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Strategic Analysis of the Logistics Market and Contract Logistics in Saudi Arabia
Frost & Sullivan, Nov 2010, Pages: 329
The study provides a strategic analysis of Saudi Arabian logistics market covering about 12 key industries including automotive, engineering goods, fast moving consumer goods, pharmaceuticals, textiles, oil & gas, electronics and metals. It also provides a comprehensive analysis of the total logistics spend and its breakup by segments such as transportation, warehousing, freight forwarding and value added logistics services for each industry. In addition, the study provides revenue forecasts for the total logistics market and each of the four segments, for each industry. Apart from these the study also provides an overview of competitive structure in the covered industries and key competitors in logistics market of respective industries.
This Frost & Sullivan research service titled Strategic Analysis of the Logistics Market and Contract Logistics in Saudi Arabia provides the current market size, forecasts, and key drivers and restraints. It analyses the total Saudi Arabian logistics market and provides the market segmentation by key industries, key competitors, and status of contract logistics in the Saudi Arabian logistics market. In this research, Frost & Sullivan's expert analysts thoroughly examine the following markets: apparel and footwear, automotive, basic material and industrial products, cement, chemicals, electronic-electrical and communications equipment (EECE), engineering equipments, fast moving consumer goods (FMCG), food and beverages, metal, medical and pharmaceutical products, oil and gas, paper, and rubber and plastics.
This analysis is available through our Automotive & Transportation Growth Partnership Services programme. With continuous access to intelligence and resources from all seven perspectives of the Complex Business Universe, the Growth Partnership Services programme ensures that you and your Growth Team™ are able to maintain a 360 Degree Perspective of the market. This comprehensive, objective information allows your company to mitigate risk, identify new opportunities, and drive effective strategies for growth.
Market Overview
Strong Revival of the Oil Industry and Aggressive Diversification into Oil-related Industries Drive the Saudi Arabian Logistics Market
The strong revival of the oil industry and Saudi Arabia's active diversification into oil-based businesses are expected to cause a surge in exports, thereby creating a plethora of opportunities for the nation's freight forwarding market. The spectacular growth in export-import volumes, backed by a rise in the domestic uptake of major manufacturing and consumer-oriented industries such as retail, FMCG, engineering, chemicals, food, and electronics, has catapulted the country ahead of other leading Middle Eastern countries in the logistics field. In Saudi Arabia, the impressive performance of the industries and their strong expansion plans despite the global economic downturn has opened up several prospects for logistic outsourcing. There has been an influx of global majors in all industries including food and beverages, FMCG, and EECE, as they are looking to expand their geographical reach and capture the highly lucrative Saudi Arabian consumer market.
The rising complexity in supply chains due to the frantic global sourcing and distribution practices has made it imperative for companies to outsource their logistic functions. The high value of items being traded is another reason companies are increasingly seeking the services of third-party logistics services. 'In addition, being the largest economy in the Gulf Cooperative Council (GCC), accounting for almost two-thirds of the council nations’ collective economy size, has made Saudi Arabia a happy hunting ground for logistics service providers (LSPs) in Middle East,' says the analyst of this research. 'The country's growing population of nationals and expatriates and its strong economy are further accelerating the growth of the local delivery services sector.'
On the flip side, the expanding population causes traffic congestion on the national and international highways, which affects the industry’s performance and restrains logistic activities. The current road network in Saudi Arabia, particularly at international borders with the United Arab Emirates, Yemen, and Oman, has posed capacity issues, resulting in long waits for load carriers. Moreover, due to the restrictions on international traffic between Saudi Arabia and other countries, the road network between commercial areas is often circuitous, which, in turn, raises the transportation costs. 'At present, due to the lack of integrated multi-modal transportation service, Saudi Arabian industries depend on discrete single modes of transportation (primarily road) throughout their distribution network, which leads to high logistics costs,' notes the analyst. 'The Government has implied that it plans to invest heavily on infrastructure, thus enabling multimodal transportation and consequent cost savings.' Meanwhile, Saudi Railways Organization’s (SRO) ambitious project, the Saudi Landbridge, is expected to transform the existing rail network in the country into a world-class freight and passenger rail link across the country. Upon completion, the network is expected to facilitate the movement of large quantities of cargo over long distances at competitive rates, thus providing impetus to the logistics industry.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Apparel & footwear
- Automotive
- Basic material & industrial products
- Cement
- Chemicals
- Electronic-electrical and communications equipment
- Engineering equipment
- FMCG
- Food & beverages
- Metal
- Medical & pharmaceutical products
- Oil & gas
- Paper
- Rubber & plastics
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