Saudi Arabia Third Party Logistics Market Expected to Reach $24.0 Billion by 2033

According to a recent report published by Allied Market Research, titled, “Saudi Arabia Third Party Logistics by Mode of Transport, Service, and Industry: Regional Opportunity Analysis and Industry Forecast, 2024-2033,” The Saudi Arabia Third Party Logistics market size was valued at $13.6 billion in 2023, and is projected to reach $24.0 billion by 2033, registering a CAGR of 6.2% from 2024 to 2033.

Saudi Arabia’s third-party logistics sector is rapidly expanding due to a range of emerging trends. One of the main drivers is the country’s strategic location as a global trade hub between Asia, Europe, and Africa, which enhances its appeal for companies seeking efficient logistics solutions for cross-border trade. Supported by the Saudi Vision 2030 initiative, which aims to transform the Kingdom into a leading logistics center, the government has committed over $267 billion to infrastructure projects, including the development of smart ports, rail networks, and roads. This ambitious initiative aims to strengthen Saudi Arabia’s position as a vital logistics link across Asia, Europe, and Africa, ultimately supporting the Kingdom’s larger goals of economic diversification and sustainable development.

Furthermore, technological innovation is another prominent trend. Saudi Arabia is investing in advanced third-party logistics solutions that incorporate automation, artificial intelligence, blockchain, and the Internet of Things (IoT) to streamline logistics operations. For instance, in September 2024, Qualcomm Technologies, Inc., Aramco, partnered with Saudi Arabia’s Research, Development, and Innovation Authority (RDIA) to launch "Design in Saudi Arabia" (DISA), an incubator program aimed at fostering innovation among startups. DISA focused on supporting emerging companies that adopted artificial intelligence (AI), the Internet of Things (IoT), and wireless technologies for industrial applications. This initiative aligned with Saudi Arabia’s Vision 2030, promoting technological advancement and building a robust ecosystem for industrial innovation within the Kingdom.

These technologies improve visibility and traceability in supply chains, reduce operational costs, and enable predictive analytics, which help third party logistics providers optimize routes and inventory management.

In addition, the rapid growth of e-commerce in Saudi Arabia is driving the demand for third party logistics services, as online retailers require efficient warehousing, distribution, and last-mile delivery solutions. For instance, in October 2024, AJEX expanded its innovative solutions to enhance e-commerce growth and improve last-mile delivery efficiency at Seamless Saudi Arabia.

This expansion emphasized AJEX’s latest advancements in logistics technology, stressing streamlined processes to support the rapid expansion of online retail. By addressing last-mile delivery challenges, AJEX contributed to the development of Saudi Arabia's digital economy and supported the nation's ambitions to establish itself as a regional logistics hub. This shift has encouraged third party logistics companies to expand their capabilities, particularly in urban logistics, to support quicker delivery times and improve customer satisfaction.

the Saudi Arabia third-party logistics market is a crucial market of the nation’s broader economic strategy, particularly as the Kingdom seeks to diversify its economy away from oil dependency. The third-party logistics sector in Saudi Arabia provides comprehensive logistics services across transportation, warehousing, distribution, and supply chain management. With a rise in the e-commerce market and the Kingdom’s ambition to become a global logistics hub by 2030, the demand for advanced logistics services is expected to increase. Third party logistics providers are integral to ensuring the efficient movement of goods across domestic and international markets, especially through Saudi Arabia’s strategic location connecting Asia, Europe, and Africa. Third party logistics providers facilitate a seamless flow of goods by offering services such as inventory management, order fulfillment, and last-mile delivery, particularly to the rapidly expanding retail and e-commerce sectors.

In addition, sustainability is another growing trend in Saudi Arabia’s third-party market. The Kingdom is increasingly focusing on green logistics practices to reduce its carbon footprint. 3PL providers are adopting eco-friendly transportation options, such as electric vehicles, and sustainable warehouse designs, in line with global trends towards environmental responsibility. The government’s commitment to achieving net-zero emissions by 2060 is prompting companies to integrate sustainability into their logistics operations. This shift not only helps reduce environmental impact but also appeals to consumers and businesses that prioritize sustainability.

