The sixth edition of the Supply Chain and Logistics Conference held on December 15 and 16 in Riyadh, Saudi Arabia, heard how the fast-growing Saudi logistics and supply chain sector is helping diversify the economy away from a dependence on oil revenues. Industry expert John Lucy attended for MT.
HE Eng Saleh Al-Jasser, Saudi minister of transport and logistics services, opened the event which was attended by ministers, senior officials, executives from supply chain and logistics companies, representatives from global organisations and prominent public and private sector entities.
Few countries have moved so fast and changed so much in such a short timespan as Saudi Arabia. Moreover, Saudi Arabia’s non-oil activities contributed over 50% to GDP for the first time in 2023, indicating considerable success in diversifying the economy beyond oil, as well as being aligned to renewable energy targets of 50% by 2030 as per the Saudi Green Initiative Target. Saudi Arabia is booming, and was the fastest-growing economy in the G20 in 2022, growing by 8.7%, and the conference focused on progress made and prospects for the future of its transport sector.
Road transport cuts across all sector growth areas and Saudi has over one million heavy trucks registered. Demand for road transport is fuelled by the general economic growth, additionally the kingdom’s ‘Vision 2030’ goals are driving one trillion dollars’ worth of infrastructure projects plus several more football stadiums are to be constructed for the 2034 football World Cup.
The value of the Saudi commercial vehicle market is forecast to be worth $6.7bn (£5.36bn) in 2025, with the sector expected to be worth some $28bn by 2030. More specifically the Saudi government is investing in a further 59 logistics zones by 2030 and $130bn direct investment to enhance multimodal freight transport to achieve its aims of becoming a top 10 global logistics hub.
The conference focused heavily on innovation and Saudi government initiatives to embrace new technologies to improve operational efficiency in the sector and especially to decarbonise road transport, although it would appear to be at the start of this journey compared to the more mature UK market.
Artificial intelligence (AI) solutions in demand forecasting, route optimisation, digital freight platforms, fleet management and supply chain design were in evidence at the event but not on the scale of comparable European events. With sector growth at 6.5% and a total logistics sector value estimated at $133bn by 2026, the scale of the challenge and opportunities are however unprecedented.
Saudi Arabia is making tangible efforts to become a global trade and logistics hub; the country is investing an estimated $133bn into logistics infrastructure and freight handling capacity as it seeks to diversify its economy and increase non-oil GDP. Large-scale projects are underway in the maritime sector to upgrade ports and terminals – and to develop new gateways and introduce new trade routes. The aim is to more than quadruple the country’s annual container throughput, up to 40m TEU, by 2030.
Through the strategic Landbridge project, the country’s rail network should also be expanded considerably, linking Saudi’s Red Sea and Arabian Gulf ports, and leveraging its geographic advantage in trade over other regional hubs. Riyadh Airport is also to be transformed into a massive aviation hub, with six parallel runways and a ‘Special Integrated Logistics Zone’, also called ‘Riyadh Integrated’, covering some 3m sq m. The new national airline, Riyadh Air, is headquartered there. Saudi Arabia has also unveiled a ‘Master Logistics Centres Plan’ to boost local, regional, and inter-continental connectivity for international trade networks and global supply chains.
Approximately 40 logistics centres will be built, covering an area exceeding 100m sq m, doubling the number that already exist, up from only two in 2020. Saudi Arabia has the resources and ambition to become a major regional and global hub over the next decade – a conduit for trade between some of the fastest-growing markets in Asia and Africa, as well as serving the rest of the Middle East and parts of Europe. Its large domestic and export market will give it an advantage over other hub ports in the region which focus largely of transshipments
Increases in domestic demand for road freight is matched by demand for cross-border journeys. Almost all overland freight amongst the Gulf Cooperation Council (GCC) countries is carried by road. In 2024 alone, some 50,000 TIR carnets have facilitated overland journeys between Saudi and Dubai, helped with the creation of TIR “fast lanes” at key borders, and the future growth of TIR road movements to other UAE states, Iraq and Egypt for example are expected to be substantial.
In addition to infrastructure changes, the conference highlighted that Saudi Arabia is actively working on digitising trade and modernising the rules and laws that underpin trade. Furthermore, there were multiple events at the conference highlighting and encouraging women in logistics, indicating that change in diversity is being encouraged.
International logistics specialist John Lucy was invited to speak at the conference at an IRU panel session “Shaping the Future of Supply Chain: Leveraging Al and Digital Innovation for safer, greener and more efficient road transport”.
Joining other industry leaders from Europe the panel discussed what are considered the most successful digital and AI innovations currently available in Europe for the road transport sector and how these technologies could be implemented in Saudi haulage companies as a force for good.
The conference was also showcasing decarbonisation strategies for the haulage industry, with demonstration electric and hydrogen trucks on display. Focusing on the three key components of road transport decarbonisation - the truck, the operation and the driver - there was real interest from the audience in understanding what was happening in the UK, for example how the sector is taking the least-cost option first with interim alternative solutions such as bio and synthetic fuels which can be used in standard trucks, as the starting point of their decarbonisation journey.
In terms of road transport alone the Middle East and Saudi in particular are becoming increasingly important in terms of opportunities for UK businesses, but market entry is not without its challenges. MT hopes to bring more news on this rapidly evolving market in the coming months.
