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Report
Saudi Arabia Freight and Logistics Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)
Market Report I 2023-01-23 I 300 Pages I Mordor Intelligence
The Saudi Arabian freight and logistics market is forecast to register a CAGR of 6.53% through the forecast period.
During the COVID-19 pandemic, the country experienced a shift in purchasing behavior from traditional hypermarkets and supermarkets to online shopping for basics like groceries and other items. This is expected to increase the scope and competition in the long term for logistics players in the country in terms of faster delivery and seamless experience for customers.
Being a focal area and a large economy, Saudi Arabia offers an advantage as an important logistics hub. The country has set out on a program to improve logistics services, which incorporates streamlining import and export processes, infrastructure enhancements, administration and regulatory reforms, and progression and privatization of the market.
The prospects for growth of the Saudi logistics industry look promising over the next five years as economic diversification, policy reforms, tax regimes, and foreign direct investment (FDI) policies are shifting in favor of an open economy and encouraging private investment. Until recently, Saudi Arabia was a closed market. However, recent initiatives for economic diversification have opened doors to industrial, retail, and logistics players worldwide by allowing 100% ownership.
Saudi Arabia Freight & Logistics Market Trends
Vision 2030 Fueling the Demand for Freight and Logistics
With the Saudi Vision 2030, the Saudi government is actively looking into reforming governance structures and regulations and heading toward opening a path for market liberalization and private-sector participation. The government is planning to become more open to issuing licenses for full-fledged foreign logistics businesses.
Due to the initiative by the government, new entrants are expected to fill the gap in Saudi's overall logistics landscape. The Vision also includes the creation of greenfield industrial sites and cities. One of the most notable projects is the King Abdullah Economic City, primarily focused on industry and logistics. It is about 70 km north of the Red Sea port of Jeddah. The city has its own seaport, the King Abdullah Port, with a current capacity of handling 1.4 million TEU and aspires to reach 10 million TEU capacity.
The country is strengthening its logistics competitiveness and contributing toward increasing the volume of non-oil exports and diversifying the country's sources of income in accordance with the objectives of Vision 2030.
The size of the maritime sector has doubled in the past decade, bringing the number of ships operating in it to 53,000 marine vessels registered in 150 countries and carrying 11 billion ton of cargo annually, as reported in April 2021. The country aims for the private sector's GDP contribution to reach from 40 to 65%. It plans to achieve this goal with the development of the maritime transport sector, especially since 13% of the volume of international trade passes through the Red Sea.
Growth in E-commerce to Drive the Logistics and Transportation Sector
E-commerce in Saudi Arabia is experiencing a rapid spike in growth amid the COVID-19 pandemic. The supply chain will need to respond to increased competition in the last mile as e-commerce operations grow in the wake of the pandemic. Last-mile logistics will be a highly competitive space as companies look to their supply chains to give the best possible customer experience. This will call for technological innovation to enable retailers to scale-up home delivery systems quickly once normality returns.
The government has also sought to improve the regulatory framework to help incentivize this growth and ensure long-term sustainability in the segment. In October 2019, the government implemented the E-commerce Law, designed to regulate digital payments and improve transparency, while on January 31, 2020, the Ministry of Commerce and Investment adopted the Implementing Regulations of the E-commerce Law, adding increased oversight to areas such as personal data protection, consumer rights, and disclosure obligations.
As part of the Financial Sector Development Program, which is also a part of Vision 2030, the government plans to increase the proportion of online payments to 70% by 2030, up from the 2020 target of 28%. Logistics and infrastructure are set to witness growth during the forecast period due to the factors mentioned above.
Saudi Arabia Freight & Logistics Market Competitor Analysis
The freight and logistics market in Saudi Arabia is fiercely competitive, fragmented with many international and domestic companies. The top players in the segment include Deutsche Bahn AG, DHL, Gulf Agency Company Ltd (GAC) among the global players, and Almajdouie Group and Bahri among the domestic players.
International companies are partnering with local players to form joint ventures. This provides an opportunity for local players to exploit the global network of multinational companies. In terms of logistics competence, the country aims to reform its regulations and governance and liberalize and open the logistics market to attract best-in-class private sector logistics operators.
