Saudi Arabia’s transport and logistics industry continues to experience robust expansion and is a pillar of Vision 2030, the national blueprint for economic diversification. Sector growth is driven by the roadmap’s aims to position the Kingdom as a global logistics, aviation and trading centre. Giga-projects, including port and airport upgrades and the construction of large-scale new cities, coupled with rising tourism and population growth, are driving development in the sector backed by significant public funding and growing public-private partnerships (PPPs).
Ongoing metro and high-speed rail construction, and expanded bus networks are enhancing urban and intercity connectivity, particularly in Riyadh, Makkah and Jeddah. Progress has been made in urban mobility following the launch of the Riyadh Metro in November 2024, while the Kingdom’s nascent electric vehicle (EV) industry is poised to flourish in the coming years. Underpinning Saudi Arabia’s transport networks and logistics industry is a focus on renewable energy use, technological innovation and digital infrastructure as the Kingdom seeks sustainable economic growth beyond oil.
Structure & Oversight
The Ministry of Transport and Logistic Services (MTLS) oversees all transport sectors – land, maritime, and air, while strengthening the Kingdom’s position as a global logistics centre. Within the ministry is the General Authority of Civil Aviation (GACA), responsible for overseeing safety and aviation regulations across the Kingdom. GACA, which previously functioned as both operator and regulator, fully transitioned in 2021 to become solely a regulator. As a result, GACA transferred the Kingdom’s airports to government-owned Matarat Holding Company, which oversees and operates the country’s 27 airports through its subsidiaries, and promotes privatisation of the aviation sector. The Saudi Ports Authority (also known as Mawani) is the main government agency overseeing port operations. Mawani regulates, owns and operates, directly or through concessions, Jeddah Islamic Port, Dammam Port, Jubail Commercial Port, King Fahad Industrial Port Jubail, King Fahad Industrial Port Yanbu, Yanbu Commercial Port, Ras Al Khair Industrial Port and Jazan Port. Ports outside Mawani’s remit include King Abdullah Port, the first privately owned and funded port facility of Saudi Arabia and the Middle East, established in 2010.
The Transport General Authority (TGA) is responsible for regulating rail, sea and land transport; issuing licenses for transport services; and monitoring safety standards. The Roads General Authority, under the MTLS, is the principal entity for overseeing the Kingdom’s construction, operation and maintenance of roads. Another key entity is the Government Expenditure and Projects Efficiency Authority, which promotes government spending and planning efficiency in government entities and infrastructure programmes, while the National Centre for Privatisation & PPP supports the implementation of private sector projects and forges PPPs.
As the owner of several transport and logistics organisations, the Public Investment Fund (PIF), Saudi Arabia’s nearly $1trn sovereign wealth fund, plays a central role in achieving the goals of Vision 2030. In recent years, the PIF has expanded its investment portfolio in transport and logistics services, including airline Riyadh Air, which began operations in October 2025. Other transport companies in the PIF’s portfolio include the Saudi Public Transport Company, the National Shipping Company of Saudi Arabia, the Saudi Global Ports and Saudi Arabia Railways (SAR), the Kingdom’s rail network.
Strategy
Under Vision 2030, Saudi Arabia aims to increase the contribution of the transport and logistics sector from 6% of the country’s GDP in 2021 to 10% by 2030 and expand the market size of the logistics sector to reach $57bn by 2030. To achieve these goals, the National Industrial Development and Logistics Programme (NIDLP), the National Transport and Logistics Strategy (NTLS), and Global Supply Chain Resilience Initiative (GSCRI) are flagship government initiatives aimed at boosting the efficiency and performance of the logistics sector and port infrastructure development. This is part of broader efforts to transform Saudi Arabia into an international logistics powerhouse backed by government funding of $147bn to grow the sector, announced in 2021, and to be invested by 2030.
