According to American Journal of Transportation article published on January 20, 2023, KSA warehousing automation industry is a consolidated market and is in the growing phase which comprises of warehouse management system provider, autonomous mobile robot companies, piece picking robots’ companies, warehouse drone providers, autonomous truck loading service providers etc. There are many major players in the KSA warehouse automations market some of which are ABB, Konecranes, Swisslog, Diggipacks etc.
- Rapid digitalization, growing adoption of technology for improving efficiency & faster delivery and emergence of advanced technologies have led to the growth of the industry.
- Moreover, industry trends such as utilization of warehouse drones, increasing demand for hyperlocal deliveries, automated data analytics, Collaborative Robots, etc., are facilitating market growth.
- High initial investment with actual return on investment in the long-run, improper installation, data inaccuracy, technology obsoletion, etc., have been the key pain points of the industry. Additional costs of training & hiring skilled workforce have further restrained growth.
Saudi Vision 2030: The government has planned to invest billions of dollars in its transportation & logistics infrastructure as a part of its Vision 2030. For instance, government plans in place to expand and modernize King Abdul Aziz International which is one of the key airports of the country, planning to increase investments into modernizing and upgrading port infrastructure to handle containers greater than 55+ Mn TEUs and to construct new land bridge which will connect the east and west coasts of the country. This will decrease the transportation times from 10 days through sea to 13 hours through rail.
Expansion by logistics players: The growing logistics market of Saudi Arabia is simultaneously witnessing an increasing number of new players and existing players expanding their current level of operations. For instance, Wared Logistics has started first of a series of temperature-controlled warehouses in mid-2012. Also, the logistics chain of UAE, Al Futtaim began with the operations of its second warehousing facility in Riyadh in July 2018.
Emergence as transhipment hub: Saudi Ports Authority signed a long-term memorandum-of-understanding with Saudi Industrial Services Co (SISCO), to expand Red Sea Gateway Terminal (RSGT) at Jeddah Islamic Port, which will bolster the aim of turning Jeddah into a transshipment hub for the Middle East. Saudi Arabia will emerge as a transshipment hub for goods which will increase customer’s demand for modern warehouse.
Analysts at Ken Research in their latest publication “KSA Warehousing Automation Market Outlook to 2026 - Driven by Bolstering Ecommerce Industry & Ambitious Government Plans for Digitalization” by Ken Research observed that KSA Warehouse Automation market is in the growing phase. The emergence as transhipment hub, rising number of logistics players, influx of new investments, Saudi vision 2030 and increasing focus on digitization are some of the factors that has contributed to the KSA Warehouse Automation market growth. It is expected that KSA Warehouse Automation market will grow at a CAGR of ~19.7% for the 2021-2026F forecasted period.
