Investing in Saudi Arabia’s Transport and Logistics
Advantages of Investing in Saudi Arabia
Investing in Saudi Arabia offers numerous advantages, including its strategic location at major international trade routes, a large and growing youth population, a supportive government, and a strong focus on diversification and modernization.
Saudi Arabia’s Impressive Logistics Infrastructure
Saudi Arabia boasts 10 ports, over 40 industrial cities and zones, and a railway network spanning more than 5,000 km. It holds the top position in the GCC logistics market size, accounting for 55% of the market share.
National Transport and Logistics Strategy: Transforming Saudi Arabia
The country’s transport and logistics sector plays a vital role in achieving Vision 2030. The recently unveiled National Transport and Logistics Strategy (NTLS) aims to establish Saudi Arabia as a global logistics hub while prioritizing goals such as improving the Kingdom’s quality of life and enhancing the performance of public entities. The strategy encompasses all modes of transportation, including air, land, sea, and railways. It will guide significant investments in collaboration with regional stakeholders, international organizations, and private sector companies.
Key Strategic Goals of the National Transport and Logistics Strategy
The NTLS focuses on four key strategic goals:
- Transforming Saudi Arabia into a logistics hub
- Enhancing the quality of life
- Implementing balanced fiscal policies
- Improving the performance of public entities
Specific Strategies for Each Sector within the NTLS
Aviation
Saudi Arabia aims to become one of the leading countries worldwide regarding air travel. They want more people to choose Saudi Arabia as a destination and increase the number of people traveling to and from the country. To make it easier for travelers, they plan to expand the number of international destinations available, aiming for over 250 options. Saudi Arabia also intends to launch a new airline that will be owned by the country, offering more choices for people who want to fly. Additionally, they want to double the amount of cargo transported by airplanes, exceeding 4.5 million tonnes. It’s like upgrading from a small backpack to a larger one to carry more items. Similarly, Saudi Arabia wants to handle more cargo by increasing the capacity of its airplanes.
– Rank Saudi Arabia 5th globally in transit passenger volume
– Expand international destinations to over 250
– Launch a new national air carrier
– Double air cargo volumes to exceed 4.5 million tonnes
Air cargo
Saudi Arabia wants to be among the best countries in the world for the number of people traveling through its airports. Their goal is to be ranked 5th globally, which means many people will choose to travel to and from Saudi Arabia. It’s like wanting to have one of the most popular airports in the world, where there are lots of people coming and going. It’s similar to having a favorite restaurant that many people visit because the food is really good. Saudi Arabia wants to become a favorite destination for travelers.
– Achieve the 5th global ranking in transit passenger volume
Maritime transport
Saudi Arabia wants better ports that handle more containers. They’ll invest in improving them, connect them to shipping lines, and integrate them with rail and road networks. This boosts trade and transportation.
– Reach an annual capacity of 40 million containers
– Invest in port infrastructure development
– Enhance connectivity with international shipping lines
– Integrate with rail and road networks
Rail network
Saudi Arabia wants to expand its rail network from 5,310 km to 8,080 km, connecting more cities and offering more travel options. They also plan to build a 1,300 km Land Bridge for trains, making transportation faster and opening new routes. Overall, their goal is to improve transportation, connect cities, and facilitate the movement of people and goods.
– Expand the rail network to 8,080 km from the current 5,310 km
– Undertake the $7 billion Land Bridge project, spanning 1,300 km
Roads
Saudi Arabia wants to make the road network bigger. Right now, there are roads that connect cities and towns, but they want to expand it. It’s like adding more lanes and wider roads to accommodate more cars and make it easier for people to travel. It’s similar to having more paths in a playground, so moving around and reaching different places is easier. Saudi Arabia wants to make the road network larger and more extensive, just like making the playground bigger with more paths for everyone to use.
– Expand the road network
Saudi Arabia’s Strategic Position and the National Industrial Development and Logistics Program
Saudi Arabia’s strategic location at the crossroads of Europe, Asia, and Africa positions it as a global logistics hub. The National Industrial Development and Logistics Program (NIDLP) seeks to attract private sector involvement and ensure the financial sustainability of logistics development.
Development of Logistics Platforms and Industrial Cities
Logistics platforms and industrial cities are being developed to modernize Saudi industry, attract investments, create job opportunities, and boost the GDP. The NIDLP aims to generate 1.6 million jobs and attract investments worth SAR1.6 trillion ($427 billion) over the next decade, with SAR135 billion ($36 billion) allocated to various logistics projects involving government and private spending.
Modon: Overseeing Logistics Platforms and Industrial Cities
Modon, a leading authority in Saudi Arabia’s logistics industry, oversees numerous logistics platforms and industrial cities, covering a vast area of 74 million square meters through 5,895 industrial contracts.
Government Investments and Digitization Agenda in the Transport and Logistics Sector
The Saudi government has made significant investments in the transport, logistics, and warehousing sectors, resulting in improved productivity and efficiency. A comprehensive digitization agenda has further stimulated logistics innovation, supported by both government initiatives and private sector participation.
Projected Growth and Goals of the Transport and Logistics Sector
The Transport and Logistics sector is projected to experience substantial growth, with a total market size of $18 billion, the construction of 2,000 km of railways, and a compound annual growth rate (CAGR) of 12% by 2030. The NTLS aims to increase annual port capacity to over 40 million containers by 2030 while enhancing integration with other modes of transportation.
