SME Logistics Outsourcing In Oman

Outsourcing of logistics services is an effective strategy to reduce the costs and expenditure of freight movements. Usually, 3PL logistics or third-party logistics make use of outside parties to execute different activities generally done by the internal staff and resources. SME Logistics outsourcing Oman can be considered as a boon for the active flourishing of cargo services without much expenditure.  

How SMEs are associated with logistics outsourcing?

The SME companies are facing problems related to on-time delivery, impaired goods, lack of knowledge related to international rules, and poor experience in customs clearance.  As a remedy for all these issues, SME  increasingly come to the forefront with services like logistics outsourcing. Logistics and transportation is an extensive area that boosts the development and growth of SMEs ( Small and Medium  Enterprise). 

Four Ways to Reduce Costs on Freight Transport- A Guide for SME

Small and Medium Enterprises (generally known as SMEs) are the main ingredient of the fertile structure of one country’s GDP. The labor resource and massive job opportunities fostered SMEs as a pillar of economic growth. As aforementioned, logistics and transportation enhanced the wide range of these opportunities into another realm. But sometimes they face huge amounts for the active running of cargo services. The best way for reducing the costs of freight transportation is the outsourcing method. By reducing the number of employees and saving time logistics outsourcing reduces the operating costs.

Shipping consolidation is another important strategy to maintain and reduce the costs of freight transportation. This kind of shipping allows the combining of goods into a single shipping container. Warehouse consolidation is also there. It is an economical way of warehousing by collecting all the supplies into the nearest warehouse and supplying them in different locations.

Labor cost is the flipside through which money flows extensively. For reducing labor costs automatic container loading and unloading systems will help to a greater extent. By focusing on accurate delivery, time management, handling of goods, customs clearance, and customer retention it is possible to be a dedicated SME logistics solution.

3PL Logistics Solution for SMEs

In the supply chain management system, Third-Party logistics allows the outsourcing of cargo (freights) from warehousing to distribution. The operational logistics needs are accurately moved and by enabling 3PL we can foster our  Small-Medium Enterprises logistics business into the next level. The holders of SMEs are always concerned with the accurate and timely distribution of logistics, and for that, they associate with third-party logistics. 3PL is a whole system that focuses on warehousing to distribution with minimal expenditure. Cost-effectiveness and accuracy in distribution are the significant features of 3PL. Hence, SMEs can easily save money and time with more efficient service delivery. 

2021’s Small and Medium-sized Enterprises actively growing and developing by bonding with different outsourcing logistics solutions. Logistics outsourcing extends all the solutions for the growth of SME logistics companies from collecting parcels, warehousing, shielded shipping, and on-time delivery. The outsourcing of logistics helps to reduce the burden of the SMEs and avail the solutions to save money and time. Flexibility and expertise in the handling of logistics assure the fostering of SMEs through logistics outsourcing.

Riyada- Supporting SME in Oman

RIYADA, Oman’s Authority for Small and Medium Enterprise Development for supporting SME in Oman, is key to enable the SME sector to work and contribute progressively to the economy.

The Authority for Small and Medium Enterprises Development (Riyada) has issued long-term and detailed incentive plans and programs offered to owners of small and medium enterprises (SMEs) intending to write off SME license fees. RIYADA is part of the Government of Oman and, in recent years, has put a plan of actionable programs in place to boost the productivity of the SME sector in the country.

What is Riyada?

RIYADA is located in Muscat with around 12,000 member companies and SMEs. Under Dr. Ahmed Al Ghassani, CEO, Riyada, and Khalid bin Al Safi Al Huraibi, acting CEO of Riyada, the organization works as a facilitator for the SME sector, supporting end-to-end with improving their economic and financial conditions.

Benefits of Riyada for SME in Oman

Registered SMEs with Riyada are given varied incentives and programs to propel their business towards newer heights and growth. There are various ways that the organization helps SMEs in Riyada.

1. Incentives to SMEs

Small and Medium Enterprises that work in the manufacturing industries, logistics in Oman, fisheries, agriculture, services, and other similar activities are offered incentives under the Invest-Easy portal rating program. The same is in line with the Ministry of Commerce and Industry and Investment Promotion program in Oman.

The particular incentive is offered only to valid cardholders of Riyada, even though it is a one-time and one-activity incentive. Riyada cardholders get very many advantages; some of these are as follows:

• Few activities have been identified exempted from government license fees when the license is issued in the beginning. The license, however, cannot be sell or transfer to the license or commercial register of the SME, at least for a maximum of three years. Modification of the register is not permitted. However, the commercial register transfer can be done to an Oman citizen who is also a Riyada cardholder. Or when the commercial register is canceled because of which the cancellation of the establishment. So, all beneficiaries, including Riyada logistics companies, are exempted from paying all kinds of government license fees.

• There are other kinds of exemptions too that Riyada cardholders in Oman get to enjoy too. SMEs registered with Riyada are also free from paying labor license fees if they indulge in specified new activities in specified sectors. There are conditions too – a total of 5 workers engaged in a single activity in incentive-backed sectors are exempted from paying labor license fees. However, the fees towards the renewal of the government licenses need to be paid for.

 How is Riyada providing support for SME entrepreneurs?

Specific SME sectors are liable to get full support from the Authority for Small and Medium Enterprise Development in Oman.

Take the case of a Logistics company registered with Riyada. There are incentives, but efforts are on for financially supporting and bringing in joint cooperation of SMEs in the logistics sector.

There is a concerted effort to support entrepreneurship amongst SMEs in this particular sector in the logistics sector. There have been various partnership agreements and memorandum signed between key players and Riyada. The net objective is to create an ecosystem where entrepreneurs and the Omani youths can work independently or find employment opportunities.

The impact of the SME sector on the Oman economy is substantial. The logistics sector and SME’s contribution to the GDP aim to be improved, and the bar is raised.

In 2020, Riyada came up with new incentives for Riyada cardholders. Called OmoorakSahalat involves several government departments helping several establishments set up varied services and products. Omoorak means Your Business Is All Ease in Omani. With the help of several private establishments and government departments that are eager to encourage support SMEs and help in their growth and progress, the program has been realized.

In 2o16, Riyada focused on three major industries. The three industries identified are Logistics companies registered with Riyada, Tourism, and Manufacturing. It was said that these three industries would be the driving force behind the Oman economy’s growth. The areas that Riyada focused on were – infrastructure, financial and technical backing. There was a five-year plan in place because, in 2016, the SMEs’ contribution to the economy was about 15% to 20%, aiming to get increased to a more substantial percentage.

It has been realized that the SME sector plays an important role in the growth of the Oman economy. Sectors like logistics, manufacturing, or tourism help offer employment opportunities to the youth of the country and can stop Omani youths from leaving the country for better opportunities on foreign shores. The SME sector’s development also helps create entrepreneurship opportunities, promoting research and development and innovations in the country. It makes sense when the entire Gulf region is trying to shift its dependency on oil to other potential business sectors like logistics, tourism, manufacturing, agriculture, etc.

Even Oman’s Government has put its force in enhancing the SME sector’s working conditions and growth rate. The Government has a deep understanding of how important a role small and medium enterprises have played in other economies. That is why the Government is confident, that SMEs can become the propelling force behind this small nation’s growth and prosperity in the Gulf. While Riyada offers SME advisory services, Al Raffd Fund has been created to offer financial support to entrepreneurs in these sectors in Oman.

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