Overall Rankings

Ranking Country Domestic Logistics Opportunities International Logistics Opportunities Business Fundamentals Overall
1 China 8.82 9.70 7.12 8.87
2 India 8.09 7.20 6.35 7.39
3 UAE 5.56 5.48 8.89 6.16
4 Indonesia 6.32 5.94 5.94 6.09
5 Malaysia 5.23 5.64 8.39 6.00
6 Saudi Arabia 5.27 5.23 7.67 5.71
7 Mexico 5.34 6.23 5.13 5.67
8 Qatar 5.38 4.85 7.84 5.62
9 Turkey 5.27 5.85 5.49 5.56
10 Vietnam 4.88 6.12 5.31 5.48
11 Thailand 4.95 5.79 5.84 5.47
12 Oman 4.98 4.84 7.73 5.44
13 Chile 4.79 5.18 7.26 5.42
14 Russia 5.15 5.55 5.60 5.40
15 Brazil 5.67 5.58 4.17 5.35
16 Bahrain 5.05 4.72 6.80 5.24
17 Morocco 4.65 4.92 6.61 5.13
18 Kuwait 5.09 4.62 6.19 5.10
19 Jordan 4.87 4.78 5.99 5.04
20 Philippines 5.03 5.15 4.40 4.96
21 Uruguay 4.78 4.54 6.10 4.93
22 Kazakhstan 4.78 4.70 5.63 4.91
23 Peru 4.71 5.11 4.71 4.88
24 South Africa 4.66 4.93 5.09 4.86
25 Colombia 4.72 5.01 4.57 4.81
26 Egypt 4.95 4.64 4.84 4.80
27 Ukraine 4.78 4.95 4.25 4.75
28 Pakistan 5.17 4.46 4.44 4.74
29 Lebanon 4.93 4.69 4.30 4.71
30 Argentina 5.01 4.74 3.94 4.70
31 Kenya 4.49 4.62 5.22 4.68
32 Ghana 4.62 4.40 5.31 4.86
33 Tunisia 4.54 4.50 5.16 4.64
34 Sri Lanka 4.54 4.71 4.51 4.61
35 Algeria 4.86 4.25 4.80 4.59
36 Ecuador 4.49 4.62 4.62 4.57
37 Iran 4.83 4.18 4.89 4.57
38 Tanzania 4.57 4.22 4.91 4.48
39 Bangladesh 4.97 4.44 3.47 4.47
40 Paraguay 4.33 4.60 4.27 4.43
41 Ethiopia 4.59 4.39 4.18 4.43
42 Cambodia 4.49 4.50 4.04 4.41
43 Nigeria 4.84 4.29 3.63 4.38
44 Bolivia 4.40 4.57 3.83 4.36
45 Uganda 4.44 4.49 3.77 4.34
46 Libya 4.45 4.41 1.65 3.90
47 Mozambique 4.31 4.50 1.65 3.89
48 Myanmar 4.38 4.52 1.41 3.88
49 Angola 4.43 4.29 0.80 3.68
50 Venezuela 4.52 4.09 0.72 3.62

China and India top the 2019 Agility Emerging Markets Logistics Index finishing some distance ahead of the remaining 48 emerging markets covered. The rest of the top 10 markets, however, are ranked much more closely together, with just 0.68 points separating them. In sum, the top 10 reflects the reality of emerging markets – that China and India dominate given both their scale and the initiatives undertaken to capitalise on those structural advantages, and that the remaining markets in the top 10 each present viable opportunities, between which it is difficult to discern at the surface level.

However, measuring across all three sub-indices of the top 10 reveals a picture of asymmetric competition most evident in the business environments offered by the Middle Eastern and South East Asian markets. Building a significant advantage in business fundamentals across regulatory environments which create confidence for investors has proven a viable strategy for driving performance and potential as a logistics market, as the UAE and Malaysia demonstrate. Conversely, the Philippines, which achieves top 15 rankings for both domestic and international logistics opportunities, ranks 34th overall for business fundamentals – primarily the result of a legislative and judiciary system that fails to ensure protection of investments and contracts.

The larger point here, though, is that success and potential as an emerging logistics market in 2019 requires coherence of policy across and throughout a markets business environment, and that this can reduce the weight of structural disadvantages if designed and implemented effectively. Given that it is a measure over which markets have near full control, poor performance is an opportunity lost.

