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Amazon's new investment in the Middle East! Abu Dhabi as the preferred automated logistics center

source:Cross-border News 2021-11-30 15:51:21 1 FBI headway International Freight

In the latest news, Amazon will establish the most technologically advanced logistics center in the Middle East in Abu Dhabi through cooperation with the Abu Dhabi Investment Office. The 175,000-square-meter site is expected to be completed in 2024 and aims to create thousands of jobs, promote logistics innovation, and allow local entrepreneurs and retailers to enter new markets through Amazon.

Mohamed Al Sholafa, Chairman of the Ministry of Economic Development of Abu Dhabi and head of Adio, said: “By introducing new features and enhanced infrastructure to bring benefits to other companies, the addition of Amazon’s new operations center has further promoted the ecology of the UAE. system."

The Middle East provides huge growth opportunities for the Seattle-based technology giant. Amazon's e-commerce business is facing headwinds due to labor shortages in the United States and rising inflation and freight costs. As delivery demand during the pandemic began to weaken, net sales in the third quarter increased by 3.3% to 49.9 billion U.S. dollars.

But in the UAE, the situation is different. According to Euromonitor, the UAE’s retail e-commerce market reached a record US$3.9 billion in 2020 and is expected to double by 2025 to reach US$8 billion.

Amazon already operates three sites in the UAE, Saudi Arabia and Egypt, and has five operations centers in the region. Russell Grandinetti, Amazon’s senior vice president of international customers, said, “We are very pleased with the growth of our business in the UAE over the past few years, so this is just a continuation of this progress.”

With the planned fulfillment center in Abu Dhabi, customers in the UAE can expect same-day or next-day delivery of certain products and a wider range of options, and automation will become a core feature of the logistics center.

Automated transportation systems will move items point-to-point during picking, packaging, and transportation, and reduce the number of workers required. The robot will attach shipping labels to boxes customized for each item to reduce waste. The building itself will also have a solar roof to generate on-site renewable energy and will be designed to accommodate zero-emission vehicles.

Mr. Grandinetti identified two technical areas where Abu Dhabi can help Amazon develop solutions: the electrification of its delivery fleet in warm climates (which is bad for batteries) and geographic positioning.

The company is committed to achieving net zero by 2040. Earlier this year, it ordered 100,000 customized electric delivery vehicles from electric car manufacturer Rivian.

In parts of the world, such as the Middle East, addresses are rare. Advanced geolocation technology will shorten delivery time, and the solution can be replicated elsewhere. But all of these require highly skilled employees.

"The difference between Amazon and many other large, visible technology companies is that we have created jobs in all income classes and on a truly meaningful scale," said Mr. Grandinetti. "We hope this will happen here, in the next step. This will create thousands of jobs at all levels in Abu Dhabi in the next 10 years."

Adio has established a cloud data center partnership with AWS to provide incentives for the land, buildings, and sustainable energy of the new site to attract Amazon with undisclosed value. This government entity began operations in 2019 and is responsible for attracting and promoting investment in Abu Dhabi.

As part of the cooperation with Adio, Amazon will provide entrepreneurs and local business owners with specialized seller training in the next ten years.

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