Report Overview

A growing demand for temperature-sensitive goods, expanding pharmaceutical and food industries, stringent quality and safety regulations, increased international trade, and a focus on reducing food waste, which require efficient and reliable cold chain infrastructure, are expected to contribute to the growth of the Saudi Arabia Cold Chain Logistics Market during the forecast period between 2023 and 2029.

Saudi Arabia Cold Chain Logistics Market - Industry Trends & Forecast Report, 2029

Saudi Arabia cold chain logistics market size was estimated at USD 3.54 billion in 2022. During the forecast period between 2023 and 2029, the size of Saudi Arabia cold chain logistics market is projected to grow at a CAGR of 17.7% reaching a value of USD 9.4 billion by 2029. The driving factors of the Saudi Arabia cold chain logistics market include the growing demand for temperature-sensitive goods, such as pharmaceuticals and perishable foods, due to population growth and changing consumer preferences. Government initiatives to promote food safety and quality standards are boosting investments in cold chain infrastructure. Also, the expansion of the healthcare sector and increasing pharmaceutical production necessitate efficient cold chain solutions. Further, globalization and international trade are driving the need for robust cold chain networks to maintain product integrity during transportation. These factors, coupled with advancements in technology and a focus on sustainability, are propelling the growth of the Saudi Arabia cold chain logistics market.

Cold Chain Logistics - Overview

Cold chain logistics is a specialized supply chain process that involves the storage, transportation, and handling of temperature-sensitive products such as food, pharmaceuticals, and vaccines. Maintaining a consistent low temperature throughout the entire journey is essential to preserve product quality and safety. This process typically includes refrigerated storage, insulated packaging, temperature monitoring, and specialized transportation equipment. Cold chain logistics plays a critical role in ensuring that perishable goods reach consumers in optimal condition, preventing spoilage and maintaining product efficacy, making it vital for industries reliant on maintaining specific temperature conditions during distribution.

Saudi Arabia Cold Chain Logistics Market

Growth Drivers

Expanding Pharmaceutical Sector

Saudi Arabia's cold chain logistics market is experiencing robust growth, driven in large part by the expanding pharmaceutical sector. As the demand for temperature-sensitive drugs and vaccines continues to surge, there is an increased need for a reliable cold supply chain infrastructure to maintain product integrity. This has led to substantial investments in refrigerated transport, storage facilities, and advanced temperature-monitoring technologies. Further, the government's commitment to diversifying the economy and supporting healthcare initiatives positions the pharmaceutical industry as a significant growth driver, propelling the cold chain logistics sector to new heights in Saudi Arabia.

Restraints

Limited Focus on Development of Infrastructure for Cold Chain Logistics

Saudi Arabia cold chain logistics market faces a significant restraint in the form of inadequate infrastructure investment. Despite the growing demand for temperature-sensitive goods such as pharmaceuticals and perishable foods, the country has struggled to modernize its cold storage and transportation facilities. This lack of investment resulted in inefficient and unreliable cold chain services, leading to potential spoilage of goods and increased operational costs. To unlock the full potential of this market, Saudi Arabia must prioritize substantial investments in cold chain infrastructure, ensuring the safe and efficient transportation of temperature-sensitive products across the kingdom.

Escalating Geopolitical Tensions Driven by Prolonging Israel-Hamas Conflict

The raging war between Israel and Hamas, a Palestine-based militant and nationalist organization, sends shockwaves across various industries, particularly oil & gas, transcending geographic boundaries and affecting businesses globally. The conflict between Israel-Hamas has been a longstanding, deeply entrenched geopolitical issue. On October 07, 2023, Hamas, in a surprise and heavy attack, struck Israel with thousands of rockets and infiltrations killing more than 1,100 people. In response, the prime minister of Israel declared war against Hamas and anticipated that the war would be ‘long and difficult.’ The United States has sent its warships and aid to Israel and stated that its citizens were killed in the war.

