Saudi Arabia freight forwarding market is expected to generate USD 18.8 billion in revenue by end of 2025. The government is heavily investing in logistics infrastructure, including logistics parks, ports, and intermodal connectivity as a part of the Vision 2030 plan to establish the kingdom as a logistics hub. Economic growth, rising population, and rapid urbanization are driving the demand for freight forwarding services. Saudi Arabia is making significant strides in developing its logistics infrastructure. These initiatives are part of a broader strategy to transform Saudi Arabia’s logistics sector and support its economic diversification goals
National Industrial Development and Logistics Program (NIDLP)
The National Industrial Development and Logistics Program (NIDLP) aims to transform the Kingdom into a leading industrial powerhouse and a global logistics hub by maximizing the value of its mining and energy sectors while unlocking the full potential of local content. NIDLP will largely contribute to driving the Kingdom’s economic diversification towards sustainable growth by fostering a globally attractive investment environment
Strategic Partnerships in Logistics
A new strategic partnership has been established between Egypt’s Hassan Allam Utilities, the investment and development arm of Hassan Allam Holding, and Saudi Arabia’s Defaf United for Logistics, a subsidiary of Nesma Holding. Under the deal, the two companies will work jointly to invest in and develop an off-port terminal in King Abdullah Economic City (KAEC), located next to King Abdullah Port. The collaboration aims to improve logistics capabilities in the region by providing integrated solutions to meet the growing demands of the logistics and trade sectors. The terminal will include container yards and warehousing facilities, offering logistics solutions for a variety of customers. It is expected to enhance operations in Saudi Arabia, as well as across the Gulf Cooperation Council (GCC) region and East Africa. The development aims to streamline logistics processes, improve supply chain efficiency, and support trade connectivity. The infrastructure will facilitate cargo handling, reduce operational costs, and assist businesses in expanding their reach.
Investments in Logistics Infrastructure
The Saudi government is heavily investing in logistics infrastructure, including ports, logistics parks, and intermodal connectivity. These investments are part of the Vision 2030 plan to diversify the economy and reduce dependence on oil. Saudi Arabia’s Ministry of Finance has released its Pre-Budget Statement for the fiscal year 2025, estimating revenues of SAR 1.184 trillion and expenditures of SAR 1.285 trillion, resulting in a projected deficit of SAR 101 billion, or 2.3% of the GDP. The logistics sector stands to benefit from the government’s strategic transformational spending, which will drive infrastructure development and support transportation and warehousing innovations. The continuous improvement of transport and logistics services is expected to attract foreign investment, create new business opportunities, and increase competitiveness in regional and global markets. This comes as international organizations and credit agencies are forecasting positive trends for the Saudi economy, with real GDP growth expected to reach 4.6% in 2025.
Ports and Maritime Advancements
The Kingdom is investing heavily in upgrading and expanding its ports to increase capacity and efficiency. King Abdullah Port (KAEC) is one of the largest and most advanced ports in the region. Located on the Red Sea, it is designed to handle large volumes of cargo, including containerized goods. Jeddah Islamic Port, a key gateway for trade, is undergoing expansion to handle more cargo and facilitate smoother operations. Dammam Port, located on the Arabian Gulf, is essential for trade with the eastern part of the world, including Asia. The Red Sea Gateway Terminal is a modern facility being developed to handle container traffic and improve Saudi Arabia’s maritime logistics capabilities.
Enhancements in Air Cargo
The Kingdom is also enhancing its air cargo and passenger transport capabilities. King Abdulaziz International Airport (Jeddah) and King Khalid International Airport (Riyadh) are being expanded to accommodate increasing air freight demand and passenger traffic. Saudi airports are modernizing facilities and implementing advanced technologies to handle higher volumes of air cargo, particularly as e-commerce grows in the region. Dedicated air cargo hubs are being established at key airports to streamline the movement of goods and enhance air freight logistics.
Road and Rail Infrastructure Development
Saudi Arabia is significantly improving its road and rail infrastructure to improve domestic and international connectivity. The Saudi Railway Network is being developed to connect major cities and transport goods efficiently. The Saudi Landbridge Project, a multi-billion-dollar rail project, will connect the Red Sea (Jeddah) to the Arabian Gulf (Dammam) via Riyadh, facilitating faster movement of goods across the Kingdom. Highways and roads are being upgraded to improve the efficiency of land-based logistics, with projects such as the King Abdulaziz Road in Riyadh aiming to reduce congestion and improve traffic flow.