Launched in January 2019, NIDLP has the objective of boosting the GDP contribution of the non-oil sector in four identified core industries – mining, industry, logistics and energy – along with promoting private investment in these sectors. In 2024 these industries, including logistics, contributed SR986bn ($262.9bn) to non-oil GDP growth. In 2024 NIDLP issued 1056 logistics licences, while re-export logistics centres expanded to 23 in 2024, up from two in 2019, underscoring NIDLP’s role in accelerating growth in the logistics sector. Additionally, NIDLP promotes the establishment of special economic zones near transport facilities, which offer investors bespoke regulatory, fiscal and logistical incentives to attract foreign investment.
The NTLS, launched in June 2021, aims to integrate multiple modes of transport and improve the local, regional and global connectivity of trade and transport networks. Efforts to enhance connectivity, along with port modernisation, are part of the government’s broader goal to more than quadruple the country’s annual container trade throughput to 40m twenty-foot equivalent units (TEUs) by 2030, according to ratings agency Standard & Poor’s. Reflecting rapid growth in the sector is the number of logistics facilities surging by 267% between 2021 and 2025.
Distribution Network
The GSCRI, created in October 2022, aims to attract international firms to incorporate Saudi Arabia into their supply chains. The GSCRI has targeted SR40bn ($10.7bn) in foreign investment in industries including health care, mining, real estate and financial services as part of efforts to diversify the economy. To enhance supply chain infrastructure and improve efficiency, in December 2024 the MTLS announced plans to increase the number of logistics zones from 22 to 59 by 2030, with SR10bn ($2.7bn) to be spent on developing 18 logistics zones.
All initiatives place an emphasis on sustainability, the use of renewable energy, and strengthening digital infrastructure to improve competitiveness and operational efficiency across the supply chain. Automated ports, artificial intelligence-driven supply chains and blockchain technology are increasingly being adopted in transport and logistics, as well as autonomous delivery with drones, robots and driverless vehicles to streamline and enhance freight transport and delivery. Such measures have helped Saudi Arabia improve its ranking on the World Bank’s Logistics Performance Index (LPI), which evaluates trade logistics performance in 139 countries. The 2023 LPI, the most recent iteration of the survey, saw Saudi Arabia rise from 55th to 38th, underscoring the Kingdom’s significant role in global trade and increased efficiency in its logistics sector.
Size & Performance
Saudi Arabia’s transport infrastructure construction market was valued at $98bn in 2023 and is expected to reach $154bn by 2029, according to non-profit organisation Saudi British Joint Business Council. In terms of logistics, Saudi Arabia’s logistics market is forecast to reach $38.8bn by 2026, expanding at a compound annual growth rate (CAGR) of 5.9%, according to a November 2024 report by Denmark’s transport and logistics firm Maersk. As part of Vision 2030, Saudi Arabia aims to capture 55% of the GCC’s logistics market.
Driving growth in the transport and logistics industry is the ongoing construction of giga-projects as part of Vision 2030. Most notable of these are NEOM, a vast high-tech futuristic urban development, and the Red Sea Project, a 28,000-sq-km luxury resort development. These flagship projects are driving long-term demand for new and large-scale integrated transport networks, including roads, airports, urban metro and bus systems, and railways.
Additionally, major international events such as Expo 2030 and the 2034 FIFA World Cup are accelerating economic growth in the transport and logistics industry and boosting air connectivity, along with rising numbers of visitors travelling to the Kingdom each year. “Domestic and international travel growth in Saudi Arabia is driving significant demand for flexible, tech-enabled mobility services that support both leisure and business itineraries, reflecting the broader transport ecosystem’s expansion,” Azfar Shakeel, CEO of Lumi, told OBG. “This expansion underscores how integrated mobility solutions contribute to tourism-led economic activity and improve connectivity across urban and regional corridors.”
Public funding, most notably through the PIF, remains the largest funder of transport infrastructure projects, with public entities backing 80.6% of the Kingdom’s transport infrastructure construction market in 2024. However, private sector investment is projected to expand at a CAGR of 6.6% from 2025 to 2030, according to market research firm Mordor Intelligence. The MTLS forecasts 80% of future investment in the transport and logistics sector, including road construction and port and airport expansion, will originate from the private sector.
