The UAE is a re-exporting haven. Re-export trade accounts for one third of the country's entire trading sector and, according to the UAE's government website, it has become the third most important re-export centre in the world (after Hong Kong and Singapore).
Projects such as Dubai Logistics City and terminal expansions at Jebel Ali and Ras Al Khaimah are set to develop the industry further.
The strength of this trade lies in bulk purchases, low taxes, good infrastructure and the high concentration of traders.
"The UAE is a tax-free haven, with a proximity advantage to Asia, Africa, CIS and Europe," explains James Paul, Manager of Exports and Corporate Sales, Jacky's Middle East.
"It also offers world-class infrastructure, comprehensive free zones, single window approvals for business establishments and good workforce availability, making it an ideal hub for re-exporting."
The primary export centres of the UAE are the free zones, which provide administrative and financial advantages for re-exporting companies.
The UAE government has given top priority to infrastructural utilities that facilitate the re-exporting market.
For example, Dubai International Airport, Sharjah Airport, the Duty Free Complex and Cargo Village help sustain the re-exporting market.
Port Rashid, Jebel Ali Port and Dubai Creek are also part of this re-exporting chain.
The goods which enter the UAE for re-export purposes come from all over the world. Keyvan Nowrouzian, General Manager, Clarion Shipping Services UAE, says, "A large majority of these goods come from China.
Then come countries such as Japan, Taiwan and Korea in the Far East, Indonesia, Malaysia and Thailand in South East Asia.
These are followed by European countries, with Germany and Italy at the top, then the UK, Spain, France and others. There are also imports from the USA."
Traditionally, the UAE is the re-export point for the GCC, Africa and the Indian sub-continent, so the majority of the imported goods are redistributed to these parts.
Iran is a major re-export destination from the UAE. "The country has a population of over 70 million and does not have port facilities that can be used by premium carriers of a load of such capacity," explains Nowrouzian.
Higher demand for imports
Due to the population increase in the UAE, there is a higher demand for imports in order to meet re-export requirements and an increasing level of individual expenditure.
There has also been a rise in the value of the volume of imports. "The goods that are mainly transited through the UAE are fast moving consumer goods, bulk commodities and supplies and equipment for the oil and gas industry.
This hasn't changed much over the years, however, as the population has increased, and markets expanded, so has the volume of goods that are being transited," says Matthew Diggle, Business Manager of Freight Services, GAC world.
Other goods that are re-exported are electronics, IT and office automation equipment, home appliances and building materials.
The re-exporting process is simple. Cargo must be announced prior to the arrival of the vessel into the UAE as transshipment cargo'. After discharging the goods from the vessel, these containers will be put into the transshipment stack of the port until the other carriers arrive.
Once the vessel to be used to re-export the goods arrives, the goods are loaded onto the second vessel.
Another possible scenario is presented when the cargo does not need re-exporting immediately.
This cargo is transported to a warehouse in a free zone area and remains there until the client instructs otherwise.
Re-exporting can take place via air, sea or road. It is difficult to estimate which method is used more often in the UAE, as each method of transportation is quantified differently.
"Ocean freight volumes are measured in TEUs and cubic metres — air rates are measured in kilograms," says Diggle. "Each movement carries a different value, therefore it would be misleading to estimate which is used the most".
Need more facilities
As the UAE continues to experience phenomenal growth, it is expected that re-exporting will continue to be a major part of this economic development.
Looking into how the re-export industry can be further improved, industry insiders suggest that more facilities are needed to ensure the growth is facilitated adequately.
"Currently, the major chunk of re-exporting activity is in Dubai and Jebel Ali. As the UAE has a wide coast line, developing other parts and free zones would definitely increase the re-export volumes from the country," says Paul. n
