Saudi Arabia’s logistics sector is reaching out to the world


Saudi Arabia`s Ministry of Transport is developing the logistics sector to support the Vision 2030 program of social and economic reform.

Diversifying the economy away from hydrocarbons is an important pillar of the Vision 2030 and transforming the country into a logistics hub is a key strategy. As a result, Saudi Arabia’s policies are focused on moving goods and people, either by land, air or sea to connect the rest of the world with the Gulf Cooperation Council (GCC) region.

To support the development and implementation of the strategy, the Ministry of Finance invested SAR 56.3 billion (USD 15 billion) in infrastructure and transportation projects last year. The logistics sector is valued at SAR 67.5 billion (USD 18 billion) and is one of the GCC`s most attractive emerging markets, according to a report by Saudi Bulk Transport, a transport and warehousing firm. Another report by Ken Research expects the revenues in logistics to grow at a compound annual growth rate of 6.7% between 2020 and 2025.

A majority of this growth is directed by the Transport General Authority (TGA) which is responsible for rail, sea and land transport development. The TGA has introduced a number of intuitive regulations and manages an overland freight network across eight countries in the Middle East and Central Asia with a fleet of over forty thousand trucks.

Further, Saudi Arabia has begun to open up the market by encouraging international companies to enter joint ventures to boost operations in the private sector. An example is Saudi Logistics Services’ agreement with Classic Automotive Relocation Services from the United Kingdom sealed last October. The deal sees the Jeddah-based business provide logistics support to the British firm’s in country operations.

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