Specialized Logistics Zones
Saudi Arabia is developing specialized logistics zones and industrial cities. Logistics cities like the Riyadh Logistics Hub, King Abdullah Economic City, and Jeddah Logistics City are being established. These zones are designed to integrate different modes of transportation, such as rail, road, and sea, and provide businesses with storage, warehousing, and distribution facilities. King Salman Park, a new logistics city with state-of-the-art infrastructure, is also under development to serve as a central hub for manufacturing and logistics. The Kingdom has also created economic cities like the King Abdullah Economic City (KAEC) and Prince Abdulaziz Bin Mousaed Economic City that focus on developing infrastructure for logistics, trade, and industry.
Vision 2030 and Logistics Goals
Under Vision 2030, Saudi Arabia aims to rank among the top 25 countries in the world for logistics by improving infrastructure, services, and logistics performance. The Kingdom plans to transform into a global logistics hub by enhancing connectivity between Europe, Asia, and Africa. It seeks to improve ease of doing business in the logistics sector by simplifying regulations and incentivizing private investment in logistics and supply chain services. The government is also focused on creating jobs by expanding logistics-related industries and attracting foreign investment in logistics infrastructure. The Saudi government is increasingly leveraging public-private partnerships (PPPs) to fund the development of logistics infrastructure. Key projects, including airports, ports, and transport hubs, are being developed in collaboration with international partners and private investors.
Oil and Gas Sector Developments
Saudi Arabia’s oil and gas sector in 2025 will continue to expand through significant investments in both upstream and downstream infrastructure. The country will focus on increasing its natural gas production, expanding its petrochemical industry, and enhancing its oil production capabilities. Furthermore, Saudi Arabia’s efforts to develop new energy hubs and increase its technological and environmental sustainability will shape the future of its oil and gas industry, helping the Kingdom maintain its leadership role in global energy markets. The Jafurah gas field, located in the Eastern Province of Saudi Arabia, is one of the largest non-associated gas fields in the country. The project is key to Saudi Arabia’s strategy to increase natural gas production and reduce reliance on crude oil for domestic energy consumption. Saudi Aramco is expected to make significant progress in the development of Jafurah, aiming to produce up to 2.2 billion cubic feet of gas per day by 2030. The project will involve large-scale drilling, processing facilities, and infrastructure to transport and utilize the gas for power generation and industrial uses.
Energy Industrial Hubs
SPARK, located in the Eastern Province, is a large-scale energy industrial hub that will focus on the oil, gas, and petrochemical sectors. The park is intended to be a global centre for energy innovation, with numerous oil and gas companies expected to operate in this area. The first phase of SPARK is set to be operational, with infrastructure in place to support oil and gas exploration, production, and downstream industries. SPARK aims to create thousands of jobs and is expected to attract significant investments in oil and gas projects, further solidifying Saudi Arabia’s status as an energy leader.
Expanding Oil Fields
The Shaybah oil field, located in the Rub’ al Khali (Empty Quarter), is one of the largest and most remote oil fields in Saudi Arabia. In recent years, Aramco has been working on expanding its production capabilities from this field. Expansion of Shaybah’s capacity is expected to help boost the field’s production to over 1 million barrels per day. The development will also include enhancing the field’s infrastructure and expanding its capacity to handle high-production output, ensuring that Saudi Arabia can maintain its position as the world’s leading oil exporter. Saudi Aramco is working on projects to boost the output from its offshore oil fields, including the Marjan and Berri fields in the Arabian Gulf. These fields are critical to maintaining Saudi Arabia’s oil production capabilities. The ongoing developments in Marjan and Berri are expected to significantly increase production.
Saudi Aramco has already invested billions into upgrading the facilities, including offshore platforms, pipelines, and storage facilities, to increase overall output by hundreds of thousands of barrels per day
Renewable Energy Initiatives
By 2025, Saudi Arabia is set to make significant advancements in renewable energy, particularly in solar and wind power. These projects will be key in helping the country meet its Vision 2030 objectives of diversifying its energy mix and reducing carbon emissions. Saudi Arabia’s investments in green hydrogen, energy storage, and eco-friendly urban developments like NEOM will also position it as a leader in sustainable energy in the region and globally. The NEOM Green Hydrogen Project is the world’s largest utility scale, commercially based hydrogen facility powered entirely by renewable energy. An equal joint venture between NEOM, Air Products and ACWA Power, the project is based on proven, world-class technologies that will include the innovative integration of a combined capacity of around four gigawatts of renewable power from onshore solar, wind and storage. When commissioned in 2026, it will produce 600 tonnes per day of clean hydrogen by electrolysis using ThyssenKrupp technology; production of nitrogen by air separation using Air Products technology; and production of up to 1.2 million tonnes per year of green ammonia. When complete, the project will mitigate the impact of 5 million metric tonnes of carbon emissions per year.