Logistics is an important sector for a developing country like United Arab Emirates as it combines infrastructure, technology, and new types of service providers to facilitate other industries to reduce their costs and provide effective services. Rapid globalization, increasing consumerism, growth in the manufacturing sector, and expanding e-commerce are some of the key factors driving the growth of 3PL logistics companies in Dubai.
The ability of third-party logistics companies in Dubai to provide the latest technological advances in logistics and supply chain management has helped many outsource their logistics activities to third-party suppliers. With services like warehouse management, online documentation for domestic and international freight movement, real-time data, tracking of transportation, and more provided by 3PL, the complexities of handling supply chain management operations becomes the responsibility of the 3PL provider.
The United Arab Emirates 3PL market is expected to register a growth rate of over 4.1% and 6.8% respectively over the 2020-2027 period. The eCommerce sector has been a major contributor to the growth of 3PL logistics in UAE. It involves supply chain management, warehousing, consolidation service, and order fulfillment as the e-commerce companies are accountable for ensuring timely delivery, and if the products are returned, the company has to manage reverse logistics too. Thus, it is a reliable alternative to outsource to the 3PL and enabling companies to concentrate on marketing and other business operations.
Reasons for the increased demand for 3PL companies
Companies are outsourcing logistics activities to enhance their operations and cost-effectiveness. With services becoming more customer-centric and focusing on just-in-time delivery, companies are outsourcing their supply chain activities to adapt and expand their geographical reach to increase value and improve customer engagement.
Few reasons for the rising demand for 3PL companies in UAE
· Greater flexibility to adapt to a new business model
· Ease in logistics and documentation management
· Adoption of various software solutions such as SCMs and cloud ERP for logistics applications
· Implementation of data-driven solutions
· Effective last-mile delivery solutions
· Usage of the latest technology with no additional overhead costs to the company
· Facility to utilize 3PL warehouses for centralized delivery management and new markets
A significant proportion of the higher cost in the UAE logistics industry is attributed to the absence of efficient intermodal and multimodal transport systems, higher warehousing costs, and a lack of modern technology. UAE Government has taken a keen initiative to improve the logistics sector by developing the logistics infrastructure with dedicated freight corridors, free trade warehousing zones, logistics parks, and container freight stations, which would lead to improvement in the efficiency of the UAE 3PL market.
With multinationals and global supply chains finding India an attractive location to set up their manufacturing base, there is an increasing demand for third-party logistics companies in UAE. SLR Shipping Services LLC, one of the largest and fastest logistics companies in UAE. They are equipped to handle the varied needs of customers through their well-established country-wide network that enables extensive and flexible logistic operations. With its safe warehousing and inter-modal express distribution services, SLR Shipping Services LLC would be an ideal 3PL logistics provider for your company.
Adaptability to changing requirements in the logistics industry is the key to bring efficiencies to its supply chain operations. By outsourcing the supply chain operations to a 3PL logistics company in UAE, a business would be able to utilize the operational expertise and ideas for improvement.