Saudi Arabia, whose economy is the biggest of all the members of the Gulf Cooperation Council, hopes to use its flagship Vision 2030 initiatives to position itself as a regional logistics hub and thus stimulate growth in this area. We are here to discuss Vision 2030 of Saudi Railways. Without wasting our time, let’s start this conversation:
The Role of Saudi Railways in Vision 2030
As part of Vision 2030, The Kingdom introduced the National Industrial Development and Logistics Program (NIDLP), which, over the past four years, has seen 5 new shipping lines open out from Saudi Arabia’s ports to Europe, Africa and Asia. It has also facilitated a high degree of cross-border accessibility between the local and distant transport networks, with customs procedures simplified and digitized.
Supporting this program is the National Transport and Logistics Strategy, which is for laying the development of transportation structures foundation through the various modes of transport: air, sea, and road. It is designed to increase sea freight movement and build new rail lines until 2030, stimulating multi-modal transport.
The strategy also hopes to raise by 4 % the proportion of the transport and logistics segment in GDP so as to make it account for 10 % for that year. Faced with the nation’s planned growth, the Kingdom should hurry to organize and digitalize the logistics infrastructure development.
If the country wishes to unlock its full logistics potential, it must build up a robust multimodal network and infrastructure in every transportation area. Also by using the railway lines KSA will be able to quicken and lighten freight movement within the country and GCC region also. The government is speeding up cross-border trade by streamlining procedures.
Therefore, the country can and will lower its logistics costs by improving its performance in this area. To support this logistics development, Saudi Arabia will be backing its Global Supply Chain Resilience Initiative, launched in 2021.
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Global Supply Chain Resilience Initiative
GSCRI is an initiative of the Saudi National Investment Strategy, focusing on investments in the supply chain of KSA. The strategy’s objective is to support foreign investment policies by expanding the number of economic zones and transforming KSA into a major logistics base serving global export economies.
With the lessons learned from the supply chain failure of the pandemic era, aiming to build a safe redundancy in its own supply chain with easy access to and participation in global supply chains is one of the goals that the country sets for itself.
The GSCRI will concentrate its investment in the leading defence industries and aerospace, equipment and machining, healthcare manufacturing, maritime, and automotive. Building materials, agriculture, petrochemicals, and food processing. Mining metals renewables and communication &information technology The plan expects SAR 40 billion to be invested in the first few years and has put up incentives of SAR 10 billion.
Mainly around sustainability and climate change, future industry enablement, global supply diversification, and advanced manufacturing), both financial and non-financial incentives are supposed to attract foreign direct investment (FDI) inflows for trade-oriented services or products. Vision 2030 not only provides opportunities in the areas of development but, even more importantly, will include investments for the development of these departments.
GSCRI really has no choice but to take advantage of these developments in order to capture global companies through providing low-cost renewable energy sources for the green manufacture of products such as green metals, which are predicted to rise four times compared with
Influxes of investments in the green supply chains will bring KSA new sources of supplies.
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GSCRI’s Influence on Supply Chain and Logistics
Given its geographic location, between the Asia-to-Europe trade route with borders along the shipping routes which are busiest of the Arabian Gulf and the Red Sea, the Kingdom really has a great opportunity in terms of other countries’ closeness to it. The country can take advantage by leaning on them for support and attracting investment away from competing sites to.
Initiatives like the Middle East Green Initiative and Saudi Green Initiative are supposed to develop carbon-free industrial, renewable energy resources, and logistics activities. They will be expected to attract foreign firms to locate their operations in the Kingdom. In this way, not only will the country be able to strengthen its industrial base, but it also can become part of the international supply chain.
Global Connectivity and Logistics Infrastructure
It has 28 airports in total connecting with 45 countries and its combined rail and road networks totalling more than 5,590 km and over 232,000 km, respectively, make the Kingdom’s network the world’s ranks the 23rd largest. Furthermore, KSA’s three major ports are in the top 20 of the Container Port Performance Index 2021. Adding warehouse capacity to support the trade influx has laid a firm foundation for the nation’s logistics infrastructure.
As cross-border e-commerce rapidly develops and trade volumes are increasing steadily, filling the supply gaps, Saudi integrated logistics zones have begun to emerge in airports. The quality and number of warehouses with cold storage facilities or e-commerce fulfilment centres are expected to increase further.
Building Digital Infrastructure
The strides made in its digital infrastructure means KSA’s 5G penetration has developed very rapidly over the years. Following digitalization across the whole of the logistics sector in the use of big data, blockchain, artificial intelligence, automation and robotics. 5G will connect these technologies together for faster and more efficient connections.
This will be a quantum leap in technological progress in the supply chain. With automation and predictive analytics, these new technologies will change efficiency by eliminating disruptions.
Freight Capacity Expansion
Also, the KSA’s King Abdullah port and the expansion of its Jeddah Islamic port should increase sea freight. GSCRI is expected to have a positive impact on the development of seaports worldwide. Improvement in import and export container storage and movement will be achieved by having more established seaports.
The investments of USD 100 billion in the development of civil air are estimated to double KSA’s freight haulage capacity. Investment is also being made in the country’s railway cargo- they are planning to add another railway line and expand their 3650-kilometre track on three lines. The goal is to expand its existing track between Jubail Industrial and Dammam Industrial Port by 8,000 kilometres.
People May Also Ask
What is the core objective of Vision 2030?
Vision 2030: everyone has the chance to succeed in a booming economy. Saudi Arabia is building an exciting and prosperous future for all by creating a sustainable business environment to encourage businesses of all sizes and investing in education to train people for the jobs of tomorrow.
What is a logistics hub?
Large-scale structures and logistics hubs are places where multiple players in the logistics service industry can share assets while offering each other value-added services. These hubs also affect the efficiency of transportation systems, and they determine entirely the flow of goods.
Saudi Arabia’s 59 logistics zones by 2030?
The Kingdom of Saudi Arabia plans to create 59 logistics zones by 2030. This is all part of the country’s National Transformation Plan 2020-2030, although it seeks to diversify the economy and reduce dependence on oil.
What is a Saudi hub?
The Saudi Logistics Hub, a government-led initiative based on operations by the leading transport and logistics companies of Saudi Arabia, is targeting Vision 2030’s bold ambitions of making this up-and-coming country the bridge that connects three continents.