Saudi Logistics, Warehousing Markets Looking Bouyant

Saudi Logistics, Warehousing Markets Looking Bouyant

Thanks to rising infrastructure spend, government reforms and surge in trade

Ken Research has released a new report on the Saudi Arabian logistics market called "Saudi Arabia Logistics and Warehousing Market Outlook to 2023 (Second Edition).”

The Saudi market has witnessed a buoyant five years despite the temporary stagnation of the economy and decrease in oil prices owing to the global oil price shock.

The market increased at a positive CAGR (of 0.3%) during the period 2012 to 2018.

The improving road infrastructure, rise in government support in the form of incentives and subsidies, improving corporate working environment due to large availability of expatriate workforce and rise in the industrial activities are expected to support the growth of the market in future.

Freight forwarding segment that deals with FMCG goods, retail, food and e-commerce industries in the kingdom is expected to stabilize in future.

The warehousing sector too has increased at a positive CAGR during the review period of 2012-2018.

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The country is experiencing a major rise in the demand for warehousing services. Industrial and retail warehousing were the main drivers in 2018 while expanding e-tail companies in the country have also triggered growth.

Online stores have become quite popular in the kingdom lately. The growth in the market is also driven by increased demand for the outsourcing of warehouse services.

Jeddah contributed the majority revenue share in warehousing industry. In future, it is anticipated that the market will continue to grow at a single digit positive CAGR.

E-Commerce Market in Saudi Arabia has increased with customers demanding quick deliveries which has led to an increase in the logistics and warehousing requirements in the country.

E-commerce companies such as, Noon, JollyChic, Wadi, and Ali Express are some of the major players that promise one day delivery to its clients.

Meanwhile, third-party logistics (3PL) outsourcing is rapidly gaining prominence as more corporations across the world are entering the kingdom and are unable to manage their complex supply chains and hence are outsourcing logistics activities to the 3PL service providers.

Saudi Arabia’s logistics and warehousing market is expected to grow at a single digit CAGR during the review period of 2018 to 2023. (Source: Ken Research).

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