How the
Oman Logistics and Warehousing Market Is Positioned?
Logistics service in Oman comprises a range of
activities that look over at the procurement as well as final delivery of raw
material and finished products. These services include freight forwarding,
warehousing and other value added services such as customs brokerage, inventory
management, order fulfillment and product repair. With the influx of various
foreign companies, the number of players involved in the sector is estimated to
be roughly around ~. The government of Oman is in the process to bring down the
economy’s dependence on oil and gas sector by diversifying into other industry
verticals. Logistics sector has gained special focus of the government due to
its potential and the geo-strategic location of Oman. With political
uncertainty in gulf area, Oman offers a safe by-pass to some of the major trade
lines of the world.
The growth in Oman
Logistics and Warehousing Market was ~%, thus evaluated at USD ~
million in the year 2013. The market witnessed an increase from USD ~ million
in 2012. The overall growth had declined in 2015 and 2016 due to slowdown in
the overall exports and imports from the country due to closing down of several
SMEs in the country. The growth rate of the sector has continuously gone down
in the past three years with a ~% growth registered in 2017. The change in the
policies is attributed as the prime reason for the loss of momentum observed in
the sector. In 2016, the Central Bank of Oman launched a national debit card
payment gateway infrastructure for e-commerce transactions, OmanNet Debit Card
E-Payment Gateway infrastructure, which will provide safe and secure e-commerce
transactions. A new law for the protection of e-payment is under deliberation.
Which
Service Dominates in Oman Logistics and Warehousing Market?
The freight forwarding segment has dominated Oman
logistics and warehousing market with revenue share worth ~%, thus evaluated at
USD ~ million in the year 2017. Seaways were observed as the most preferred
mode of transportation in terms of volume share. It was followed by roadways in
Oman freight forwarding market in 2017. The remaining volume share was captured
by air transport. Due to its important geographical position in the trading
routes of the world and less than two weeks of sea-distance from major European
and Asian economies, Oman’s ports handle a large volume of international
freight. Major goods transported through road freight include motor vehicle
spare parts; machinery, apparatus and parts for textile, garment; electronic
goods, computers and their parts; and food and beverage raw materials.
The warehousing segment followed freight
forwarding in Oman logistics and warehousing market with revenue share of ~%,
thus evaluated at USD ~ million in the year 2017, majorly due to rise in usage
for modern warehousing facilities in the country. Modern warehousing was
convenient for workers as it helped in saving time and efforts wasted on
loading and offloading goods.
The traditional method was being replaced by high
tech machinery such as cranes, thus creating a positive impact on the
warehousing services in the country. In Oman, the rise in the retail and FMCG
industry in the country has driven the demand of warehousing services.
Additionally, the expanding e-tail industry has triggered the demand for
warehousing services for the storage of international and domestic packets.
Value added services in Oman captured the
remaining Oman logistics and warehousing market with revenue share worth ~% in
the year 2017. These services are optional / additional in nature thus resulting
into low revenue share. Value added services such as inventory management,
cross docking, labeling, packaging of products and door-to-door delivery
provide a competitive edge for the logistics and warehousing companies.
Oman
Freight Forwarding Market
The freight forwarding industry in Oman was
evaluated at USD ~ million in terms of revenue contribution during 2012. The
market witnessed an increase to USD ~ million in 2013, thus growing at ~% in
comparison with previous year. With the rising industrial activities in the
country due to the entry of number of leading foreign players, the demand for
freight forwarding has surged in the country.
Which
Freight Movement Dominates?
The sea freight segment dominated Oman freight
forwarding market with a revenue share of ~% despite a sharp decline compared
to previous year majorly due to increase in roadways trade among GCC neighbors. In Oman, there major methods of ocean
freight shipping are Exclusive Containers and Shared Containers. The Port of
Salalah, the largest port in Oman, is centrally located at the crossroads of
trade between Asia and Europe.
