Trucking is the leading freight transportation mode in the world with 70% of goods being shipped by road, according to Roland Berger
. In 2020, the global road freight industry was valued at around $3.1 trillion in 2020, due to a Frost & Sullivan white paper
. The market has grown continuously owing to the increasing levels of trade and economic activity. The COVID-19 outbreak marked the first time in a decade that activity in the sector decreased caused by travel restrictions, border closures, and lockdowns. Those drastic precautions have obviously impacted freight capacity and flow of goods with estimates suggesting a decline of between 15% and 25%, depending on the market.
The sector’s global revenues are forecasted to grow by an average of 4.3% annually from 2020 to 2025. Looking at a regional level, the growth forecast for the Africa & Middle East region is estimated at 3.9%. Another source predicts the transport sector in the Gulf Cooperation Council (GCC) to grow by a CAGR of 5% between 2020 and 2025.
But which aspects will drive this growth in the GCC region and are there challenges which could possibly slow down the upwards development when not addressed in the right way?
In this article, we will look at the current road freight market in the GCC and some of its potential growth drivers. Then we will identify the risks the industry should be aware of to avoid staying behind the expectations and international competition.