Saudi Arabia unveils master plan to develop 59 logistics centres by 2030

The move is part of the kingdom's National Transport and Logistics Strategy

The Riyadh skyline. Saudi Arabia's non-oil economy grew 5.5 per cent in the second quarter of this year. Reuters

Saudi Arabia has unveiled the master plan to develop 59 logistics centres across the kingdom as part of its broader National Transport and Logistics Strategy, as it aims to become a global logistics hub.

The kingdom will complete the development of all centres by the end of this decade, Crown Prince Mohammed bin Salman said in a statement carried by Saudi Press Agency on Sunday.

The push to develop the logistics infrastructure will help the kingdom further diversify its economy and bring more foreign direct investment to the country, SPA said without giving financial details of the master plan.

“The plan is part of a package of continuing initiatives set as targets by the [NTLS] … with the aim of developing the logistical sector to support the economy, increase the local, regional and international connections of the international trade networks and global supply chains,” Prince Mohammed, who is also chairman of the country’s Supreme Committee for Transport and Logistics, said.

The strategy will help the kingdom boost “the partnership with the private sector, and thus increase the opportunity to generate jobs, and make of the kingdom of Saudi Arabia a global logistical hub, given its geographical location among three important continents: Asia, Europe and Africa”, he added.

Under the master plan, the 59 centres will have total area of more than 100 million square meters. The kingdom is developing 12 centres each in Riyadh and Makkah regions, 17 in the Eastern region as well as 18 spread across the country.

“There are currently 21 centres being worked on. All centres will be completed by 2030,” SPA said.

Once completed, the planned centres will enable Saudi industries to export their products more efficiently and support the e-commerce sector, which will be a vital link between the logistics centres and distribution hubs in various regions, cities and governorates.

The development of the logistics sector is part of Saudi Arabia’s broader push to invest more than 500 billion riyals ($133bn) by 2030 to expand its transport sector.

The kingdom plans for more than 300 projects in transport and logistics through partnerships with the local and international private sector, Abdulaziz Al Duailej, president of the General Authority of Civil Aviation said in July 2021.

The broader plan includes launching new airlines, expanding airports, broadening its railway network, increasing ports' capacity and developing logistics hubs across the kingdom.

A crucial goal of the strategy is to increase the contribution of the transport and logistics sectors to national gross domestic product by the end of this decade to 10 per cent, from 6 per cent in 2021.

It will increase the sectors' annual contribution to non-oil revenue to 45 billion riyals by 2030, officials said at the time.

Saudi Arabia, is pushing to diversify its economy away from oil to develop new sectors that can help it boost its non-oil economic growth.

The kingdom’s economy grew by 1.1 per cent in the second quarter, boosted by a sharp expansion in the country’s non-oil sector as the kingdom continues to pursue its diversification goals.

The non-oil sector grew 5.5 per cent in the three-month period to the end of June, compared with the same period in 2022, according to flash estimate by the General Authority for Statistics released earlier this month.

“The logistics services sector represents one of the promising pillars of economic diversification and development in the kingdom. It is currently witnessing many important initiatives and major developments aimed at developing the sector and expanding its economic and developmental contributions,” SPA said on Sunday. “The Ministry of Transport and Logistics seeks to develop the logistics industry, enhance the export strategy, expand investment opportunities and strike partnerships with the private sector.”

The Saudi economy expanded 8.7 per cent in 2022, the highest annual growth rate among the world's 20 biggest economies, driven by a rise in oil prices and the strong performance of its non-oil private sector.

However, growth will slow to 1.9 per cent this year, on the back of lower oil output, according to IMF estimates.