For instance, in October 2024, at the Global Forum, Saudi Arabia emphasized its commitment to sustainable logistics by highlighting the importance of green logistics in the Kingdom’s future development. This included discussions around adopting innovative technologies and energy-efficient practices to reduce the carbon footprint of logistics operations. Moreover, Saudi Arabia is advancing its logistics infrastructure by integrating renewable energy sources, such as hydrogen-powered vehicles and adopting sustainable building certifications. These efforts are aligned with the country's Vision 2030, which emphasizes environmental responsibility, economic diversification, and the transition to cleaner, more sustainable energy systems. These initiatives aim to reduce carbon footprints while improving logistics efficiency, marking a significant step in supporting Saudi Arabia's long-term sustainability goals.

Technological advancements such as automation, artificial intelligence (AI), the Internet of Things (IoT), and blockchain are revolutionizing the logistics industry, thus significantly boosting efficiency and driving demand for third-party logistics services in Saudi Arabia. For instance, in September 2024, Saudi Arabia expanded its Vision 2030 goals of economic diversification and technological growth. With the expansion of the e-commerce sector, AI is essential for improving logistics efficiency, reducing costs, and meeting surge in consumer demands. The integration of AI technologies, such as predictive analytics and machine learning, is transforming supply chains in Saudi Arabia, providing enhanced operational capabilities and fostering economic growth. Moreover, automation in warehousing and last-mile delivery systems enables faster processing and reduced human error. AI enhances route optimization, predictive analytics, and inventory management, allowing third-party logistics providers to offer more reliable and cost-effective services. The integration of IoT facilitates real-time tracking of shipments, improving transparency and supply chain visibility.

In addition, blockchain ensures secure and transparent transactions, thus enhancing trust between logistics providers and clients. These technologies support the rapid growth of Saudi Arabia’s logistics sector, aligning with the country’s Vision 2030 objectives to diversify its economy and improve trade efficiency. As a result, third-party logistics companies are increasingly adopting these technologies to stay competitive and meet the rise in demand for advanced logistics solutions in the Saudi Arabia region.

The growth of the dry storage segment in Saudi Arabia third-party logistic (3PL) market is driven by including the rapid growth in e-commerce, retail demand, and industrial activities. With the rise in demand for consumer goods and manufactured products, businesses require efficient warehousing solutions that support both bulk storage and quick turnaround of goods. For instance, in September 2023, Sadr Logistics, a leading Saudi Arabia third-party logistics provider specializing in warehouse leasing, management, and operational solutions, invested $39.72 million in developing a logistics complex in Riyadh’s Industrial Gate City. The project was to create an integrated logistics hub offering a variety of storage solutions, including dry storage, supporting the company’s expansion strategy, and enhancing the region's logistics infrastructure. This development aligns with the rise in demand for efficient logistics services in Saudi Arabia as part of its broader economic development goals.

The growth of refrigerated storage in the Saudi Arabia third-party logistics (3PL) market is driven by the increased demand for facilities that meet specific temperature-controlled conditions, especially as food processing, distribution, and healthcare sectors expand. Furthermore, warehouses for refrigerated storage are equipped with advanced technology to maintain strict temperature and humidity levels, which is critical for preserving perishable goods such as pharmaceuticals, dairy, and frozen food. These facilities integrate sophisticated monitoring and control systems, ensuring goods remain within the required temperature range throughout the supply chain, thereby protecting product quality and compliance with food safety standards.

Moreover, as e-commerce accelerates, particularly in online food and grocery delivery, the demand for refrigerated storage has surged. With Saudi Arabia’s emphasis on diversifying its economy under Vision 2030, investment in state-of-the-art refrigerated warehouses has become a strategic focus. These warehouses are optimized with automation, energy-efficient cooling, and inventory management systems that reduce operational costs while enhancing storage conditions, making them pivotal to the 3PL sector's evolution in the region. Therefore, expanding food processing and distribution sectors, rising import-export activities, and the ongoing development of the healthcare sector are driving the demand for refrigerated storage for the Saudi Arabia third-party logistic market.

Key Findings Of The Study

• On the basis of mode of transport, the airways segment are anticipated to have a highest growth rate during the forecast period.
• On the basis of service, the dedicated contract carriage (DCC) segment is anticipated to exhibit a remarkable growth during the forecast period.
• On the basis of industry, the healthcare segment are anticipated to have a highest growth rate during the forecast period.

The key players analyzed in this report are Agility Logistics, Al-Futtaim Logistics, Almajdouie Logistics, Aramex, CEVA Logistics, DHL Supply Chain, FedEx Express, GAC Saudi Arabia, Kuehne + Nagel, and Wared Logistics. These companies have adopted strategies such as expansion, partnership, product launch, and others to improve their market positioning.