The Saudi Arabian Ministry of Transport and Logistics Services (MOTLS) has developed an ambitious strategy to increase the market size of the kingdom’s logistics sector to SR 57.4 billion (US$15.31 billion) by 2030 and to promote it as a global logistics hub position.
In October 2022, Crown Prince Mohammed bin Salman launched the Global Supply Chain Resilience Initiative (GSCRI) to attract local and international investment in the supply chain sector. Aiming to raise SR 40 billion (US$10.64 billion) over the first two years, the initiative has raised SR 10 billion in financial and non-financial incentives for investors.
Saudi Arabia was on the fast track to shifting its economy away from oil and building a more diverse and holistic economic ecosystem. Currently, the logistics sector contributes 6% to KSA’s GDP and is expected to contribute 10% by 2030, i.e. around SR 20.1 billion.
59 logistic zones
To increase its cargo capacity and further strengthen supply chains, the kingdom announced the opening of 59 logistics zones by 2030, 21 of which are already operational. The country also opened its first dedicated integrated logistics zone at King Khalid International Airport in Riyadh.
The measures are part of the infrastructure development strategy and aim to boost business growth, attract investment and boost non-oil sector revenues to around SR 45 billion a year by 2030.
In line with Vision 2030’s goal of transforming the Kingdom into a leading industrial powerhouse and global logistics hub, the strategy aims to develop the Kingdom’s transport and logistics sector and meet the increasing global demand for logistics services.
Since then, the sector has experienced unprecedented growth and advancement, making its mark on the global logistics industry, a direct result of MOTLS’ continued efforts. In the Logistics Performance Index 2023 (LPI) recently released by the World Bank, Saudi Arabia made significant progress, moving up 17 places to 38th place from 55th place in 2018.
To increase the Kingdom’s efforts in this direction, the Crown Prince has launched comprehensive programs focusing on different aspects of the sector. The National Transport and Logistics Strategy (NTLS) was launched in 2021 with the aim of strengthening the human and technical capabilities in the transport and logistics sector in the Kingdom.
In early 2019, the National Industrial Development and Logistics Program (NIDLP) was launched to expand the country’s industrial and logistics capabilities and position it as a global leader in the industry.
Global logistics hub
The aim of the programs is to position the Kingdom as a global logistics center. With its unique geographic location connecting three continents: Europe, Asia and Africa, the country is in an advantageous position to become the gateway facilitating easy trade and movement of goods across continents. The country lies on the Asia-Europe trade route and already hosts 12% of the world’s annual container trade passages.
Vision 2030 is the roadmap for building a globalized country with sustainable progress. “Transportation and logistics are the backbone of any economy and our goal is to further develop the sector, build connectivity and improve our global competitiveness as a country.” We put all our emphasis on developing internal and external supply chains and optimizing processes according to the best international standards to provide first class infrastructure and services. Our focus is to open Saudi Arabia to the world with a variety of opportunities,” the ministry said.
Seeking rapid transformation, the kingdom has set milestones for the rail, road, shipping and aviation sectors. As the largest and most populous GCC country, the Kingdom also aims to create over two hundred thousand jobs in the sector by 2030.