Robust yet challenged filled air cargo industry and logistics chain
By Venkat Das, General Manager, Al Reyami Shipping and Logistics LLC
Demand for air freight has been boosted since mid-2016 with stronger economic and trade backdrop, by bottlenecks in manufacturing supply-chains and a broader inventory restocking cycle.
It’s been a great start to the year. Al Reyami Shipping & Logistics has seen robust air cargo growth throughout 2017
which continued unabatedly over the course of Q1 2018.
ARSL saw the demand for air cargo which continued to be strong, with 9.8 percent growth in February. The positive outlook for the rest of 2018, however, faces some potentially strong headwinds, including escalation of protectionist measures, into a fullblown trade war.
As we have noticed, the logistics sector is gaining momentum as more and more newcomers have started setting up their companies in the UAE in various industries.
The UAE market has a blend of conventional logistics players which are offering the cheapest rates and services to win their airfreight customers. The challenge now remains on how the existing players can face competition from
startups which are more equipped in terms of latest technology, offering transparency at a click of a button, as against traditional logistics companies which are accustomed to the old methods of networking.
Air freight appears to have entered a period of sustainable growth with steadily increasing volume from the e-commerce and pharmaceuticals sectors over the past few years leading to a decoupling of air cargo demand
from goods trade growth and muddying the research waters in the process.
Demand for air freight has been boosted since mid-2016 with stronger economic and trade backdrop, by bottlenecks in manufacturing supply-chains and a broader inventory restocking cycle.
Although this is good for airline margins, the strong demand has been a nightmare for shippers with record high freight rates and severe shortages of space at peak periods.
The growth of e-commerce is brightening the outlook for global air freight demand this year against a dire background of escalating trade tensions and rising fuel costs.
2017 was a big year for e- Commerce in the UAE. Amazon bought Souq.com, the biggest e- Commerce brand in the country and Emaar Properties launched Noon. Al Reyami, incidentally, has also started its exposure with Noon.