As of February 2025 new agreements worth around SR240bn ($64bn) had been signed with private firms in the port and maritime industries, as well as the ongoing expansion of the Prince Mohammad bin Abdulaziz International Airport (Al Madinah Airport), which is entirely funded by private capital. Opportunities for the private sector include the development of ports, cargo terminals, airports, rail and road infrastructure projects, as well as logistics innovation and digital infrastructure.
Air
Saudi Arabia’s aviation industry is poised for rapid growth in the coming years. Valued at $1.2bn in 2023, the segment is expected to expand at a CAGR of 8.9% between 2025 and 2029. According to bilateral NGO US-Saudi Business Council, the aviation segment is forecast to increase its contribution to GDP by 235% from SR75bn ($20bn) in 2018 to SR251bn ($66.9bn) by 2030. The segment has experienced significant growth in the past several years in terms of increased air traffic, passenger numbers and air cargo operations as the Kingdom seeks to position itself as a leading global aviation hub aligned with Vision 2030. In 2024 a record 94m passengers used Saudi airports, a 15% increase from 2023, alongside a 10% rise in flight activity and a 52% surge in air cargo reaching 1m tonnes. By 2030 Saudi Arabia aims to increase national air cargo capacity to 4.5m tonnes. The Kingdom plans to spend $100bn in its aviation segment, including more than $50bn for airport upgrades. GACA aims to expand air connections from 90 to 250 destinations by 2030 and triple annual passenger traffic to the Kingdom from 103m passengers as of early 2025 up to 330m annually by 2030.
A rising number of tourists visiting the Kingdom, notably Hajj and Umrah pilgrims, is propelling growth in the aviation industry. Accordingly, expansion work at several major airports is under way, including at Al Madinah Airport. The $1.2bn airport expansion includes the construction of a new domestic terminal and upgrading the existing international terminal to increase capacity up to 18m passengers annually.
Plans are advancing to build the new man International Airport in Riyadh in time to receive a jump in visitors to Expo 2030 and handle up to 100m travellers per year by 2030. The new airport will be built around the current King Khalid International Airport (KKIA) and feature six runways covering 57 sq km. In May 2025 US-based firms Bechtel and Parsons announced they secured a $7.2bn contract for the airport’s expansion. Scheduled to open in 2030, the King Salman International Airport is expected to become one of the world’s largest airport in terms of passenger capacity, handling 185m passengers and 3.5m tonnes of cargo per year by 2050. Progress has also been made at KKIA after the completed expansion of Terminal 1 in January 2025, raising capacity to 7m passengers annually. This follows the completion of Terminals 3 and 4 in November 2022, underscoring Saudi Arabia’s ambition to transform the airport into one of the world’s largest aviation centres. In a separate project, Riyadh-based construction firm Safari Company began construction on a $107m concourse at the airport in September 2025.
New Carrier
Another notable development in the aviation segment is the launch of a second airline, Riyadh Air, owned by the PIF. On October 26, 2025 the airline completed its inaugural daily flight to London Heathrow Airport, with flights to Dubai expected in 2026. In October 2024 Riyadh Air reported a deal to purchase 60 Airbus A321 aircraft as part of efforts to expand its network to 100 destinations by 2030.
Ports
Strategically located as a gateway connecting three continents and with an extensive coastline along both the Red Sea and the Gulf, Saudi Arabia continues to leverage its geographic location to become a leading global trade and logistics destination through its 11 major ports. Among the significant port infrastructure projects is ongoing expansion work at the South Container Terminal at Jeddah Islamic Port, the Kingdom’s largest port, which handles 65% of the country’s sea imports. The expansion project is expected to increase the terminal’s capacity from 1.8m TEUs to 4m TEUs by the second quarter of 2026. “Saudi Arabia is moving from being a transit economy to becoming a fully integrated logistics destination at the heart of international trade routes,” Farooq Shaikh, CEO of LogiPoint, told OBG. “The focus now is on connectivity, efficiency and regulatory streamlining to make the movement of goods seamless across every mode of transport.”