Major companies offering ocean freight services
in Oman include Agility Logistics Oman, GAC Oman, Oman Global Logistics, ILS
Logistics, Shipco Oman, CEVA Logistics Sohar Shipping and others. The road
freight segment despite being second by volume has the smallest contribution by
value with a ~% share on account of cheap rates as compared to air freight.
Road transport is gaining attraction in Oman as the bulk of trade is with
neighboring GCC countries. Major companies offering road freight services in
Oman includes Aramex, DHL, Ex-freighters, Badar Shipping, Majan Shipping,
Bahwan Logistics, CEVA logistics and others. Air freight is the quickest method
among all other freight services and is usually reserved for essential items
such as food products, medicines and small shipments in Oman which have an
urgent requirement. The air freight segment captured a revenue share of ~% in
Oman freight forwarding market during 2017. Major companies offering air
freight services in Oman are DHL, Oman Air, Qatar Navigation and others.
Oman
Warehousing Market
The Oman warehousing market was valued at USD ~
million in the year 2012. The market grew to the value of USD ~ million by 2014.
A key driver behind Oman’s significant warehousing market and its regularly
increasing growth is the location, considering that it is an intermediary trade
corridor leading to it being an ideal pit stop for goods being transported
between the western and Asian regions. The market was still in the nascent
stage signified by strong yet marginal growth rates in their YoY revenue.
Which
Business Model Dominates?
The industrial/retail freight segment dominated
overall Oman warehousing market with a massive revenue share of ~% in the year
2017. The rising industrial / retail sector in Oman has elevated the
requirement of warehouses in the country majorly due to increasing demand for
storage of processed packaged foods and beverages.
Recent retailing trends have led to the
development of warehouse style retail stores in Oman which constitutes high
ceiling buildings, thus displaying retail goods on tall, heavy duty industrial
racks rather than conventional retail shelving. The e-tail companies require
warehouses for storing goods and hence are one of the leading growth factors
for the warehousing market in Oman.
Container freight followed industrial / retail
freight segment in Oman warehousing market with a revenue share of ~% in the
year 2017. The use of containers in export shipments makes the transport and
goods handling easier and faster.
The cold storage segment in Oman warehousing
market captured revenue share worth ~% in the year 2017 owing to the rise in
products requiring cold storage. The growing tech savvy population has
triggered the online ordering of food which has enhanced the demand for cold
storage systems as various foods and drinks require cold storage.
The agriculture and other segments collectively
captured the remaining revenue share worth ~% in Oman warehousing market in the
year 2017. Agricultural products are highly probable to adverse treatment which
would lead to damage or destruction of the inventory.
Oman
Express Logistics Market
The express logistics market in Oman was
evaluated at USD ~ million in 2012 which witnessed an increase to USD ~ million
in 2017. Oman’s express delivery firms such as Oman Post have been operating
well in the market alongside foreign giants such as DHL Express, Aramex, TNT,
FedEx and UPS. These foreign giants firms mostly deliver documents, mails,
cargos in small quantities. Air express was the most popular means of express
delivery as compared to ground express delivery. The use of E-commerce in Oman
has become very common following the spread of IT systems such as laptops,
tablets and smart phones, thus aiding people to shop online. The trend of
shopping online for perishable items such as food products including fruits and
vegetables, meat, fish and others has been rising Changing consumer shopping
habits coupled with rising usage of E-commerce has given a rise to express
delivery services in the country.
The international express segment dominated Oman
express logistics market with a massive revenue share of ~% in the year 2017.
To aid the increase in air freight traffic in Oman, the new Muscat
International Airport was inaugurated in late 2017. In accordance with Oman
e-commerce association, the rapid development of online trading activities has
opened great opportunities for express delivery firms in the domestic market.
In the domestic market, express services in Oman express logistics market
captured the remaining ~% revenue share in the year 2017 majorly owing to
development in transport infrastructure for sending goods to domestic
locations. The Ministry of Transport and Communication is currently
constructing several road projects as well as repairing, raising the capacity
and dualizing the existing roads. DHL, FedEx, TNT, Aramex and others provides
international as well as domestic express across Oman.
