Inside Saudi Arabia’s Remarkable Logistics Transformation
It may not be the first nation that springs to mind, but Saudi Arabia is increasingly playing a central role in international logistics having undergone a remarkable recent transformation.
Groundbreaking initiatives such as Saudi Vision 2030, in tandem with the National Industrial Strategy, are driving the creation of the next generation of logistics within the Kingdom.
Saudi Arabia's logistics journey
Underpinned by the Saudi Vision 2030 theme of ‘A Thriving Economy’, a number of strategic objectives have set the direction for the growth and expansion of the logistics sector within Saudi Arabia.
They include:
- Creation and improvement of logistics hubs
- Improvement of local, regional and international connectivity of trade and transport networks
- Enhancement of the ease of doing business
The 2024 Agility Emerging Markets Logistics Index continues to rank Saudi Arabia highly across several key metrics and demonstrates the impact of the agenda set forth by Saudi Vision 2030.
The country ranks sixth for ‘international opportunities’ in the logistics sector, up three places from 2023. When it comes to ‘business fundamentals’ and ‘digital readiness’, it ranks third and sixth respectively, showing how well the Kingdom matches up in the context of global logistics.
Meanwhile, Saudi Arabia has risen 17 places in the World Bank's Logistics Performance Index and is set to host the Global Logistics Forum in Riyadh later this month, reflecting its growing status as a leader in the field.
“Saudi Arabia has always sat at the crossroads of three continents, serving as a vital trade route between Asia, Africa and Europe for thousands of years,” says H.E. Ahmed S. Alhassan, Assistant Minister of Transport and Logistic Services in the Saudi government.
“In recent years, led by Saudi Vision 2030 and its theme of creating A Thriving Economy, Saudi Arabia has striven to significantly develop its logistics sector, securing the Kingdom as the north star of modern global logistics.”
Widespread logistics investment
Driven by the National Transport and Logistics Strategy, which outlines a slew of mega projects across the sector, investment and activity in logistics has grown exponentially in Saudi Arabia.
Within just two years, the nation has jumped nine places to become the 15th biggest handler of shipping containers globally, according to the 2024 Lloyd’s List report, cementing it as a vital global leader in international shipping.
The Kingdom has spent 4.5 billion SAR to upgrade ports across Saudi Arabia, enabling this growth and unlocking future potential with sustainability top of mind. King Abdullah Port, located on the Red Sea, is leading the shift towards greener port operations, with solar energy systems and water-efficient practices reducing its carbon footprint by more than 20% while increasing its efficiency and effectiveness.
In aviation, tens of billions of dollars’ worth of commitments have been sealed for new aircraft. At the Future Aviation Forum, held in Riyadh earlier this year, the biggest aircraft order in Saudi history was signed when Saudia Group confirmed its order of 105 Airbus aircraft for its group of airlines.
Beyond aircraft, significant investments in Saudi Arabia’s airports, led by the General Authority of Civil Aviation (GACA), will ensure both passengers and freight from across the globe can seamlessly connect in Saudi Arabia.
Such substantial investments are resulting in growing enthusiasm across Saudi Arabia to become part of the logistics sector.
New logistics business registrations increased by a staggering 76% in Q2 2024, making it the fastest-growing sector in Saudi Arabia.
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