Saudi Arabia
2.6 Saudi Arabia Storage Assessment
Home

The Saudi dry warehousing market grew by 2.8 percent between 2015 and 2020 and will continue to grow until at least 2025. The industrial and retail industries are responsible for the largest percentage of this expansion. The warehousing market is largest in the cities of Jeddah, Riyadh, and Dammam. While Jeddah has a majority of the warehouse revenue share, all three cities play a key role in the expansion of warehousing in Saudi Arabia.

  • Jeddah: Jeddah is a port city on the Red Sea. Its warehousing district is close to the Jeddah Islamic Port. Here, the warehouse and logistics supply districts stretch 26.1 million square meters.
  • Riyadh: Located in the center of the country, Riyadh is the capital of Saudi Arabia and its main financial hub. Its warehousing districts are primarily near Riyadh’s dry port. The city dedicates 24.5 million square meters to warehousing and logistics parks.
  • Dammam: The Dammam metropolitan area is on the Persian Gulf. Its warehousing and logistics parks cluster among four zones to the north, east, south, and west of the city. Currently, the city uses 20.9 million square meters for its warehouses and logistics parks.

Identifying Saudi Arabian warehousing challenges

As a result of growth in the retail sector, increased manufacturing activity, and expanding international trade, Saudi Arabia’s warehousing needs are growing. The 72 million square meters of warehousing and logistics space in the logistics hubs of Riyadh, King Abdullah Economic City (Jeddah), and Al Khobar (Dammam) are no longer sufficient.

  • Beyond dry goods Saudi Arabia’s warehousing challenges go beyond needing space for companies to store dry goods. According to a Research and Markets report, Saudi Arabia’s cold storage market is projected to reach $2.5 billion by 2024. With this growing demand in mind, forecasters see the warehousing market in Saudi Arabia continuing its upward trend. the warehousing market expects a compound annual growth rate increase of 4.1 percent through 2023.
  • Realizing revenue: Saudi Arabia, along with the rest of the world, is seeing a rise in e-commerce. The Saudi Gazette reported that e-commerce grew 74 percent during March and April of 2020 alone. This sizzling growth is putting pressure on Saudi Arabia’s warehousing sector to provide more space for online retailers like Namshi and Amazon. Saudi Arabia needs more state-of-the-art facilities. Businesses in the e-commerce space need modern warehouses so that they can receive, process, and ship product efficiently, accurately, and quickly. The retail sector accounted for half of warehousing revenue in 2018. It’s clear that there is a need for additional warehousing space to accommodate projected growth.
  • Other immediate challenges: The physical locations of Saudi Arabia’s current warehousing facilities pose another challenge. Most of the nation’s logistics centers are in and around Riyadh, Jeddah, and Dammam. The challenge is heightened by long distances over varied, rugged topography in extreme temperatures as goods are moved between stops along the supply chain. One challenge that companies face related to warehouse management is finding enough workers to staff facilities. Some logistics providers believe Saudi Arabia lacks the labor force it requires to meet the growing needs of the warehousing sector. As a result, warehouse operators sometimes must find ways to operate their facilities with minimal staff.
  • e-Commerce: The use of e-commerce has expanded globally and among Saudi Arabian citizens. The market is fast growing, which exposes weaknesses in Saudi Arabian supply chains. Urban centers in Saudi Arabia are not as compact and densely populated as urban environments elsewhere. That lack of density limits efficiency in distribution from the warehouse to the customer. Because of this, suppliers are sometimes unable to meet the demands of e-commerce shoppers for fast shipping.
  • Supply chain interruption: COVID-19 revealed vulnerabilities in supply chains. Because their success is dependent upon a variety of uncontrollable variables, warehousing facilities have little power over supply chain interruptions. This means facilities are vulnerable to delays that can result in canceled orders and a lack of customer trust.
  • Aging warehouses: Modern, automated warehouses come at a cost. Because of this, many warehousing districts, particularly in Riyadh, contain a large number of aging and outdated structures These are less suited to meet demand and can slow the throughput of goods. Saudi Arabia will need to upgrade these aging warehouses in order to keep up with the global warehousing market.