Also, the war in West Asia and escalating geopolitical tensions in West Asia and Middle East will affect industries across verticals and regions. Instability in the region, including conflicts and trade disputes, often disrupts the flow of raw materials and the manufacturing process, leading to uncertain supply levels and increased costs. Also, Saudi Arabia’s heavy reliance on imported components for cold chain logistics exacerbates vulnerability to global disruptions. These geopolitical and supply chain challenges hamper the market's growth potential, making it crucial for industry stakeholders to navigate these complexities for sustained success.

Impact of COVID-19 on Saudi Arabia Cold Chain Logistics Market

The COVID-19 pandemic significantly impacted the Saudi Arabia cold chain logistics market. With the urgent need for the efficient distribution of vaccines and medical supplies, the demand for cold storage and transportation solutions surged. The sector witnessed increased investments in temperature-controlled facilities and advanced refrigeration technologies to ensure the safe storage and transport of sensitive healthcare products. This pandemic-induced focus on cold chain logistics not only bolstered the healthcare sector but also spurred growth in the food and pharmaceutical industries, as stringent temperature control measures became a priority for various goods, driving long-term expansion and modernization in the Saudi Arabian cold chain logistics market.

Saudi Arabia Cold Chain Logistics Market

Segmental Coverage

Saudi Arabia Cold Chain Logistics Market - By Business Type

By business type, Saudi Arabia cold chain logistics market is divided into Warehousing, Transportation Railways, Airways, Roadways, and Waterways segments. The roadways segment is the largest in the Saudi Arabia cold chain logistics market. This segment plays a pivotal role in the transportation of temperature-sensitive goods and products, ensuring their timely and efficient delivery across the country. While warehousing, transportation railways, airways, and waterways are also important components of the cold chain logistics network, the extensive road infrastructure in Saudi Arabia makes the "Roadways" segment the most prominent and widely utilized for the distribution of perishable items, pharmaceuticals, and other temperature-sensitive cargo, catering to the diverse needs of the market.

Saudi Arabia Cold Chain Logistics Market - By End-Use Industry

By end use industry, Saudi Arabia cold chain logistics market is divided into Fruits & Vegetables, Bakery & Confectionary, Dairy & Frozen Desserts, Drugs & Pharmaceuticals, Meat, and Fish & Sea Food segments. The pharmaceuticals segment is the largest in the Saudi Arabia cold chain logistics market. This segment plays a crucial role in ensuring the safe and efficient distribution of pharmaceutical products, vaccines, and other healthcare-related items that require strict temperature control. Given the growing healthcare industry and the increasing demand for pharmaceuticals in Saudi Arabia, the drugs and pharmaceuticals segment witnessed significant growth. It stands out as the most prominent category within the cold chain logistics market, ensuring the integrity and effectiveness of vital medical supplies across the country.

Competitive Landscape

Saudi Arabia cold chain logistics market is fiercely competitive, with Americold Logistics Lineage Logistics Holdings, Nichirei Corporation, Burris Logistics, Agro Merchants Group, Kloosterboer, Tippmann Group, and VersaCold Logistics Services. The key strategies used by these market leaders are new product launches, mergers & acquisitions, and alliances. To grow their market share, these companies are also focusing on investing in innovations, collaborations, and expansions.

Recent Developments

• November 2022 - As part of a land-concession deal announced by Saudi Arabia's State Properties General Administration, Agility, a supply chain services, infrastructure, and innovation business, agreed to develop a huge logistics park for storage and distribution near Jeddah, Saudi Arabia. Agility announced its plans to invest SAR 611 million (USD 163 million) in the park and will have the right to run it for 25 years under the terms of its deal with SPGA.

Scope of the Report

By Business Type

• Warehousing

• Transportation

1. Railways

2. Airways

3. Roadways

4. Waterways

By End-Use Industry

• Fruits & Vegetables

• Bakery and Confectionary

• Dairy & Frozen Desserts

• Drugs & Pharmaceuticals

• Meat, Fish & Sea Food