Iraq Logistics Market Size & Share Analysis – Growth Trends & Forecasts (2025 – 2030)

Iraq Logistics & Frieght Market Trends

Manufacturing and Automotive Industry Growth Driving the Logistics Market

The manufacturing and automotive sectors are emerging as significant drivers of Iraq’s logistics market, with the automotive market being one of the largest in the Middle East and North Africa (MENA) region. The industry’s foreign direct investments significantly contribute to the nation’s GDP, with labor productivity in the manufacturing sector standing at USD 10.1, positioning Iraq among the top four countries in the Middle East for manufacturing productivity. The automotive market has shown remarkable resilience, with approximately 85,380 units sold annually, predominantly in passenger automobiles, while commercial vehicle purchases have shown consistent growth since 2017. This growth in automotive sales and manufacturing activities has created increased demand for sophisticated logistics services, particularly in transportation and warehousing. The integration of freight forecasting techniques is becoming essential to manage this demand efficiently.

The entry of new competitors and foreign corporations’ plans to develop production facilities have further stimulated the logistics sector. Notable developments include the debut of EXEED, a high-end automobile brand, in the Iraqi market, joining established players like Toyota, Ford, and Volkswagen. The government’s strong support for the sector, viewing it as a primary source of income, has led to improved infrastructure and logistics networks. With rising disposable income levels and projected economic growth through 2026, the automotive market’s expansion is expected to continue driving demand for logistics services. The passenger automobile market alone is anticipated to generate revenue of USD 1.16 billion, with large SUVs comprising the majority of sales, necessitating robust logistics solutions for vehicle transportation and distribution. This scenario underscores the importance of transportation research in optimizing logistics operations.

Oil and Gas Sector Supporting Logistics Activities

The oil and gas sector remains a fundamental driver of Iraq’s logistics market, with significant developments in infrastructure and transportation networks supporting the industry’s growth. The government has embarked on ambitious plans to upgrade and expand its energy industry, signing substantial investment contracts for gas capture, oilfield development, and solar energy production. A notable example is the USD 27 billion deal with TotalEnergies signed in September 2021, encompassing four major projects including the development of the Ratawi oilfield, a gas processing plant, seawater supply facility, and solar power infrastructure. These developments have created extensive demand for specialized logistics services, particularly in equipment transportation and project cargo handling.

The sector’s logistics requirements have been further amplified by recent strategic partnerships and infrastructure developments. In October 2022, SAFEEN Group signed a significant agreement with Amaan Baghdad Company for the transportation and storage of fuel oil from Iraq’s Khor Al Zubair and Umm Qasr oil terminals. This project involves the deployment of three Very Large Crude Carriers (VLCCs) and one Medium Range (MR) tanker, demonstrating the scale of logistics operations required in the sector. The expansion of port infrastructure, including the development of six new berths at the Khor Al Zubair port for oil operations, has created additional demand for logistics services. These developments, coupled with Iraq’s position as one of the world’s major producers of associated gas, releasing 17.89 billion m3 of gas in 2021, continue to drive growth in specialized logistics services for the energy sector. The role of supply chain research is crucial in enhancing the efficiency of these logistics operations.

Segment Analysis: By Function

Freight Transport Segment in Iraq Freight & Logistics Market

The freight transport segment continues to dominate the Iraq freight and logistics market, commanding approximately 72% of the total market share in 2024. This substantial market position is primarily driven by the country’s growing international trade activities and increasing domestic transportation needs. The segment’s strength is particularly evident in road transport, which handles the majority of inland freight movement across Iraq. The segment benefits from ongoing infrastructure developments, including improvements in port connectivity and road networks. The government’s focus on enhancing port efficiency and increasing the efficiency of road transport has further solidified this segment’s market leadership. Additionally, the integration of digital technologies and transportation analytics in freight transport operations has helped maintain its dominant position in the market.

