The GCC region is undergoing a transformative shift in last-mile delivery logistics, driven by a 3.2x increase in quick commerce volumes between 2022 and 2025. Electric vehicle adoption in urban fleets rose from 12% to 40% between 2021 and 2025, supported by national sustainability goals. Centralised distribution hubs in Abu Dhabi reduced delivery routes by 28%, while AI-powered routing cut fuel use by 18%. In Riyadh, micro-fulfilment centres now serve 68% of Q-Commerce deliveries, enabling sub-30-minute delivery windows. These changes reflect a strategic pivot toward efficiency, sustainability, and speed in high-density urban environments.
According to Logistics Middle East, the Gulf Cooperation Council (GCC) region is experiencing a rapid expansion in last-mile delivery volumes, driven by the growth of quick commerce and e-commerce, which is forcing logistics operators to reconfigure their fleet models. The shift is accelerating adoption of electric vehicles, centralised distribution hubs, and AI-driven route optimisation.
Electric Fleet Adoption Accelerates Amid Urban Pressure
Electrification of last-mile fleets is becoming a strategic priority across the GCC. According to the report, over 40% of new delivery vehicles deployed in Dubai and Riyadh between 2023 and 2025 were electric, up from just 12% in 2021. This growth aligns with national sustainability targets, including Saudi Arabia’s Vision 2030 and the UAE’s Net Zero 2050 pledge. The report notes that by 2030, electric vehicles are expected to account for 70% of all urban delivery fleets in the region. The shift is supported by government incentives, with the UAE offering up to 100% funding for EV charging infrastructure at logistics hubs.
Centralisation Reduces Urban Congestion and Costs
Logistics operators are consolidating delivery operations through centralised hubs to improve efficiency. The report states that companies like Aramex and STC Logistics have reduced last-mile delivery times by up to 35% by relocating distribution centres closer to high-density urban zones. In Abu Dhabi, a single central hub now serves over 120,000 daily deliveries, reducing the number of individual delivery routes by 28%. The report attributes this to the use of dynamic routing algorithms and real-time traffic data integration.
“The old model of scattered, decentralized warehouses is no longer viable in cities like Doha and Riyadh, where traffic congestion and delivery windows are tightening.” — Ahmed Al-Mutawa, Head of Logistics, STC Logistics, 2025
AI-Driven Optimization Cuts Delivery Costs and Emissions
Artificial intelligence is playing a pivotal role in enhancing delivery efficiency. The report highlights that AI-powered route planning systems have reduced average delivery times by 22% and cut fuel consumption by 18% across the GCC. In Qatar, a pilot using AI to predict delivery demand spikes based on social media and weather data reduced late deliveries by 41% during peak seasons. The report cites a case study from Dubai where a logistics provider achieved a 63% reduction in failed first attempts through AI-enabled customer scheduling.
- Electric vehicle adoption in GCC urban fleets rose from 12% in 2021 to 40% in 2025
- Centralised hubs reduced delivery route count by 28% in Abu Dhabi
- AI route planning cut fuel use by 18% in GCC operations
- AI scheduling reduced failed delivery attempts by 63% in Dubai
- Quick commerce volume in GCC grew by 3.2x between 2022 and 2025
Impact of Quick Commerce on Fleet Strategy
Quick commerce (Q-Commerce) is the primary driver of change. The report states that Q-Commerce delivery volumes in the GCC increased by 3.2 times between 2022 and 2025, reaching over 3.5 billion deliveries annually. This spike has forced companies to shorten delivery windows from 24 hours to under 30 minutes in major urban centres. In response, logistics providers have introduced micro-fulfilment centres located within 500 meters of high-density residential zones. These centres, often operated by third-party firms like Deliveroo and Talabat, now handle 68% of all Q-Commerce deliveries in Riyadh.
Source: www.logisticsmiddleeast.com
Compiled from international media by the SCI.AI editorial team.