Oman Cold
Chain Market
Cold storage capacity, which is generally
measured in the number of pallets, stands at ~ as on December 2017 and looking
at the focus of the government to make Oman a gateway to all the goods that
arrive at GCC by developing the infrastructure and employing the latest
technology. The rise in industries such as, retail, frozen food, meat and
seafood, pharmaceuticals and others have increased the demand for both cold
transport and cold storage in the country. E-commerce industry has grown at a
significantly high rate which has given a boost to the cold chain industry.
Which
Industries Demand Cold Chain services?
Seafood and meat industry dominated the cold
chain market with ~% revenue share in 2017 in Oman owing to the domestic and
international demand for these products. The increase in supermarkets and
hypermarkets providing meat and seafood products have led to an increase in the
demand for cold chain units both in terms of cold storage and cold transport.
Poultry and Egg industry attributed ~% revenue
share in the cold chain industry owing to the increased food consumption due to
rising population, increase in the disposable income and increase in super
markets and hyper markets.
Omani people have a preference for Chocolate,
Cocoa and Sugar confectionary which requires the cold chain systems for these
products. Confectionary accounted for ~% revenue share in cold chain market of
Oman in 2016.
The other products include chemicals, fruits and
vegetables, pharmaceuticals etc. The increase in population has increased the
intake of fruits and vegetables over the years. In addition to this, the online
grocery and food delivery trend evolving in the country has made an impact in
this segment.
Cold
Storage Segment Dominated or Cold Transport?
Cold transport has contributed major share of ~%
in terms of revenues in cold chain industry in Oman during 2017 as most of the
companies maintain their own fleet for the temperature controlled
transportation. The processed food has been attributed to the cold transport
segment due to the requirement of temperature controlled atmosphere and short
expiration duration.
Cold storage had a significant contribution towards
the cold chain market in 2017 by attributing ~% market share owing to the fact
that the companies which demand cold storage services do not have their
warehouses. The operational cost for storage is high so the companies outsource
these services.
Competitive
Landscape of Major Players Operating In Oman Logistics and Warehousing Market
The freight forwarding industry in Oman was
observed as highly fragmented with the presence of both domestic as well
international freight forwarders in the country. Major companies offering ocean
freight services in Oman include Agility Logistics Oman, GAC Oman, Oman Global
Logistics, ILS Logistics, Shipco Oman, and others. Major companies offering
road freight services in Oman includes Aramex, DHL, Ex-freighters and others.
The express logistics industry in Oman was witnessed to be moderately
concentrated with the presence of major players in primarily international
express segment. International express is dominated by DHL Express, followed by
global players including FedEx, TNT and UPS Express, while domestic express is
dominated by Oman Post. The rising popularity of the next day and specific day
deliveries is impacting retailers’ ability to meet customer expectations.
Warehousing industry encompasses a mix of unorganized and organized players.
The companies in the country are competing with each other on the basis of the
size and location of the warehouse. Major Players in warehousing includes GGL
Oman, GAC, Avvashya CCI, Logwin Logistics and others. The major players in the
country in the cold chain services include Agility Logistics, Al Madina
Logistics and ILS Logistics.
Oman
Logistics and Warehousing Market Future Outlook
Oman logistics and warehousing market is
estimated to generate revenues worth USD ~ million, thus growing at a CAGR of
~% over the forecast period 2018-2022. The country will focus on upgrading its
logistics infrastructure especially in the seaports, constructing regional and
international logistics service centers, improving the efficiency of connection
between Oman and other countries, thereby becoming a modern logistics hub in
near future. The culmination of vision 2020 with a high implementation rate is
set to turn with development of better infrastructure coming in place to
support the operations and make use of the strategic location of Oman. Various
Free Trade Agreements (FTAs) signed between Oman which includes agreements with
India, USA, Singapore and GCC countries will lead to boost the country’s trade
relations in long term.
For more information on the research
report, refer to below link:
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Ken
Research
Ankur
Gupta, Head Marketing & Communications
+91-9015378249
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