Saudi Arabia is expected to invest $87.20 billion in economic projects

Saudi Arabia is expected to invest $87.20 billion in economic projects

Industrial investments to drive dry logistics market

October 2020

Saudi Arabia dry logistics and warehousing market has shown a volatile growth trajectory during 2015 to 2019, according to a new report released by Ken Research.

However, the kingdom’s plans to pump investment into economic cities and other industrial projects will drive market revenue in the kingdom’s logistics and transportation sector, the research firm said in a latest market outlook of the dry logistics and warehousing sector. The kingdom is expected to invest SR327.9  billion ($87.20 billion) within the various economic projects till 2025, it added.

“The KSA government is highly promoting the integration of multi-modal hubs across the country. FDI within the logistics infrastructure development, constructing regional & international logistics service centres and improving the efficiency of trade routes can collectively help the country in becoming a logistics hub over long term,” noted the report titled “Saudi Arabia Dry Logistics and Warehousing Market Outlook to 2025 – Warehousing Automation and Investment within Transport Infrastructure to Drive Market Revenue)”.

The kingdom’s dry logistics revenue declined at a CAGR of single digit  (-2.2 per cent) during 2015-2019 due to oil price shock further leading to an economic slowdown during 2016-2017 period. Revenues from this segment are, however, expected to grow at a CAGR of 1.3 per cent from 2019-2025, as per the projections made in the report.

Revenues of the kingdom’s freight forwarding market also have declined by -2.7 per cent during 2015-2019. The sector is expected to contribute in the overall market of logistics with a CAGR of 0.8 per cent in the period 2019-2025, the report forecasts.

Saudi Arabia’s dry warehousing market revenues have shown a CAGR growth of 2.8 per cent during 2015 to 2019. However, these are expected to slow down marginally at a CAGR of 2.7 per cent during 2019 to 2025.

The report also covers cost component model for trucking industry in Saudi Arabia, warehousing investment and operation model; and container yard models in Dammam and Riyadh regions.

Freight forwarders offer a limited range of services depending on their size, number of personnel, and number of branches. Major flow corridors include the Asian region and European countries in terms of freight revenue during 2019.

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