KSA Freight Forwarding Market Overview
Given its
advantageous position, the logistics business in Saudi Arabia is one of the
world's main logistics markets, second only to the UAE, and is predicted to be
the next trans-shipment hub for Asian, African, and European countries. Due to
the high level of business accessibility and the industry's ranking of 89th in
the world, growth in the sector has been promoted.
The nation had a
shift in purchasing behavior during the COVID-19 epidemic, moving away from
traditional hypermarkets and supermarkets to internet retailers for necessities
like groceries and other things. In the long run, this is anticipated to expand
the market and enhance competition for logistics players in the nation in terms
of quicker delivery and a seamless client experience.
Report Analysis
According to the
research report, “Competition Benchmarking of Top Logistics Players in KSA in Transportation,
Warehousing, 3PL, International Express, Domestic Express, Automotive, Pharma,
Oil and Gas, and Retail Logistics” asserts that
throughout the anticipated term, the increase in the e-commerce sector, which
directly drives the logistics and transportation sector, will cause the Saudi
Arabian logistics market to rise quickly. The government has also worked to
strengthen the legal foundation in order to encourage this expansion and
guarantee the logistics industry's long-term viability.
A dominant position
in oil exports and dependence on imports for all essential products means that
sea and land freight movements dominate the business. The US, Europe, and Asia
are the three main trading partners of the nation. Usually, the UAE, Bahrain,
Jordan, and Egypt trade a lot of land freight. Since it is so expensive
compared to other modes, air freight is typically employed for express
shipments. The KSA also has a robust market for warehousing, where real estate
players rent out their space to logistics firms and captive players for
extended periods of time. Due to their dense populations and proximity to
seaports, Riyadh, Jeddah, Dammam, and Al Khobar have the highest concentration
of warehouses. The expansion of Last-Mile delivery and the nation's e-commerce
sector are the driving forces behind the courier, express, and parcel market.
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Competitive
Environment
Freight forwarding,
contract logistics (warehousing), and express delivery are three service
sectors on which the competition in the logistics market in KSA can be
separated. Domestic and international firms with strong brands in the global
market for their high-quality services, such as Bahri Logistics, Kanoo
Terminal, Kuehne + Nagel, DB Schenker, DHL, and Agility, were found to be
dominating in the air freight and sea freight sectors. Local domestic carriers
dominate the road freight market in terms of fleet types, truck counts, prices,
delivery schedules, and other factors. The Saudi Arabian logistics market is
dominated by NAQEL express, SMSA Express, Saudi Post, ESNAD express, and other
companies, however, the international express market is dominated by large
international firms like DHL, FedEx, and others.
KSA
Digital Freight Forwarding Market Future Outlook
The Saudi Arabian logistics industry is anticipated
to expand in the coming years, with the exception of 2020, when a brief
shutdown that affected import and export movements by all modes caused a
decline that is anticipated to recover in the forecasted period. In order to
attract customers by offering high-quality services, improving customer
experiences, and enhancing service quality, logistics companies are expanding
and upgrading new technologies like RFID tags, WMS, Fleet Management Software,
Blockchain, and ASRS at affordable costs. Given the anticipated increase in
medical product requirements following COVID-19 and the expanding penetration
of e-commerce in the nation, the pharmaceutical logistics market and the
e-commerce logistics segment are predicted to drive growth in the near future.
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