While the oil price slump could deliver cost relief for the logistics industry, any negative impact on the economic growth of the Gulf Cooperation Council (Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and United Arab Emirates) could spell trouble for the sector’s development in 2015, according to key industry figures polled by Logistics Middle East, reported arabiansupplychain.com.
Discussing potential effects, Mustapha Kuwam, managing director for Gulf states at Globe Express Services (GES), said: “The GCC (Gulf Cooperation Council), which has substantial dependency on commodity exports, is facing enormous challenges brought on by the oil price weakness.
“Bahrain and Oman are feeling the pressure. Saudi Arabia, Qatar, the UAE and Kuwait are better shielded from the effects of the low oil piece due to large and mature domestic banking systems, access to international markets, and large sovereign wealth funds generating ample investment income.”
CEO of Kat Logics, Katharina Albert, agreed that Dubai and Abu Dhabi in particular are protected from falling oil prices, citing their successful diversification strategies over a number of years as a key component of this.
She also stated that falling oil prices will provide “a cost relief for the logistics industry” this year.
However, Shailen Shukla, head of logistics at Jumbo Logistics, said that while declining oil prices are "a big positive for the logistics industry at a global level," firms operating within the GCC region will only see "a slightly upside that could help balance out other costs" due to the controlled price of fuel price in the Middle East.
To read more, click HERE.