Value-Added Services Segment in Iraq Freight & Logistics Market

The value-added services segment is emerging as the fastest-growing segment in the Iraq freight and logistics market, projected to grow at approximately 8% during 2024-2029. This growth is being driven by increasing demand for specialized services such as kitting and assembly, labeling, packaging and repackaging, sorting, and return solutions. The segment’s expansion is further supported by the rising adoption of digital technologies and automation in warehouse operations. Companies are increasingly focusing on offering customized value-added services to differentiate themselves in the market. The integration of technology with value-added services, combined with strong warehousing and distribution networks, has enabled 3PL companies to provide more comprehensive logistics solutions. The segment is also benefiting from the growing e-commerce sector, which requires specialized handling and processing services. The application of logistics performance analysis is crucial in optimizing these services.

Remaining Segments in Iraq Freight & Logistics Market

The warehousing and freight forwarding segments continue to play vital roles in Iraq’s freight and logistics market. The warehousing segment is experiencing significant growth due to expanding industrial activities and the strong growth of e-commerce in the country. Companies like Agility, DHL, and DB Schenker are expanding their warehousing operations to meet increasing demand. Meanwhile, the freight forwarding segment is benefiting from increasing international trade and the emergence of new e-commerce companies. Both segments are witnessing technological advancement with the integration of warehouse management systems and digital platforms, contributing to improved operational efficiency and customer service delivery. The use of logistics data analytics is enhancing these advancements, ensuring efficient operations and customer satisfaction.

Segment Analysis: By End User

Oil & Gas, Mining and Quarrying Segment in Iraq Freight & Logistics Market

The oil and gas, mining and quarrying segment dominates the Iraq freight and logistics market, commanding approximately 38% market share in 2024. This substantial market position is primarily driven by Iraq’s ambitious plans for upgrading and expanding its energy industry, with the government aiming to boost oil production to 8 Mbpd by 2027. The segment’s dominance is further strengthened by significant investments in gas capture, development of oilfields, solar energy production, and regional integration of the electric grid. A notable development is the USD 27 billion deal with Total-Energies signed for developing Iraq’s energy sector over 25 years, which includes multiple strategic projects such as the development of the Ratawi oilfield, gas processing plant, seawater supply facility, and solar power plant development. The sector’s robust performance is also supported by the government’s heavy reliance on oil receipts, which account for nearly 87% of total government revenue.

Manufacturing & Automotive Segment in Iraq Freight & Logistics Market

The manufacturing and automotive segment is emerging as the fastest-growing sector in the Iraq freight and logistics market, with a projected growth rate of approximately 8% during 2024-2029. This remarkable growth is driven by Iraq’s position as one of the largest automotive markets in the Middle East and North Africa (MENA) region. The segment’s expansion is fueled by increasing foreign corporation investments and new market entrants developing their production facilities. The automotive market’s growth is particularly notable with passenger automobiles gaining significant market share, and revenue from the passenger automobile market is anticipated to show strong growth. The introduction of electric vehicles, exemplified by the launch of Iraq’s first EV, the Jaguar I-Pace, further demonstrates the segment’s progressive development and future potential in the logistics sector. The application of supply chain analytics is essential in optimizing the automotive logistics processes.

Remaining Segments in Iraq Freight & Logistics Market

The other significant segments in the Iraq freight and logistics market include construction, distributive trade, agriculture, fishing and forestry, and other end users. The construction segment plays a vital role through various infrastructure development projects and government initiatives. The distributive trade segment is crucial for supporting Iraq’s import-export activities and retail distribution networks. The agriculture, fishing and forestry segment contributes significantly to the logistics market through the transportation of agricultural products and food security initiatives. The other end users segment, which includes telecommunications and pharmaceuticals, provides diversification to the market through specialized logistics requirements and value-added services. Each of these segments contributes uniquely to the overall market dynamics and helps maintain a balanced logistics ecosystem in Iraq.