A single failed logistics deal in the MEA region doesn't just mean a missed deadline or a financial setback.
It sends shockwaves across industries, impacts national development goals, and can tarnish a company's hard-won reputation. With the MEA logistics sector projected to grow 7.9% annually, reaching $76.5 billion by 2028, the stakes are higher than ever.
Understanding why these critical agreements collapse is no longer just beneficial, but strategically imperative for survival and growth.
This article examines:
The Middle East and Africa (MEA) logistics sector holds immense potential, but securing and sustaining partnerships is uniquely complex.
Even strong deals can unravel under the weight of regional risk.
At the core of most failures are 5 interconnected categories: business, legal and contractual, political, security, and infrastructure and operational risks. These often overlap, turning isolated issues into full-blown deal-breakers.
Here are 5 top reasons logistics deal fail in the MEA:
1. Political Instability and Conflict
Political and security risks like armed conflicts, sanctions, and abrupt government actions can quickly derail logistics deals. These disruptions close trade routes, void contracts, and endanger cargo and personnel, often with little warning.
Conflicts in strategic corridors like the Red Sea and Strait of Hormuz regularly disrupt freight movement, forcing rerouting and raising costs. Attacks on vessels, including the MSC Aries near Dubai, highlight vulnerabilities in regional shipping lanes. Persistent instability and sanctions across several markets have fractured supply chains and made long-term planning extremely difficult.
2. Regulatory and Legal Barriers
In the MEA, fragmented legal systems and inconsistent regulations often derail logistics deals. Each country applies its own customs rules, licensing procedures, and compliance standards, making cross-border operations unpredictable. Poorly vetted partners can further exploit these regulatory gaps, turning legal uncertainty into major business failures.
Customs mismatches across GCC and African countries routinely delay shipments by up to 7 days. For example, firms operating in Kenya, Tanzania, and Uganda must also comply with three separate regimes, each with its own documentation and requirements.
3. Financial Instability and Credit Risk
Financial instability is a constant threat to logistics partnerships in MEA.
Currency devaluation, inflation, and limited access to credit often lead to delayed payments, defaults, or contract failures. When a partner faces liquidity issues, they may miss key delivery milestones or collapse entirely, exposing others to serious financial and operational risks.
For instance, in 2023, the rapid devaluation of the Nigerian naira left several logistics providers unable to pay for imported spare parts or fuel, leading to missed deliveries and broken agreements. Similarly, Kobo360, once a flagship African logistics start-up, faced a liquidity crisis as funding dried up and clients delayed payments, forcing the company to restructure and sell off assets. These cases show how quickly financial stress can derail even promising ventures.
4. Infrastructure and Operational Challenges
Even when political conditions are stable and partners are reliable, deals can fall apart if the physical environment doesn’t support execution. Weak transport, congested ports, and unreliable utilities cause delays and cost overruns.
In 2024, South Africa’s citrus industry lost over R5 billion due to port and rail failures. In Kenya, poor cold storage and unreliable electricity cause major losses for small farmers. Alternative routes often fail. In 2023, Red Sea diversions overwhelmed weak African ports. Landlocked countries like Uganda, reliant on fragile rail links, are even more vulnerable. Seasonal floods, customs delays, and bureaucracy compound risks, turning viable deals into failures.
5. Inadequate Due Diligence and Vetting
Limited public data and opaque company structures make it difficult to verify partners, exposing firms to fraud, fake entities, and regulatory risk.
In 2022, a Dubai logistics firm lost millions to a shell forwarder. A European provider faced cargo seizures after unknowingly working with an unlicensed subcontractor in Egypt. More recently, in 2025, two UAE shell companies, Alataya General Contracting and Double Heights Contracting, placed fake cargo orders to Oman, then vanished without paying. Both were newly formed and shared management, clear red flags that better vetting could have caught.
These examples reflect a broader trend: criminal networks across West Africa and the Middle East often use front companies and forged documents to infiltrate supply chains.
Another growing risk is data integrity. Gartner estimates poor data quality costs firms $12.9 million annually. Inaccurate freight data doesn’t just lead to poor decisions; it magnifies existing risks and can disrupt entire operations.
