Logistics, a term often relegated to the technical side of business, is undeniably important. Beneath its technical exterior lies a system shaping economies, dictating trade routes, and redefining competitiveness.

Vision 2030 is channeling over $1 trillion in investments in Saudi Arabia to overhaul the kingdom’s role in global trade, positioning it as a critical trade nexus.

In an exclusive interview with Fast Company Middle East, H.E. Ahmed S. Alhassan, Assistant Minister of Transportation and Logistics Services in Saudi Arabia, outlined the ambitious plans to reshape the kingdom’s transportation and logistics sectors, focusing on modernization and innovation to support its global trade aspirations. 

THE ECONOMIC GROWTH 

Alhassan says, “Efficient and modern logistics services are vital to supporting the kingdom’s giga-projects, such as NEOM, Qiddiya, the Red Sea Project, and Diriyah. These projects require substantial logistics to transport raw materials and construction supplies.”

These projects drive logistics demand but also represent a unique opportunity to set a global standard for logistics excellence. 

Moreover, Alhassan emphasizes that the rapid growth of sectors like e-commerce highlights the need for advanced logistics networks. Without these, ambitious projects could face significant operational challenges.

Saudi Arabia’s National Transport and Logistics Strategy (NTLS) also aligns with broader government initiatives, including those in the tourism and industrial sectors.

Alhassan explains, “To modernize transportation infrastructure, the ministry is adopting advanced technologies such as electric vehicles (EVs), drones, and autonomous vehicles. Intermodal transportation assessments are conducted for each project, ensuring that the kingdom remains a global player in logistics.”

Additionally, the recent Global Logistics Forum (GLF) highlighted Saudi Arabia’s commitment to integrating new technologies and expanding its transportation infrastructure in collaboration with international partners.

He adds, “At the forum, we discussed and evaluated new technologies with our global partners to further enhance transportation and logistics services in the kingdom.”

SMART CITIES AND MOBILITY

The Ministry of Transport and Logistics Services (MoTLS and its partners are embracing innovative technologies to enhance mobility and logistics, including the introduction of air taxis in Mecca and the exploration of autonomous vehicles.

Alhassan says, “We are also exploring last-mile delivery solutions using drones, which could help reduce traffic congestion and improve delivery efficiency.”

The vision for the transportation future is deeply integrated with the broader goals of Vision 2030. The NTLS has been designed to align with the objectives of various government programs, including those in tourism and industry. Intermodal transportation assessments are considered an essential part of project development, alongside the application of best practices and socioeconomic considerations.

The road freight transport market is seeing significant growth, driven by several factors, including the ongoing giga-projects, increased demand from the industrial and commercial sectors, and improvements in regulations and investment opportunities. He believes the development of infrastructure and attracting new investors will also contribute to the expansion of the road freight market.

In line with the smart city vision, the ministry is focused on modernizing transportation to ensure it supports urban development and sustainability. A crucial element of smart cities is transportation modernization, achieved by delivering transportation solutions supported by advanced infrastructure. The MoTLS collaborates closely with the Ministry of Municipal and Rural Affairs (MoMH) and various authorities to explore modern transportation solutions and ensure their integration into future infrastructure plans. For example, the recently developed Saudi Road Code represents a coordinated effort to incorporate new intra-city transportation solutions, such as autonomous vehicles.

Innovation is central to the ministry’s strategy for the future of transportation in Saudi Arabia.

Exploring and assessing new technologies has become an integral part of MoTLS’s operational approach. “We are continuously evaluating new technologies to enhance our transportation framework, ensuring that we remain at the forefront of innovation in the sector.”

A TECH FOCUS

The ministry actively promotes using Artificial Intelligence (AI), the Internet of Things (IoT), and blockchain in the transport and logistics sector, but with careful consideration and extensive testing. Alhassan says, “AI has been implemented in infrastructure management, while IoT is being leveraged to enhance tracking and enable real-time decision-making. Strategic partnerships with global technology firms and local startups further drive innovation.”

In addition, the ministry is working to attract talent and create innovation mechanisms that support pilot projects, ensuring the successful integration of these advanced technologies into the sector. 

The ministry also plans to adapt to the evolving demands of the logistics industry, especially in response to the rapid expansion of e-commerce and positioning the kingdom as a global logistics hub. A prime example of this progress is the opening of the Maersk logistics park, the largest in the Middle East. The launch of Logisti, Saudi Arabia’s single-window platform for logistics services, has significantly streamlined business operations within the kingdom.

To support this growth, the ministry has established a unit focused on regulatory requirements, stakeholder management, and infrastructure modernization to meet the increasing demand driven by e-commerce. Moreover, the ministry is leveraging digital transformation initiatives, AI, and data-driven solutions to predict real-time logistics demands, enhancing service delivery and decision-making.

ATTRACTING INTERNATIONAL INVESTMENT

Saudi Arabia is implementing several initiatives and programs to attract international investments. New regulations, such as the Public-Private Partnership (PPP) Law, are designed to draw major players to the kingdom’s market. In addition, existing regulations are being developed further to create a more business-friendly environment.

The Ministry of Investment of Saudi Arabia (MISA) is also actively working to build a reliable and robust ecosystem that supports international investors. For Alhassan, “Collaboration across government entities ensures that investors and businesses are supported throughout their investment journey.”

The Ministry of Finance (MOF) also focuses on enhancing the efficiency and transparency of government tenders and procurement systems. 

He adds, “By utilizing the latest technologies in the Financial Services Platform (Etimad), the MOF is streamlining processes to make them more accessible and efficient.”

Additionally, the Saudi Ministry of Justice is working to improve the quality of judicial services, ensuring that investors have the confidence and support they need. 

The Saudi financial sector is also well-established and capitalized, which enables it to meet the requirements of both local and international investors.

GROWING THE GDP 

To achieve the projected GDP growth, the MoTLS focuses on expanding transportation capacity to meet the rising demand driven by tourism, industrial activities, and commerce. Alhassan emphasizes, “The continued expansion of transportation infrastructure is crucial in facilitating this growth.” 

New airports, logistics zones, and road networks will enhance the kingdom’s connectivity, both locally and internationally, encouraging economic development.

It also collaborates closely with the Ministry of Energy to explore sustainable solutions for the transportation sector. 

One key area of focus is the adoption of Sustainable Aviation Fuel, which plays a vital role in reducing the sector’s carbon footprint. Environmental assessments are a mandatory part of every project, and sustainability KPIs are incorporated to ensure minimal environmental impact. 

Alhassan highlights, “Initiatives such as improving fleet productivity and optimizing delivery routes contribute to further reducing the sector’s environmental footprint.”