Qatar’s Resilient Supply Chain
The blockade, the pandemic, and the World Cup all presented significant challenges to Qatar’s supply chain over the past few years. In response, Qatar innovated, making significant improvements to its supply chain infrastructure, including developing new ports and logistics hubs. The country also invested heavily in technology and automation to improve efficiency and reduce costs.
Qatar’s National Vision 2030 includes ambitions to better-position the country as a global hub for logistics and transportation, develop local industry, and implement sustainable supply chain practices. In fact, given its growing logistics industry and multiple major transportation hubs, the country is well-positioned to serve as a gateway between Asia, Europe, and the Middle East.
Qatar’s economy is heavily dependent on the oil and gas sector, which accounts for more than 60% of its GDP. This has historically shaped the country’s supply chain strategies, with much of its supply chain focused on exporting hydrocarbons. However, Qatar is now working to diversify its economy and promote the growth of non-oil sectors, which will require a shift in supply chain strategies.
Qatar faced a blockade in June 2017, which led to the closure of land borders and the suspension of air and sea travel between Qatar and GCC countries. Given heavy reliance on imports from these neighboring countries, Qatar’s imports from the GCC countries were valued at around $11.5 billion in 2016, or approximately 13.6% of Qatar’s total imports, according to data from the International Trade Centre. As a result, Qatar’s supply chain suffered severe disruption. In an effort to mitigate negative impact, Qatar became more self-sufficient by investing over $200 billion in various infrastructure projects, including the expansion of Hamad Port, the construction of the Qatar Rail network, and the development of the Free Zones Authority to accommodate more trade with other countries.
With closed borders and a decrease in international trade (the volume of world merchandise trade fell by 5.3% in 2020, compared to the 2019, source: The World Trade Organization, WTO) leading to supply chain disruptions across the globe, the COVID-19 pandemic further exacerbated the challenges facing Qatar’s supply chain. As a small country relying heavily on imports for many essential goods and services (in 2019, imports of goods and services were equivalent to 47.7% of Qatar’s GDP, source: World Bank), Qatar was particularly vulnerable to the effects of the pandemic. However, the country took steps to mitigate the impact by increasing its domestic production and investing in local industries. Additionally, by diversifying its trade routes and so reducing its reliance on any given single supplier or transportation route, Qatar decreased the risk of disruptions due to pandemic-related events such as border closures and shipping delays.
The Qatar National Vision 2030 aims to promote sustainable supply chain practices with environmental protection, social responsibility, and economic viability given priority. This will help to reduce the environmental impact of the country’s economic activities and ensure a supply chain structure that is resilient and adaptable.
Emerging business models offer significant opportunities for Qatar to create a more efficient and resilient supply chain ecosystem. For example, Qatar can take advantage of the circular supply chain model, which involves the use of closed-loop systems to recycle and reuse materials. Also, the sharing economy model, which can be implemented in areas such as transportation, logistics, and warehousing, leading to more efficient use of resources and reduced carbon emissions.
Technology and innovation will undoubtedly shape Qatar’s supply chain over the next few years. By adopting digital solutions including blockchain-based supply chain platforms and digital freight forwarders, the country is already leveraging technology to improve supply chain efficiency and transparency. Looking ahead, to strike a balance between its global logistics aspirations and its commitment to sustainability, Qatar may need to continue to invest in more sustainable modes of transportation, such as electric or hydrogen-powered vehicles, and explore renewable energy sources to power supply chain operations. Further challenges will arise from shifts in global trade patterns, changes in consumer behavior, and evolving environmental regulations with innovation needed, particularly around autonomous vehicles, drones, and smart logistics.
Professor Adeinat‘s publication interests encompass service quality, operations research and knowledge management. In addition, she is a Six Sigma Black Belt Master.