Saudi Arabia Third-Party Logistics Market Statistics, 2033
The Saudi Arabia third-party logistics market was valued at $13.6 billion in 2023, and is projected to reach $24.0 billion by 2033, growing at a CAGR of 6.2% from 2024 to 2033.
Third-party logistics (3PL) refers to the outsourcing of logistics services, where external providers manage various functions such as transportation, warehousing, inventory control, and distribution. These services allow businesses to focus on core competencies while leveraging the 3PL provider’s expertise, technology, and resources to optimize supply chain efficiency. Saudi Arabia's third-party logistics (3PL) market is a rapidly growing sector driven by the country's strategic location as a gateway to the Middle East and its ongoing economic diversification efforts. The 3PL industry in Saudi Arabia includes warehousing, transportation, inventory management, and value-added services, which are benefiting from significant investments in infrastructure such as the King Abdullah Port and major transportation networks. The expansion of e-commerce, increased manufacturing activities, and robust trade agreements further boost demand for efficient logistics solutions. In addition, initiatives such as Vision 2030 are enhancing the logistics ecosystem, fostering innovation, and attracting foreign investments. 3PL providers in Saudi Arabia offer services tailored to industries such as oil and gas, retail, automotive, and healthcare, supporting both domestic and international supply chains.
For instance, in March 2023, Aramco partnered with DHL Supply Chain and has entered into a shareholders' agreement to create a procurement and logistics hub in Saudi Arabia. This initiative was aligned with the growing demand for third-party logistics (3PL) services, particularly in the industrial, energy, chemical, and petrochemical sectors. This partnership aims to streamline and enhance supply chain efficiency and sustainability, leveraging integrated procurement and logistics solutions. The project, initially focusing on Saudi Arabia, had plans to extend its reach across the MENA region, with the hub expected to be operational by 2025. This move reflected the increase in dependence on third party providers for end-to-end supply chain services across major industries.
In addition, Saudi Arabia’s third-party logistics (3PL) sector is experiencing substantial growth, driven by expanding trade and rising demand for efficient supply chain solutions. Globalization and international trade have strengthened cross-border shipping, positioning Saudi Arabia as a critical logistics hub connecting Asia, Europe, and Africa. As a result, businesses increasingly outsource logistics operations to third party logistics providers to manage the complexity of cross-border transactions while ensuring compliance and efficiency. Furthermore, e-commerce expansion is also a significant driver, as the demand for fast, reliable logistics solutions rises with the growth of online retail in the region. This shift has led to increased investments in warehousing, inventory management, and last-mile delivery services, which are essential components of 3PL offerings.
For instance, in December 2023, Omniful raised $5.85 million in seed funding, led by VentureSouq, to enhance its plug-and-play order management system platform. Focused on third-party logistics (3PL) needs in the Saudi Arabia region, Omniful leveraged this funding to bolster its cloud platform's flexibility and adaptability, essential in the fast-growing logistics market. Its API-first strategy allowed for seamless integration with various local e-commerce platforms, marketplaces, enterprise resource planning (ERP) systems, point of sales (POS) systems, and shipping tech stacks, meeting the diverse needs of Saudi businesses aiming to improve logistics efficiency and scalability.
Key Takeaways
- On the basis of mode of transport, the roadways segment held the largest share in the Saudi Arabia third-party logistics market in 2023.
- On the basis of service, the domestic transportation management segment held the largest share in the Saudi Arabia third-party logistics market in 2023.
Globalization is significantly boosting the demand for third-party logistics services in Saudi Arabia. As the Kingdom integrates more deeply into global trade networks, cross-border trade volumes continue to expand, amplifying the need for efficient, scalable logistics solutions. Saudi Arabia’s strategic location connecting Asia, Europe, and Africa positions it as a critical logistics hub, enhancing its role in the global supply chain.
For instance, in October 2024, at the global logistics forum in Riyadh, Saudi Arabia’s Minister of Transport and Logistics Services, Saleh bin Nasser Al-Jasser, introduced the Saudi-China Special Economic Zone (SEZ). This ambitious initiative, developed in partnership with King Salman International Airport and EWPartners and financed by the Public Investment Fund (PIF), is strategically designed to enhance Saudi Arabia’s trade, logistics, and manufacturing sectors. Placed as a central trade hub, the SEZ aims to strengthen Saudi Arabia’s cross-border commerce, particularly with China and other Asian markets, aligning with the country’s Vision 2030 goals of becoming a pivotal third-party logistics and economic center in the region, third party logistics providers in the region are increasingly sought after for their expertise in managing complex international logistics, handling customs processes, and ensuring smooth, timely deliveries across borders.
