Dubai Silk Road &Its Implication For Global Supply Chain
In the short term, the global supply chain is about mobility, logistics, value addition, and cost-efficiencies. In the long term, it is about sustainability. However, at a strategic level, it is all about geoeconomics. From a Trucial State to a re-export destination, Dubai’s transition to a global aviation hub has been a chain of events remarkably knit together by
inherent strengths and shifting global geodynamics.
The Dubai Silk Road (DSR) strategy, announced in March 2019, became part of the 50-year- charter to boost air and sea freight and enhance logistical integration. The strategy is the first among the nine articles mentioned in the Fifty-Year Charter. Two years since, and in the middle of a crippling pandemic, the strategy focuses on enhancing trade between free zones and the rest of the emirates.
“Dubai is destined to be a crossroad between East and West, and between North and South. We have the largest international airport in the world. It connects us with more than 200 cities. Over the next 10 years, more than one billion passengers will pass through our airports. Worldwide, we operate around 80 ports that are connected to hundreds of cities,” says the document. 1 The United Arab Emirates (UAE) is ranked 11 th as a logistics-friendly country, 3 rd in infrastructure and efficient goods market. Currently, the third strongest logistics market in the world, making it the regional leader.
As part of this strategy, the next goal is to build Silk Road in cooperation with the UAE’s friendly neighbors who share the country’s vision. “Our region has historically been a region of civilization and trade, and this role must be restored. We will seek to build international cooperation to support these aspirations,” says the vision document. This paper pieces together the various dimensions of the DSR strategy and the progress it has made. It also looks at the evolution of the global supply chain since China emerged as a significant economic power and started active engagement with the Gulf region to boost trade. The paper starts with a glimpse of Dubai’s Silk Road and its position in the global supply chain, looking at the National Logistics Plan programs.
The paper also looks at the strategic importance of the DSR, its regional importance, and its implications for economic growth. Dealing with global implications, this paper also highlights the international trade and finance components of Dubai’s logistics hub position, especially the advantages of connectivity and location that help its case. The analysis seamlessly shifts to the global logistics hub position and its global connections. The conclusion is derived in the form of commercial opportunities and implications for other global supply chain initiatives. The paper highlights Dubai’s status as the third most connected air hub having the busiest international airport in the world 2 and with the 9th largest seaport in Jebel Ali, which has more than 150 shipping lines.
Moreover, the Al Maktoum International Airport is Dubai’s emerging global cargo airport and the world’s largest global gateway. The main part of Dubai South, a planned residential, commercial, and logistics complex, it has in its vicinity the Dubai World Central (DWC) Logistics District – a multi-modal logistics platform dedicated to logistics and value-added services. The district facilitates manufacturing and assembly and provides a free zone environment catering to contract logistics, integrators, freight forwarders, agents, and traders.
The legacy of investment
At least a part of Dubai’s Silk Road Strategy story can be traced back to the investments done in the city’s ports, airports, and free zones, making the city a worldwide logistics hub and a bridge between the East and the West. Today, it is the leading provider of worldwide smart end-to-end supply chain & logistics, enabling trade flow across the globe. Growing from a local port operator to a global trade enabler, DP World has a network of 128 business units in 60 countries. It has more than 53,220 employees from 131 countries and handles 70 million containers brought in by around 70,000 vessels annually.
Externally, the focus has been on enhancing the strategic and operational connection of logistics services between DP World terminals worldwide, with Emirates airlines playing a pivotal role. DP World Group Chairman and Chief Executive Sultan Bin Sulayem says free zones can be the step-up countries need whether they belong to emerging markets or are more established independent economies. According to him, free zones boost trade, jobs, and investment and enhance a country's attractiveness to inward capital and prospective trading partners.