Source: Ken Research report: https://www.kenresearch.com/automotive-transportation-and-warehousing/logistics-and-shipping/saudi-arabia-warehousing-market/203894-100.html

For more information on storage company contact details, please see the following link: 4.6 Storage and Milling Companies Contact List.

Commercial Storage

On-demand warehousing enables companies in Saudi Arabia to access warehouse solutions on a temporary basis. On-demand warehousing services negotiate with warehouses to build a network of facilities to increase supply chain efficiency. Companies can lease on-demand warehouse space as a way to cost effectively address shifting demand.

Location

Owner

Available for Rent

Capacity

Type [1]

Access [2]

Condition [3]

Abqaiq Highway, Opposite to Dammam 2nd Industrial Area, Mekkah St., Dagran 34521 Kingdom of Saudi Arabia

Motion Supply Chain

Yes

7000 m2

Covered

Flat

Intact

Al Olaya Street, Al Olaya, Riyadh 12244 Kingdom of Saudi Arabia

Motion Supply Chain

Yes

12,000 m2

Covered

Flat

Intact

[1] Warehouse Type: Open storage, container, rub-hall, silo, concrete, other, unspecified

[2] Warehouse Access: Raised-siding, flat

[3] Warehouse condition: Appears intact, appears damaged, under construction/repair


Public Sector Storage

National Industrial Development and Logistics Program (NIDLP): Saudi Arabia launched NIDLP to improve infrastructure and design new policies related to economic growth. By dedicating financial support to logistics development, NIDLP aims to build Saudi Arabia’s role as a regional logistics hub and improve warehousing.

Al Khomrah Logistics Zone: The Saudi Arabian ministry of transport opened a logistics zone in Jeddah to support shipping, freight distribution, and transport. This is the largest logistics zone in the country.

Location

Ministry / Agency

Use Possibility

Capacity

Type [1]

Access [2]

Condition [3]

Dammam (Al-Khalidiyah)

Public Warehousing Company

Yes

150,000 m2 – divided into 204 warehouses

covered

flat

intact

Riyadh (Al-Kharj road)

Public Warehousing Company

Yes

38,700 m2 – divided into 25 warehouses

covered

flat

intact

Dhahran (Ghonan)

Public Warehousing Company

Yes

160,000 m2 – divided into 55 warehouses

covered

flat

intact

Dhahran (Al-Faisaliyah)

Public Warehousing Company

Yes

18,462 m2 – divided into 35 warehouses

covered

flat

intact

[1] Warehouse Type: Open storage, container, rub-hall, silo, concrete, other, unspecified

[2] Warehouse Access: Raised-siding, flat

[3] Warehouse condition: Appears intact, appears damaged, under construction/repair

Cold Chain

In the wake of the COVID-19 pandemic, the need for a safe and effective way to transport and store vaccines was apparent. To meet global demand for a vaccine, Saudi Arabia built a series of warehouses dedicated to storing pharmaceuticals and other perishables. These refrigerated warehouses enable the country to maintain a cold supply chain.

Location

Organization / Owner

Type [1]

Cooling /  Power [2]

Total Capacity (m³)

Condition

Al Khumra area in Jeddah

https://www.uwc-logistics.com.sa/

refrigerated warehouse

unspecified

24,000 m2

Intact

King Faisal Rd Al Khumra District,

Jeddah, Kingdom of Saudi Arabia

http://www.akungroup.com/

refrigerated warehouse

unspecified

16,000 m2

Intact

[1] Cold Room Positive, Cold Room Negative, Refrigerator, Freezer,

[2] Compression, Absorption, Solar, Other, unspecified

 

Jump to top