Transport and logistics
Saudi Arabia’s strategic location and large-scale infrastructure development will position KSA as one of the world’s leading transport and logistics hubs.
With its unique strategic location straddling the markets of east and west, KSA is recognizing its potential as a leading global transport and logistics hub. The nation already boasts numerous land and sea routes to Eastern Europe, the Indian subcontinent, the Middle East and North Africa plus East Asia. However, SAGIA, in collaboration with domestic and international partners, is now making substantial investments in a sophisticated transportation network that will leverage KSA’s competitive advantages.
Strong demand for sector growth
Saudi’s rapid domestic development spearheaded by the planned Economic Cities means there’s strong demand for sector growth. The cities alone could contribute an additional 86-129 million tons per annum (or approximately 30% of the expected growth in cargo flow through KSA).
Saudi Arabian domestic cargo demand is expected to grow by a 4-5% compound annual rate through 2020, while international flows are expected grow at 5% and 7-8% for air and sea cargo, respectively.
Improved efficiencies and speed to market
The development of a world-class, multi-modal transportation system in Saudi Arabia will improve operating efficiencies and speed to market for businesses looking for strategically located transportation systems for distribution and/or supply chains.
Naturally, the availability of low-cost fuel is a key factor making it an ideal site to centralize energy intensive logistical activities, such as refueling.
Large-scale project opportunities
Saudi Arabia’s investment initiative offers large-scale project opportunities for contractors, builders, and operators of transport facilities. Not only that, lucrative opportunities for constructing and operating advanced transportation and logistics infrastructure will continue to open up. Current infrastructure projects include airport renovations and a number of massive rail developments, such as the Medina-Mekkah monorail, the Land Bridge and the north-south Mineral Line.
Good reasons to invest
- Unparalleled land and sea lane access, with close links to Europe, Africa, South and East Asia
- Substantial cost advantages due to the low domestic cost of energy
- Large-scale, mutually reinforcing investments in road, rail, sea, and aerial transportation
- Strong domestic growth, supported by massive capital spending and rising personal wealth
- A highly stable, competitive and increasingly liberal business environment
Investment areas
SAGIA has identified nineteen priority investment opportunities for transportation facilities, fifteen of which would be based in the planned Economic Cities. Overall, a US$100 billion investment is anticipated over 10 years. These include:
- Ports: 5
- Air: 3
- Rail: 3
- Road: 3
- Logistics centers: 5
Sea: Studies indicate several opportunities for capacity expansions and operational enhancements with attractive opportunities for qualified port operators. Jeddah Islamic Port alone could increase capacity by 30-50%.
Air: Air operators are sought to drive expansions to KSA’s air transport infrastructure. For example, significant upgrades are currently underway at Jeddah Airport and a new cargo village has been planned.
Rail: The rail infrastructure in Saudi is in need of major expansion, creating significant investment opportunities for railway operators and related industries. Planned projects include the 950 km Jeddah-Damman Land Bridge and a 2,000 km Mineral Line running north to south.
Road: SAGIA seeks to invest in roads to accommodate basic demand growth in addition to traffic resulting from the establishment and evolution of the Economic Cities.
Logistics: Rising demand and deliberate public investment will drive development of world-class capabilities in supply chain management.