Stretching its services globally, the market size of Saudi Arabia’s logistic industry stands at USD 18 bn today. The economy of Saudi Arabia is largely fueled by its robust transportation activities in the Kingdom. Additionally, KSA (Kingdom of Saudi Arabia) has introduced several economic reforms in the industry accelerating its progress towards its development program ‘Vision 2030.’ The program dictates reinforcing KSA’s economy by relying less on its oil and laying special focus on logistics, health, education, infrastructure and more.
With a fleet of estimated 40,000 trucks, the freight network of Saudi Arabia comprises a vast network operating in eight countries across the Middle East and Central Asia. Reported to be the largest logistics market in the Gulf Cooperation Council (GCC), just back in the year 2020 the transportation and infrastructure projects were heavily invested with an estimated USD 15 billion.
The Kingdom of Saudi Arabia sits on the fourth spot competing with at least 30 countries based on the performance of maritime vessels and cargo handling with respect to tanker loading speed, as revealed by the UN Conference on Trade and Development in 2021. The performance is largely driven by the constant adoption of ever-evolving technologies such as drone and accurate tracking of shipments..
The nation has caught the eyes of companies across the world as the recent rise in partnerships suggests. One such important one is the recent news that UK based Classic Automotive Relocation Services has partnered with Jeddah headquartered Saudi Logistics Services in October 2021 for car shipments by land, sea and air through Jeddah, Madinah, Dammam and Riyadh. More such partnerships are expected this year with booming industrial activities across the world that demand Saudi Arabia’s seamless logistics services.
The Pride of Saudi Arabia
Saudi Arabia headquartered Bahri, one of the leading logistics and transportation companies in the world has revolutionized the global logistics and shipping industry with its quick-footed innovation and adoption of sophisticated technologies simplifying its operations worldwide. Known as the national shipping carrier of Saudi Arabia, Bahri has scaled its operations in logistics, oil, chemicals, desalination, dry bulk and ship management. With an estimated 3,500 diligent employees, Bahri has expanded its business worldwide with offices in Saudi Arabia, India, UAE and USA.
Founded in 1978, Bahri has built a massive portfolio that includes owning one of the world’s largest Very Large Crude – oil Carriers (VLCCs), one of MENA region’s largest chemical tankers, 9 dry bulk carriers, 95 vessels, 28 chemical tankers, 6 multipurpose ro-ro vessels, 10 product tankers and the company serves around 150 ports across the world.
Growing as Market Demands
In September 2022, Bahri signed a Memorandum of Understanding (MoU) with Germany based MOSOLF group, one of Europe’s leading system service providers for the automotive industry. The MoU will pave the way to structure and develop automotive logistics in Saudi Arabia and eventually expand across Gulf Cooperation Council (GCC) regions. Furthermore, the collaboration aims to implement sustainable innovative solutions to accelerate the automobile supply chain network across the entire scale of its business by bridging unique resources and expertise from both firms. An ambitious vision announced by Saudi Arabia to manufacture 300,000 cars by 2030, Bahri eyes to supply its logistics services along the progression.
Bahri also signed a Memorandum of Understanding (MoU) with Saudi Arabia Company for Electronic Information Exchange ‘Tabadul’, one of the leading providers of digital and financial solutions to logistics sectors, to boost innovation in logistic operations based on information sharing. With acceleration towards Digital Transformation, the alliance will advance the efficiency of logistics and shipping sectors that include Port Community System (PCS) and trade lane traffic.
Advancing on its developments, Bahri made a major announcement that it has moved ahead of phase one of its Fleet Performance Monitoring Center (FPMC), dedicating the center for data and analytics during crew deployment involving various logistic operations. The global logistics company aims to use FPMC as a centralized hub to support Bahri’s vessel operations by sending high frequency data from cargo to the receiver at the Monitoring Center, and controlling operations through alarm monitoring, and navigation systems in each of the vessels.
In appreciation of its impressive logistics services in recent years, Bahri grabbed two awards recently at International Business Magazine..The titles conferred are ‘Best Logistics Solutions Provider Saudi Arabia 2022’, and ‘Most Sustainable Fleet Management Company Saudi Arabia 2022’.
The market size of Saudi Arabia’s logistics industry is projected to grow at a Compound Annual Growth Rate (CAGR) of 6.7 % during the forecast period of 2020 to 2025. Bringing in new strategies to the sector, the government of Saudi Arabia’s Transport General Authority is expected to lead the market, dominating with its robust activities in sea, land and rail transportation.
Emerging as a global hub for transportation, Saudi Arabia stays in an advantageous position for business as it furthers with foreign direct investment, policy reforms, tax regimes and more. The nation is also looking forward to issuing licenses to organizations that seek full fledged operations in foreign logistics.
Blog By Harish Rajulu
