Logistics — the backbone of the economy

Saudi Minister of Transport and Logistics Services Saleh Al-Jasser was in Ankara last week to explore cooperation in transportation and logistics services with his Turkish counterpart, Abdulkadir Uraloglu. The two officials discussed issues related to the transport and logistics sectors in their respective countries, as well as mutual investment and cooperation opportunities in line with the Kingdom's National Transport and Logistics Strategy.

It is worth noting that bilateral discussions between the officials of the two countries have taken place since the state visit of the Turkish president and his delegation to Jeddah last July.

Al-Jasser's visit aimed to strengthen ties, support air carriers, expand maritime connectivity by increasing the number of shipping lines, and promote partnership between the two sides to enhance the Kingdom's position on the logistics map and boost trade volume between the two countries and beyond.

Saudi Arabia is an important international hub due to its strategic central location and vast area. In addition to these location and size advantages, the government has undertaken an ambitious plan to enhance its logistics infrastructure.

Companies can cater to over 2 billion potential customers across three continents by utilizing the Kingdom as an international logistical hub. With the doors opening for the private sector, these companies will improve and enhance their logistical infrastructure to leverage the new opportunities.

Given the Kingdom’s sizeable food import volumes and arid climate, it is imperative to establish a robust warehousing and distribution system.

Investments in new infrastructure, specialized facilities, and economic zones will further expand these opportunities. During my recent visit to the Bulgarian capital, Sofia, I met with the owners of a cargo drone manufacturer who are considering Riyadh as a potential hub for their regional operations in the Gulf.

Given the Kingdom's sizeable food import volumes and arid climate, it is imperative to establish a robust warehousing and distribution system.

Warehousing is a significant pillar of the logistics ecosystem in the country. Another key pillar is transportation, which is experiencing substantial growth in Saudi Arabia. Modes of transportation are vital veins for creating an attractive investment environment in various sectors. They play a crucial role in the efficient movement of passengers and goods, while also attracting private investments for essential transportation projects.

A case in point, cargo firm SAL Saudi Logistics Services received orders worth $48.6 billion for its $678 million initial public offering, which is set to be the Kingdom’s second-largest this year. Additionally, with the significant announcement of Riyadh Air, everyone is anticipating it to be a game-changer in commercial air travelling space.

As the backbone of the economy, the government has been moving swiftly, implementing enhancements and reforms to maintain the logistics ecosystem in its most efficient and competitive structure, making it attractive to both local and international investors.

Basil M.K. Al-Ghalayini is the chairman and CEO of BMG Financial Group.