Saudi Arabia Freight and Logistics market-growth, trends and forecast ( 2019-2024)
The Saudi Arabia freight and logistics market is estimated to be valued at USD 22.95 billion and is estimated to grow at a CAGR of 7.35% during the forecast period.
– The Saudi Arabian freight and logistics industry is a large and dynamic industry, strongly supported by state-led investments in rail, maritime, road, logistics, and airport infrastructures. Economic growth, population maturation, and rapid urbanization are the factors driving the Saudi Arabian government to invest in the massive expansion of the country’s transportation networks.
– In January 2019, the Saudi Arabian energy minister Khalid al-Falih announced that the country is raising USD 427 billion in private sector investments, which may include roughly USD 36 billion for logistics infrastructure. The investment may be used to develop Saudi Arabia into a gateway for the trade supply chains of Africa, Asia, and Europe.
Saudi Arabia is determined to broaden the role of the private sector, as it pushes to diversify its economy. Private entities are being encouraged to collaborate with the government, as they develop the country’s transport infrastructure. Partnership is being sought for the operation of seaports, airports, and their related supply chains. Public-private partnerships (PPP) are being pursued to fund several key schemes, while a number of the country’s publicly operated transportation facilities are being prepared for full privatization.
– Technology is improving the security, transparency, and control over the import-export process in the country. Currently, importers track the status and progress of their shipments in real time. Customs brokers receive automated notifications on their mobiles about the status of their shipments and are prompted to create their declarations as soon as the shipping manifest is available online, prior to ship arrival.
A complete background analysis of the Saudi Arabia freight and logistics market, which includes an assessment of the economy and contribution of sectors in the economy, market overview, market size estimation for key segments, and emerging trends in the market segments, market dynamics, and logistics spending by the end-user industries are covered in the report.
Saudi Arabia has the largest seaport network in the Middle East, with nine major ports and around 200 piers that handle more than 90% of the country’s trade. Out of the nine major ports in the country, six are commercial and the three are industrial ports. The seaports in the country have gradually developed over the years. The number of berths for vessels increased from 33 in 1976 to 224 in 2017. The Saudi Arabian ports have an overall cargo handling capacity of around 600 million metric ton.
Under the national development strategy, Vision 2030, one of the main objectives of Saudi Arabia is to replace the exports of oil and related products with the exports of other products. This objective requires a substantial increase in the seaport and logistical infrastructures for containerized exports. Additionally, the government is boosting the upgrading of ports to better handle the increasing number of ultra-large container vessels (ULCVs) that are traveling across the global shipping lanes.
In addition to the existing nine ports in the country, the King Abdullah Port (KAP) opened in 2014, and it significantly expanded the country’s container-handling capabilities. Additionally, it is one of the largest private infrastructure investments in Saudi Arabia. The KAP makes the country a linking point for the three continents, namely, Asia, Europe, and Africa. All the countries in the region are planning to become logistic hubs for transshipments into Africa.
The King Abdullah Port was ranked the second-fastest growing port in the world in 2018, according to Alphaliner, the global leader in analyzing maritime transport data, port capabilities, and the future of vessels and shipping route development. The port was ranked eighth in 2017. Out of the 100 largest container ports in the world, the port was ranked 83rd in 2018 and was ranked 87th in 2017.
In 2018, the annual throughput of the King Abdullah Port increased to 2,301,595 TEUs, which represented an increase of more than 36%, as compared to that in 2017. Thus, the KAP maintaining its position as the second-largest port in the country, in terms of container handling. The annual increase in throughput in 2018 was primarily achieved in conjunction with an 8% increase in imports and exports, as compared to those in 2017.