Moreover, as more businesses outsource logistics functions to focus on core activities, they turn to 3PL providers for specialized solutions, ranging from warehousing and transportation to inventory management and distribution. This trend aligns with Saudi Arabia's Vision 2030, which aims to transform the Kingdom into a global logistics powerhouse, supported by advanced infrastructure and investment in digital logistics technologies. Therefore, rise in globalization leading to higher cross-border trade and demand for international logistics solutions is driving the demand for the Saudi Arabia third-party logistic (3PL) market.
Furthermore, technological advancements such as automation, IoT, and data analytics, are transforming Saudi Arabia’s logistics landscape. These technologies enable third party logistics providers to enhance visibility, optimize operations, and offer predictive analytics, helping businesses make informed supply chain decisions. For instance, in November 2024, Saudi Arabia expanded its third party logistics service by investment of $267 billion in its logistics sector, thus aiming to establish itself as a global logistics hub by 2030. According to Saudi Minister of Transport and Logistics Services, Saleh bin Nasser Al-Jasser, highlighted that $53.2 billion has already been allocated towards this goal. The minister emphasized the transformative role of advanced technologies such as artificial intelligence, blockchain, and smart infrastructure in enhancing supply chain efficiency. These innovations are expected to lower costs, improve speed, and support environmental sustainability, marking a significant step in Saudi Arabia’s commitment to logistics excellence.
Segment Review
The Saudi Arabia third-party logistics market is segmented on the basis of mode of transport, service, and industry. By mode of transport, it is divided into railways, roadways, waterways, and airways. By service, it is classified into dedicated contract carriage (DCC), domestic transportation management, international transportation management, warehousing and transportation, and others. By industry, it is classified as technological, automotive, retailing, elements, food and beverages, healthcare, and others.
By Mode of Transport
On the basis of mode of transport, the roadways segment generated maximum revenue in 2023 due to its extensive network, cost-effectiveness for short and medium distances, and flexibility in handling diverse cargo types. With road transport being the primary mode for domestic and regional logistics, it efficiently connects industrial hubs, retail centers, and key cities like Jeddah, Riyadh, and Dammam.
By Mode Of Transport
Roadways is projected as the most lucrative segment.
By Service
On the basis of service, the domestic transportation management segment generated maximum revenue in 2023 due to the growing need for efficient, cost-effective logistics within the country. With increasing urbanization and e-commerce demand, businesses prioritize streamlined supply chains for timely delivery. Saudi Arabia's vast geography and strong regional trade further boost the reliance on domestic logistics providers, ensuring optimized operations and market accessibility.
By Service
Domestic Transportation Management is projected as the most lucrative segment.
By Industry
On the basis of industry, the automotive segment generated maximum revenue in 2023 due to the nation's significant automotive imports and robust demand for spare parts and vehicles. The rise in vehicle ownership, coupled with ongoing infrastructure projects, drives logistics needs for efficient distribution. Additionally, 3PL providers cater to automakers' requirements for streamlined supply chains, inventory management, and just-in-time deliveries.
By Industry
Automotive is projected as the most lucrative segment.
Competitive Analysis
The key players profiled in the Saudi Arabia third-party logistics market include some leading companies profiled in the report include Agility Logistics, Al-Futtaim Logistics, Almajdouie Logistics, Aramex, CEVA Logistics, DHL Supply Chain, FedEx Express, GAC Saudi Arabia, Kuehne + Nagel, and Wared Logistics.
Rise in e-commerce activity, which boosts demand for efficient warehousing, fulfillment, and last-mile delivery
The rapid growth of e-commerce in Saudi Arabia is significantly driving the demand for third-party logistics services, as businesses increasingly rely on efficient warehousing, fulfillment, and last-mile delivery solutions to meet the needs of online shoppers. The surge in online retail activities requires 3PL providers to streamline inventory management, packaging, and shipping processes, ensuring quick and reliable deliveries. With the rising consumer demand for faster delivery times, 3PL providers in Saudi Arabia are focusing on optimizing last-mile delivery services to reduce transit times and improve customer satisfaction.
For instance, in August 2023, Saudi Arabia launched an initiative to construct 59 logistics centers by 2030 to capitalize on the growing e-commerce market. This move strengthened the country’s logistics infrastructure, thus enhancing third-party logistics (3PL) capabilities. The centers are designed to improve warehousing, last-mile delivery, and integrate advanced technologies such as automation and real-time tracking, aligning with Vision 2030 goals. By positioning Saudi Arabia as a key logistics hub, the initiative has encouraged 3PL providers to expand operations, thereby supporting the country's economic diversification and the growth of online retail.
In addition, the growth of e-commerce encourages the development of advanced logistics technologies, such as automation, AI, and real-time tracking, which further enhances operational efficiency. As the e-commerce sector continues to expand in the Kingdom, the demand for 3PL services is expected to increase, positioning logistics providers as key enablers of the country's digital economy. Therefore, rise in e-commerce activity, which boosts the demand for efficient warehousing, fulfillment, and last-mile delivery, is driving the demand for the Saudi Arabia third-party logistic (3PL) market.
