Oman: Towards a thriving logistics sector

With ecommerce set to boom in the Sultanate, the country’s logistics sector is heading for exciting times.
The Sultanate ranks 12th globally in terms of competitiveness, and fourth for business fundamentals, in the Agility Emerging Markets Logistics Index released this year. Notably Gulf countries have shown spectacular growth in the sector driven largely by a pro-business environment supported by streamlined policies and regulations, huge investments in developing the logistics and transport infrastructure, and a focus on strategic digital capabilities.

Logistics sector forms one of Oman’s key pillars for economic diversification, and the efforts by authorities have boosted Oman’s rank in the World Bank’s Logistics Performance Index 2018 by five positions from 48th to 43rd, while its Global Competitiveness ranking improved by 19 places from 66 to 47, driven by a leap to the 18th rank in ports’ efficiency.
Notably, the Sultanate’s logistics sector registered a healthy 8 per cent growth in 2018, with a contribution of nearly 3.75 per cent to the national economy. Meanwhile, Oman’s 2040 Logistics Strategy aims at establishing the country as a global logistics hub, ranked among the global top ten. Many transformative projects have been either completed or are under way.
The sector added a whopping 3,500 plus jobs for Omanis last year, and boosted Omanisation rate from 12 per cent to 16.4 per cent.
Its ambitions are powered by world-class road networks that link its ports, free zones, airports and industrial zones. The odds stacked in favor of the Sultanate include its strategic geopolitical advantage on account of its proximity to the key markets in North Africa and the Indian sub-continent, political stability, and a conflict-free foreign policy and international diplomacy. Three deep ports that are well integrated with its free zones service the emerging markets in India, East Africa, Iran and Gulf countries.
Add to these, the expected uptrend in the country’s ecommerce sector. Globally, we see that increasingly a thriving ecommerce industry is driving the logistics business, and disruptive ecommerce platforms are coming up with innovative business models that streamline logistics operations. Studies suggest that ecommerce can put the focus sharply on on-demand warehousing, automation, co-working spaces, and a thrust on modern customs systems and processes.
Oman’s Logistics Strategy 2040 looks at creation of as many as 300,000 jobs in logistics services and a GDP contribution of OMR 14 billion, elevating the sector as the country’s second-largest economic contributor after hydrocarbons. Surely, ecommerce will have a major role in nurturing Oman’s logistics sector and helping the country achieve its logistics goals. Significantly, Oman’s Ministry of Commerce and Industry (MoCI) has established an E-Commerce Department to strategically develop the sector and ensure the rights of online customers, along with providing an enabling ecosystem for ecommerce entrepreneurs. In what can be called a major step, the Ministry of Commerce and Industry and the Information Technology Authority have decided to collaborate to ensure that Oman doesn’t miss out on the latest global e-commerce developments.
With the government extending full support for ecommerce firms, and the people increasingly turning to online shopping, Oman may witness a groundswell in new ecommerce ventures riding on innovative ideas. Giving a glimpse into the future state of things, a unique retail store-based multi-category, omnichannel e-commerce platform is all set for launch in the Sultanate, possibly next week.
Interestingly, ecommerce firms are racking their brains to find a seamless, efficient execution of last-mile delivery, possibly same-day.
Several ecommerce firms such as Amazon, eBay and Alibaba have already taken the plunge into logistics, and they look at innovative delivery systems including drones, droids and autonomous vehicles towards improving freight transportation and last-mile deliveries. With an expected ecommerce bloom in the Sultanate, it is natural that the country’s logistics sector is heading for exciting times.