When Saudi Arabia launches a national transport and logistics strategy in 2021 that aims to position the kingdom as a global logistics hub linking three continents, some skeptics wonder how the kingdom will realize this ambitious dream.

But now, 18 months later, their doubts have been dispelled, as progress in Saudi Arabia's logistics sector shows that the government under Crown Prince Mohammed bin Salman is heading in the right direction to make the kingdom a global hub Logistic diagram. Improving logistics efficiency is important for Saudi Arabia, as strengthening the Kingdom’s supply chains is inevitable, which in turn is critical to achieving the economic diversification goals outlined in Vision 2030.

Game Changing Initiatives

The growth of the logistics industry in Saudi Arabia is being driven by a series of game-changing initiatives led by the Ministry of Logistics and Transport of Saudi Arabia, the Saudi Ports Authority, and the National Industrial Development and Logistics Program. Mawani and NIDLP are also promoting the use of advanced digital technologies, including artificial intelligence, to fully automate Saudi ports and logistics centers.

Paul Sullivan, lecturer at Johns Hopkins University and senior associate at the King Faisal Center for Energy and Environmental Security Studies and Islamic Studies, said both NIDLP and Mawani must become important players in the country's future logistics development and relations with other countries. Mawani and NIDLP have to be involved in many discussions as investments and systems within systems evolve. Many other parts of the Saudi government at the local and national levels also need to be part of these developments.

To accelerate the development of the logistics industry, Saleh Al-Jasser, Saudi Arabia's Minister of Transport and Logistics, announced in October 2022 plans to open 59 logistics zones to strengthen supply chains. On January 12, during the Future Minerals Forum in Riyadh, Al-Jasser further pointed out that Saudi Arabia is on the road of transformation, and the logistics industry in Saudi Arabia must promote this transformation. We currently have a very strong infrastructure in Saudi Arabia in terms of ports, rail and roads.

Sullivan said Saudi Arabia has crucial geographic advantages that will help it become a logistics powerhouse. Saudi Arabia can use the Gulf, the Red Sea, the Indian Ocean and its own lands and their connections to develop logistics within the system. The proximity to logistics hubs in the UAE could be a major advantage for Saudi Arabia's future logistics network.

skill improvement

Sullivan further noted that Saudi Arabia should develop skills in the region by providing education and training programs to achieve its logistics goals. With the development of Saudi Arabia's logistics system, laws and regulations need to be further improved. Need to learn more training about Saudi laws and regulations as well as laws and regulations of other countries. Launched in 2021, the Saudi Academy of Logistics is one of the first steps taken by the government to increase employment opportunities in the industry, while training more Saudi nationals to be competitive in this growing industry.

The academy targets seven industries, including postal logistics services, sea and port transport, international trade, shipping and export, land transport, e-commerce, warehouse management and air transport. In early November, the Public Transport Authority of Saudi Arabia announced the launch of a program to localize freight brokerage offices in Saudi Arabia. The initiative is being carried out in partnership with several other entities, including the Saudi School of Logistics. Speaking at the Local Content Forum in Riyadh, Al-Jasser singled out that the kingdom's transport and logistics sector is working to increase the proportion of Saudi nationals in all its services.

meet the challenge

Amid all these developments, Sullivan believes Saudi Arabia will better position itself to address some of the challenges that may arise along the way. Logistics at local, national, regional and international levels. These levels are connected in complex ways. Not only does Saudi Arabia need to further develop its internal logistics network, but it also needs to cooperate with regional and extra-regional networks.

Sullivan added that Saudi Arabia does not need to reinvent the wheel, for example, it can figure out co-investments and developments with the logistics systems of the UAE and Egypt. It can also do the same for the UK, EU, India, Japan, Australia and other networks. The integration of logistics networks is an important part of making them work their best, and this includes comprehensive planning and investment with trusted partners and others. In early January, Mulvaney announced that Geneva-based international liner operator Mediterranean Shipping Company had added Jeddah Islamic Port to its new India-West Mediterranean service.

Mawani further pointed out that this development is a key step in boosting liner connectivity in Saudi Arabia, as the new route will open up new opportunities for importers and exporters in all parts of the region. Sullivan noted that the development of critical parts of internal and coordinated external logistics networks is only possible if infrastructure, information, communications and other systems are secured. The highest form of logistics is a system of connected systems, nested within other systems, and connected to still more systems. Each one adds to the whole, all of which need to work properly.

More landmark initiatives could be seen in 2023 and beyond as Saudi Arabia continues to work towards the logistics goals outlined in Vision 2030, thanks to the leadership of Saudi Arabia who always aim high and strive to achieve them Target.Editor/XingWentao