Growth prospects for the Saudi logistics industry look promising over the next five years, according to new research.
Frost & Sullivan said economic diversification, policy reforms, tax regimes, and FDI policies are shifting in favour of an open economy and encouraging private investment.
Its report added that the advent of technology and the nation’s vision on economic diversification are creating opportunities across several industry sectors such as retail, e-commerce, healthcare, and other non-oil-based industries.
Frost & Sullivan analysts forecast the market to reach $60.68 billion by the end of 2024, driven by government initiatives in trade and industry promotion, development of economic cities, infrastructure development, and economic diversification.
"Saudi Arabia is focused on diversifying from oil and increasing GDP contribution from non-oil sectors by developing economic, industrial cities,” said Frost & Sullivan.
"Until recently, Saudi Arabia was a closed market. However, the recent initiatives on economic diversification have opened doors to industrial, retail, and logistics players around the world by allowing 100 percent FDI ownership."
Frost & Sullivan's report added: "This region is extensively focusing on industrialisation and improving the transport infrastructure to become a transshipment hub.
"With the rapid growth in e-commerce, automation of warehouses with built-to-suit models is likely to be in high demand through 2024. In addition, the rail freight transportation is underutilised and the government is taking necessary steps by developing new rail lines and building better port connectivity to increase the usage."For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.