News / Logistics majors invest, boosting Saudi Arabia's global hub ambition

Photo: © Peter Hermes Furian

Saudi Arabia is targeting “global hub” status by the end of the decade and plans to pump some $267bn into its logistics sector, after having attracted some of the industry’s biggest names.

Just a day after the country’s inaugural Global Logistics Forum, Ceva formalised a joint venture with Saudi’s Almajdouie Logistics (Ceva Almajdouie Logistics) to target the growth in domestic supply chain activities.

Ceva CEO Mathieu Friedberg said: “With the Saudi market experiencing significant growth, seamless logistics and global connectivity are essential for the domestic economy.

“Our partner’s business and reputation will ensure the JV starts as one of the top five logistics players in the kingdom. We see the deal as a strong, strategic move for both partners and great news for our customers.”

Alongside Ceva in pumping money and extending its footprint in the country, MSC has just inked a deal for a temperature-controlled warehouse at King Abdullah Port, and this year has seen an influx of logistics heavyweights adding to their Saudi operations.

For example, Agility and the Saudi Railway Company (SAR) signed an MoU to assess processing, storage and transport requirements in Sudair Industrial City and at King Khalid Airport.

Agility vice chair Tarek Sultan noted: “We see a future where Saudi and the region lead the world’s supply chain sector. We thank SAR for giving us the opportunity to be part of this future and the opportunity to contribute to Saudi’s growth and success story”

Similarly attracted have been DHL and Maersk, the latter opened a 250,000 sq metre, $250m logistics park at the Jeddah Islamic Port in August, its largest in the region.

Strong interest from these major players will play into the Saudi government’s plan to modernise transport systems and better integrate them into its and the region’s logistics networks.

At the forum, Saudi minister of transport and logistics services Saleh bin Nasser Al-Jasser said somewhere in the region of $53bn had already been invested in projects. he added: “These investments have translated into leapfrogs in the Saudi logistics sector, leading us to rise in global rankings, jumping 17 ranks in the Logistics Performance Index issued by the World Bank and 14 places in IATA’s Global Connectivity.

“Current disruptions highlight the fundamental need to ensure the safety and security of the supply chain and the seamless functioning of the backbone of global commerce.”