Before trading, please ensure that you fully understand the risks involved
- About Us
- Contact Us
Saturday, May 22, 2021
Khaleej Times - Logistics Passport: A game-changer for Dubai trade
Bal Krishen Rathore, Special to Khaleej Times May 22, 2021
The UAE has strongly established itself as a strategic logistics hub between the East and West and initiatives such as the World Logistics Passport (WLP) are set to drive global trade in coming years, expert say.
Analysts, experts and corporate executives said the WLP will be playing an instrumental role in Dubai’s plan to increase the emirate’s existing trade exchange from Dh1.4 trillion to Dh2 trillion in the next five years. The programme has already increased its participants’ trade by around 10 per cent and similar growth is expected this year.
“In 2021, we’ve seen the WLP go from strength to strength — validating a concept conceived at the World Economic Forum in Davos in 2020. Core to the WLP’s strategy is the integration of land, sea and air freight,” said Mike Bhaskaran, chief executive officer of the WLP.
As many as 11 countries have joined the Dubai-led initiative so far. Industry stakeholders said the WLP creates opportunities for businesses across Africa, Asia, Central and South America to improve existing trading routes and develop new ones.
It addition, the programme overcomes non-tariff trade barriers by fast-tracking cargo movement, reducing administrative costs, advancing cargo information and facilitating movement between ports and air.
“The World Logistics Passport will allow participating nations to gain access to new markets, diversify trade and increase market shares in key export developing countries,” Saad Maniar, senior partner at Crowe, said.
“As countries see the benefits of being part of this programme, over the years the participation will increase,” he added.
UAE an established player
Shailesh Dash, a Dubai-based financier and entrepreneur, said the UAE has strongly established itself as a strategic logistics hub between the East and West, facilitating international trade and commerce. In recent years, increased investments in infrastructure and key initiatives by the government have led to a spike in the domestic logistics industry.
“For instance, the WLP, a Dubai-led initiative aimed at boosting trade between developing markets, has expanded its network of trade hubs to over four continents and 11 countries since its inception in 2020. Global trading hubs such as Brazil, India and South Africa, along with Southeast Asian majors such as Vietnam, Thailand and Indonesia, are now part of the major policy initiative,” he said.
Dash said domestic industry stakeholders such as the Dubai Multi Commodities Centre and flydubai signed up for the initiative, joining ports operator DP World, Dubai Customs, Emirates airline and dnata. Multinational firms like UPS, Pfizer, Sony, Samsung, LG, and Johnson & Johnson have also joined the coalition, he added.
“This alliance demonstrates the UAE’s zeal to work with leading nations and corporates to increase resilience in global supply chains and remove trade barriers. As the founding member, the UAE stands to benefit from stimulated trade growth regionally while exploring opportunities to create new economic value.
“This will also help the UAE improve its logistics performance index ranking [currently ranked 11 globally] in the coming years,” he said.
Moreover, he said the Dubai Chamber of Commerce and Industry is providing a wide range of value-added benefits to participating nations/companies of the WLP that will help improve the ease of doing business in Dubai.
“This should help boost Dubai’s trade with the rest of the world, protect the interests of the private sector and enhance the emirate’s economic competitiveness as a global business hub,” he said.
Bright trade prospects
Dubai’s non-oil foreign trade reached Dh1.182 trillion in 2020. Exports rose eight per cent to Dh167 billion while imports and reexports accounted for Dh686 billion and Dh329 billion, respectively. Its total trade volume in 2020 reached 100 million tonnes.
Dubai’s direct trade in 2020 totaled Dh711 billion, while trade through free zones reached Dhs464 billion and customs warehouse trade was recorded at Dh7 billion.
More to join WLP
Dash said the WLP is planning to tap into more than 20 markets representing 54 per cent of global GDP in the long-run period. As the closed-knit alliance grows in stature, it will not only enhance prosperity but also expand growth opportunities for businesses at a time when the industry is seeking to revive growth momentum.
“In the wake of the slowdown caused by Covid-19, the alliance will help stakeholders create efficqiency gains, reduce costs, provide access to newer markets, and reduce complexity of clearance processes. More specifically, benefits range from increased trade revenue for businesses, increased fee generation for state trade authorities, tax revenues, connection of customs departments and global knowledge sharing networks,” he said.
“Touted as the world’s first logistics loyalty programme for freight forwarders and traders, the WLP could be a game-changer for the industry as it thrives to overcome non-tariff trade barriers by incentivising increased trade through efficient and cheaper trade processes,” he added.
Exploring new markets
To a question on how it could benefit logistics and trade of participating nations, Dash said by connecting to the WLP network of fast-growing economies, member businesses have the opportunity to venture into new markets such as Latin America, South Asia or Africa while shoring up their regional connectivity and unlock operational agility.
“Going forward, the initiative could help streamline the industry while facilitating investments in modernising existing infrastructure across the member nations. It could also help develop future projects to ensure high levels of efficiency and sustainability for the participating nations/companies. Most importantly, the WLP will help create opportunities for businesses across the world to improve existing trade routes and develop new ones,” he said.
Time, cost benefits