Mays Ibrahim (ABU DHABI)

The UAE freight forwarding market is set to reach a value of $30.19 billion by 2031, up from an estimated $20.11 billion in 2024, according to a recent report by global market intelligence company CoherentMI.

The report, titled "UAE Freight Forwarding Market Size and Share Analysis - Growth Trends and Forecasts (2024 - 2031)", forecasts a compound annual growth rate (CAGR) of 7.01% from 2024 to 2031.

Key Drivers of Market Growth

The report highlights two major factors contributing to the rapid expansion of the UAE freight forwarding industry: the explosive growth of e-commerce and strategic government initiatives to enhance global trade.

"With more consumers and businesses doing transactions online, there has been a substantial rise in cross-border shipments of goods. E-commerce retailers are heavily reliant on logistics and shipping companies to move products from warehouses to customers located around the world," it stated. 

The report cited figures by the United Nations Conference on Trade and Development (UNCTAD), which indicate that the share of individuals using the internet to purchase foreign goods increased from 15% in 2019 to 19% in 2021. 

Moreover, cross-border e-commerce shipments globally surged by 26% in 2021 compared to the previous year, according to the International Post Corporation.

Government Initiatives to Boost Trade

The UAE government has significantly boosted the country's logistics capabilities through a series of trade-friendly initiatives, according to the report. 

This includes the establishment of free trade zones in cities like Dubai, Abu Dhabi and Sharjah, offering incentives such as 100% foreign ownership, tax exemptions and world-class infrastructure. 

"With over 40 free trade zones currently operational, the UAE has emerged as a key regional trade and logistics hub connecting Asia, Africa and Europe. This has boosted the demand for freight forwarding services multi-fold as a wide range of industries have set up base in these zones to leverage the strategic advantages," the report said. 

The UAE government has also signed several comprehensive trade agreements, including the Gulf Cooperation Council (GCC) agreement, which allows for the duty-free movement of goods across GCC nations. 

The report noted that World Bank data showed that intra-GCC trade grew from $80 billion in 2020 to an estimated $105 billion in 2022.