Saudi Arabia’s logistics sector has experienced impressive growth, showing an increase of 267% in facilities since 2021. The General Authority for Statistics (GSTAT) provided this insightful report, highlighting significant developments in the industry. By 2023, the Kingdom boasted 22 logistics hubs encompassing more than 34 million square meters. This achievement aligns with the nation’s ambition to become a leading regional logistics center under its Vision 2030 initiative.
The Eastern Province stands out as the region with the most logistics facilities, featuring six hubs over 6.3 million square meters. Conversely, the Mecca region occupies the highest total area, hosting five centers that extend across 20 million square meters. Riyadh also adds to these statistics with five logistics centers covering 4.9 million square meters. This distribution showcases strategic planning for developing logistics infrastructure across various regions.
Expanding Warehouse Capacities
In 2023, Saudi Arabia reported having 12,451 warehouses covering a total area of 22.8 million square meters. Riyadh led the way, accounting for 52.9% of the total warehouse area with 10.6 million square meters. Makkah followed with 17.9%, while the Eastern Province accounted for 14.3%, and other regions contributed 14.9%. These figures reflect the growing demand for warehousing capabilities across the Kingdom.
The report indicates that general warehouse licenses dominated the market, totaling 6,923, which constitutes 55.6% of all licenses issued. Following this, humidity-controlled warehouses stood at 2,115 licenses, making up 17% of the total. Additionally, refrigerated warehouses accounted for 16% with 2,006 licenses granted. These licenses affirm the diverse needs within the logistics industry in Saudi Arabia.
Maritime Sector Dominance
The maritime sector maintained its dominance in cargo transport, moving an impressive 308.7 million tonnes of goods. Land transport followed with 24.9 million tonnes, while rail transportation achieved 14.3 million tonnes. Lastly, the air sector transported 918,000 tonnes of cargo. This diverse transportation network enhances the overall logistics capacity within the Kingdom.
The report emphasizes that the goods transport segment recorded 7,963 valid licenses, with Riyadh region leading significantly with 1,996 active licenses. This trend demonstrates Riyadh’s pivotal role in the logistics landscape of Saudi Arabia. A robust licensing structure encourages competitive growth in the sector, further integrating logistics processes.
Vision 2030 and Sector Investment
Saudi Arabia’s warehousing and logistics sector experiences transformative growth, primarily driven by Vision 2030 initiatives. The Kingdom attracts substantial investment from both government and private sectors, ensuring the industry’s development. A report from Maersk highlights Saudi Arabia’s potential as a global trade center, projecting the logistics market to reach $38.8 billion by 2026.
Supporting this growth, Saudi Arabia pledged $106.6 billion to enhance land, air, and sea cargo capacities significantly. The Saudi Ports Authority’s investment of $4.5 billion in maritime logistics during 2023 exemplifies this ongoing commitment to industry development. Coupled with ambitious projects like NEOM, the nation aims to seize 55% of the Gulf Cooperation Council’s logistics market while boosting non-oil exports.
Record Warehouse Occupancy and Global Interest
According to Knight Frank’s Industrial and Logistics Market Review for the first half of 2024, warehouse occupancy in Saudi Arabia reached a record high of 97%. This statistic emphasizes the escalating demand for storage and light industrial facilities across the Kingdom. Notably, Riyadh and Jeddah have become focal points of interest, attracting global firms such as Maersk, DB Schenker, and DP World.
As e-commerce continues to rise, the logistics sector experiences significant advancements. Digital logistics solutions foster innovation and competition, further positioning Saudi Arabia at the forefront of the region. The landscape of logistics is evolving rapidly, showcasing the Kingdom’s response to changing market dynamics.
In 2023, Saudi Arabia’s postal and parcel sector processed over 140 million items through 1,300 sales outlets. These improvements resulted in an average delivery time of just 2.45 days, highlighting increasing efficiency within the sector. Continued advancements in customs and digital transport reshape the overall logistics framework and enhance operational capabilities.
Saudi Arabia’s logistics sector is on an ambitious trajectory, driven by Vision 2030 and significant investments. The transformative changes visible today point towards a promising future as the Kingdom aspires to become a regional logistics powerhouse. The pace of progress reinforces Saudi Arabia’s strategic goal of enhancing its global trade network and logistics capabilities.
