Flexibility, reorganization and rewriting of trade

• From transit to transformation: Gulf hubs such as Abu Dhabi, Dubai and Riyadh are evolving from traditional transportation nodes into integrated, multimodal logistics systems in line with national diversification strategies.
• Strategic flexibility amid global volatility: Geopolitical turmoil and US trade tariffs have redirected merchandise flows from Asia, turning the Middle East into a stable and efficient bridge between the markets of the Global South and those of the West.
• Policy coherence as a growth enabler: Unified customs digitalization, free trade zones, and logistics-oriented economic policies have significantly reduced clearance time and enhanced regional competitiveness in high-value goods sectors.
• Sustainability and digitalization as differentiators: Investment in the SAF, electrified ground operations, AI-driven optimization, and human capital development position the Gulf region as a global model for green, technology-driven air logistics.
• Outlook for 2025 and beyond: The region’s focus is shifting from infrastructure expansion to strategic coordination – integrating trade, technology and sustainability into a unified model for air cargo resilience.

As the industry prepares to meet at the upcoming TIACA Air Cargo Forum 2025 in Abu Dhabi next November, the region stands at a pivotal juncture – not just as an East-West transit corridor, but as a policy-driven logistics force reshaping the architecture of global trade.

Amidst geopolitical volatility, tariff realignments, and changing manufacturing rules, the Arabian Peninsula has benefited from state-backed infrastructure investment, regulatory innovation, and sustainability-focused policies to strengthen its position as a resilient hub in global supply chains.

From transit hubs to trade-oriented ecosystems

The Gulf region’s aviation model has long relied on transhipment efficiencies – linking manufacturing bases in Asia to Western markets. However, this model is evolving rapidly. Across the UAE, Saudi Arabia and Qatar, airports are transforming into multimodal trade ecosystems, combining airport expansion with customs warehousing, cold chain logistics, and digital customs integration.

Abu Dhabi, which hosts this year’s TIACA Forum, has become a case study in this transformation. The Kizad Logistics Complex in the emirate and Etihad Cargo’s expansion into dealing with pharmaceutical products and perishable items reflect the compatibility of national logistics strategies with broader economic diversification agendas. Likewise, Dubai’s Al Maktoum International Airport is being reimagined as a mega cargo hub integrated with Jebel Ali Port through automated cargo lanes – a logistics model now studied globally for its intermodal efficiency.

Meanwhile, the Riyadh Air Cargo Village – the hub of the logistics pillar of Saudi Arabia’s Vision 2030 – aims to handle up to 4.5 million tons of cargo annually by the end of the decade, with support from the Saudi Global Logistics Hub programme. According to the General Authority of Civil Aviation (GACA), air cargo traffic in Saudi Arabia grew by 11 percent in 2024, with pharmaceuticals, machinery and e-commerce goods leading the growth.

Capability and connectivity: strategic realignment

The International Air Transport Association (IATA) estimates that airlines in the Middle East now represent 14% of global air cargo traffic, equivalent to 9.2 million tons annually. Emirates SkyCargo, Qatar Airways Cargo and Etihad Cargo collectively dominate intercontinental cargo capacity between Asia, Europe and Africa – but new entrants, including Saudia Cargo, Wizz Air Abu Dhabi and flydubai, are reshaping market dynamics through short-haul connectivity and digital efficiency.

While major hubs such as Dubai and Doha remain dominant, emerging secondary gateways – such as Muscat, Dammam and Sharjah – are diversifying the geography of logistics in the Gulf. These airports attract e-commerce, perishables, and pharmaceutical flows displaced by the redirection of trade from China and Southeast Asia, where U.S. tariffs and regional regulatory frictions have upended traditional supply routes.

This repositioning has transformed the Middle East into an alternative logistical bridge between Global South and Western markets. According to WorldACD data, air cargo volumes in Asia and the Middle East rose 13 percent year-on-year in 2024, far outpacing global growth of 3.5 percent. Much of this was driven by cargo diversions from trans-Pacific and East Asian corridors affected by escalating tariffs and supply chain localization.

Politics as an enabler: digitalization and free zones

The region’s progress is based on policy coherence. Governments have prioritized comprehensive digital customs systems, AI-driven clearance, and harmonized health and safety protocols – especially for medicines and perishables.

For example, the Single Trade Window in the UAE and the Fasah digital platform in Saudi Arabia now enable pre-clearance and data exchange between agencies, reducing the average arrival time of goods by up to 40 percent. These systems support bonded logistics zones such as Dubai South, Ras Al Khaimah Economic Zone, and King Abdullah Economic City, where simplified VAT systems, flexible labor laws, and 100% foreign ownership policies create low-friction business environments.

As the UAE Ministry of Economy commented, “The Gulf is no longer positioning itself merely as a transshipment corridor. We are designing a policy environment in which logistics efficiency becomes part of national competitiveness – particularly for high-value regulated industries such as pharmaceuticals and aerospace.”

Geopolitics and redirection profits

Ironically, the geopolitical turmoil of recent years – from the security crisis in the Red Sea to the realignment of tariffs between the United States, China and India – has enhanced the strategic importance of the Gulf region. As manufacturers in Asia diversify their production across Vietnam, India and Indonesia to avoid being hit by tariffs, the Middle East is benefiting from the gains of redirection: goods passing through Gulf hubs reach Western markets more predictably and more cost-effectively.

According to the World Bank’s Global Logistics Performance Index, the UAE and Qatar are ranked among the top 15 countries globally in terms of logistics efficiency and infrastructure quality. Their ability to maintain reliability amid conflict-prone supply routes, coupled with their proximity to energy markets, gives them an unparalleled resilience advantage.

Moreover, intra-GCC logistics integration, supported by customs coordination and multimodal corridors linking ports, airports and railways, allows shippers to replicate routes – a critical asset in a fragmented trade landscape.

Sustainability: The next competitive frontier

Sustainability has emerged as a critical test for Gulf airlines and airport operators. Aviation decarbonisation strategies in the region, once criticized as reactive, are now embedded in national development frameworks.

The UAE’s National Net Zero Carbon Strategy 2050 commits to reducing aviation emissions through sustainable aviation fuel production and carbon accounting systems aligned with the ICAO CORSIA framework. Emirates and Etihad Airways have jointly launched trial flights for the Sudanese Air Force, while Qatar Airways Cargo has offered carbon offset options to shippers through IATA’s CO₂ Connect platform.

Beyond fuel, airports are investing in electrified ground operations, solar-powered cold storage, and AI-based energy management systems. Abu Dhabi Airports Company (ADAC) reported that its cargo facilities reduced energy consumption by 17 percent in 2024, largely through digital efficiency upgrades.

However, the challenge for the region is to scale up these measures at a reasonable cost while maintaining cost competitiveness – especially as the EU Carbon Border Adjustment Mechanism (CBAM) and ESG-related procurement standards begin to influence trade finance and buyer preferences.

Technology and human capital: building the center of the future

Digital transformation is reshaping competitiveness. AI-based upload optimization, blockchain authentication, and real-time visibility tools are becoming standard. The e-air policy adoption rate in the GCC countries exceeded 91% in 2024, compared to 79% globally, which reflects how Gulf airlines are integrating technology as a differentiator.

But digital infrastructure must be matched by human capacity. The UAE Aviation Training Strategy 2030 and the Logistics Talent Initiative in Saudi Arabia are establishing specialized academies in the field of cold chain, e-commerce and digital customs training. These efforts aim to build a knowledge-based workforce capable of sustaining the region’s logistics ambitions beyond capital investment.

Resilience, Reorganization and Rewriting Trade appeared first on Air Cargo Week.