Additional Benefits:
The market estimate (ME) sheet in Excel format
3 months of analyst support
1 INTRODUCTION
1.1 Study Assumptions
1.2 Scope of the Study
2 RESEARCH METHODOLOGY
2.1 Analysis Methodology
2.2 Research Phases
3 EXECUTIVE SUMMARY
4 MARKET INSIGHTS
4.1 Market Overview
4.2 Technological Developments in the Market
4.3 Government Regulations and Initiatives
4.4 Industry Value Chain/Supply Chain Analysis
4.5 Insights into Freight Rates
4.6 Spotlight on the E-commerce Market (Trends of Domestic and Cross-border E-commerce and Key Performance Indicators will be Provided)
4.7 Insights into the Courier, Express, and Parcel (CEP) Market (Market Volume, Key Players, and Future Outlook)
4.8 Brief on the 3PL Market in Saudi Arabia (Market Size and Forecast, Top Players)
4.9 Spotlight on Free-trade Zones (FTZs) and Special/ Exclusive Economic Zones
4.10 Spotlight on the Key Logistics Hubs and Cities in Saudi Arabia
4.11 Demand and Supply Analysis of Trucks, Drivers, and Labor
4.12 Insights into Intermodal Transportation
4.13 Impact of COVID-19 on the Market
5 MARKET DYNAMICS
5.1 Market Drivers
5.2 Market Restraints
5.3 Market Opportunities
5.4 Industry Attractiveness - Porter's Five Forces Analysis
5.4.1 Bargaining Power of Suppliers
5.4.2 Bargaining Power of Consumers
5.4.3 Threat of New Entrants
5.4.4 Threat of Substitutes
5.4.5 Intensity of Competitive Rivalry
6 MARKET SEGMENTATION (Market Size By Value)
6.1 By Function
6.1.1 Freight Transport
6.1.1.1 Road
6.1.1.2 Rail
6.1.1.3 Sea/Ocean Transport
6.1.1.4 Air Transport
6.1.2 Freight Forwarding
6.1.3 Warehousing
6.1.4 Value-added Services and Other Services
6.2 By End User
6.2.1 Manufacturing and Automotive
6.2.2 Oil and Gas
6.2.3 Petrochemicals
6.2.4 Pharmaceutical
6.2.5 Agriculture, Fishing, and Forestry
6.2.6 Construction
6.2.7 Distributive Trade (Wholesale and Retail)
6.2.8 Other End Users (Mining and Quarrying, Healthcare, Services Sector, Telecommunications, etc.)
7 COMPETITIVE LANDSCAPE
7.1 Overview (Market Concentration and Major Players)
7.2 Company Profiles
7.2.1 International Companies
7.2.1.1 Agility Logistics
7.2.1.2 Deutsche Bahn AG (DB Group)
7.2.1.3 Deutsche Post DHL Group
7.2.1.4 FedEx Corporation
7.2.1.5 Aramex
7.2.1.6 Gulf Agency Company Ltd (GAC)
7.2.1.7 Al-Futtaim Group
7.2.1.8 Ceva Logistics
7.2.1.9 Kuehne+Nagel
7.2.1.10 United Parcel Service*
7.2.2 Domestic Companies
7.2.2.1 Bahri
7.2.2.2 Almajdouie Group
7.2.2.3 Saudi Transport & Investment Co. (Mubarrad)
7.2.2.4 Rezayat Group (Crescent Transportation)
7.2.2.5 Mosanada Logistics Services
7.2.2.6 BAFCO International Shipping and Logistics
7.2.2.7 Saudi Bulk Transport
7.2.2.8 Hala Supply Chain Services Co.
7.2.2.9 Takhzeen Logistics Company
7.2.2.10 Himmah Logistics
7.2.2.11 Abdul Latif Jameel Logistics
7.2.2.12 Naqel Express
7.2.2.13 Motion Supply Chain
7.2.2.14 Tamer Logistics
7.2.2.15 Arabco Logistics
7.2.2.16 Al Jabri Logistics
7.2.2.17 Al Rashed Transport
7.2.2.18 Namma Cargo
7.2.2.19 Etmam Logistics
7.2.2.20 SA TALKE
7.2.2.21 LSC Logistics and Warehousing Co.*
7.3 Other Companies (Key Information/Overview)
7.3.1 SMSA Express, LV Shipping, United Warehouse Company Limited, Saudi Development & Export Services Co. Ltd, Aldrees Petroleum and Transport Services Company, Wared Logistics, Kaden Logistics Company, Riadco, Platinum Shipping, Logistics Solution Services Co., Glaube Logistics, Four Winds, ProConnect Integrated Logistics, City Link Companies, Flexigistic LLC, NTF Cargo
8 FUTURE OUTLOOK OF THE MARKET
9 APPENDIX
9.1 GDP Distribution, by Activity and Region
9.2 Insight into Capital Flows (Investments by Sector)
9.3 Economic Statistics - Transport and Storage Sectors
9.4 External Trade Statistics - Export and Import, by Product
9.5 Insight into Key Export Destinations
9.6 Insight into Key Import Origin Countries
9.7 List of Prospective Clients for Logistics Service Providers
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