Saudi Arabia aims to be global logistics hub

3rd October 2019 By: Kim Cloete - Creamer Media Correspondent

Saudi Arabia is moving ahead with certain megaprojects to diversify its economy and to position itself as a global logistics hub.

The Governor of Saudi Arabia’s General Customs Authority Ahmed Alhakbani this week said the country was ramping up its customs services in line with the goals of Saudi Vision 2030, which aims to attract international investment and drive overall growth.

Alhakbani told the International Federation of Freight Forwarders Associations (Fiata) World Congress 2019, being held in Cape Town, that the Saudi customs authority was adopting an integrated technical system, while also moving towards automating clearance procedures. It was also among the first customs authorities in the world to adopt blockchain technology for shipping operations.

As part of its blockchain pilot programme, and in conjunction with its information technology partner Tabadul, the authority recently witnessed the integration of the single-window platform, Fasah with TradeLens, a blockchain-enabled global shipping solution jointly developed by Maersk and IBM, as part of its pilot.

Alhakbani said the streamlining of processes had ensured that 80% of all imported goods clear customs in less than 24 hours of their arrival in Saudi Arabia, marking a significant improvement on previous years, when it could take up to eight days.

The Saudi Port Authority had also recently announced the launch of a truck appointment system to speed up the turnaround time for trucks to leave ports.

Saudi Arabia, which has been synonomous with petroleum wealth, has relied on oil exports since the 1960s.  

“Over the past 45 years, we have tried to diversify from oil with very limited success, so we needed a shock to the system,” conceded Alhakbani.” He said Vision 2030, which was announced in 2016, was the response to this. Since then, foreign direct investment has doubled in Saudi Arabia.

Megaprojects which the government has given the green light for include NEOM, a futuristic development purpose-built for "a new way of living". It covers 26 000 km2 and is based on technology and renewable energy.  

Other developments include the Red Sea project, which promotes its islands in the Red Sea as a luxurious tourist haven, and Diddya, which has been billed as a major entertainment city. The Riyadh metro, which covers 176 km2 in total, is also being developed.

Alhakbani is hoping that Saudi Arabia will become a hub for trade and logistics in the region.

“About 10% of global trade passes through the Red Sea. With a five-hour flight you can reach half the world’s population,” he told the opening plenary of the three-day congress in Cape Town.

Saudi Arabia’s land border with Iraq will be opening this October after being closed for nearly 30 years. The border has been closed since 1990 when relations between Saudi Arabia and Iraq deteriorated following Saddam Hussein’s invasion of Kuwait.

A 30 km2 logistics zone in Arar, next to Saudi Arabia’s border point with Iraq, has been privatised. The Saudi Arabian government hopes the opening of the border will lead to significant trade between the two countries and within the region.