Sources: Transport Intelligence

Domestic Logistics Opportunities

Ranking Country Domestic Logistics Opportunities
1 China 8.82
2 India 8.09
3 Indonesia 6.32
4 Brazil 5.67
5 UAE 5.56
6 Qatar 5.38
7 Mexico 5.34
8 Turkey 5.27
9 Saudi Arabia 5.27
10 Malaysia 5.23
11 Pakistan 5.17
12 Russia 5.17
13 Kuwait 5.09
14 Bahrain 5.05
15 Philippines 5.03
16 Argentina 5.01
17 Oman 4.98
18 Bangladesh 4.97
19 Egypt 4.95
20 Thailand 4.95
21 Lebanon 4.93
22 Vietnam 4.88
23 Jordan 4.87
24 Algeria 4.86
25 Nigeria 4.84
26 Iran 4.83
27 Chile 4.79
28 Uruguay 4.78
29 Kazakhstan 4.78
30 Ukraine 4.78
31 Colombia 4.72
32 Peru 4.71
33 South Africa 4.66
34 Morocco 4.65
35 Ghana 4.62
36 Ethiopia 4.59
37 Tanzania 4.57
38 Tunisia 4.54
39 Sri Lanka 4.54
40 Venezuela 4.52
41 Ecuador 4.49
42 Kenya 4.49
43 Cambodia 4.49
44 Libya 4.45
45 Uganda 4.44
46 Angola 4.43
47 Bolivia 4.40
48 Myanmar 4.38
49 Paraguay 4.33
50 Mozambique 4.31

With China and India topping the overall ranking in 2019, it should come as no surprise that both also top the ranking for domestic logistics opportunities. In part, this is driven by the current scale of both markets, both in term of GDP and population size, but perhaps more significantly, it is also a result of the growth expectations in both.

In China, already the second largest economy in the world, the World Bank forecasts GDP growth of 6.3% in 2019. Domestically, its logistics markets are also already vast, with high growth expectations. Ti estimates the Chinese contract logistics market will expand at a 12.4% CAGR over the five years to 2022, while the country’s domestic parcels market will see a 16.5% CAGR over the same period. This will be driven in part by the rapid expansion of e-commerce giants including Alibaba and JD.com into second and third tier cities and more rural areas as well as the increasing presence of global players in the market in high value sectors such as healthcare and pharmaceuticals.

There is a similar picture in India. A large economy and increasingly wealthy population are driving demand for goods that sees a rapidly expanding contract logistics and domestic parcels market propel India up the ranking. In several measures, however, India lags China, including in terms of GDP per capita and urbanisation. The UN estimates that approximately 34% of the Indian population lives in cities. Over the next 20 years, however, India’s urban population is expected to increase by some 250m. Research from McKinsey Global Institute estimates that India’s cities could generate 70% of new jobs by 2030, while also producing 70% of India’s GDP, and driving near fourfold growth in per capita income.

Sources: Transport Intelligence

International Logistics Opportunities

Ranking Country International Logistics Opportunities
1 China 9.70
2 India 7.20
3 Mexico 6.23
4 Vietnam 6.12
5 Indonesia 5.94
6 Turkey 5.85
7 Thailand 5.79
8 Malaysia 5.64
9 Brazil 5.68
10 Russia 5.55
11 UAE 5.48
12 Saudi Arabia 5.23
13 Chile 5.18
14 Philippines 5.15
15 Peru 5.11
16 Colombia 5.01
17 Ukraine 4.95
18 South Africa 4.93
19 Morocco 4.92
20 Qatar 4.85
21 Oman 4.84
22 Jordan 4.78
23 Argentina 4.74
24 Bahrain 4.72
25 Sri Lanka 4.71
26 Kazakhstan 4.70
27 Lebanon 4.69
28 Egypt 4.64
29 Kenya 4.62
30 Kuwait 4.62
31 Ecuador 4.62
32 Paraguay 4.60
33 Bolivia 4.57
34 Uruguay 4.54
35 Myanmar 4.52
36 Cambodia 4.50
37 Tunisia 4.50
38 Mozambique 4.50
39 Uganda 4.49
40 Pakistan 4.46
41 Bangladesh 4.44
42 Libya 4.41
43 Ghana 4.40
44 Ethiopia 4.39
45 Nigeria 4.29
46 Angola 4.29
47 Algeria 4.25
48 Tanzania 4.22
49 Iran 4.18
50 Venezuela 4.09

China ranks at the top of the international logistics opportunities sub-index by a large distance, driven by a high value logistics intensive trade market, and large international forwarding and express markets that are expected to continue strong growth trajectories. The real key to China’s position, though, is the vast global network the country’s international logistics market connects with through high quality infrastructure in key coastal export regions. India’s 2nd position, meanwhile, powered by strong growth expectations in airfreight forwarding and international express.

