Choosing the right location to build your company’s warehouse can significantly affect your long-term profitability.
Find the right place and you’re set up for seamless logistics and supply chain management. Pick the wrong one and you’re faced with rising costs, late deliveries and inefficiency.
The way businesses choose locations for their warehouses is influenced by global trends, including the rise of e-commerce, shorter lead times and new digital technologies. The UAE’s free zones – such as Umm Al Quwain – are able to meet these often complex demands.
So here are seven factors you should consider when choosing where to build your UAE warehouse.
1. The location
Proximity to your main markets is a key factor to consider when selecting a warehouse location. If you serve just one town, it makes sense to choose a location close to or even within that town. However, if you serve (or hope in future to serve) clients throughout the UAE, it’s important to find somewhere that offers access to major population centres.
Umm Al Quwain Free Trade Zone’s location
With rapid access to Dubai, Sharjah, Ajman, Fujairah and Ras al Khaimah, Umm Al Quwain Free Trade Zone offers a central location within reach of the UAE’s most populated regions.
2. Surrounding infrastructure
The UAE has a world-class transport network and it’s expanding all the time. According to a new Bank of America Merrill Lynch report, it ranked third among the world’s top locations for infrastructure investment.
But in order to take advantage of this, you need to make sure you build your warehouse close to good quality road, air and sea transport. This will allow you to move your goods quickly and easily to the warehouse before distributing them to your customers or stores.
Umm Al Quwain Free Trade Zone’s surrounding infrastructure
Umm Al Quwain is served by excellent transport infrastructure. With a location on the E 311 highway, the UAE’s longest road, the free zone offers a starting location for shipping to any road-connected location in the GCC.
For import and export, the emirate’s Hutchison Port provides a four-berth facility with an 845-metre long quay. The free zone is also just 45 minutes from Dubai International Airport by road.
3. Direct cost
Warehousing typically makes up around one quarter of companies’ logistics costs, so any opportunity to reduce that expense will impact your bottom line.
Many companies understandably want to build their warehouses in the immediate vicinity of their head offices, but this can often come with a real estate premium. Choosing locations outside major urban centres means a significant decline in cost, so it’s definitely worth considering offsite.
Umm Al Quwain Free Trade Zone’s direct costs
Thanks to its location, Umm Al Quwain’s Free Trade Zone offers highly competitive rates compared to city centre locations elsewhere in the UAE. And given that you’re still less than one hour from Dubai by road, your warehouses will still be accessible for businesses.
4. Available workforce
Warehouses need pickers, forklift drivers and security personnel to keep operations running smoothly. It’s therefore essential to choose a location with an educated, dependable workforce in the vicinity.
Umm Al Quwain Free Trade Zone’s available workforce
The free zone is well served by nearby towns and cities to ensure a source of local labour. Umm Al Quwain itself has a population of around 73,000, while Ajman, Sharjah and Dubai are all within commuting distance.
5. Flexibility of space
Businesses grow, pivot and downsize for various reasons. While the IMF predicted that the UAE’s economy will expand 3.7% in 2019 – more than previously predicted – the country is still heavily reliant on oil revenue while the fortunes of the private sector can fluctuate. For businesses, this means their warehousing space needs can also change.
If you’re expanding, it’s important to know you won’t be constrained by a location with limited availability. Equally, if you find you need to reduce your company’s product lines, you don’t want to be stuck in lengthy contracts which force you to pay for space you aren’t using. It’s therefore important to find warehouses which offer this kind of flexibility.
Umm Al Quwain’s warehouse packages are designed to provide businesses of all sizes with the flexibility to meet their changing requirements, offering both short- and long-term land options.
The UAE is a great place to do business. The World Bank’s most recent Ease of Doing Business report saw it jump to 11th place globally in 2019 compared to 21st place last year.
That being said, when choosing your company’s warehouse space, it’s still crucial to understand the rules on local governance so you don’t get caught out. It’s vital to know what you can and can’t store in a warehouse, as well as tax obligations and other fees. It’s also worth considering whether you will have full ownership of the warehouse or co-operate with a local partner.
Umm al Quwain Free Trade Zone offers plenty of incentives, including:
- 100% foreign ownership
- 0% corporate and personal tax
- 100% repatriation of capital and profits
- No exchange controls
- No restriction on investment
- No limitations on what you can store (providing it complies with UAE laws)
7. Facilities you can trust
A warehouse must provide dependable facilities which keep your goods at the correct temperature while offering total security.
Today, there is also an expectation that they will incorporate the latest technologies (including Big Data tools and even robot pickers). A survey carried out in 2017 by Honeywell and YouGov found that 87% of retailers in the UAE who adopted new warehousing and logistics automation technologies saw a positive impact on productivity.
With power and water access available to each warehouse, large areas of land and telecommunications connections available, Umm Al Quwain Free Trade Zone provides a comprehensive range of land to build your warehouse.
Making the right choice
Getting the right location is key. Naturally, all the above factors are intertwined, so it’s essential to balance them out when making your decision.
Many of the warehouses in the UAE’s free zones, including Umm Al Quwain, offer some of the most comprehensive packages for distribution, supply chain and logistics in the UAE and wider region.
Look for those that provide excellent infrastructure, a central location, competitive pricing and technical support.