Saudi Arabia Freight and Logistics Market Outlook

According to the report by Expert Market Research (EMR), the Saudi Arabia freight and logistics market size achieved a value of USD 31.82 billion in 2024. Driven by the country's growing trade activities, advancements in logistics infrastructure, and the increasing demand for supply chain efficiency, the market is projected to expand at a compound annual growth rate (CAGR) of 5.5% from 2025 to 2034, reaching a value of USD 51.60 billion by 2034.

The freight and logistics industry plays a crucial role in Saudi Arabia's economy, enabling the efficient movement of goods both domestically and internationally. The Kingdom’s strategic location, access to key global shipping routes, and its commitment to infrastructure development make it an essential hub for trade in the Middle East. As the country continues to diversify its economy and implement ambitious development plans, including Vision 2030, the freight and logistics sector is poised for substantial growth.

Driving Factors

The rapid expansion of Saudi Arabia’s non-oil sectors is one of the primary factors driving the Saudi Arabia freight and logistics market. With diversification efforts under Vision 2030, the Kingdom is placing increased focus on sectors such as manufacturing, retail, and e-commerce. These industries require highly efficient logistics services to facilitate the movement of goods. The rise in demand for fast, reliable delivery, particularly in the retail and e-commerce sectors, is expected to significantly contribute to the market’s growth. E-commerce platforms in Saudi Arabia have surged in popularity, creating a strong need for advanced logistics networks to meet the demands for timely deliveries and last-mile solutions.

Moreover, Saudi Arabia's growing industrial output, particularly in petrochemicals, construction, and heavy machinery, is pushing the demand for transportation services that can handle larger volumes of goods. Additionally, with major projects such as NEOM, the Red Sea Project, and other infrastructure developments underway, there is a substantial increase in the movement of goods and materials, further boosting the freight and logistics market.

The rise in international trade is another significant factor contributing to the Saudi Arabia freight and logistics market growth. Saudi Arabia’s ports, such as King Abdullah Port and Jeddah Islamic Port, are seeing increased activity due to the country’s position as a critical player in the global supply chain. As a result, Saudi Arabia’s freight and logistics market is benefiting from both inbound and outbound shipping, positioning itself as a gateway for goods between Asia, Europe, and Africa.

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Technological Advancements and Innovation

Technological advancements are playing a critical role in shaping the future of Saudi Arabia freight and logistics market The rise of automation and digitalisation is transforming traditional logistics operations, enhancing efficiency, and reducing operational costs. The adoption of technologies such as artificial intelligence (AI), the Internet of Things (IoT), and blockchain is improving tracking, monitoring, and security across supply chains. AI-driven systems enable more accurate forecasting and route optimization, while IoT sensors enhance real-time tracking of goods, offering better visibility and control.

Moreover, the development of autonomous vehicles and drones is expected to revolutionize the logistics landscape in Saudi Arabia. These innovations are being increasingly tested and integrated into logistics operations, offering the potential for faster and more cost-effective delivery solutions. As these technologies mature, they will further strengthen Saudi Arabia’s position as a leader in the logistics industry in the region.

In line with the technological revolution, the implementation of digital freight platforms is also transforming the market. These platforms allow businesses to easily connect with logistics service providers, access real-time information, and optimize their supply chain operations. The convenience and flexibility offered by these platforms are attracting more businesses to the freight and logistics industry, driving market growth.

Infrastructure Development

The continuous improvement of Saudi Arabia's logistics infrastructure is a critical enabler of market growth. The country is investing heavily in its transportation networks, including roadways, railways, and ports. The expansion of King Abdulaziz Port in Jeddah and King Abdullah Port in Rabigh is enhancing the country’s port capacity and connectivity, making it a crucial hub for international trade. Additionally, the construction of modern warehousing facilities and distribution centers is improving the efficiency of domestic logistics operations.

The country is also focusing on enhancing its railway network, particularly with the completion of the Saudi Railway Master Plan, which aims to create an integrated transportation system linking key cities and economic zones. The development of the Riyadh-Dammam rail corridor and the Haramain High-Speed Railway, which connects Mecca and Medina, will further facilitate the movement of goods across the Kingdom.

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

Despite the promising growth outlook, the Saudi Arabia freight and logistics market faces some challenges. One of the key hurdles is the high reliance on road transportation, which can lead to congestion and delays, especially in urban areas. The infrastructure challenges related to roadways and the increasing number of trucks on the roads are pushing the need for better traffic management solutions and improved logistics planning.

The shortage of skilled labor in logistics operations is another challenge that needs to be addressed. The growing demand for logistics services requires a skilled workforce that is well-versed in the latest technologies, including AI and automation. Saudi Arabia will need to invest in training and development programs to ensure the availability of skilled labor in this sector.