Saudi Arabia's Logistics Sector Achieves 76% Growth In Second Quarter

The logistics sector experienced the most growth among ten promising sectors in the second quarter of this year. Active commercial registrations reached 11,928, marking a 76% increase from last year's 6,742 registrations. These sectors are vital for supporting the gross domestic product and offer opportunities for business expansion and partnerships.

In the second quarter, logistics services saw notable growth with 11,928 active registrations. Riyadh led with 5,802 active registrations, making up 49% of the total. Makkah followed with 3,170 registrations (27%), while the Eastern region had 1,465 (12%). Qassim and Madinah had 347 and 323 registrations respectively, accounting for 3% and 2.70%.

Saudi Arabia has made significant strides in global maritime network connectivity. The country ranked 16th globally among 187 countries according to a United Nations Conference on Trade and Development (UNCTAD) report. Saudi Arabia achieved a connectivity index score of 77.66 points this year, surpassing its 2030 target of 75 points.

The Ministry of Commerce recently released a bulletin highlighting ten promising sectors that align with Saudi Arabia's Vision. These sectors present opportunities for both local and foreign businesses. The sectors experiencing the most growth in active registrations include logistics (76%), artificial intelligence technologies (53%), container handling services (48%), cloud computing services (43%), pharmaceutical manufacturing (34%), urban passenger transport (31%), electronic game manufacturing (29%), arts and entertainment (24%), short-term accommodation (22%), and mining and quarrying (18%).

Container handling services ranked third among the fastest-growing sectors with a growth rate of 48%. This increase is attributed to improved operational efficiency in Saudi ports. Active registrations for container handling services reached 2,457 compared to last year's 1,658 during the same period.

Regional Performance in Container Handling

The Riyadh region led container handling services with 1,027 active registrations, accounting for 42%. Makkah followed with 738 registrations (30%). The Eastern region had 405 active registrations (16%), while Madinah and Qassim had 79 (3%) and 59 (2%) respectively.

Saudi Arabia's transportation system has undergone significant reforms aligned with the National Transport and Logistics Strategy. The country's rank in the World Bank's Logistics Performance Index rose by 17 places to reach the 38th position. These reforms have enhanced logistics sector efficiency and supply chains.

Urban Passenger Transport Growth

The urban passenger land transport sector ranked sixth among the fastest-growing sectors with a growth rate of 31% in Q2 of this year. Reforms include market liberalisation, customer experience improvements, and new intercity bus services. These changes enhance connectivity between regions while providing modern transportation options.

Additionally, private sector investment in logistics has increased both globally and locally. The establishment of logistics zones in Saudi ports has expanded to twelve major zones. These developments have strengthened the logistics sector's capabilities while contributing to economic growth.

International shipping lines have also increased to twenty-five, enhancing Saudi Arabia's ties to global markets and international trade.

The Ministry of Commerce's bulletin underscores that these promising sectors are crucial for economic diversification as part of Vision goals aimed at strengthening economic infrastructure.

With inputs from SPA