Chinese logistics companies shift focus from Middle East to Africa, Southeast Asia

Chinese logistics companies are scaling back operations in the Middle East as ongoing conflict heightens geopolitical risks and disrupts global trade. Many firms are shifting resources to Africa, Southeast Asia, and the Americas to mitigate exposure to the region.

A senior executive at an international logistics company with extensive operations in Dubai confirmed the trend. The firm manages customs brokerage, overseas warehouses, container truck fleets, and pickup truck fleets in the UAE, employing over 100 staff. Due to the current instability, most Dubai-based colleagues now work on flexible schedules, with some returning home early for holidays.

“In light of the development trends of the Middle East war, our business footprint in the region will further shrink,” said Fan Jiansheng, head of an international logistics company based in Shenzhen, Guangdong Province. “Therefore, we will increasingly allocate our resources to routes serving Africa, Southeast Asia, and the Americas, including redeploying personnel to other countries as part of our new layout.”

While companies are actively adjusting their strategies and shifting to other regional routes, they face mounting pressure from rising freight rates. “On other routes — the United States, Europe, South America, and Southeast Asia — freight rates have risen by 10 to 20% or even more, whether by air, courier, or sea, due to rising fuel surcharges,” said Li Liangjuan, head of a freight forwarding company based in Shenzhen. “From the end of February to the beginning of April, rates have gone up four or five times in just one month.”

In response, many European and American trading companies and cross-border e-commerce businesses are bulk purchasing and stockpiling in advance to hedge against further rate increases. “Combined with current order demand, many of our warehouses in North America are now completely overloaded,” said Zhao Kaijie, head of a warehousing and logistics company based in Shenzhen.

The realignment of logistics operations underscores the broader economic ripple effects of regional instability, as firms seek stability in markets less affected by conflict.