Saudi Arabia Contract Logistics Market

Saudi Arabia Contract Logistics Market Size and Share:

The Saudi Arabia contract logistics market size was valued at USD 3.02 Billion in 2024. Looking forward, IMARC Group estimates the market to reach USD 5.32 Billion by 2033, exhibiting a CAGR of 6.10% from 2025-2033. The Saudi Arabia contract logistics market share is increasing due to improvements in supply chain technology, escalating demand for e-commerce, and tactical investments in infrastructure. Efforts to create logistics hubs and improve transportation networks are additionally bolstering the market growth. Furthermore, companies are looking for economical, scalable options, thereby fueling the need for third-party logistics services in multiple industries.

As online shopping is rising, companies need quicker, more dependable logistics options to manage increasing order quantities. This is driving the demand for contract logistics, since e-commerce platforms depend on third-party providers for prompt deliveries, effective inventory management, and smooth operations. Besides this, governing authorities are investing significantly in infrastructure initiatives like logistics centers, modern transport systems, and smart city projects to establish itself as a key trade center in the area. By improving connection and logistics efficiency, these investments facilitate product mobility and bolster the capabilities of logistics providers. Moreover, the rise in within logistics and supply chain industries is fostering the creation of advanced logistics facilities, enhancing market prospects for service providers.

Besides this, the integration of latest technologies like automation, artificial intelligence (AI) and the Internet of Things (IoT) into logistics operations is improving efficiency and translucency. Logistics firms benefit through real-time monitoring, forecasting analytics, and automated storage systems that optimize routes, enhance inventory management, and reduce operational costs. Additionally, numerous companies are delegating their logistics operations to external providers for lowering expenses and obtaining specialized knowledge and flexible solutions. This trend enables companies to concentrate on their main strengths while depending on logistics professionals for effective, economical solutions. In addition, the increasing focus on environment-friendly methods in logistics like employing electric vehicles (EVs), improving fuel efficiency, and adopting sustainable packaging is offering a favorable contract logistics market outlook in Saudi Arabia. Businesses are implementing more eco-friendly logistics strategies to lessen their environmental footprint and meet regulatory requirements.

Saudi Arabia Contract Logistics Market Trends:

Robust E-commerce and Retail Sector

In 2024, the International Trade Administration (ITA) anticipated that the count of Saudi internet users engaging in e-commerce (both buying and selling) would hit 33.6 million, representing a 42 percent rise since 2019. With high internet penetration rate and increasing use of digital payments, e-commerce firms require advanced warehousing, last-mile logistics, and improved supply chain systems. Logistics service providers are putting money into automated distribution centers, temperature-controlled storage for food and medications, as well as fleet management technologies to enhance efficiency. In addition, worldwide logistics firms are collaborating with regional suppliers to improve distribution networks, reduce delivery times, and integrate AI-driven demand forecasting. As individual expectations for rapid, affordable shipping grow, contract logistics firms are constantly evolving to manage large order volumes and varying demand.

Infrastructure Investments and Logistics Hubs

Saudi Arabia is building state-of-the-art logistics hubs, advanced warehouses, and interconnected transportation networks to upgrade its growing contract logistics industry. The government is investing billions in large projects that will improve links between seaports, airports, and industrial zones. For instance, in 2024, Saleh Al-Jasser, Saudi Minister of Transport and Logistics, signed deals for 18 logistics areas with investments totaling over SR10 billion. The program is complementary to Vision 2030 and is part of the Saudi Arab efforts to improve its international competitiveness. Moreover, major development at King Abdullah Port and Jeddah Islamic Port is augmenting container-handling capacity, boosting trade, and attracting international logistics firms. Saudi Arabia's strategic location between Europe, Asia, and Africa makes it a regional logistics hub to receive foreign direct investment (FDI) from international third-party logistics (3PL) and fourth-party logistics (4PL) players. The contract logistics sector is evolving to meet the growing needs of domestic and international trade by enhancing warehousing, cold chain logistics, and automated supply chain management.

Sustainability Initiatives and Green Logistics

With growing emphasis on minimizing environmental footprint, logistics operators are turning to green measures to facilitate the ecological goals of Vision 2030. Measures are designed to reduce carbon footprints, optimize supply chains for fuel efficiency, and minimize waste throughout operations. The push towards more sustainable modes of logistics is promoting investments in energy-efficient technology, developing circular economy models, and ensuring compliance with sustainability norms. With growing domestic and international need for sustainability, logistics companies are innovating more to fit into changing user requirements of greenery. The market is changing in favor of the production of more environment-friendly, cost-effective supply chain solutions. Aramco and DHL Supply Chain launched ASMO in 2024 as a new center of procurement and logistics services in Saudi Arabia. The collaboration aims at improving supply chain efficiency and sustainability in the energy, chemical, and industrial sectors through the application of digital technologies such as blockchain and AI.

Saudi Arabia Contract Logistics Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the Saudi Arabia contract logistics market, along with forecasts at the country and regional levels from 2025-2033. The market has been categorized based on type, service, end-user, and region.

