This is a best prospect industry sector for this country. Includes a market overview and trade data.

Overview
While the Mongolian government and private sector have expended considerable financial resources on transportation improvements, the area of logistics lags behind.  According to the World Bank’s 2016 Logistics Performance Index, Mongolia ranked 108 out of 160 countries.  In addition to inefficient connections and inadequate warehousing, underdeveloped transportation systems and choke points cause goods to move slowly.  This lack of efficient logistics threatens to keep the cost of imported goods high and exports uncompetitive despite the heavy investment in transportation.
 
Initiatives led by regional countries and organizations as well as by the private sector are introducing better-managed systems and improved logistics within Mongolia.  These initiatives, involving efforts from China, the Central Asia Regional Economic Cooperation program (CAREC), and others, are poised to put Mongolia at the center of major global logistical networks.
 
  

 
(In Millions USD)
 

2013

2014

2015

 
2016
 

Total Local Production

4,388

6,127

5,092

4,678

Total Exports

4,269

5,774.3

4,669.5

4,046

Total Imports

6,358

5,236.7

3,797.2

3,466

Imports from the U.S.

512.7

229.5

116.5

55.6

Total Market Size

6,477

5,590

4,220

4,098

Exchange Rate: 1 USD

1,524

1,818

1,970

2,130

Data Sources:
Total Local Production:  National Statistics Office of Mongolia
Total Exports:  Bank of Mongolia
Total Imports:  Bank of Mongolia
Imports from U.S.:  U.S. Census Bureau
 
Leading Sub-Sector Opportunities
As Mongolia develops its agricultural export industry, it must develop a cold-chain capacity to ensure food preservation during shipment.  With an estimated 60 million head of livestock, Mongolia produces large quantities of meat and dairy products, almost all of which is domestically consumed or wasted.  Due to the lack of a reliable cold chain, the small amount exported is limited to carcasses or live animals. 
 
An effective supply chain consists of refrigerated transportation and storage, and good roads, rail, and airports connecting suppliers, warehouses, and consumers.  Mongolia has made great strides in developing its road network which transported 16.7 million tons of cargo in 2015.  Currently, Mongolia has a network of 6,000 miles of hard-top roads, of which 3,800 miles has been built within the past three years.  The Mongolian government is seeking regional support to further develop its roads.  Mongolia’s rail network transported the vast majority, or 19.1 million tons, of cargo in 2015.  However, due to underinvestment, the rail network has reached its current capacity and barring additional investment, additional cargo will need to be sent by road or air.  
 
A key component of Mongolia’s plans to expand its logistical networks is the New Ulaanbaatar International Airport (NUBIA), located about 36 miles south of Mongolia's capital city Ulaanbaatar.  With operations projected to commence by May 2018, NUBIA will be operated by the Civil Aviation Authority of Mongolia, and will meet all International Civil Aviation Organization requirements.  NUBIA will have the capacity to handle 3 million passengers per year and can potentially expand to up to 12 million passengers per year; its six connecting gates can receive 21 aircraft simultaneously and 22,000 flights per year compared to the approximately 4,000 flights that can be accommodated at the current Chinggis Khaan International Airport.
 
While minimal at 28.2 metric tons in 2015, air cargo has great potential to grow with NUBIA.  The new airport has the potential to serve as a cargo hub linking Mongolia to China, Korea, Japan and Europe.  The development of an airport logistics hub — “Hybrid Cargo Logistics Center” — located at the intersection of road and rail traffic coming out of the capital of Ulaanbaatar is under discussion.  Airport officials estimate NUBIA will annually handle 9,200 metric tons of international cargo and 2,700 metric tons of domestic cargo.
 
The Mongolian warehousing industry currently is quite small and basic, with next to no capacity for temperature-controlled storage.  Several private firms have constructed warehouses, but agricultural products often spoil due to inadequate facilities, with estimates of up to $120 million in product losses. 
 
Web Resources
Mongolian Resources
American Chamber of Commerce in Mongolia
Bank of Mongolia
Business Council of Mongolia
Civil Aviation Authority of Mongolia
Customs General Administration    
Embassy of Mongolia, Washington, DC
General Agency for Intellectual Property and State Registration
General Agency for Specialized Inspection    
General Authority for Social Insurance
General Tax Authority of Mongolia
Government of Mongolia    
Ministry of Construction and Urban Development
Ministry of Nature, Environment, and Tourism
Ministry of Roads and Transport
Mongolian Builders Association   
Mongol National Chamber of Commerce and Industry
National Statistics Office of Mongolia
Parliament of Mongolia  

U. S. Resources
U.S. Embassy in Mongolia Commercial Specialists:  Ulaanbaatar-Econ-Comm@state.gov
U.S. Embassy, Ulaanbaatar
U.S. Department of Commerce
U.S. Department of Commerce Advocacy Center
U.S. International Trade Administration
U.S. Trade and Development Agency
U.S. Export-Import Bank
U.S. Overseas Private Investment Corporation
U.S. Department of State

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.