Technological advancements such as automation, AI, IoT, and blockchain are significantly boosting logistics efficiency
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.
High Operational Costs and Investment Requirements for Advanced Logistics Technologies and Infrastructure
High operational costs and substantial investment requirements for advanced logistics technologies and infrastructure are posing challenges for the growth of the Saudi Arabian third-party logistics market. The integration of cutting-edge technologies such as artificial intelligence (AI), automation, and real-time tracking, while essential for improving efficiency, demands significant financial resources, which can be a barrier for smaller logistics firms and startups.
In addition, the development of extensive logistics infrastructure, such as warehousing and transportation networks, requires large-scale investments that may limit the ability of some third-party logistics providers to scale operations. This high-cost structure, combined with competition from both local and international players, can slow down the expansion of 3PL services and limit their adoption, especially in a market where cost efficiency is a critical factor for businesses. Therefore, high operational costs and investment requirements for advanced logistics technologies and infrastructure are hampering the demand for the Saudi Arabia third-party logistics (3PL) market.
Rise in industrialization in developing countries
The rise in industrialization in developing countries presents a significant opportunity for the Saudi Arabian third-party logistics market. As these economies continue to grow, there is a rise in need for efficient and reliable supply chain solutions to support manufacturing, distribution, and retail sectors. Saudi Arabia, strategically positioned as a regional trade hub, stands to benefit from the growing demand for logistics services in these developing markets. The expansion of industrial operations in neighboring regions, such as the Middle East, Africa, and Asia, further amplifies the demand for logistics support, including warehousing, transportation, and customs handling.
In addition, the Saudi Arabia's Vision 2030, which focuses on diversification and infrastructure development, provides a strong foundation for enhancing the country’s logistics capabilities. As industrialization spreads across these regions, Saudi 3PL providers are well-positioned to cater to this demand, offering scalable, integrated solutions to address the growing supply chain needs of these emerging markets. Therefore, rise in industrialization in developing countries provides lucrative opportunity for the Saudi-Arabia third-party logistics (3PL) market.
Recent Developments in the Saudi Arabia Third-Party Logistics Industry
• In October 2024, FedEx partnered with Saudi Arabia’s King Salman International Airport Development Company (KSIADC) & Integrated Logistics Zone (SILZ) to revolutionize the Saudi Arabia logistics sector and elevate the industry as one of the world’s leading logistics and air cargo centers. This strategy helps to enhance the air cargo logistics capabilities across Saudi Arabia region.
• In May 2024, DHL Group collaborated with Aramco, one of the world's leading integrated energy and chemicals company formed a joint venture company, ASMO (Advanced Supply Management Operations); a new Procurement and Logistics Services Hub in Saudi Arabia. ASMO aims to meet the increasing demand for sustainable and efficient supply chain services in Saudi Arabia. It also reflects the region's growing potential as a global trade hub, especially for the energy, chemical, and industrial sectors.
• In July 2024, Almajdouie Logistics signed a Joint Venture (JV) agreement with CEVA Logistics to work collaboratively in the Middle East Region through joint venture—CEVA Almajdouie Logistics. This strategy leverages the strengths of both companies to meet the growing demand for integrated logistics solutions in Saudi Arabia to support the Kingdom’s growing logistics sector and overall economy.
• In November 2022, Agility signed a contract with Saudi Arabia’s State Properties General Administration (SPGA) to build a large logistics park for storage and distribution near Jeddah, Saudi Arabia. Under this strategy, Agility invested $ 163 million to build the park and has the right to operate it for 25 years.
• In January 2021, CEVA Logistics collaborated with Abu Dhabi Ports to work with the Hope Consortium. The Consortium is the parent organization of a UAE-based public-private partnership set up to address the logistical challenge of the worldwide distribution of COVID-19 vaccines.
Key Benefits for Stakeholders
- This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the Saudi Arabia third-party logistics market analysis from 2023 to 2033 to identify the prevailing Saudi Arabia third-party logistics market opportunities.
- The market research is offered along with information related to key drivers, restraints, and opportunities.
- Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
- In-depth analysis of the Saudi Arabia third-party logistics market segmentation assists to determine the prevailing market opportunities.
- Major countries in each region are mapped according to their revenue contribution to the market.
- Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
- The report includes the analysis of the market trends, key players, market segments, application areas, and market growth strategies.
