ACU SEP-18_Final Draft

ACU EXCLUSIVE
Robust yet challenged
filled air cargo industry
and logistics chain
By Venkat Das, General Manager, Al Reyami Shipping and Logistics LLC
Venkat Das
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
s o m e p o t e n t i a l l y s t r o n g
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
pa s t f e w years l e a d i n g 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.