In August 2024 the $346.6m Maersk Logistics Park was inaugurated at the Jeddah Port, reflecting Saudi Arabia’s growing importance as a global logistics centre. In addition, the King Abdulaziz Port in Dammam is expanding its container terminal capacity to accommodate larger vessels and increase capacity, as well as the construction of eight new logistics zones to boost operational efficiency. Elsewhere, at the King Abdullah Port, expansion plans are under way to increase capacity to over 25m TEUs by 2030.
Construction work at the Port of NEOM on the Red Sea has also made strides. In June 2025 the facility, formerly known as Duba Port, had its first automated, remote-controlled cranes installed, with operations slated to begin with the opening of Terminal 1 in 2026. The Port of NEOM is part of a new floating industrial mega-city under construction called Oxagon, an advanced global manufacturing and logistics centre using renewable energy.
Saudi Arabia has improved connectivity from its ports to other international naval facilities in recent years, boosting Red Sea trade routes. In September 2025 Mawani added a direct route between Jeddah Islamic Port and Port Sudan, bringing the total number of new shipping services launched in 2025 to 30 as of September that year. Container volume managed at Saudi ports has also risen. In September 2025 Saudi Arabia’s ports handled 22.5m tonnes of cargo, up 8.6% from the same month in 2024, reflecting the Kingdom’s expanding maritime trade infrastructure upgrades and expanded logistics services. “Sustainability in shipping is a strategic imperative,” Poul Hestbæk, CEO of Folk Maritime, told OBG. “Reducing emissions, optimising fleets and improving port efficiency is investment that benefits the industry, the partners we serve and the surrounding environment.”
Buses
Urbanisation, population growth and government objectives to create more sustainable public transport infrastructure are driving economic growth in the bus market. In 2024 Saudi Arabia’s bus market was valued at $707.4m and is expected to reach $955.6m by 2030, rising at a CAGR of 5.1%, according to India-based market researcher TechSci Research. The King Abdulaziz Project for Riyadh Public Transport aims to create a comprehensive bus rapid transit system designed to integrate with the metro network. Once fully launched, the bus system will feature 80 routes, served by 842 buses, including 160 km of dedicated bus lanes.
Diesel-powered buses still dominate the urban landscape but electric and hydrogen-powered buses in the Kingdom’s main cities are gradually gaining traction. Electric buses were first introduced as a pilot programme by the TGA in Jeddah in 2023 to support the goals of the NTLS, which aims to reduce carbon emissions from vehicles by 25% by 2030. In August 2024 Riyadh Air introduced its first electric bus for employee transport.
EVs
The Vision 2030 economic development roadmap places emphasis on the use of renewable energy and technological innovation as part of broader efforts to lower carbon emission and achieve environmental goals. Saudi Arabia has set a goal of 30% EV adoption in Riyadh by 2030 as part of its electric mobility strategy. In 2024 Saudi Arabia’s EV market was valued at $620,000 and is projected to reach $1.9m by 2030, rising at a CAGR of 24.6%, according to Mordor Intelligence.
While EVs accounted for approximately 1% of vehicle sales in Saudi Arabia as of July 2025, consumer interest is expected to gain momentum following the launch of Saudi Arabia’s first homegrown EV brand, CEER, with production at the King Abdullah Economic City (KAEC) in Jeddah, slated to begin in the fourth quarter of 2026. In February 2025 CEER announced 11 new partnerships worth $1.5bn, the majority with Saudi companies, to supply vehicle components and charging equipment. This comes after the Lucid Group, a California-based EV producer that is 60% owned by the PIF, opened a manufacturing facility in September 2023 at KAEC to make EVs for Saudi Arabia and international markets. Once operational, the facility will have a capacity of 155,000 EVs per year. This positions the Kingdom as a potential regional EV production centre, allowing it to reduce reliance on imports and drive EV sales. Additionally, Tesla’s market entry in the country in July 2025 is expected to boost sales of EVs. A key challenge in mass EV adoption is the lack of high-speed charging stations across the country with around 100 public charging stations, mostly concentrated in Riyadh as of 2024.
