Jafza has been instrumental in the advancement of the auto industry in the country.
Dubai is home to the region’s largest car trade center and the largest used car market should come as no surprise. Dubai’s strategic location as a gateway between Europe, Asia and Africa, coupled with its unique logistics infrastructure, has fueled the steady rise of the emirate’s automotive sector.
Jebel Ali Free Zone (Jafza), a leading trade and logistics hub in the Middle East, part of DP World Group, facilitated more than 1.2 million metric tons (MT) from Dubai’s total volume of approximately 4.8 million MT of vehicle and transport goods passing through the emirate in 2021. This amounts to $12.4 billion, more than a third of total trade worth $31.3 billion.
Jafza has been instrumental in the advancement of the auto industry in the country. In particular, its unique logistics infrastructure and global trade network has fueled the steady rise of the automotive sector, connecting African, Asian and Middle Eastern merchants with consumers around the world.
With companies from 70 countries and a workforce of nearly 8,000, Jafza’s infrastructure and trading volumes are an attraction to industry giants such as Ford, General Motors, Honda, Hyundai, Nissan, Mitsubishi, Volkswagen and Volvo.
The free zone’s multimodal ecosystem connects merchants to more than 260 airports through Al Maktoum International Airport and more than 150 ports with direct services to Jebel Ali Port. It will also give them access to the GCC road network and the Etihad Rail which will start in 2023 and will have the Jebel Ali Rail Terminal as one of the first stations in its network.
In addition, smart trading solutions and benefits such as 0 percent VAT and corporate tax help companies operate efficiently as international distribution centers.
Although the Jebel Ali Port is an integral part of the car trade in general, it is a constant contributor to the export and import of used cars. Thus, Dubai’s status as a major used car export hub in the UAE and the Mena region will be strengthened. Due to a steady demand for used cars, according to a report by Ken Research, the used car market in the UAE is expected to reach a turnover of Dhs 112 billion by 2025. enormous growth for the automotive sector in the coming years.
Jebel Ali Port’s state-of-the-art roll-on, roll-off (RoRo) terminal plays a vital role in this continued success. The port has RoRo berths that can handle up to 1 million car equivalents (CEUs). It can also store up to 27,000 CEUs at its dockside yards, including a multi-storey facility, the largest in the region. Adjacent container filling and unclogging services are also important benefits for partners.
Prior to importing or exporting from the port, car manufacturers, dealers and importers can also use the Pre-Delivery Inspection (PDI) facilities in Jafza for services such as mounting light accessories, vehicle storage, washing, aging prevention and installation of audio systems.
In addition, including third-party logistics (3PL), container services and automated customs clearance and brokerage, in Jafza has created a one-stop ecosystem for importers, exporters and OEM distribution.
While physical infrastructure was the foundation of Jafza’s success, it was supported by custom solutions from DP World Logistics to optimize supply chain operations for automotive dealers.
These include fourth party logistics operations (4PL) and track-and-trace technology to enable transparency and simplicity in logistics operations, trade finance, feedering and reverse logistics. Global automotive customers can benefit from DP World’s global presence in 78 countries, including dedicated RoRo facilities in Cyprus, Romania, Germany and Dubai.
DP World’s acquisition of Syncreon in July 2021 will also enable the company to provide end-to-end solutions to freight owners. Syncreon operates in high-growth automotive industries with services such as material receipt, warehousing, inventory management, line supply kitting/sequencing and export packaging.
DP World’s European network includes 12 inland terminals, strategically located in economic centers in Germany, Switzerland, Belgium and France. DP World also offers trimodal connectivity between inland terminals in major European ports via 60 weekly inland shipping services and over 100 rail connections. The UAE contributes 21 percent to the auto trade in Africa, which amounts to about 7 billion tons of cargo per year.
Africa is a continent of 54 countries and 1.4 billion people. The diverse population is also remarkably young – with a median age of just 20 – and growing rapidly. By the end of this century, Africa could be home to more than four billion people. New connections within the region and with the rest of the world could help Africa take advantage of its population growth, creating a new global demand center for cars.