Analysis by Type:

• Insourced
• Outsourced

Outsourced dominates the market with a 74.8% market share in 2024. It leads the market, as companies aim to enhance efficiency and concentrate on their primary strengths. Businesses favor delegating logistics operations to third-party providers that possess specialized knowledge, adaptable infrastructure, and cutting-edge technology. This provides flexibility, lowers operational expenses, and offers access to advanced logistics facilities. Outsourcing logistics allows companies to take advantage of the provider's network and global presence, improving supply chain efficiency and adaptability. As the focus on speed, reliability, and cost-efficiency increases, the need for outsourced logistics services is escalating in sectors including retail, automotive, and healthcare. The trend is additionally reinforced by the growing complexity of supply chains, as third-party providers can deliver customized, integrated solutions that match changing business requirements, thereby enhancing operational performance.

Analysis by Service:

• Warehousing
• Transportation
• Distribution
• Others

Transportation stands as the largest component in 2024, holding 45.0% of the market. It leads the market due to the growing demand for effective and dependable delivery of goods throughout the area. Businesses are expanding and diversifying, resulting in a heightened demand for efficient transportation solutions, particularly in industries like retail, automotive, and e-commerce. Companies rely on external logistics firms to manage the complexities of transport systems, ensuring prompt deliveries while optimizing routes and reducing costs. The rise in intermodal transport and the integration of advanced technologies like global positioning system (GPS) tracking, real-time data analysis, and automation are significantly enhancing efficiency and transparency in transportation services. Moreover, the development of road, rail, and port infrastructure in Saudi Arabia is fostering expansion in this sector, allowing firms to manage greater quantities of goods with enhanced speed and dependability.

Analysis by End-User:

• Manufacturing and Automotive
• Consumer Goods and Retail
• High-tech
• Healthcare
• Pharmaceuticals
• Chemicals
• Petrochemicals
• Others

Consumer goods and retail represent the largest segment, accounting 33.6% in 2024. They hold the biggest market share as per the Saudi Arabia contract logistics market research report, because of the swift expansion of online shopping and the rising need for effective supply chain management. Retailers and consumer goods firms are seeking third-party logistics providers to guarantee speedy, dependable, and economical distribution of their products. This industry demands advanced warehousing, inventory control, and logistics solutions to fulfill individual needs for prompt deliveries and product accessibility.  Outsourcing logistics enables companies to expand their operations, manage seasonal demand changes, and lower operational expenses. Additionally, advancements in technology related to tracking, automation, and real-time analytics are improving the efficiency of logistics operations within this industry. The growth of online shopping platforms is increasingly driving the need for efficient logistics services, as businesses aim to fulfill the rising demands for convenience and rapid product delivery.

Regional Analysis:

• Northern and Central Region
• Western Region
• Eastern Region
• Southern Region

The Northern and Central region accounts for the majority of the market share as per the Saudi Arabia contract logistics market analysis, largely due to its strategic location, which includes key economic hubs such as Riyadh, the capital. This area hosts a substantial share of the nation's industrial and commercial operations, fueling the need for effective logistics solutions. The clustering of companies in different industries, such as manufacturing, retail, and technology, establishes it as a central hub for logistics activities. Its closeness to key transportation systems, such as highways, railroads, and airports, boosts connectivity and facilitates the seamless movement of goods. Moreover, the region benefits from ongoing infrastructure development, including logistics parks and distribution centers, which further enhance the growth of the logistics industry. Consequently, the Northern and Central Region is essential for fulfilling the logistics requirements of companies throughout Saudi Arabia.

Competitive Landscape:

Key market players are focusing more on enhancing operational efficiency using technological advancements, such as automation, AI, and IoT integration. They are building substantial service offerings into complete supply chain solutions, such as warehousing, transportation, and inventory management. These players are also involved in sustainability projects, increasing energy efficiency, and decreasing the carbon footprint in logistics operations. They are becoming strategic partners with local and global firms to enhance regional presence and widen market share. They also invest in advanced infrastructure including intelligent warehouses and distribution hubs to respond better to increasing demand for faster and more reliable logistics solutions. In 2024, Kaden and DB Schenker revealed a strategic alliance aimed at improving logistics infrastructure in Saudi Arabia. The alliance formed plans to create tailor-made warehouses and logistics centers, in line with Vision 2030.

The report provides a comprehensive analysis of the competitive landscape in the Saudi Arabia contract logistics market with detailed profiles of all major companies.

Latest News and Developments:

• December 2024: Saja Pharmaceuticals and Tamer Group signed a SAR 1 billion (USD 266 million) deal to build a pharmaceutical manufacturing plant in Jeddah and a solar-powered logistics park in Riyadh. The distribution hub will cover an area of 200,000 square meters.
• October 2024: A partnership agreement was established in Saudi Arabia between CEVA Logistics and Almajdouie Logistics. By integrating Almajdouie's regional expertise with CEVA's vast global network, CEVA Almajdouie logistics seeks to deliver complete logistical solutions.
• August 2024: Maersk launched its biggest Logistics Park at Jeddah Islamic Port in Saudi Arabia to boost trade, supply chains, and economic activities in the area. The park covered an area of 225,000 square meters and provides comprehensive logistics solutions, featuring multi-modal transportation and climate-controlled storage.
• November 2023: SAL Saudi Logistics Services announced that it is working with the Saudi Ports Authority (Mawani) to develop a 54,000-square-meter logistics park at the Islamic Port of Jeddah. By strengthening air and marine links, this project sought to advance Saudi Arabia's logistics capabilities and help it achieve its objective of becoming a worldwide logistics hub.

Saudi Arabia Contract Logistics Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Saudi Arabia contract logistics market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the Saudi Arabia contract logistics market.
• Porter's Five Forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Saudi Arabia contract logistics industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.