Report Overview

Thriving e-commerce sector and significant investments in infrastructure development are expected to boost the growth of Saudi Arabia freight and logistics market during the forecast period between 2023 and 2029.

Saudi Arabia Freight and Logistics Market - Industry Trends & Forecast Report, 2029

Saudi Arabia freight and logistics market size was estimated to be worth USD 22.5 billion in 2022. During the forecast period between 2023 and 2029, the Saudi Arabia freight and logistics market size is projected to grow at a CAGR of 5.7%, reaching a value of USD 33.2 billion by 2029. Major growth factors for the Saudi Arabia freight and logistics market include the flourishing e-commerce sector in the country and rising government initiatives and investments towards boosting the logistics sector of the Kingdom to proliferate the volume of non-oil exports.

Saudi Arabia Freight and Logistics Market – Overview

Freight and logistics are a cost-effective operation and the delivery of products from one place or country to the other. Businesses generally employ freight to efficiently transport vast amounts of commodities throughout the globe, including via truck, train, ship, and air. Shippers can choose from four main methods of freight transportation. The main modes of transportation are via land (road), train, ocean, and air. The phrase "logistics" covers a wide range of operations, including distribution, warehousing, and many more in addition to the transportation of products.

Saudi Arabia Freight and Logistics Market

Growth Drivers

Rising Investments in Development of Supply Chain Infrastructure

In order to achieve economic diversification under its ‘Vision 2030’, Saudi Arabia is significantly investing in supply chain infrastructure to promote trade in the Kingdom. Saudi Arabia announced in 2021 that it will invest more than 500 billion riyals (about USD 133 billion) in infrastructure, including airports and seaports. As part of its economic diversification strategy, the Kingdom initiated an effort in 2022 to encourage investments in supply chains to and from the Kingdom. Such investments are anticipated to provide lucrative growth opportunities to the Saudi Arabia freight and logistics market, proliferating the overall market growth.

Restraints

Complex Customs Procedures and Regulations

The custom rules and regulations of GCC countries, including Saudi Arabia, is a bit more complex compared to other countries. According to the International Trade Administration, to import products into Saudi Arabia, importers must provide a commercial invoice, a bill of lading, and a certificate of origin to Zakat, the country's tax and customs department. Personal publications, books, and movies may be examined and can be restricted. Additionally, importers must complete the "Fasah" platform clearing processes by submitting the proper paperwork and filling out the customs declaration form at least 48 hours before the consignment arrives at the port of entry. Such regulations may limit the import in the country, and further limit the demand for freight and logistics in Saudi Arabia.

Impact of COVID-19 on Saudi Arabia Freight and Logistics Market

The unprecedented COVID-19 pandemic negatively impacted the growth of the Saudi Arabia freight and logistics market. The imposition of the lockdown followed by immediate restrictions on cross-border trade significantly reduced the freight and logistics demand in the country. The operations of the end users including trade and transportation manufacturing and retail were hampered during the lockdown, which also limited the market growth. However, the market gained significant traction in the e-commerce and healthcare sectors. The freight and logistics sector assisted the healthcare industry in efficiently managing the transportation of vaccines and other medicines essential for the treatment of COVID-19, which significantly proliferated the overall market growth.

Saudi Arabia Freight and Logistics Market

Segmental Coverage

Saudi Arabia Freight and Logistics Market – By Shipping Type

Based on shipping type, the Saudi Arabia freight and logistics market is segregated into roadways, railways, waterways, and airways. Roadways hold the largest share in the Saudi Arabia freight and logistics market owing to their cost-effectiveness and rising demand for door-to-door delivery. However, the airways are witnessing a substantial growth rate owing to the flourishing cross-border trade in the country. The faster and safer transportation of goods strong airport infrastructure along with the adoption of climate change-related sustainable aviation fuel is significantly influencing the growth of the airways in the freight and logistics market.

Saudi Arabia Freight and Logistics Market – By Function

Based on function, the Saudi Arabia freight and logistics market is segmented into inventory management, packaging, warehousing, transportation, distribution, custom clearance, and others. The transportation segment accounts for the highest share of the market. The high demand for imported products that are not domestically produced, such as certain fruits and vegetables, chemicals, and others, along with flourishing exports of crude petroleum and pharmaceuticals of the Kingdom is boosting the demand for transportation in Saudi Arabia.

Saudi Arabia Freight and Logistics Market – By End User

Based on end user, the Saudi Arabia freight and logistics market is segmented into trade & transportation, healthcare, manufacturing & construction, retail, media & entertainment, banking & financial services, IT & telecommunication, and others. The retail segment dominates the Saudi Arabia freight and logistics market owing to the flourishing e-commerce in the country. The rising consumer inclination towards the purchase of a wide range of products, from regular household items such as groceries and personal care products to gadgets and clothing, directly influences the growth of the freight and logistics market in the Kingdom.

Competitive Landscape

Major players operating in the Saudi Arabia freight and logistics market include Almajdouie Logistics, Bahri Logistics, CEVA Logistics, SAL Logistics, DHL Saudi Arabia, Nesma Trading Co. Ltd., Almajdouie Heavylift Transport, Gulf Agency Company, Al-Saad Logistics and Transportation Co., and Agility Logistics.

To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In August 2023 - Mediterranean Shipping Company, a global container shipping company based in Switzerland, announced plans to expand its regional port range to include the Port of NEOM, which will boost cargo movement across Saudi Arabia.

Scope of the Report

By Shipping Type

• Roadways

• Railways

• Waterways

• Airways

By Function

• Inventory Management

• Packaging

• Warehousing

• Transportation

• Distribution

• Custom clearance

• Others

By End Users

• Trade & Transportation

• Healthcare

• Manufacturing & Construction

• Retail

• Media & Entertainment

• Banking & Financial Services

• IT & Telecommunications

• Others