SAUDI ARABIA FREIGHT AND LOGISTICS MARKET 2020 Size, Share, Growth Insights, Uses, Trends, Top Key Manufacturers, Regional Outlook 2025

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Market Overview

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.

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- 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.

Scope of the Report

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.

Key Market Trends
King Abdullah Port is Witnessing Huge Growth in Maritime Throughput

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.

Use of Logistics in the Distributive Trade Sector is anticipated to witness Highest Growth

The Saudi retail sector supplies a population that is expected to reach around 35 million by 2021. With recent economic reforms, the sector has been affected mainly by subsidy cuts that have increased utility costs, and by the new Saudization law that has increased labor costs by 15%. Furthermore, seeing stagnation in their real disposable incomes, consumers are increasingly cutting back on spending and looking for ways to save money.
With these reforms and changes, there are retail trends that will influence the industry's future growth, including offering more budget goods, e-commerce, implementing omni-channel strategies, and artificial intelligence (AI) among others.

The government aims to increase the contribution of e-commerce to 80% of the retail sector by 2020. The success and anticipated pace of growth of the Saudi e-commerce market can be attributed to the fact that 70.49% of the population used the internet in 2017, and this figure is projected to grow to 73.45% in 2022. According to the Saudi Communications and Information Technology Commission (CITC), by 2020, the e-commerce market in the Kingdom is expected to grow to USD 8.35 billion.

Wholesale and retail sector (16% of non-oil GDP) recorded growth of 0.8% in 2018, slightly better than the 0.6% registered in 2017. The improved level of growth in 2018 was achieved despite the introduction of VAT and rising costs related to expat levies.

Competitive Landscape

Shipping and logistics activity relies heavily on road transport services. The market is heavily fragmented and in Saudi Arabia only a handful of large trucking companies providing services, such as Crescent Transportation, Almajdouie Transport, and Saudi Land Transport Company, which compete head-to-head with leading regional and global logistics providers in the Middle East. The warehousing and distribution segment of the transportation and logistics sector is growing rapidly. Several international logistics companies, such as Agility, have been able to penetrate the growing market and win government contracts. Still, there remains significant and increasing demand for experienced providers of logistics, in support of both the transportation side of the sector and the distribution of retail products, throughout the country. It is observed significant number of international players are present in the market. International companies are partnering with local players to form joint ventures. This provides an opportunity for local players to exploit the global network of international companies.

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Major Points from Table of Content:

1.1 Study Deliverables
1.2 Study Assumptions
1.3 Scope of the Study

2.1 Analysis Methodology
2.2 Research Phases


4.1 Current Market Scenario
4.2 Market Dynamics
4.2.1 Drivers
4.2.2 Restraints
4.2.3 Opportunities
4.3 Industry Attractiveness - Porter's Five Forces Analysis
4.4 Value Chain/Supply Chain Analysis
4.5 Government Regulations and Initiatives
4.6 Technological Trends
4.7 Insights into the E-commerce Industry
4.8 Elaboration on the 3PL Market in Saudi Arabia (including Market Size, Compared with the Global 3PL Market, and Competitive Landscape)
4.9 Insights into Intermodal Transportation in Saudi Arabia

5.1.1 Freight Transport Road Sea Air Rail
5.1.2 Freight Forwarding Sea Freight Forwarding Air Freight Forwarding
5.1.3 Warehousing
5.1.4 Value-added Services and Others
5.1.5 Courier, Express, and Parcel (CEP)
5.1.6 Other Functions (Cold Chain Logistics, Last Mile Logistics, Return Logistics, and Other Emerging Areas)
5.2.1 Manufacturing and Automotive
5.2.2 Oil and Gas, Mining, and Quarrying
5.2.3 Agriculture, Fishing, and Forestry
5.2.4 Construction
5.2.5 Distributive Trade (Wholesale and Retail Segments - FMCG included)
5.2.6 Other End Users (Telecommunications, Pharmaceuticals, etc.)

6.1 Overview (Market Concentration and Major Players)
6.2 Company Profiles
6.2.1 International Companies A


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