Dubai future foundation foresees reinvention of logistics sector with a spate of fresh investments


Investment in logistics sector is gaining more ground. Perhaps, it is the top-most priority of the world that reeled under widespread supply chain disruptions caused by Covid-19. However, the logistics sector of the future would not be the same like the one we see now, according to a recent report by Dubai Future Foundation (DFF).

Life after Covid-19 – the DFF report done in collaboration with Dubai Future Councils perceives future trends in logistics sector, identifies emerging opportunities and lays a roadmap for their utilisation to remain insulated from public health events which World Health Organisation (WHO) says have been rising steadily during the last four decades.

It is estimated that the coronavirus-induced recession will cost the global economy $ 5.5 trillion in 2020-21 and a recent global survey reveals supply chain disruptions brought about by Covid-19 affected 75 per cent companies at one level or the other.

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“But, the UAE has not seen shortages of the scale experienced by countries in some other regions. This is an indication of the resilience of the country’s supply chain and its high inventory levels,” the DFF report notes. It means UAE’s strategic and technological investments made in ports, airports and freezones really helped it pull through the ongoing pandemic.

Thus, immediate disruptions to supply chains in the region have been mitigated, but the report, however, adds that significant risks remain over the medium and longer term and they can be tackled only by reinventing and repositioning the logistics sector. This, the DFF report cautions, cannot happen by securing the supply-side capacity of supply chains alone because a point in case is the automobile sector whose sales collapsed despite high levels of automation and advanced robotics.

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“It has become clear that no amount of automation can prevent a recession if ‘human agency’, the ability of humans to engage in social and economic activities, is undermined, and the focus now should be on investing in technologies that protect and enhance human productivity,” report points out adding that the next phase of automation in consumer demand may well come through technologies that link the digital and physical worlds.

It is clear indication that it won’t be long when 3D printing, unmanned ground vehicles (UGVs), unmanned aerial vehicles (UAVs), the Internet of Things (IoT), augmented reality, exoskeletons and companion robots would dwarf current online platforms such as Netflix, Coursera, Amazon or Uber since there is a limit to the demand that humans can consume or initiate using these digital channels alone.

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The list of demand chain technologies is long and they enhance and sustain not only human agency but also the global supply chains. “For example, if more consumers today could fly their own drones to run errands, operate companion robots to perform tasks and use smart wearables and exoskeletons to avoid hazards such as infections there would have been less urgency to lockdown economic activity,” the report informs.

Even as Covid-19 is forcing countries, businesses and individuals reassess two critical elements in the economic system – the supply chain and consumer demand – the report concedes that there would be a greater stress on localization in the future though manufacturing along broadly conventional lines would continue for some complex items like spare parts, automobiles and white goods. In the medium to long-term 3D printing would be used to avoid the need to construct hi-tech factories and ship products half way across the world.

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Thus, in the post-Covid era, the DFF report foresees development of a regional storage hub that allows nearby nations to secure their supply chains and helps suppliers maintain demand besides increased automation and robotics in manufacturing and ports.

“The spotlight is on industrial real estate and investment in logistics is of higher priority than ever before,” report says justifying its conviction based on private equity firm Blackstone’s decision to buy 22 logistics sites as online shopping soared due to the coronavirus pandemic.


Disclaimer: This article is a part of featured content series on Business in Dubai





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