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The challenges in logistics and transportation industry in Oman

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Oman has been a key destination and transit point for trade for many centuries with the port of Muttrah in Muscat being the preferred berthing place for refilling en route from the Persian Gulf to the Indian Subcontinent. Oman has continued to maintain this position and looks to further expand and modernize to be the preferred logistics hub in the region. The country has a long-held reputation of being a safe country with a stable government for doing business.

The Logistics transportation and industry in Oman

The transportation and logistics industry is a key non-oil component that contributes around 5% to the GDP of Oman. The industry has been growing rapidly in recent times and has created many new jobs. However, the faces many challenges which are being addressed by the government and other stakeholders to ensure that the growth is sustained and Oman maintains its preeminent position in the industry. These are set out in the long term plan called Sultanate of Oman Logistics Strategy (SOLS) 2040.
The awareness of the potential of the logistics and transportation industry as a key driver of economic growth and job creator has traditionally been limited to the existing industry players in the country. The government of Oman has created ASYAD as an umbrella organization to synergize the activities of all logistics and transportation stakeholders and expand capabilities to meet future market demands.

Challenges faced by the logistics and transportation industry

Below are some of the ongoing challenges the industry has to overcome to remain competitive and ensure continued growth.

Technological advancements

The logistics and transportation industry is facing major challenges due to disruptions caused by technological advances and it is imperative for businesses to adopt these advancements as an enabler of future growth. This requires the setting up of integrated and intelligent logistics facilities incorporating the next-generation features, the capability to handle all types of cargo including those that have special requirements, active collaboration and seamless business transactions among all stakeholders, learning from industry pioneers and adoption of best practices, etc. All these should lead to more efficient storage and movement of cargo.

Employment laws

Oman has enacted laws to increase the number of Omani nationals working in the private sector. Logistics and Transportation companies, like other businesses, have to focus on employing Omani nationals. The challenge here is to impart the necessary training to the workforce to make them employable in all areas of the industry.
Trade bodies, government agencies and individual businesses carry out extensive training programs to develop a workforce with the required skills. The study of logistics is also now part of education curricula in the country.

Government regulations

The government has also made several interventions to streamline and liberalize regulations that would ease the setting up and operation of logistics companies. These include the setting up of special economic zones, relaxation in ownership of businesses by foreign entities, customs regulations, tax breaks, etc. All stakeholders in the logistics and transportation industry are in constant dialogue amongst them to facilitate trade, improve processes, manage risks, reduce the number of inspections, arrange pre-clearance for cargo, etc.

Transportation costs

One of the main challenges faced by the industry is the rising transportation costs due to rising fuel costs. The overall logistics budget gets affected by this which in turn translates to higher shipping prices that need to be paid by customers.
To address this issue, logistics and transportation companies have started to incorporate a responsive transportation system that will allow for faster identification of issues and deliver economical solutions. Various technologies such as autonomous tracking, AI etc, are being put to use to bring down transportation costs and maintain an effective transportation network system.

Workforce management

With the fast growth of the transportation and logistics industry, the need for a faster and efficient workforce has become an issue that many businesses’ have to address.
To overcome this challenge, a few logistics and transportation companies have adopted the use of robotics and drone technology to augment supply chain operations and increase its efficiency and productivity.


By implementing some of the key technologies and effective strategies the logistics and transportation service providers can overcome the challenging issues faced by them and ensure continued growth in the industry.
Though the challenges are many, we at Alsi Oman, a leading logistics service provider in Oman, have the necessary resources, technology and the expertise to overcome these challenges and meet your logistics requirements satisfactorily
Contact us today to know more.

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