Saudi Arabia Logistics Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

Saudi Arabia Logistics Market Size

Saudi Arabia Logistics Market Trends & Growth Drivers

Government Investment to Boost Transport Infrastructure Is Key Trend

• Saudi Arabia has a broader vision to diversify the economy, improve connectivity, and become a leading country for logistics and transportation. Due to this, it is heavily investing in road infrastructure, maritime infrastructure, aviation infrastructure, rail infrastructure, logistics zones, and many other areas.
• In the Gulf region, for example, there are currently 98 aviation projects, which include 68 airports, 9 hangar facilities, and 18 runways, with a total investment of USD 49 billion.
• In Saudi Arabia, projects with large investments, such as the King Abdulaziz International Airport project, are estimated to require an investment of USD 7,200 million by 2035. Numerous other major rail projects are also underway, including the Saudi Landbridge project, with an estimated cost of USD 7,000 million. 

Energy Trade Is Key Driver

• Saudi Arabia is one of the largest producers and traders of crude oil. As such, it needs efficient pipelines and transportation systems for smooth operations, which is why it is making significant investments in the logistics industry.
• In 2022, it was estimated that Saudi Arabia exported a total of 7.3 million b/d of crude oil, which is 34% of all exports from OPEC members. This increased export has acted as a key driver for the expansion of the logistics market.

Saudi Arabia Logistics Market Analysis

Model Type Insights

• The 3PL is the largest and fastest-growing category, with a share of 45% in 2024 and CAGR of 5.9% till 2030, respectively. It is widely used due to government initiatives and e-commerce growth.
• These initiatives come under Saudi Vision 2030, which aims to improve infrastructure, foster public-private partnerships, and digitalize logistics.
• This type of model helps by providing a wide range of services, including transportation, warehousing, inventory management, order fulfillment, and custom logistics consulting.
• The increasing diversification in the market requires a comprehensive solution to increase the efficiency of operations. 3PL is the ideal option because of its wide range of services and the fact that it provides end-to-end logistics solutions, unlike 2PL.

The model types covered in the report include:

• 2PL
• 3PL (Largest and Fastest-Growing Category)
• 4PL

Transportation Insights

• The roadways category will hold the largest market share of 40% in 2024. The demand for door-to-door services and the fact that they are the cheapest option are the primary reasons behind the market dominance of this category.
• Airways is the fastest-growing category, with a CAGR of 6.0% by 2030. The reason behind the substantial growth of this category is the growing international trade.
• These are the quickest and safest modes of transportation, and the increase in investments in the Saudi Arabian commercial aviation industry has fueled the growth of this category. 

The transportation modes we have come across are:

• Roadways (Largest Category)
• Seaways 
• Railways
• Airways (Fastest-Growing Category)

End User Insights

• The retail category is the largest and fastest growing market with a CAGR of 6.7%, by 2030. This category has expanded due to a number of factors, including the increasing degree of urbanization, a growing economy, the construction of more retail centers, and rising tourism activities.
• Meydan One Mall, one of the largest malls and a luxury shopping destination, is one of the many ongoing projects in Saudi Arabia, with the government heavily investing in malls for the diversification of the economy. The project has a total cost of USD 1.5 billion and an area of 1,500,000 square meters, with 620 retail stores.
• The reason behind this dynamic growth is also due to the increasing popularity of e-commerce and the presence of major players, such as Amazon, eBay, and Alibaba Groups. These players are heavily investing in the region to fulfill public demands and ensure smooth operations, for which a strong logistics network is needed.

The several end users of logistics services are:

• Manufacturing
• Consumer Goods 
• Retail (Largest and Fastest-Growing Category)
• Food and Beverages
• IT Hardware 
• Healthcare
• Chemicals
• Construction
• Automotive
• Telecom
• Oil and Gas
• Others

Application Insights

• The B2B category is the larger and faster growing-category with a CAGR of 5.9% by 2030. The main reason behind the dominance of the category is because of ongoing and upcoming construction projects and developing infrastructure under Vision 2030 leading to an increasing demand for raw materials.
• The B2B category, which is the transportation or trade between businesses, takes place on a huge scale and requires special needs. The category is dominating the market because of the clients who are generating larger revenue compared to B2C clients and also because of the participation of 3PL logistics to reduce the complexity of the operations.

The applications of logistics services are:

• B2B (Larger and Faster Growing Category)
• B2C

Al-Riyadh-Largest Provincial Market

• Geographically, Al-Riyadh holds the largest market share in 2024, of 45%. The large size of the logistics market in this region is due to the presence of major industrial and commercial hubs and the construction of a large number of projects under Saudi Arabia's Vision 2030.
• Al-Riyadh is the capital city of Saudi Arabia and also one of the largest logistics hubs because of the growing population in the area. For instance, according to the World Population Review, the population of Riyadh in 2024 will be 7.8 million, which is estimated to grow to more than 9 million by 2030. This increase requires a large logistics network, making Riyadh the largest market for these services.
• Makkah is projected to record the fastest growth in the future. This rapid growth of the market in this province is because it is home to the holy city of Mecca, which is why a large population of pilgrims visits the province. For instance, a total of 1,845,045 pilgrims visited Mecca in 2023, out of which 90% (1,660,915) were overseas pilgrims and 10% (184,130) were locals.
• The commercial center of Jeddah is also situated in this province.
• The Jeddah Islamic Port is one of the largest seaports in the Middle East, which is why the demand for logistics services in the province continues to rise.

The provinces analyzed for this report include:

• Al-Riyadh (Largest Provincial Market)
• Makkah (Fastest-Growing Provincial Market)
• Al-Madinah
• Al-Qaseem
• Eastern Region
• Aseer
• Tabouk
• Hayel
• Northern Border
• Jazan
• Najran
• Al-Baha
• Al-Jouf

Saudi Arabia Logistics Market Share

The logistics market in Saudi Arabia is highly fragmented due to the presence of both larger and smaller players. The large players, such as Expat, Aramex, and DHL, offer a wide range of services and have international connections. On the other hand, the smaller local players often better understand the domestic market, which allows them to cater to the needs of local industries. These players increase the level of competition by implementing various strategies and developing new ideas to gain an edge in the market, which leads to fragmentation.

Saudi Arabia Logistics Industry News

• In March 2024, Aramex inaugurated a new regional office in Riyadh and strengthened its presence in Saudi Arabia.
• In February 2024, DHL Supply Chain and energy giant Aramco unveiled a joint venture to create a sustainable procurement and logistics hub in Saudi Arabia.
• In October 2023, Almajdouie Logistics the adopted IRU Road Masters goods transport program.
• In September 2023, Mediterranean Shipping Company (MSC) announced plan to make investments in the Red Sea port of NEOM, Saudi Arabia, in partnership with Medlog’s logistics division.