Is Saudi Arabia’s logistics sector future-ready?

Saudi Arabia’s logistics sector today has a vast appetite for technology fuelled by a shift of mindset.

As a priority sector for the kingdom, logistics is expected to contribute upwards of 10 per cent in Saudi’s GDP by 2030, owing to a surge in technology use cases in logistics.

In a bid to diversify its economy, and engage non-oil sectors in the kingdom, Saudi Arabia launched the National Industrial Development and Logistics Program at the beginning of 2019, with an aim to increase the volume of non-oil exports to over SAR1tn and generate 1.6 million new jobs by 2030.

ICT in logistics will not only improve operational efficiency but will also substantially enhance visibility and agility of the sector for its prime stakeholders.

Furthermore, owing to its role as an enabler for digital transformation across sectors, ICT will play a key role in fuelling the next generation of logistics as well as in achieving the optimisation of fleets and tracking and monitoring of assets.

Amid a vast appetite and the growing contribution towards the national economy, the logistics sector in Saudi Arabia has – over the years – taken steps to enhance operations and digitisation with a view to drive greater business value across the private sector.

Case in point, radio frequency identification (RFID) and driverless vehicles and drones have been known to benefit supply chain management since several years now.

Read: Will 2023 be the year of drone deliveries in the region?

Challenges in the logistics sector

According to a recent RFID market report, the global market for this technology is expected to expand to $17.4bn by 2026 from $12.2bn in 2022.

However, historically, the logistics sector has faced several technological obstacles to RFID tracking implementation. According to a CompTIA/Frost & Sullivan end-user survey, the low levels of awareness and poor skills development act as a critical barrier to broader adoption of RFID.

The kingdom is exercising concerted efforts to infuse a digital-first approach through the logistics sector.

Technology providers are key enablers in the sector’s progress; they play an imperative role in offering innovative solutions for the industry to navigate bottlenecks including inaccurate addressing systems in logistics and supply chain operations, particularly in the last-mile segment.

Digital solutions such as assets tracking, fleet management and others solutions will contribute towards achieving overall efficiency in operations, reduce cost, and guarantee customer satisfaction, while also incorporating sustainability and minimising carbon footprint.

Saudi Arabia’s logistics sector is primed for sustainable growth, which will be achieved by digitisation and automation, to bring in great quantifiable value through leveraging digital solutions, cloud, big data, analytics, and artificial intelligence.

This growing focus on incorporating such emerging technologies across the value chain will help businesses to operate in a more efficient and productive manner.

Saleh Abdullah Al Zahrani is the chief technology officer – solutions at stc

Read: Saudi’s Mawani, Jeddah Chamber to jointly build $267m integrated logistics park

Also read: Kuwait’s Agility invests $163m to build Jeddah Logistics Park in Saudi Arabia