Report Overview

A thriving tourism and hospitality industry in the country driving the demand for food and beverages is expected to boost the growth of the UAE cold chain logistics market during the forecast period between 2023 and 2029.

UAE Cold Chain Logistics Market - Industry Trends & Forecast Report, 2029

The UAE cold chain logistics market size was estimated to be worth USD 2.37 billion in 2022. During the forecast period between 2023 and 2029, the UAE cold chain logistics market size is projected to grow at a CAGR of 8.1%, reaching a value of USD 4.09 billion by 2029. Major growth factors for the UAE cold chain logistics market include rising consumer demand for packaged and frozen food products of high quality, along with stringent food safety regulations in the country. Furthermore, economic diversification, along with a flourishing tourism sector, is anticipated to present lucrative growth opportunities for the cold chain logistics market during the forecast period.

UAE Cold Chain Logistics Market – Overview

Cold chain logistics refers to the management of temperature-sensitive products, such as perishable foods, pharmaceuticals, and vaccines, throughout the supply chain. It involves the use of temperature-controlled facilities, equipment, and transportation to maintain product integrity and safety from the point of origin to the point of consumption. The cold chain starts from the manufacturer or producer and includes storage, transportation, and distribution until the final destination. The temperature is carefully monitored and maintained at a specific level throughout the cold chain, and any deviations can result in product degradation, spoilage, or even harm to consumers. Effective cold chain logistics is crucial for ensuring product quality, safety, and efficacy.

UAE Cold Chain Logistics Market

Growth Drivers

Expanding Food and Beverages Sector

The UAE cold chain logistics market is expected to grow at a significant rate over the projected period, owing to the rising demand for fresh and frozen goods in the country. With greater disposable income and a larger workforce, more people are looking for high-quality food goods that require secure temperature control throughout shipping and storage. This has resulted in an increase in demand for cold chain logistics services which enable the safe and efficient transportation of perishable commodities from manufacturers to retailers and end users.

Restraints

High Installation and Maintenance Cost of Cold Chain Storages & Transportation

The exorbitant initial investment required for cold chain logistics development, as well as the significant overhead expenses associated with its upkeep, is a key impediment to the UAE cold chain logistics market. The total cost of construction of such a unit is roughly USD 33,300, but a basement unit has an initial cost of more than USD 50,000. The location of a warehouse has a considerable impact on the cost of constructing a cold storage facility. Building a cold storage facility in an urban region is often more expensive than in a rural area.

Impact of COVID-19 on the UAE Cold Chain Logistics Market

The unprecedented COVID-19 pandemic proliferated the growth of the UAE cold chain logistics market. The market gained significant traction in medical supplies and the pharmaceutical industry. The rising demand for healthcare products, such as vaccinations and medical supplies, raised the demand for temperature-controlled storage and delivery. The pandemic also brought to light the significance of maintaining a strong and effective cold chain infrastructure to protect the safety and efficacy of vaccinations and other temperature-sensitive items. As a result, the UAE government has invested in the country's cold chain infrastructure, including the construction of new facilities and the upgrade of existing ones.

UAE Cold Chain Logistics Market

Segmental Coverage

UAE Cold Chain Logistics Market – By Type

Based on type, the UAE cold chain logistics market is split into refrigerated warehouses and refrigerated transportation. The refrigerated warehouse segment holds a larger share in the UAE cold chain logistics market. Rising demand for frozen food items as a result of shifting consumption patterns, rising disposable income, and a growing workforce in the country are compelling private firms to invest in robust cold chain warehouse infrastructure, driving overall market growth.

UAE Cold Chain Logistics Market – By Temperature

Based on temperature, the UAE cold chain logistics market is split into frozen and chilled segment. The frozen segment accounts for a higher share in the market. Several products, including certain vegetables, such as peas and meat, including poultry and beef, needed to be kept at the frozen temperature (-18° to -25°) to remain fresh. Furthermore, the demand for frozen food among urban cities owing to the change in consumption patterns of consumers is also influencing the growing demand for frozen cold chain logistics in the market.

UAE Cold Chain Logistics Market – By Application

Based on application, the UAE cold chain logistics market is segmented into dairy & frozen desserts, fish, meat & seafood, bakery & confectionery, fruits & vegetables, pharmaceuticals, and others. The dairy & frozen desserts segment dominates the UAE cold chain logistics market. The use of efficient cold chain logistics is crucial for temperature-sensitive products, such as ice cream, to increase their shelf-life and prevent spoilage. The pharmaceuticals segment also holds a substantial market share, a several biologics, vaccines, or components of cells must be kept in a temperature-controlled environment.

Competitive Landscape

Major players operating in the UAE cold chain logistics market include Agility Logistics, Emirates SkyCargo, Aramex, Gulf Drug, DHL Supply Chain, Al-Futtaim Logistics, Transmed, Owaisis Group, Al Reyami Group, and Agthia Group. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In July 2023 - Maersk, a shipping and logistics company based in Denmark, opened its third warehousing and distribution (W&D) facility in Dubai, UAE.

Scope of the Report

By Type

• Refrigerated Warehouse

• Refrigerated Transportation

By Temperature

• Frozen

• Chilled

By Application

• Dairy & Frozen Desserts

• Fish, Meat & Seafood

• Bakery & Confectionary

• Fruits & Vegetables

• Pharmaceuticals

• Others