China and India are joined by four other Asia Pacific markets in the top 10, all of which are from South East Asia, a region that has become highly integrated with global value chains as the manufacturing sector growth has risen over the last several decades. Markets in the region have increasingly moved up the manufacturing value chain, and several benefitted from rising labour costs in China, undertaking the manufacture of higher value components and finished products as global manufacturers sought cheaper alternatives. An example is Vietnam – 4th overall in the international logistics opportunities sub-index – where average wages in the manufacturing sector are approximately four times lower than in China. Its expertise and infrastructure have improved to such an extent that it is a major global exporter in a number of sectors, including textiles and apparel which has come to account for approximately 40% of air freight trade with the US. Such exports are helping fulfil the rapid delivery expectations of fast-fashion and online retail. More widely, Vietnam’s ability to negotiate and sign new bilateral (such as with the EU) and multilateral (such as with ASEAN members) trade agreements has bolstered its ability to access new markets and should see it continue to grow over the longer term too. To date, it has signed 17 FTAs, although not all are implemented.

South East Asian markets are susceptible to falling Chinese growth, however, and may experience spillovers from an escalation in the US-China trade tension. While Thailand has a more robust domestic market than other countries in the region, it has seen weakening export growth in late 2018, in addition to negative PMI ratings that indicate contraction in its manufacturing sector. The outlook for Thailand remains positive overall, with GDP growth of 3.8% in 2019, but vulnerabilities in export markets across the region will need to be watched carefully.

Sources: Transport Intelligence

Business Fundamentals

Ranking Country Business Fundamentals
1 UAE 8.89
2 Malaysia 8.39
3 Qatar 7.84
4 Oman 7.73
5 Saudi Arabia 7.67
6 Chile 7.26
7 China 7.12
8 Bahrain 6.80
9 Morocco 6.61
10 India 6.35
11 Kuwait 6.19
12 Uruguay 6.10
13 Jordan 5.99
14 Indonesia 5.94
15 Thailand 5.84
16 Kazakhstan 5.63
17 Russia 5.60
18 Turkey 5.49
19 Ghana 5.31
20 Vietnam 5.31
21 Kenya 5.22
22 Tunisia 5.16
23 Mexico 5.13
24 South Africa 5.09
25 Tanzania 4.91
26 Iran 4.89
27 Egypt 4.84
28 Algeria 4.80
29 Peru 4.71
30 Ecuador 4.62
31 Colombia 4.57
32 Sri Lanka 4.51
33 Pakistan 4.44
34 Philippines 4.40
35 Lebanon 4.30
36 Paraguay 4.27
37 Ukraine 4.25
38 Ethiopia 4.18
39 Brazil 4.17
40 Cambodia 4.04
41 Argentina 3.94
42 Bolivia 3.83
43 Uganda 3.77
44 Nigeria 3.63
45 Bangladesh 3.47
46 Mozambique 1.65
47 Libya 1.65
48 Myanmar 1.41
49 Angola 0.80
50 Venezuela 0.72

The business fundamentals sub-index is dominated by the Middle East, with five of the top 10 ranking positions occupied by emerging markets from the region.

In top position is the UAE, where business fundamentals are strong across much of the economy for foreign investors. In particular, the Emirates have put into place a business environment that provides a robust financial sector, a transparent regulatory system and frameworks that offer protection from corruption, ensure property rights and enforce contracts. Saudi Arabia’s 5th rank is driven by a similar set of strengths, although access to certain sectors of its economy remains more restrictive. The Kingdom’s ambitious Vision 2030 strategy aims to attract foreign investors with the expertise to power more diversified growth and develop local capabilities. This, however, will require consolidation of regulations to attract foreign investment, create new jobs and transfer private sector skills to the public sector, areas where the Saudi business environment still lags behind global standards. The region’s other high performing markets are Qatar – where improved management of corruption has resulted from efficient management of public finances, improved public procurement and better access to public services and infrastructure – Oman and Bahrain, which both gain top 10 ranking positions as a result of favourable regulatory environments for foreign investors and low disruption to business from crime and violence.

The UAE remains the top location for FDI in the region, taking up 26% of all FDI projects in 2017, according to fDi. In the same year, though, Saudi Arabia saw capital investment fall 42% and a 14% decrease in overall FDI projects. Indeed, attracting foreign investors is a key pillar in many of the economic diversification plans across the region, and developing strong business environments has taken on new impetus since the price of oil began to fall in 2014. A diversified economy is essential in dealing both with the dynamics of global energy markets, but also in creating opportunities for investment and job creation. While nearly all hydrocarbon-centric markets felt the effects of lower commodity prices, two in particular have so far failed to address fundamental issues – Nigeria and Venezuela.

Sources: Transport Intelligence

News Release

The survey of more than 500 global logistics and supply chain executives is part of the 2019 Agility Emerging Markets Logistics Index, an annual snapshot of industry sentiment and a ranking of the world’s 50 leading emerging markets by size, business conditions, infrastructure and transport connections.

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