Logistics risk varies widely across the MEA region.
Syria and Yemen are the highest-risk markets, where conflict and destroyed infrastructure make operations nearly impossible. Sudan, Libya, Nigeria, and Iraq face frequent disruptions from political instability, militias, piracy, or damaged ports. These challenges often lead to shipment delays, cancelled bookings, or unreliable access. Ethiopia, Egypt, and Kenya carry moderate risk. Issues like landlocked geography, currency swings, and political interference create uncertainty.
By contrast, the UAE, Qatar, Morocco, and Ghana offer more stability, better infrastructure, and stronger legal systems. Still, even in lower-risk markets, due diligence is critical to avoid hidden financial or operational failures.
Logistics deal failures in MEA rarely stem from a single issue. Political shocks can trigger infrastructure delays or defaults. A poorly vetted partner may expose firms to legal or reputational harm.
That’s why firms must adopt tailored strategies across five critical risk areas:
Engage local legal experts and tailor compliance strategies to each country’s laws, licensing rules, and customs procedures. Use RegTech tools to track regulatory updates, automate documentation, and train staff regularly. Conduct due diligence to verify that partners are registered, tax-compliant, and legitimate. Leverage trade agreements like AfCFTA or the GCC union and make use of special trade zones where possible.
Draft contracts aligned with local jurisdictions, including arbitration clauses (e.g. under ICC or UNCITRAL rules) to avoid relying on slow court systems. Monitor policy shifts such as tariffs or import bans. Build contract flexibility with price adjustment or rerouting clauses, adopt blockchain customs solutions, work with regional brokers, and support harmonisation efforts like GCC customs alignment.
Begin with thorough credit checks. Review financials, payment histories, and trade references, then monitor for warning signs like payment delays or downgrades. Use secure payment structures such as letters of credit or short billing cycles,and protect receivables with trade credit insurance. Leverage AI credit scoring tools to track partner financial health in real time.
Address volatility with multi-currency contracts, inflation-linked clauses, and currency hedging tools like forward contracts. Spread financial exposure across regions and partners. Maintain credit lines and reserves and monitor macroeconomic indicators. Treat credit risk as a strategic focus to ensure long-term deal stability.
Build contingency into logistics plans by identifying alternative ports, multimodal options, and adding buffer time to delivery schedules. Use split shipments, and invest in track-and-trace systems, IoT sensors, and route optimisation software to improve visibility. Monitor cold chain integrity with temperature sensors and accelerate customs with digital documentation.
Work with reliable local logistics providers and third-party logistics companies 3PLs who offer key assets like private fleets, storage, and power backups. Vet them for local adaptability. Where possible, co-invest in infrastructure or support improvements—e.g. customs training or port upgrades. Stay flexible by adjusting volumes or modes and use mobile cooling units, leased warehouse space, or local assembly to reduce strain on weak infrastructure.
Conduct comprehensive due diligence using trusted intelligence tools to verify registration, ownership, licensing, and finances. Confirm physical addresses and track record—especially for new or small partners. Run credit and legal checks, identify UBOs, and screen for sanctions or adverse media.
Structure deals with phased contracts, pilot projects, and safeguards like escrow or performance bonds. Maintain continuous monitoring through KYC updates and third-party audits. Enforce strict subcontractor controls, ban unauthorised outsourcing, and run random checks. Prioritise ESG-aligned partners and conduct region-specific vetting to flag shell companies or unlicensed players.
MEA offers vast potential, but only for those who prepare.
At Cedar Rose, we support logistics and export firms with the intelligence to do just that.
Our CRiS Intelligence platform delivers real-time company data and risk insights, while our due diligence services verify legitimacy, financial standing, and legal compliance in high-risk jurisdictions.
We also provide sanctions, PEP, and adverse media screening, plus HUMINT investigations to uncover hidden risks. Whether you're onboarding a partner or monitoring ongoing risk, we help you stay compliant, prevent fraud, and make confident decisions in MEA.
Get in touch to secure your partnerships with clarity and control.