Supply chain disruptions cost some UAE businesses 160% more in logistics

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Finance chiefs at NAFA Summit Dubai warn that rising transport costs, shifting customer contracts and supply uncertainties are forcing companies to rethink risk management ...

UAE businesses are facing mounting pressure from rising logistics costs and supply chain uncertainties, with one multinational reporting a staggering 160 per cent year-on-year increase in the cost of moving goods due to geopolitical disruptions.

For businesses dependent on cross-border supply chains, the impact is extending beyond higher transportation bills.

Companies are having to reassess customer commitments and protect product availability as uncertainty makes planning increasingly difficult.

Speaking during a session titled Same Country, Different Problems at the NAFA Summit Dubai, finance leaders from sectors including food, pharmaceuticals and logistics highlighted how regional and global disruptions are changing their day-to-day priorities.

Umberto Giovanni Maccari, CFO Middle East and Africa at The Kraft Heinz Company, said the company's reliance on centralised manufacturing facilities had made logistics a particularly important cost factor.

The company does not manufacture in every market where it operates, meaning products must be transported from factories in different parts of the world to reach consumers in the Middle East.

"The increase in logistics costs year on year is 160 per cent. So, the cost of moving bottles of ketchup from our factories across the world, whether in Egypt, Russia or Europe, to the Middle East has almost tripled."

The increase illustrates how geopolitical developments and disruptions to international transport routes can quickly feed into the cost of everyday consumer goods.

For pharmaceutical companies, however, the bigger concern is not simply the cost of moving products but ensuring that patients continue to receive medicines when they need them.

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