Sunday 14 / December / 2025
Muscat: The need to digitise the freight transportation and logistics industry (T&L) is becoming increasingly important as Gulf Cooperation Council (GCC) countries pursue economic diversification and sustainable growth plans, a management consultancy firm said.
At present, the T&L industry in the GCC, which is one of the key drivers of economic activity in the region, faces a combined threat of declining business revenue and outdated infrastructure, according to a recent study conducted by management consultancy firm Strategy & Middle East, formerly known as Booz & Company and a part of the PwC network.
The study revealed freight revenue in the region grew at a steady pace of some 10 per cent from 2010 to 2014. Since then, however, it has seen a decline of 5 per cent per year due to low oil prices, which has resulted in a decline in imports, businesses scaling back projects, and governments spending less on freight infrastructure.
The region’s T&L industry significantly lags behind its peers in developed markets when it comes to the use of emerging technologies or investing in new digital solutions. Adding to the dilemma of regional T&L companies is the constant flood of new technologies, which can be confusing if not well understood when and what to apply them for.
“Rather than choosing from an ever-changing range of available technologies, T&L leaders must first determine their business objectives, and then identify the right application of technology to meet those objectives,” said Dr. Ulrich Koegler, Partner with Strategy & Middle East.
Digital solutions offer two key benefits to T&L companies – they allow for increased operational efficiency and the redesign of business models.
“Digital solutions can increase the operational efficiency of T&L companies by reducing operating costs up to 10 to 30 per cent and minimising operational risks and breakdowns by 75 per cent,” said Jean Salamat, Principal with Strategy & Middle East. “This is critical at a time when the industry is facing financial pressure and lower freight volumes.”
"Deploying new digital solutions also allow companies to fundamentally redesign their existing business models to enhance the customer experience, as well as create new avenues for value creation and revenue growth,” he added.
Camil Tahan, Principal with Strategy & Middle East, stressed that T&L companies have to be prepared for the shift to digital solutions.
“With the implementation of digital technologies, T&L companies will radically have a new way of working,” said Tahan. “It is, therefore, important for companies to structure their approach and consider a framework regardless of which technology they choose to prioritise.”
Before embarking on digital transformation, T&L companies must first define their digital business strategy and/or rethink their business model. They then need to think about the digital solutions that will enhance their customer interaction and lock down their choice of technology based on their roles within the value chain. T&L companies also need to invest in upgrading their digital skills particularly in cybersecurity and data mining, and re-engineer their business and operation processes to capitalize on the new digital tools.
As digitisation is rapidly disrupting different sectors, T&L companies in other markets are already capitalising on this trend. It is therefore imperative for GCC T&L companies to start embracing the use of digital technologies to support and engine the region’s economic aspirations.
