Saudi Arabia's infrastructure push fuels demand for automated warehouses

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Saudi Arabia's infrastructure push fuels demand for automated warehouses
Credit: © Reuters.

Saudi Arabia's warehousing automation industry is witnessing a significant transformation due to the country's ambitious infrastructure initiatives and the burgeoning e-commerce sector, according to a report released on Wednesday. The Kingdom's government has been striving to turn the nation into a Regional Logistics Epicenter, which has necessitated automation as a crucial component of the Regional Logistics Chain.

The government's infrastructure plans, including initiatives like NEOM, The Red Sea, ROSHN, and the National Industrial Development & Logistics Program (NIDLP), have laid a robust foundation for the logistics network in the country. With an allocation of $35 billion for logistics infrastructure, Saudi Arabia has seen an increased demand for automated warehouses. This demand is majorly driven by the evolving requirements of the booming e-commerce industry, the need to streamline operations, and ensure timely deliveries.

In addition to this, there has been a rising demand for cold storage services in Saudi Arabia, primarily driven by the food and beverage (F&B) and pharmaceutical sectors. To cater to this demand, companies are adopting asset-light models and relying on third-party logistics (3PL) providers who offer specialized cold storage solutions. These providers leverage innovative technologies to ensure efficient operations and maintain the quality of stored products.

The industry is also experiencing a surge in demand from the retail and e-commerce sectors. The adoption of automated warehouse management systems is enabling businesses to focus on their core strengths and strategic goals while achieving unprecedented efficiency and real-time inventory visibility.

As per Ken Research's estimates, Saudi Arabia's warehousing automation landscape is evolving rapidly, driven by government initiatives, industry demands, and the pursuit of greater efficiency.

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