logistics market in the Middle East, according to the study by Transport Intelligence.

South Africa-based Barloworld Logistics, a leading provider of logistics and supply chain management solutions, predicts that market conditions will continue to improve in light of the projected positive growth rates for the region.

This growth is compounded by the growing awareness of the strategic benefits of outsourced logistics solutions such as substantial cost savings, decreased cycle times, improved product and service quality, and enhanced customer satisfaction, which are acting as multipliers to the expected economic growth.

The company will focus on delivering integrated smart supply chain solutions in the region, providing strategic support that empowers Middle East companies to align their supply chain strategy to their business strategy and enables them to be more efficient and competitive.

Frank Courtney, Barloworld Logistics chief executive for EMEA region, said: “Business enterprises in the region are increasingly appreciating the real value of outsourced logistics services, particularly in terms of reduced overhead costs, stronger focus on core competencies, enhanced operational efficiency, superior health and safety standards and improved customer satisfaction through the implementation of world-class methodologies and best practices.”

“While adoption of outsourced logistics services has increased significantly, there is a large portion of the market that is yet to consider the idea of outsourcing, creating a huge window of opportunity to grow our business in the region.

“With the growing awareness of the direct and indirect benefits, outsourced logistics services will ultimately be the norm in the future. Moreover, looking at mature markets like the UK where companies outsource approximately 49.5 per cent of their contract logistics, there is still plenty of room for growth in the Middle East,” he added.

“Barloworld Logistics is fully prepared to take advantage of the new growth opportunities in the region. We will particularly focus on delivering integrated smart supply chain solutions that complement the rapid growth in size and new geographies of most businesses in the GCC and across the Middle East,” Courtney said.

GCC countries have posted the biggest gains in the Middle East contract logistics market, driven by high levels of investment, consumer spending and fast economic growth.

Qatar’s contract logistics market achieved the strongest growth rate in the Middle East in 2011, expanding by 23.1 per cent to reach $118 million. Saudi Arabia and the UAE, on the other hand, posted growth rates of 9.1 per cent and 11.9 per cent respectively during the same period and remain the region’s largest markets with a value of $630 million and $451 million, respectively, in 2011. – TradeArabia News Service