KSA Trucking Road Freight Market Outlook to 2030

KSA Trucking Road Freight Market Overview

• The KSA Trucking Road Freight market is valued at USD 8.1 billion, based on a five-year historical analysis. This market is primarily driven by the government's investment in infrastructure projects, including the expansion of the road network and the development of logistics hubs across the kingdom.
• Dominant cities such as Riyadh, Jeddah, and Dammam lead the market. Riyadh's central location and role as the nation's capital make it a major hub for logistics and freight operations. Jeddah, as a key port city, supports volumes of international trade, while Dammams industrial base and proximity to the oil and gas industry make it a critical center for bulk cargo movement.
• The Saudi government has positioned logistics as a key pillar of its Vision 2030 initiative, aiming to transform the country into a global logistics hub. A key part of this strategy is the National Industrial Development and Logistics Program (NIDLP), which aims to increase the logistics sectors contribution to the GDP by $50 billion by 2030. The government has also allocated funds for upgrading road infrastructure, ensuring smoother freight operations.

KSA Trucking Road Freight Market Segmentation

By Freight Type: The market is segmented by freight type into bulk cargo, general cargo, and perishable goods. Bulk cargo, such as cement, steel, and oil, holds the dominant market share in this segment. This dominance is due to Saudi Arabias heavy reliance on its oil and gas sector, as well as significant industrial activity in construction materials like steel and cement. The growing demand for infrastructure development and ongoing large-scale projects, including NEOM and the Red Sea Project, have resulted in increased transportation needs for bulk cargo.

By End-Use Industry: The market is also segmented by end-use industry into retail and FMCG, construction, oil and gas, automotive, and agriculture. The oil and gas sector dominates this segment due to Saudi Arabia's global leadership in oil production and exports. The transportation of oil, gas, and related equipment is crucial to the economy, with significant freight volumes generated by the energy sector. Additionally, the industry's stringent requirements for timely and secure transportation make trucking services indispensable.

KSA Trucking Road Freight Market Competitive Landscape

The market is dominated by a few key players that have established themselves through extensive fleets, strategic partnerships, and technological integration. This consolidation reflects the influence of both local and international logistics companies operating in the country.

KSA Trucking Road Freight Market

Market growth Drivers

• Expansion of Infrastructure and Road Networks: The Saudi Arabian government has been investing heavily in expanding its infrastructure, with $150 billion allocated for road network expansion and maintenance as part of Vision 2030. This has enabled better connectivity between industrial hubs such as Riyadh, Jeddah, and Dammam, increasing the volume of goods transported via road freight.
• Rising Domestic and Regional Trade: Saudi Arabia has witnessed growth in domestic and regional trade, largely driven by its strategic location at the intersection of Europe, Asia, and Africa. Saudi Arabia's non-oil exports surged by19%in July 2024, reachingSR25.38 billion($6.76 billion) compared to the previous year. This growth is driven by chemicals and plastics, which accounted for25.8%and25.6%of total non-oil shipments, respectively, reflecting the Kingdom's commitment to economic diversification under Vision 2030.
• E-commerce Growth Driving Last-Mile Delivery: E-commerce in Saudi Arabia is booming, with online retail sales growing to $11.7 billion in 2023, boosting the demand for last-mile delivery services. The growth of e-commerce giants, alongside local retailers' online expansions, has led to an increase in trucking requirements for goods movement and last-mile logistics, particularly in cities like Riyadh and Jeddah.

Market Challenges

• Regulatory Compliance and Safety Standards: Trucking companies in Saudi Arabia face stringent regulatory requirements for vehicle maintenance, driver safety, and environmental standards. The Saudi Standards, Metrology and Quality Organization (SASO) has introduced new regulations for vehicle emissions and safety compliance, which necessitate additional costs for fleet upgrades and regular maintenance. In 2023 alone, more than 1,000 violations were issued to trucking companies failing to meet these standards.
• Cross-Border Trade Challenges: Despite Saudi Arabias strategic location, the country faces cross-border trade challenges, particularly at the customs checkpoints along its borders with neighboring countries like Jordan and Kuwait. In 2023, it was reported that delays at border checkpoints averaged 48 hours, resulting in disruptions in the supply chain and increased costs for trucking companies.

KSA Trucking Road Freight Market Future Outlook

Over the next five years, the KSA Trucking Road Freight Industry is expected to experience substantial growth driven by continued government investments in infrastructure, the expansion of industrial sectors, and the growth of cross-border trade. Major projects such as Vision 2030, the development of new economic cities, and the establishment of logistics zones will significantly increase freight volumes.

Future Market Opportunities

• Growth in Electric and Alternative Fuel Trucks: By 2028, the adoption of electric and alternative fuel trucks is expected to grow in the Kingdom, driven by government incentives and sustainability targets under Vision 2030. With pilot programs already in place, the number of electric trucks on Saudi roads is projected to increase by 12,000 units over the next five years, reducing dependence on fossil fuels for freight transport.
• Technological Integration for Operational Efficiency: The future of trucking in Saudi Arabia will increasingly focus on technological integration. By 2028, over 90% of trucking companies in the Kingdom are expected to adopt advanced fleet management systems, incorporating AI, telematics, and data analytics. This will lead to better route optimization, reduced fuel consumption, and improved operational efficiency, driving profitability for logistics companies.