Riyadh, Saudi Arabia – The logistics sector in Saudi Arabia is poised for remarkable expansion, with its market size projected to grow to SAR 57.4 billion ($15.3 billion) by 2030, according to latest data.
The surge is an outcome of the efforts made by the Ministry of Transport & Logistics Services (MOTLS) to make the kingdom a global logistics hub and a leading industrial powerhouse.
Leveraging its unique geographical location, which connects Europe, Asia, and Africa, Saudi Arabia is primed to become a vital gateway for facilitating seamless trade and the movement of goods across continents. Already hosting 12 percent of the global container trade annually, the kingdom’s position along the Asia-Europe trade route offers substantial advantages.
As part of its efforts to diversify the economy and reduce dependence on oil, the logistics sector currently contributes 6 percent to the kingdom’s GDP. However, this is projected to increase to 10 percent by 2030, equivalent to approximately $5.4 billion in US dollars.
To support and expand cargo capacity, the Kingdom has unveiled plans to establish 59 logistics zones by 2030, with 21 already operational. Notably, the first Special Integrated Logistics Zone at King Khalid International Airport in Riyadh has been inaugurated. These infrastructure developments are expected to drive business growth, attract investments, and increase the sector’s non-oil revenue to approximately $12 billion annually by 2030.
In October 2022, The Crown Prince Mohammed bin Salman Al Saud launched the Global Supply Chain Resilience Initiative (GSCRI) to attract local and international investments in the supply chain sector. The initiative aims to raise $10.64 billion (40 billion riyals) within its first two years, providing financial and non-financial incentives worth $2.67 billion (10 billion riyals) for investors.
Saudi Arabia has made significant progress in the Logistics Performance Index 2023 (LPI) recently released by the World Bank, jumping 17 ranks to secure the 38th position, compared to 55th in 2018.
The programs have been launched to enhance various aspects of the sector. The National Transport and Logistics Strategy (NTLS), initiated in 2021, focuses on strengthening human and technical capabilities within the transport and logistics sector. Additionally, the National Industrial Development and Logistics Program (NIDLP), launched in 2019, aims to fortify the country’s industrial and logistical capabilities.
Saudi Arabia has set milestones for the rail, road, maritime, and aviation sectors. The Kingdom, being the largest and most populous nation in the Gulf Cooperation Council (GCC), aims to create over 200,000 jobs within the logistics sector by 2030.