Saudi Arabia leads Gulf in demand for logistics, says DHL chief

Saudi Arabia will continue to see its logistics industry grow in 2017 to power various private and public sectors and support the country's Vision 2030 reforms, Faysal Elhajjami, general manager of DHL Saudi Arabia told Argaam in an exclusive interview. The development of free zones, along with a stronger industrial sector, is also expected to drive growth in logistics and help the kingdom compete with other free zones in the region.

Q: What factors will drive the growth or decline in Saudi Arabia’s logistics sector in 2017?

A: Logistics in Saudi Arabia is seeing higher demand compared to the rest of the GCC and is expected to boom for another 10 years, with demand for international shipping from Saudi expected to grow by 5 to 8 percent over the next three years.

Much of Saudi Arabia’s growth has come about due to the development of the free zones in the country to rival those in the UAE, as well as the booming industrial and real estate sectors which have seen a lot of growth over the past couple of years.

Q: Tell us about the new ground and air operations facility in Jeddah?

A: Over the past two years DHL has continued to invest heavily in Saudi Arabia, starting with Dammam and Riyadh and now our new SAR 100 million facility in Jeddah. This ground and air operations facility has the ability to handle 4,000 shipments per hour. It has over 40 vehicle spaces with indoor loading and offloading facilities, and the conveyor belt can process more than 100,000 shipments every day.

Q: What are your future expansion plans and what funds are earmarked for future projects?

A: Over the past 2-3 years DHL Express MENA has invested more than 100 million euro across countries like Egypt, KSA, UAE, Morocco and Bahrain to name a few. We shall continue to invest further in order to maintain our market position.

Q: What are the challenges of working in Saudi Arabia, considering the volatile economic and political environment of the region?

A: Governments across the region recognize the role that the logistics industry plays in powering their economies and are generally keen to facilitate inbound and outbound trade.

Some of the challenges that logistics companies face in the Middle East are the sudden changes to customs clearance procedures.

Things are definitely improving across the region, and the continued support of local governments is vital to helping the logistics industry develop within the region, along with sustained investment in the infrastructure. Modernizing customs procedures as well as further automation and simplifying of data exchange will also help to facilitate quick and efficient international trade.

Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com