Saudi Arabia Freight Forwarding Market Overview, 2029

Saudi Arabia Freight Forwarding Market Overview, 2029

The freight forwarding industry in Saudi Arabia has come of age over the years. Pivotal in location and currently in a course of economic transformation, the country has traditionally formed part of the ancient trade routes that linked Asia, Europe, and Africa. Following the discovery of oil in the 1930s, it underwent rapid economic growth included modern logistics and freight forwarding services were called for. The infrastructure development was accelerated even further in the 1970s and 1980s by the oil boom, under which major investments in ports, airports, and road networks were affected. In 1976, the Saudi Ports Authority was created as a vital step toward improving the efficiency of the ports. Over the past two years, Vision 2030 has been striving to reorient the economy from absolute dependence on oil to positioning it as a global logistics hub through aggressive investment in infrastructure and the National Industrial Development and Logistics Program. Modernization and expansion of ports like King Abdullah, coupled with the inclusion of state-of-the-art technologies such as blockchain and AI, made the freight forwarding sector much stronger. Despite regional geopolitics and global trade dynamics, the freight forwarder market in Saudi Arabia continues to grow in opportunities and innovation through its focus on regulatory reforms and sustainable logistical practices. It is expected to clearly stipulate the regulation and procedure of importation and exportation of goods, including the customs duties, requirements of documents, and the process of clearance. This looks forward to promoting trade while at the same time protecting national security and economic policy. Saudi Arabian Ports Authority (Mawani) Regulations, the management and operation of the country's ports. The regulations cover usage of the ports, fees, safety standards, and environmental guidelines to ensure efficient and secure port operations. Transport General Authority (TGA) regulates land, maritime, and air transport sectors by setting licensing requirements for companies dealing with freight forwarding and standards to be followed in the interest of safety, laying down guides on operation. These regulations deal with the reliability and safety of transport services.

According to the research report, ""Saudi Arabia Freight Forwarding Market Outlook, 2029,"" published by Bonafide Research, the Saudi Arabia freight forwarding market is anticipated to add to more than USD 400 Million by 2024–29. Saudi Arabia is investing billions in its infrastructure as it tries, according to its Vision 2030, to become a global hub for logistics. Some of the developments include modernization and expansion projects at major ports such as King Abdullah Port, Jeddah Islamic Port, and King Abdulaziz Port. The development of new logistics hubs, such as the King Abdullah Economic City, offers modern facilities that include efficient customs clearance procedures. Meanwhile, upgraded road networks and expanded airports, notably the King Khalid International Airport and King Abdulaziz International Airport, facilitate freight forwarding through easier and faster transportation. Advanced technologies are being adopted and implemented in Saudi Arabia to drive a change in the freight forwarding market. The technology is applied in blockchain to improve the transparency and security of supply chain operations by allowing real-time shipment tracking, thereby cutting down fraud. IoT devices in monitoring the condition and location of cargo provide critical data to optimize logistics operations. Artificial intelligence can be used to predict demand and optimize routes. Digital customs clearance systems and automated warehouses minimize paper works and humans' faults, hence increasing the efficiency of freight forwarding services to a huge extent. Fast-growing e-commerce in Saudi Arabia is proving to be the major driver of the freight forwarder market. The trend in online shopping increased parcel deliveries, thus creating a need for efficient logistics and distribution networks. As such, companies are investing subsequently in last-mile delivery solutions and warehousing. On the other hand, the growth of e-commerce has also increased the requirement for freight forwarders who can undertake international shipments and returns quickly and safely.

The Industrial & Manufacturing segment drives the freight forwarding market of Saudi Arabia. The ambitious plans of industrialization and economic diversification for the country have been enlisted in Saudi Vision 2030, which aims to reduce the country's dependence on oil and gas by providing growth impetus to sectors such as petrochemicals, metals, machinery, and construction materials. The establishment of industrial cities and economic zones has also dramatically boosted the manufacturing activities that generate demand for freight forwarding services in order to ensure effective transportation of raw materials and finished goods. With its large market size and strategic location, Saudi Arabia continues to become an attractive place for regional manufacturing and distribution, thus entrenching the Industrial & Manufacturing segment. The retail and e-commerce segment is large and growing, driven by a large consumer base, increasing urbanization, and the general trend of online shopping. Freight forwarding services are therefore increasingly demanded in Saudi Arabia due to its high internet penetration rate and tech-savvy people. Another important industry would have to be the automotive, driven by the size of the country's automobile market and also by the demand for spare parts. The outlook of consumer goods should be relatively good, driven by improving disposable incomes and changing consumer preferences that continue to spur imports of various goods, such as electronic goods, fashion, and food products. The Healthcare segment is on the rise, with growth attributed to Saudi Arabian commitments in the improvement of healthcare infrastructures and services in the implementation of its Vision 2030. Rising pharmaceutical demand, medical equipment, and supplies lead to increasing pressure on specialized freight forwarding services to secure safe and on-time delivery of these critical goods. Initiatives from governments to foster medical tourism and increase the ease of access to healthcare further boost growth in this sector.

