Saudi Arabia is at forefront of innovation drive in logistics

Saudi Arabia is at forefront of innovation drive in logistics

Saudi Arabia is at forefront of innovation drive in logistics
As Saudi Arabia embraces automation technologies, it stands at the forefront of reshaping its economic trajectory.
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The logistics and warehousing landscape in Saudi Arabia is undergoing a significant transformation driven by a range of motives, from budget management to ensuring health and safety standards. Organizations across the supply chain are actively embracing automation to reduce operational costs, enhance production efficiency, and navigate the challenges posed by fluctuating workforce availability.

In fact, the global material handling equipment market is expected to reach $369.01 billion by 2032, while projections indicate that the Middle East and Africa automated materials handling market will reach $1,885.8 million by 2026.

Middle Eastern nations, notably Saudi Arabia and the UAE, are shifting towards economic diversification, directing investments into specialized manufacturing zones, and boosting tourism to enhance non-oil revenue sources. The two hold the largest market shares in material handling in the region, investing heavily to become prime hubs for logistics and warehousing.

Moreover, the expansion of industries, spanning from construction to e-commerce in the wider Gulf region, is driving a demand for more effective and modern material handling solutions. This trend is steering the adoption of automation as a means to improve service quality within these industries.

Saudi Arabia’s Vision 2030, which aims to grow and diversify the economy, enhance social responsibility, and increase employment, outlines efficiency and a thriving economy for businesses of all sizes. The advancement of technology, particularly intralogistics, is key to this.

Several industries need logistics technology to function, including e-commerce, food and beverage, manufacturing as well as pharma, micro-fulfillment, banking, and many more. All these industries are positioning themselves to offer world-class facilities that will serve the region and export to the world.

The integration of automation and robotics is a progressive approach aligned with the Kingdom’s transformation plan, making it a strategic focus for entities like Swisslog to support local industries with experience, technology, and solutions.

As Saudi Arabia strategically positions itself as a global economic leader, investors are presented with compelling opportunities within the Kingdom. The freight and logistics market, currently valued at $23.83 billion in 2023, is projected to experience robust growth, reaching $32.88 billion by 2029 with a compound annual growth rate of 5.52 percent.

This not only establishes the Kingdom as a key player in the Gulf Cooperation Council’s emerging markets but also underscores the potential for lucrative investments in the logistics sector.

Simultaneously, Saudi Arabia is actively advancing its digital infrastructure, recognizing the pivotal role technology plays in modernizing logistics. This commitment to digital transformation is poised to streamline operations and enhance overall efficiency within the logistics industry.

As for warehouse automation, it not only liberates time for crucial tasks and enhances accuracy, but also elevates overall process intelligence. This heightened efficiency enables companies to smoothly transition from a two-shift to a three-shift operation, ensuring greater flexibility and effectiveness, particularly during peak periods such as the holiday season.

This surge in operational efficiency aligns with the broader economic transformation underway in Saudi Arabia, marked by a substantial $51 billion investment plan in non-oil sectors. The strategic diversification not only mitigates dependence on oil revenues but also lays the foundation for innovation and sustainable development.

For investors seeking long-term growth prospects, exploring opportunities in various non-oil sectors becomes a compelling strategy, aligning their portfolios with Saudi Arabia’s vision for economic resilience.

Furthermore, the adoption of robots in supply chain operations is experiencing a significant surge, driving enhanced productivity and cost efficiency. Projections suggest that by 2025, an impressive 45 percent of manufacturing processes will be handled by robots.

This shift promises not only streamlined operational workflows but also a substantial reduction in defects, ultimately leading to zero-defect processes. The strategic integration of robotics across warehousing and logistics represents a crucial response to the workforce challenges triggered by the 2020 pandemic.

This proactive approach extends its impact across sectors such as e-grocery, retail, food, beverage, pharmaceuticals, healthcare, and manufacturing, underscoring the indispensability of automation in navigating the complexities of the modern business landscape. 

As Saudi Arabia embraces automation technologies, it stands at the forefront of reshaping its economic trajectory. These technological advancements contribute significantly to the ongoing evolution of the global supply chain. The Kingdom’s commitment to innovation and technological integration not only mitigates future disruptions but also solidifies its role as a key player in shaping the future of global commerce.

Rami Younes is general manager, Swisslog Middle East.

Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News' point of view