Analyst Review
The Saudi Arabia third-party logistics (3PL) market is undergoing transformative growth, driven by a combination of economic diversification efforts, infrastructure development, and technological innovation. According to analysts, the 3PL market in Saudi Arabia is poised to achieve significant expansion over the coming years, supported by the nation’s Vision 2030 initiative, which emphasizes modernization of logistics and transportation networks as a critical enabler of economic growth. This review delves into key trends, drivers, restraints, and opportunities shaping the market while providing a forward-looking perspective on its trajectory. The rapid growth of e-commerce is a defining trend in the Saudi logistics market. Increasing internet penetration, coupled with a rising preference for online shopping, has led to heightened demand for efficient logistics services. As e-commerce platforms strive to meet customer expectations for fast and reliable delivery, 3PL providers have emerged as indispensable partners, offering scalable and cost-effective solutions for warehousing, transportation, and fulfillment.
Technological integration is revolutionizing the logistics sector in Saudi Arabia. Advanced tools like real-time tracking, route optimization, and predictive analytics are being widely adopted to enhance operational efficiency. Automation and robotics in warehousing, along with the deployment of artificial intelligence (AI) in demand forecasting, are enabling companies to address operational bottlenecks and improve customer satisfaction. Sustainability is gaining traction in the 3PL sector, with companies adopting electric and hybrid vehicles, energy-efficient warehouses, and sustainable packaging solutions. These measures not only align with global environmental goals but also cater to the growing consumer demand for eco-friendly logistics services.
The growth of the railway sector in Saudi Arabia third party logistic (3PL) market is being driven by the country's ambitious infrastructure projects, including the development of the Haramain High-Speed Railway and the expansion of the North-South Railway line. The national transport and logistics strategy (NTLS) has prioritized rail development to enhance the country's position as a global logistics hub. For instance, in May 2024, Saudi Arabia Railways (SAR) partnered with Ismail Abudawood and Procter & Gamble (P&G), one of the largest consumer goods manufacturers, to facilitate the transport of goods from P&G’s Dammam factory to its Riyadh customers through rail, representing an advancement in third-party logistics solutions in Saudi Arabia. This partnership aims to improve transportation speed and efficiency while reducing highway congestion and lowering carbon emissions by shifting from road to rail. Aligned with Saudi Arabia's Vision 2030 and the national transport and logistics strategy (NTLS), this contract emphasizes the role of sustainable 3PL services in enhancing supply chain reliability and infrastructure preservation.
The healthcare in Saudi Arabia third-party (3PL) market is witnessing growth due to the country’s expanding healthcare sector and the rise in demand for pharmaceuticals, medical devices, and supplies. For instance, in March 2023, the Johnson & Johnson MedTech KSA partnered with Tamer Logistics as its third-party logistics provider in Saudi Arabia. This partnership aims to streamline the delivery of advanced medical solutions to healthcare providers, aligning with J&J MedTech KSA’s commitment to supporting Saudi Arabia's Vision 2030 healthcare goals. The partnership is expected to enhance logistical efficiency and ensure timely access to technology-driven medical solutions, addressing the increasing healthcare demands of Saudi Arabia’s growing population.
The retail sector in Saudi Arabia has seen a significant transformation in recent years, especially with the growth of e-commerce and online shopping. This shift is driving the demand for advanced logistics solutions, such as automated warehouses, smart delivery systems, and real-time tracking, to keep up with consumer expectations for speed and accuracy. For instance, in September 2024, CJ Logistics, a global logistics leader, launched first dedicated e-commerce Global Distribution Center (GDC) in Saudi Arabia located in Riyadh's Special Integrated Logistics Zone at King Khalid International Airport, the GDC will serve as a critical part of Saudi Arabia's vision to become a global logistics hub. This project aligns with the Kingdom's broader strategy to enhance its thirdparty logistics infrastructure and support the rapid growth of retail in the region.
Furthermore, the government's Vision 2030 initiative, which encourages digital transformation and an expansion of the non-oil economy, has further accelerated the demand for innovative logistics solutions in the retail sector. The rise in middle class, increased disposable income, and a tech-savvy population are key factors that contribute to the expansion of retail logistics. Moreover, the rise in dependance on mobile shopping apps and e-commerce platforms is prompting 3PL providers to invest in tech-driven solutions that can handle the complexities of retail logistics. Therefore, rise in demand of e-commerce, online shopping, rise in middle class, increased disposable income, and tech-savvy population of the retailing segment are driving the demand for the Saudi Arabia third-party logistic market
The estimated industry size of Saudi Arabia third-party logistics in 2033 is $24.0 billion.
The growth rate of airways mode of transportation in Saudi Arabia third-party logistics is 9.0% from 2024 to 2033.
Domestic transportation management is the leading service segment in Saudi Arabia third-party logistics.
Healthcare is the fastest growing industry segment in Saudi Arabia third-party logistics market.
Roadways is the leading mode of transport segment in Saudi Arabia third-party logistics in 2023.
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