Transportation and warehousing drive the Saudi Arabian freight forwarding market due to huge trade volumes and large market size. In a strategic geographical location, Saudi Arabia bridges three continents with well-developed infrastructure, such as sea ports, airports, and the road network, which placed the country at the forefront of regional and international trade. It is in the transportation and warehousing segment that cargo handling, storage, distribution, and other associated services are involved in the facilitation of a seamless flow of goods. It is expected that the Packaging segment in the freight forwarders market would form a critical part in ensuring that products are delivered safely and securely. The wide array of goods being shipped, which includes fragile and hazardous items to temperature-sensitive products, creates growing demand for special packaging requirements. Another factor contributing to growth in this segment has been the increase in e-commerce coupled with the requirement for protective packaging to avoid damage in transit. The Documentation segment is the intrinsic part of freight forwarding that includes management for customs clearance, import/export documentation, and regulatory compliance. Saudi Arabia's commitment to smoothening the processes in trade and digital solutions has increased the efficacy of documentation services. The Value-added Services segment is fast expanding, impelled by the rising demand for customized and integrated logistic solutions. These include inventory management, order fulfillment, cross-docking, and reverse logistics. The value-added services market has grown because of the need for businesses to work out the optimization of their supply chains and reduce operational costs. Another reason for the rise in demand for such services is the increase in electronic commerce and growing supply chain complexity. In Saudi Arabia, freight forwarders have been gaining a competitive advantage in the marketplace by increasing the range of services offered to customers by meeting their special requirements.

Ocean Freight was the largest segment of freight forwarding in Saudi Arabia, due to the country having a long coastline and sitting on main international shipping lanes. The country boasts several well-equipped ports, such as Jeddah Islamic Port and King Abdullah Port, which enable the handling of large cargo volumes. Ocean freight is preferred as it is cost-effective and suitable for bulk goods included quite ideal for Saudi Arabia's huge import and export activities in oil and gas, petrochemicals, and manufactured products. Air freight forwarding is gaining momentum as a result of its ever-growing requirement for quick and reliable transportation of time-critical and high-value cargo. Road freight forwarding forms a vital part of the Saudi Arabian freight forwarding market, which is built on the back of its well-maintained and extensive road networks. This segment facilitates domestic and regional trade by not only connecting major cities in the country but also neighboring countries in the GCC and the Middle East region. Road freight is preferred because of its flexibility, low costs over short to medium distances, and feasibility for carrying all types of goods. Rail Freight Forwarding is a new segment in Saudi Arabia, with immense growth potential. The Saudi Railway Company (SAR) operates a state-of-the-art railway network that links all the major industrial and commercial centers of the country. There are many advantages to using rail transport: it is more environmentally friendly, less expensive than long haulage, and can easily transport large cargo volumes. The GCC railway network, currently under development, will eventually connect all the Gulf countries, making the Rail Freight forwarding segment even more viable. Considering that Saudi Arabia has been continuously spending in the development of its railway infrastructure, this sector is going to grow since it will offer an efficient and green alternative for cargo movement.

The freight forwarding industry of Saudi Arabia is dominated by the B2B segment, owing to the strong industrial and trade sectors in the country. Economic diversification under Vision 2030 has given an upbeat growth trajectory in multiple industries, especially manufacturing, petrochemicals, construction, and wholesale trade, in Saudi Arabia. This increase in industrial activity has in turn created demand for efficient and reliable freight-forwarding services for the transportation of raw materials, intermediate goods, as well as finished products within firms. The location of Saudi Arabia as a regional business hub, with its associated well-developed infrastructure, also facilitates the smooth flow of goods and hence supports the B2B segment. The Business-to-Consumer segment grows at gale force, mainly because of the surge of e-commerce activities and changing consumer behaviors in Saudi Arabia. A large number of consumers, coupled with a high internet penetration rate, backed up by a tech-savvy population, is driving the growth of online shopping platforms and consequently increasing the demand for efficient B2C freight forwarding services. This segment caters to products delivered directly to consumers included it will require specialized logistics solutions in areas such as last-mile delivery, real-time tracking, and flexible scheduling. The growth in the B2C segment is also accelerated by the presence of global e-commerce giants and a growing number of local online retailers in Saudi Arabia. In addition, supportive government policies for digital transformation and the development of e-commerce also help the growth of this segment.

Considered in this report
• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in this report
• Freight Forwarding market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By End-User
• Industrial & Manufacturing
• Retail and E-commerce
• Automotive
• Consumer Goods
• Healthcare
• Others

By Service Type
• Transportation and Warehousing
• Packaging
• Documentation
• Value-added Services

By Transport Mode
• Ocean Freight forwarding
• Air Freight forwarding
• Road Freight forwarding
• Rail Freight forwarding

By Customer Type
• B2B
• B2C

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Freight Forwarding industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.