Feasibility Study for Logistics and Last-Mile Delivery in the UAE

The UAE is emerging as one of the leading logistics and e-commerce hubs in the Middle East. With its strategic geographic location, world-class infrastructure, and booming online retail sector, the demand for logistics and last-mile delivery services in the UAE is skyrocketing. From food delivery to fashion, electronics to pharmaceuticals, businesses are racing to optimize delivery networks that are fast, reliable, and cost-effective.

However, launching or expanding a logistics or last-mile delivery company in the UAE requires meticulous planning, strong market understanding, and high capital investment. That’s where a feasibility study plays a pivotal role. A feasibility study provides the necessary roadmap to evaluate market demand, financial viability, operational requirements, and regulatory compliance.

In this blog, we explore the vital components of a logistics feasibility study in the UAE, current industry trends, growth opportunities, and how Aviaan, a leading consulting firm, supports clients through actionable, research-driven insights. We also include two real-world case studies to showcase results.

Feasibility Study for Logistics and Last-Mile Delivery in the UAE

UAE’s Booming Logistics and Last-Mile Delivery Market

The UAE’s logistics industry is valued at over USD 30 billion, driven by key factors such as:

E-commerce growth post-COVID
Dubai Expo legacy projects and smart city initiatives
Increasing demand for same-day and next-day delivery
Rising adoption of cold chain logistics for food and pharma
Investments in smart warehouses and delivery automation

The UAE’s vision to become a global logistics hub is underpinned by infrastructure such as Jebel Ali Port, Dubai Logistics City, Etihad Rail, and Al Maktoum International Airport.

Key Logistics & Delivery Segments in the UAE

E-Commerce Fulfillment
- Warehousing, pick-and-pack, real-time inventory, doorstep delivery
B2B and B2C Courier Services
- Last-mile deliveries for retail, SMEs, and corporations
Food & Grocery Delivery
- Temperature-controlled, timed deliveries for restaurants and cloud kitchens
Pharmaceutical and Healthcare Delivery
- Compliance-driven logistics with tracking and cold storage
Reverse Logistics
- Handling returns and exchanges for online retailers
Cross-border Logistics
- International shipping, customs clearance, and last-mile drop-off

Why Conduct a Feasibility Study for Logistics and Last-Mile Delivery?

Setting up a logistics or last-mile delivery company involves fleet procurement, warehouse space, labor, software systems, partnerships, and licensing. A feasibility study helps evaluate:

Market demand and competition
Financial projections and profitability
Legal and regulatory frameworks
Tech stack and operations readiness
Risk mitigation strategies

Without a clear feasibility study, businesses risk underutilizing assets, overspending, or failing to meet market expectations.

Components of a Logistics & Last-Mile Delivery Feasibility Study

1. Market Analysis

Identify demand in major UAE cities (Dubai, Abu Dhabi, Sharjah, etc.)
Assess growth of e-commerce, grocery, and retail delivery sectors
Benchmark top players (Aramex, Careem, Talabat, Fetchr)
Analyze customer expectations on delivery speed, accuracy, and tracking

2. Business Model Assessment

Decide between:
- Owning fleet vs. outsourcing (3PL)
- B2C vs. B2B focus
- Warehouse-based vs. hub-and-spoke or dark store models
Evaluate revenue streams: per delivery fee, subscription, partnerships, logistics-as-a-service

3. Site Selection and Warehousing

Identify ideal warehouse or fulfillment center locations
Proximity to highways, ports, and urban centers
Assess leasing vs. owning, cold storage vs. ambient, and space optimization

4. Fleet Planning and Route Optimization

Evaluate vehicle types: bikes, vans, electric vehicles, drones (future)
Determine fleet size, maintenance, and delivery capacities
Integrate GPS, geofencing, and AI route optimization software

5. Technology Integration

Delivery Management Software (DMS)
Real-time tracking for customers and admins
Proof of delivery (POD) systems
Customer communication tools (SMS, WhatsApp updates)

6. Regulatory and Licensing Compliance

RTA licensing for commercial delivery vehicles
Warehousing permits (Dubai Municipality, DED, Civil Defense)
Customs compliance for international logistics
Data privacy and electronic transaction laws

7. Financial Feasibility

Capital expenditure (vehicles, warehouse, tech systems)
Operational costs (fuel, maintenance, salaries, software)
Revenue forecasts and pricing models
Break-even analysis, ROI, and funding strategy

8. SWOT and Risk Analysis

Identify threats: rising fuel prices, tech disruptions, labor shortages
Opportunities: green logistics, AI automation, regional expansion
Risk mitigation plans for delays, theft, or downtime

Benefits of a Feasibility Study in the UAE Logistics Sector

Validates your business plan with real-world data
Boosts investor and lender confidence
Helps select optimal technology and fleet mix
Avoids regulatory pitfalls and compliance failures
Provides a cost roadmap and timeline for scaling

How Aviaan Can Help with Logistics & Last-Mile Delivery Feasibility Studies in the UAE

Aviaan is a top-tier consultancy firm in the UAE, offering end-to-end feasibility study services for logistics startups, 3PL companies, e-commerce ventures, and international firms entering the UAE.

Aviaan’s Expertise:

Detailed market research and competitor benchmarking
Cost modeling, CAPEX/OPEX analysis, and financial forecasting
Regulatory guidance and licensing assistance
Technical advice on fleet planning, automation, and tech integration
Sustainability planning (EV fleets, solar-powered warehouses)
Strategic rollout plan with measurable KPIs

Whether you’re setting up a new delivery network, launching a dark store model, or expanding a cross-border logistics operation, Aviaan ensures your investment is future-proof, profitable, and efficient.

Case Study 1: E-Commerce Delivery Company in Abu Dhabi

Client:

A UAE-based startup aiming to launch a tech-enabled last-mile delivery service for fashion and electronics in Abu Dhabi.

Objectives:

Cover Abu Dhabi City and Al Ain with guaranteed 24-hour delivery
Integrate smart delivery tracking with customer alerts

Aviaan’s Contribution:

Market research to identify peak e-commerce zones and underserved suburbs
Feasibility study for 2 micro-fulfillment hubs
Vehicle sourcing strategy (leased electric vans)
Pricing model and break-even analysis
Licensing roadmap with RTA and Abu Dhabi DED

Outcome:

Successfully launched within 4 months
Achieved 95% on-time delivery rate
Secured Series A funding within 12 months

Case Study 2: Grocery Delivery Platform in Dubai

Client:

A retail group aiming to pivot into online grocery delivery, requiring warehousing and cold-chain last-mile delivery in Dubai.

Objectives:

Offer 90-minute delivery across key Dubai zones
Ensure chilled and frozen items meet food safety guidelines

Aviaan’s Deliverables:

Feasibility study for 3 dark stores with cold storage
Route planning and delivery shift optimization
Vehicle fleet plan with insulated vans and bikes
Technology recommendations for order tracking and inventory sync

Outcome:

Scaled operations to 1,000+ daily orders in 6 months
Reduced delivery costs by 15% through optimized routing
Gained HACCP certification and high customer satisfaction ratings

Conclusion

The logistics and last-mile delivery sector in the UAE is filled with opportunities—but also fraught with challenges ranging from fleet planning to tech implementation and cost control. A detailed, data-backed feasibility study is essential to navigate these dynamics successfully.

Whether you’re a tech startup, a retail chain, or a logistics veteran, understanding the financial, operational, and regulatory landscape is key to winning in the UAE’s fast-paced delivery ecosystem.