Agility Launch Overview Of The Freight And Logistics Markets Of Tomorrow

WORLD WIDE – Global logistics firm Agility have launched their Emerging Markets Logistics Index 2011 from their Global Integrated Logistics business in Switzerland in which they compares 39 major emerging markets on a number of different metrics, identifying the key attributes which will they believe make the market attractive from the point of view of logistics, air cargo, shipping lines and freight forwarders.

Obviously the BRICS countries (Brazil, Russia, India, China and South Africa) are in vogue as the place to be if you are in the freight business but Agility point out that foreign investors are increasingly looking towards “near-sourcing” markets that are closer to end-consumers in the West driven by ongoing concerns about economic over-heating in China and higher global oil prices.

They conclude that in Turkey (8 on the index) offers significant potential as near-sourcing location as it already has a strong manufacturing base in the automotive, clothing and textile industries, as well as a direct land link to the EU through the newest members, Bulgaria and Romania. Globally, the UAE (9) is a strong contender in this context, offering low barriers to entry and efficient transportation services.

The top of the index contains all the usual suspects, as is to be expected, although Indonesia’s fourth place ranking, only just behind Brazil, is somewhat of a surprise. Beyond the top five and leading the pack of emerging markets offering significant potential for future investment is Saudi Arabia, up four places in the ranking from last year. Also making the Index top ten are Mexico, Turkey, the UAE and Chile – the latter climbing three places up the Index buoyed by further improvements in its already strong market access.

Compared with the 2010 Index, the largest movements both up and down are to be seen in the Middle East. Saudi Arabia (6) was the top mover, climbing four places and with the greatest increase in its overall score. Over the past year, the Saudi market improved its market compatibility rating and enjoyed greater foreign direct investment. Oman (14) also moved up four places, buoyed by developments in its airport infrastructure and improvements in security. Moving four places down in the rankings was Egypt (13), on the back of increased business costs associated with crime, violence and terrorism, while Qatar (19) fell three places because of its slowing oil and gas sector.

At the bottom of the rankings, Paraguay (39) performed the least well, falling below Kenya (37) and Bolivia (38). A weak economy, poor infrastructure developments and security threats (especially the latter in the case of Kenya) make these markets the least attractive for investment by logistics companies. Africa, in general, is seen as a distant potential alternative to the Asia Pacific region as a future manufacturing hub, although many infrastructure, security and business compliance challenges remain to be overcome.

To supplement the quantitative results of the Agility Emerging Markets Logistics Index 2011, Transport Intelligence undertook an electronic survey of more than 330 industry professionals. The opinion-based portion of the report provides insight into perceptions of which countries are more attractive propositions as logistics markets and have the potential to become future logistics hotspots.