Dubai-listed Aramex said it has separated its core activities as part of a “new operating model” aimed at seizing growth opportunities in the transport and logistics sector after Covid 19.
The company, in which Abu Dhabi-backed investment holding company ADQ last year bought a 22.25% stake, said it had created Aramex Express, which will provide delivery services between business and customers, and Aramex Logistics, which is responsible for business-to-business operations.
Aramex announced the adoption of a new operating model, through which it aims to improve the level of customer services and enhance the efficiency of operational processes, by launching Aramex Express, which includes international and local express transportation solutions, and its services for businesses directed to individuals, and will include “Shop and Ship” solutions and e-commerce. Fast Moving Consumer Goods and Small and Medium Enterprises.
It appointed Muhammad Al-Akhras as Chief Operating Officer of Aramex Logistics and Alaa Al-Saudi as Chief Operating Officer of Aramex Express.
Othman Al-Jedda, Group CEO of Aramex, said: “The global transportation and logistics industry is witnessing radical transformations, primarily driven by the boom in the e-commerce sector, challenges in supply chains, high customer expectations, in addition to the tremendous speed in the pace of digital transformation.”
Stemming from our keenness to establish Aramex’s leading position in the sector and enhance its growth, competitiveness and reliability in a sustainable manner, we decided to focus on seizing growth opportunities by separating our core business lines.
The business express services segment accounts for 70% of the group’s revenue, and Aramex has stated that it plans to boost growth by creating new domestic and international trade routes.
The company plans to expand its logistics activities, which account for 28% of revenue, by increasing its presence in key markets and markets that facilitate trade flows to the region.
The statement said that the recovery in oil prices is expected to help growth in shipping activities.
As part of the redesign, the company created a new regional structure and appointed a Chief Strategy Officer to oversee international expansion and merger and acquisition plans.
Meanwhile, Aramex Logistics, which includes solutions for air, sea and land freight, warehousing and distribution, will serve the business base of companies across several industries including oil and gas, healthcare, pharmaceutical, aviation and aerospace, retail, fashion and more.
Al-Jedda added: “By launching Aramex Express and Aramex Logistics, we will enhance the company’s flexibility so that we can focus more on seizing the right opportunities for growth and diversifying our customer base, as well as investing in employing the best and latest technologies, and raising the levels of efficiency in our business. Through our existing investments, we will provide our customers with improved levels of service and create long-term value for our shareholders.”
Al-Jedda continued: “We are witnessing many good growth opportunities in the express transport services sector, which accounts for 70% of our revenues, and we intend to continue developing this sector. As for our logistics services sector, it constitutes about 28% of our revenues.”
According to the latest market studies, the global logistics industry is expected to reach $1,232 billion in 2025, with a compound annual growth rate of 7.5% from 2020 to 2025.
More specifically, the global e-commerce-related logistics industry is expected to reach $657 billion in 2025, representing an 8.6% compound annual growth rate in the cited period.
Market studies expect the express freight and international parcel freight sector to increase by 9.2% to reach $117 billion, and the express freight and domestic parcel freight sector to grow by 8.6% to reach $543 billion. Meanwhile, the freight forwarding and contract logistics sector is expected to grow 6.2% to $242 billion and $331 billion, respectively.
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