Metro
To improve urban mobility, reduce traffic congestion and promote sustainable development, the PIF is investing heavily in rail and public transit projects like the Riyadh Metro. Still, automobiles remain the dominant form of transport across the Kingdom, including in Jeddah and Riyadh. This trend could change in the capital following the opening of the $22.5bn Riyadh Metro in December 2024, marking a milestone in the capital’s transport system.
The driverless trains and fully automated metro feature six lines and 85 metro stations spanning over 176 km, with capacity to carry 3.6m passengers daily. Riyadh Metro’s early success has already spurred expansion plans. In May 2025 the first 65 km of the seventh metro line with 19 planned stations was tendered. It aims to link KKIA in the north to Qiddiya Entertainment City in the west, serving the Diriyah Gate and the New Murabba district. The opening of the Riyadh Metro and gradual rollout of its public bus network exemplifies the Kingdom’s commitment to creating sustainable urban transport networks as the capital prepares to accommodate a population of 10.1m by 2030, according to estimates by real estate consultancy Knight Frank.
In Makkah, the city’s planned metro project appears to be gaining momentum after facing delays due to financing issues and land acquisition challenges. In September 2025 the Royal Commission for Makkah City and Holy Sites invited contractors to attend a consultation event to gauge market interest for the planned first phase of the four-line metro network. The project envisages 89 stations implemented over three phases between 2032 and 2045.
Rail
Plans are moving ahead to expand the country’s rail network to connect cities and ports to enhance freight movement and reduce road congestion and car emissions. In 2024, 13m passengers moved by rail, up 22% from 2023, according to government figures. Saudi Arabia’s rail sector is expected to grow its network of passenger and freight services from 5300 km in 2024 to 8080 km by 2030.
The most ambitious railway development is the $7bn Saudi Landbridge project that aims to be the country’s first PPP railway. The high-speed line, still in the planning phase, involves the creation of a passenger and logistics network stretching more than 2000 km, from Jeddah on the Red Sea to Dammam on the Gulf. When complete, the railway would link ports and logistics centres, creating an east-west corridor for freight and passengers, further solidifying Saudi Arabia’s position as a regional logistics centre.
France-based engineering organisation SYSTRA, Saudi Arabia’s Al Ayuni Investment and Contracting Company and China Civil Engineering Construction Corporation form a consortium of contractors conducting the preliminary design of the project. Plans to develop the railway were first announced in 2004, later put on hold in 2010 and revived in 2011. In April 2025 SAR issued a tender for the project’s lead design consultancy services. According to the US-Saudi Business Council, the project is expected to take seven years to complete.
Tapping into luxury tourism demand, in January 2025 SAR and Italian hospitality company Arsenale unveiled the final designs of the Dream of the Desert train. The rail service is billed as the first five-star luxury train in the Middle East. Travelling from Riyadh to Qurayyat, train operations are set to begin in 2026.
Outlook
Saudi Arabia will continue to support large-scale infrastructure and transport projects to achieve its Vision 2030 agenda of economic diversification, backed by funding from the PIF and a projected rise in private sector investment. Significant opportunities exist for businesses offering digital solutions, sustainable practices and innovative urban mobility schemes. Ongoing giga-projects and related port construction and expansion are expected to drive long-term demand for the logistics and transport sectors, while rising tourism to the Kingdom will underpin growth in the aviation sector. Amid Saudi Arabia’s forecast GDP expansion of 4% in 2025, these industries are set to play an increasingly substantial role in non-oil GDP contribution and are regarded as cornerstones of the Kingdom’s sustainable economic growth as the country seeks to position itself as a global logistics and aviation destination by 2030.
Read More from OBG
