The Role of Digitization in Simplifying Cross border Logistics in the Middle East

cross border logistic in middle east
cross border logistic in middle east

– Soham Chokshi, CEO & Co-Founder at Shipsy

Digitization has disrupted industries faster than any other phenomenon in history. And the seismic shift is coming to the logistic sector in the Middle East. By embracing digital technologies, customers in the Middle Eastern market can participate in cross-border transactions safely, efficiently, and cost-effectively.

Streamlining cross-border processes through digital solutions

However, the Middle East has an emerging logistics market, with the UAE becoming the transportation and logistics hub. According to a recent report by the global research firm, Technavio, the UAE’s logistics market is expected to grow by over AED 43 billion between 2021 and 2026. The country is heavily investing in invited technological tools and solutions to transform the logistics sector.

Digital solutions can play a pivotal role in simplifying cross-border shipping. Keys like electronic documentation cut the need for lengthy paperwork, trade platforms unify multiple parties involved in one place, and blockchain keeps track of everything safely and securely. These novel concepts bring transparency and speed to the cross-border shipping process that was once unheard of.

Countries like China have transformed their economies by leveraging digital technologies, and Middle East nations should follow the same route.

Overcoming challenges and embracing digital transformation

Digital transformation occurs when an organization or a region adopts digital technologies on a large scale. Essentially, it becomes digital-first.

Companies in the Middle East need more logistics infrastructure. The majority of businesses need help with first-mile pickup and last-mile delivery. Kearney revealed that only 36% of companies in the UAE have invested in an online channel.

Such challenges can be solved with the adoption of digital transformation. Alibaba in China opened up to the world through a digital portal. Such measures are necessary to overcome cross-border merchants’ challenges in the Middle East.

Enhancing efficiency and cost-effectiveness with digital technologies

Cross-border transactions are inherently expensive and are plagued with inefficiencies. Custom charges, exchange rate fees, and delivery charges all factor into the total price. Digital technologies promise to change that.

In the Middle Eastern market, the last-mile delivery address must often be more specific. Cash payments are still the primary transaction method. By embracing digital technologies, you can speed up the delivery process.

Automated custom clearance can help move goods through the borders at greater efficiency. And real-time tracking can help managers track the delivery of the goods. These technologies are the need of the hour for Middle Eastern businesses.

Many nations in the region are landlocked. Such countries need more ports and rely on roads for logistics movement. Businesses in such areas must adopt digital solutions to facilitate cross-border logistics.

The changes the industry has experienced over the past 3-4 years have forced many leaders to rethink their logistic infrastructure and make necessary upgrades and improvements. With futuristic technologies like blockchain and machine learning now in practice at scale across the globe, adoption is easier than ever.

Last Updated on January 28, 2024 by News Editor

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