Saudi Arabia Freight and Logistics Market Outlook

According to the report by Expert Market Research (EMR), the Saudi Arabia freight and logistics market size is projected to reach a value of USD 51.60 billion by 2034, growing at a robust CAGR of 5.5% between 2025 and 2034, up from USD 31.82 billion in 2024. This growth is attributed to the increasing demand for efficient logistics solutions, the expanding e-commerce sector, and significant investments in infrastructure development in the region.

Saudi Arabia, as the largest economy in the Middle East, serves as a strategic logistics hub connecting Asia, Europe, and Africa. The country’s pivotal geographic location has established it as a major trade gateway, facilitating the movement of goods through sea, air, and land transport. The government’s efforts to diversify the economy away from oil dependence, encapsulated in the Vision 2030 initiative, have further accelerated the growth of the logistics sector.

The increasing demand for global supply chains, improvements in infrastructure, and the evolving needs of the e-commerce market are the driving forces behind the growth of the freight and logistics market in Saudi Arabia. Additionally, the country is also enhancing its port capacities, road networks, and airports, contributing to the expansion of logistics services across the region.

Key Market Drivers

Growing E-commerce Industry: Saudi Arabia’s e-commerce sector is experiencing rapid expansion, driven by a tech-savvy population and an increasing shift towards online shopping. According to the Saudi Arabian Monetary Authority (SAMA), the country's e-commerce market has grown significantly, This Saudi Arabia freight and logistics market growth has generated a surge in demand for freight and logistics services, particularly last-mile delivery, which plays a pivotal role in fulfilling e-commerce orders.

The increasing popularity of online shopping, along with consumer expectations for fast delivery, has created a need for more efficient logistics solutions. E-commerce businesses rely heavily on the freight and logistics market to ensure timely product delivery, which in turn drives the demand for both domestic and international freight services.

Vision 2030 and Infrastructure Development: Saudi Arabia's Vision 2030, a strategic initiative aimed at transforming the economy and reducing its reliance on oil exports, has placed a significant focus on infrastructure development, including the expansion of the logistics sector. As part of Vision 2030, the government is heavily investing in upgrading its transport infrastructure, including roads, railways, ports, and airports.

Key infrastructure projects include the King Salman International Complex for Maritime Industries and Services, which is expected to increase the kingdom's port capacity significantly. The development of the Saudi Landbridge project, a 1,300-kilometer railway system connecting the Red Sea coast with the Arabian Gulf, will also boost the country’s logistics efficiency by reducing travel time for freight. These infrastructural advancements are crucial for enhancing the freight and logistics market’s capabilities in Saudi Arabia.

Expanding Port and Airport Capacities: Saudi Arabia has long been recognized as a crucial hub for sea freight due to its proximity to key global trade routes. The kingdom is home to several major ports, including the King Abdulaziz Port in Dammam and the Jeddah Islamic Port, which are among the busiest in the region. The development of these ports, as well as the ongoing expansion of the King Fahad Industrial Port, is aimed at increasing container handling capacity, reducing congestion, and enhancing efficiency for international trade.

Additionally, Saudi Arabia is also enhancing its airport infrastructure, particularly for air cargo. The King Khalid International Airport in Riyadh is expanding its cargo capacity to accommodate the growing volume of goods transported by air. These investments in port and airport infrastructure are pivotal in positioning Saudi Arabia as a global logistics leader.

Growing International Trade and Connectivity: Saudi Arabia's strategic location between Europe, Asia, and Africa has made it an essential logistics and trade gateway. The country has long been a vital partner in global trade, with its ports facilitating the movement of goods across continents. Saudi Arabia’s participation in regional trade agreements, such as the Gulf Cooperation Council (GCC) and the Arab Free Trade Area, further enhances its connectivity with other key markets in the region.

