Saad Baber

L18-3168
MBA- B

PART 1

Dubai, as discussed in the case, is considered the Logistical Hub. As there are other logistical hubs such
as Singapore and Hong Kong, so Dubai being another hub is comparable to the other two as well.
Following are some details that can elaborate the comparison and pros and cons of Dubai as a logistical
hub:

 Establishment of Port Rashid. This was the first deep water port built in the region named after
H.H. Sheikh Rashid.
 Jebel Ali Port, which is the world’s largest manmade harbor and the biggest port in the Middle
East.
 Constitution of the Jebel Ali Free Zone Authority (JAFZA). UAE has always been the hub
connecting both the East and the West.
 The UAE’s major ports became capable of handling 10 million twenty foot equivalent unit (TEU),
the highest TEU handled by any country in a single year.
 Jebel Ali port is equipped to store and refrigerate goods that require cold storage.
 Jebel Ali upgraded its TEU capacity to 14 million, due to strategic geographical location and has
been a vital element of the competitive global freight network.
 The logistics market of the UAE accounted for US$23.4 billion, which includes the revenues from
logistics activities, such as domestic manufacturing, import and export trading, agricultural and
service sectors.
 As Dubai is at the crossroads of important shipping routes. It is located midway between Asia
and Europe, linking the Pacific, Atlantic and Indian Oceans. This strategic location, coupled with
other logistical advantages, gives Dubai tremendous opportunities to be one of the leading
logistical hubs worldwide.

Some of the strategic advantages for logistics companies operating in Dubai Free Zones are as follows:

1. 100 per cent ownership

2. Tax exemption for corporate
3. Purpose-built office or warehouse facilities
4. Liberal VISA policies
5. No import or export custom duties
6. Abundant availability of space and energy

Airport landing charge, is more competitive than Singapore and Hong Kong. Dubai has been providing
comparable competitive advantage for logistics and friendly environment when the goods are to be
transited towards the West through the Middle East corridor.

Following table also indicates that Dubai, apart from all the trade benefits such as tax exemptions, state
of the art logistical technology and business friendliness, provides competitive figures for doing
business:
Saad Baber
L18-3168
MBA- B

 There has been a tremendous increase in the amount of imports and exports as well as in the
number of organizations that are setting up their business within the UAE from 2010.
 Major international logistics players are preparing for this extensive investment in the logistics
operations by increasing their shipment capacity and warehousing capabilities along with other
value-added services.
 Organizations based in Hong Kong have chosen Dubai as their hub and gateway to the Middle
East and North African region.
 Commodities, such as pearls, precious materials and metals, are the major goods that are
imported from Hong Kong to Dubai.
 The prices for commercial and residential properties are 20 per cent lower than the peak of
2009 and marginally cheaper than other comparable logistics hubs.
 The strategic geographic location of Dubai is also a key factor giving Dubai a competitive
advantage over other logistical hub.

Some Key Factors contributing to Dubai as logistical hub are:

 Better response time

 Better cost of handling
 100 per cent ownership
 Tax exemption for corporate
 Purpose-built office or warehouse facilities
 Liberal VISA policies
 No import or export custom duties
 Abundant availability of space and energy
 Lower prices of real estate
Saad Baber
L18-3168
MBA- B

PART 2

Dubai is a logistical hub, however in this logistical hub, there are a lot of business opportunities apart
from any logistics based business as well. As Dubai is now a big economy and it is financially stable as
well, so it is a good place to do business. As there are a lot of opportunities for doing business, but there
are some hindrances as well. As of now, UAE has implemented 5% value added tax which has increased
the cost of doing business. The cost of living in Dubai is also not very competitive at present, so one
needs more finances to spend daily. As UAE has increased the Visa fees as well as Aqama fees, so that
also adds up to the difficulty of doing business or starting a career in Dubai. The entry barrier for a new
entrant of business is high as well, as initial cost of starting a business in Dubai is also higher than other
parts of the world.