With e-commerce growing fast in Saudi Arabia, the kingdom is preparing to increase its logistical facilities.
The nation’s B2C e-commerce Gross Merchandise Value, estimated at $14.1 billion in 2021, is projected to increase to $31.7 billion by 2026.
As such, on Tuesday, Saudi Ports Authority (Mawani) and Maersk began construction on Saudi Arabia’s largest Integrated Logistics Park at Jeddah Islamic Port.
This project will be located at the Jeddah Islamic Port, offering an array of solutions aimed at simplifying the supply chains of Maersk’s customers in the kingdom. The facility is spread over an area of 225,000 square metres.
The ground breaking ceremony for the construction was attended by the president of the Saudi Ports Authority, Omar Bin Talal Hariri, the Danish mmbassador to Saudi Arabia, Liselotte Plesner, the CEO of Zamil Construction, Abdullah Al Zamil, and the managing director of Maersk Saudi Arabia, Mohammad Shihab – as well as Maersk’s customers and partners.
The project is expected to create more than 2,500 direct and indirect jobs in Saudi Arabia and will represent a $346 million investment.
According to a statement, the facility has a provision for additional space for e-commerce, omni channel fulfilment and value-added service (VAS), across all storage types.
“The facility will also have a dedicated e-commerce fulfilment centre to cater to the rapid growth of e-commerce in Saudi Arabia,” a report said.
The remaining part of the park will act as a hub for transshipment, air freight, and LCL cargo, with the Integrated Logistics Park able to handle annual volumes of close to 200,000 TEU across different products.
Meanwhile, in Jeddah’s First Industrial City, the Saudi Authority for Industrial Cities and Technology Zones (Modon) is developing 14 smart warehouses in various locations across the city.
The warehouses based on smart, automated systems, will provide quick logistical solutions to retailers, which is expected to stimulate investment in the sector. It will provide support to industrialists and entrepreneurs as well.
According to Modon, the project involves the construction of fully digital and automated warehouses that do not need human intervention, using the latest technology and equipment that provides access to storage units via a smartphone app called ‘smart door locks.’
Jeddah is looking to cement its position as the Red Sea’s main commercial hub, and is at the forefront of development in Saudi Arabia. It is expected to develop $90 billion of real estate and infrastructure projects by 2030. The port city will get nearly 1.4 million square meters of retail space, along with 89,000 new homes and 250,000 square meters of office space.