The rise in international trade, both imports and exports, is contributing to the increased demand for Saudi Arabia freight and logistics market. The kingdom’s diverse export base, which includes oil, chemicals, petrochemicals, and non-oil products, fuels the demand for logistics services that can facilitate the smooth movement of goods both within the region and globally.

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Market Trends

Automation and Digital Transformation: One of the key trends shaping the Saudi Arabia freight and logistics market is the integration of automation and digital technologies. The increasing adoption of digital platforms for freight management, tracking, and inventory management has streamlined operations and enhanced efficiency. Logistics companies in Saudi Arabia are incorporating technologies such as artificial intelligence (AI), blockchain, and the Internet of Things (IoT) to improve supply chain visibility, reduce costs, and increase operational efficiency.

Automation is also playing a significant role in improving warehousing and distribution operations. The use of automated guided vehicles (AGVs), drones, and robotics in warehouses and sorting centers is enhancing operational efficiency, reducing human error, and speeding up the supply chain process.

Sustainability and Green Logistics: As global concerns over climate change intensify, there is growing pressure: on the logistics industry to reduce its carbon footprint. Saudi Arabia is taking steps to make its logistics operations more sustainable by investing in cleaner technologies, such as electric vehicles for transportation and renewable energy sources for warehouses.

Additionally, Saudi logistics companies are adopting green logistics practices, such as optimizing routes to reduce fuel consumption, using eco-friendly packaging, and exploring alternative transportation modes like rail and sea freight, which have a lower environmental impact than road transport.

Expansion of Warehousing and Distribution Centers: With the growth of e-commerce and the increasing demand for efficient logistics solutions, Saudi Arabia has seen a surge in the development of warehousing and distribution centers. These centers serve as key hubs for storing, managing, and distributing goods to meet consumer demand efficiently.

The development of industrial parks and logistics hubs in major cities like Riyadh, Jeddah, and Dammam is helping to optimize the supply chain process. The proximity of these hubs to key transportation routes is making it easier for businesses to transport goods quickly, reducing lead times and improving delivery efficiency.

Saudi Arabia Freight and Logistics Market Segmentation

The market can be divided based on function and end use.

Market Breakup by Function

• Courier, Express and Parcel
  • Domestic
  • International
• Freight Forwarding
  • Railways
  • Airways
  • Roadways
  • Waterways
• Freight Transport
  • Railways
  • Airways
  • Roadways
  • Waterways
• Warehousing and Storage
  • Temperature Controlled
  • Non-Temperature Controlled
• Others

Market Breakup by End Use

• Manufacturing
• Consumer Goods and Retail
• Food and Beverages
• IT Hardware and Telecom
• Healthcare
• Chemicals
• Construction
• Automotive
• Oil and Gas
• Others

Competitive Landscape

The EMR report looks into the market shares, plant turnarounds, capacities, investments, and mergers and acquisitions, among other major developments, of the leading companies operating in the Saudi Arabia freight and logistics market. Some of the major players explored in the report by Expert Market Research are as follows:

• Kuehne + Nagel Management AG
• Deutsche Post AG
• UPS Express Private Limited
• The Aramex Group
• FedEx Corporation
• Agility Public Warehousing Company K.S.C.P.
• Mosanada Logistics Services
• Zajil Express
• Alma Express
• SMSA Express Transportation Company Ltd.
• Wared Logistics
• Saudi Logistics Services Company (SAL)
• Saudi Post Corporation
• United Warehouse Co. Ltd.
• Others

Challenges in the Market

Despite the significant growth potential, the Saudi Arabia freight and logistics market faces several challenges. One of the main obstacles is the shortage of skilled labor, particularly in specialized logistics roles such as warehouse management, supply chain analysis, and logistics technology implementation. To address this challenge, there is a growing emphasis on training and education programs to develop a skilled workforce in the logistics sector.

Another challenge is the intense competition in the logistics space, both from local players and international companies. To stay ahead in the market, logistics companies must invest in cutting-edge technologies, improve service offerings, and focus on customer satisfaction.