Saudi Arabia’s logistics sector achieves astonishing 267% growth
Saudi Arabia’s logistics sector is experiencing rapid growth, with the
number of logistics centers surging by 267% since 2021, according to a report
by the General Authority for Statistics. This expansion underscores the
Kingdom's commitment to becoming a regional logistics powerhouse under its
Vision 2030 framework.
In 2023, Saudi Arabia boasted 22 logistics hubs spanning over 34 million
square meters. The Eastern Province led in the number of logistics centers,
with six hubs covering 6.3 million square meters, while the Makkah region
dominated in total area, housing five centers over 20 million square meters.
Riyadh followed closely with five centers covering 4.9 million square meters.
The Kingdom also recorded 12,451 warehouses in 2023, with a combined area of
22.8 million square meters. Riyadh accounted for 52.9% of this capacity,
covering 10.6 million square meters, followed by Makkah (17.9%), the Eastern
Province (14.3%), and other regions (14.9%).
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Warehousing and Transport Insights
General warehouses comprised 55.6% of total licenses with 6,923, while
humidity-controlled warehouses held 17% (2,115 licenses) and refrigerated
warehouses made up 16% (2,006 licenses).
The maritime sector dominated cargo transport, handling 308.7 million
tonnes, followed by land (24.9 million tonnes), rail (14.3 million tonnes), and
air (918,000 tonnes). Goods transport licenses totaled 7,963, with Riyadh
leading with 1,996 active licenses.
Vision 2030 and Strategic Investments
The logistics and warehousing sector’s transformation is being driven by
Vision 2030 and substantial investments from both government and private
sectors. A Maersk report from November 2024 projects the Kingdom’s logistics
market will reach $38.8 billion by 2026, growing at a compound annual growth
rate of 5.85%.
Saudi Arabia’s $106.6 billion commitment to expanding land, sea, and air
cargo capacities further solidifies its position as a regional logistics hub.
The Saudi Ports Authority alone invested $4.5 billion in maritime logistics in
2023.
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Giga-projects like NEOM and the National Industrial Development and
Logistics Program are key drivers of this growth, positioning the Kingdom to
capture 55% of the Gulf Cooperation Council’s logistics market and
significantly increase non-oil exports.
Demand and Digital Transformation
Warehouse occupancy reached a record 97% nationwide by mid-2024, reflecting
high demand for storage and light industrial facilities. Riyadh and Jeddah have
emerged as key logistics hubs, attracting global firms like Maersk, DB
Schenker, and DP World, spurred by increasing lease rates and global interest.
The rise of e-commerce and digital logistics solutions has further
accelerated innovation and competition. In 2023, Saudi Arabia's postal and
parcel sector handled over 140 million items with an average delivery time of
2.45 days. The sector also saw the licensing of 37 delivery app companies,
highlighting a significant shift toward digital freight transport.
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A Promising Future
Saudi Arabia’s logistics advancements, supported by digital transformation
and strategic investments, position the Kingdom as a leader in regional
logistics innovation. With a strong focus on efficiency, technology, and global
partnerships, the sector is set to play a pivotal role in realizing Vision
2030’s economic diversification goals.
Source: Arab News
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