With a strategic geographic location between east and west, a vast land covering more than 2 million square km and with a substantial mining and heavy industry sector, transport and logistics have a fundamental role to play in Saudi Arabia’s current and future economic success.
Saudi Arabia’s transport services have witnessed significant developments in recent times, and this is set to continue with $190bn to be invested in the sector through to 2025. The majority of this investment (approximately $141bn) will be allocated across a total of 14 different projects for improving rail and public transport networks.
Beyond these investments in multi-modal land transport, the Saudi Arabian General Investment Authority (SAGIA) anticipates that $28bn will be invested in ports and sea transport, and around $23bn in aviation.
The International supply chain solutions company, Agility Logistics, placed Saudi Arabia second in its 2015 Emerging Markets Logistics Index, behind only China and replacing Brazil at the top of the table. The Kingdom has steadily climbed Agility’s index over the past five years thanks to its “strategic economic planning, combined with growing domestic demand” and to its “high market potential with few barriers to market entry”.
The Kingdom of Saudi Arabia has built a massive network of modern roads (97,000 km) linking all parts of the country. This makes road transportation very important for Saudi Arabia and the new Aramco conditions for the transfer of petrol have led to the search of foreign companies to provide aluminum-tank vehicles to replace the iron ones.
Aluminum tanks do not interact with the fuel transported inside, reducing evaporation rates, have a longer life span, are bigger and can hold 42,000 liters (against the 37,000 liters of the iron tanks) and have a lower weight (7 tons against 8-10 tons of the iron tanks).
There is high competition in the Middle East between seaports to handle international cargoes, with Saudi Arabia in second place to the UAE, handling approximately 20% of all Middle East throughput. With its ports on the Red Sea and the King Abdulaziz Port in Dammam, Saudi Arabia is investing heavily to increase this percentage by taking advantage of its strategic location on the trade routes to many emerging markets.
Abdullah Al Mogbel, the Minister of Transport, has stated that the Kingdom is updating and developing its railway network building other four citywide metro systems for Jeddah, Makkah, Medina and Dammam by 2025 with a total investment of close to $65bn. Successive phases of railway development will extend the network bringing the Kingdom’s total track length to 9900 km by 2040.
In addition to the ongoing expansion of King Khalid International Airport in Riyadh and King Abdulaziz International Airport in Jeddah, the King Fahd International Airport (KFIA) in Dammam is now developing its Cargo Village Project to reduce timings for customs clearances by 50% introducing:
a second Cargo Terminal of 20,000 sqm
a non-dedicated new outbound terminal of 10,000 sqm to handle exports
a semi-automated processing facility
high service standards
a Bonded Free Zone