Global supply chain impairs even as Saudi logistics industry shows signs of recovery

According to Riyadh-based Saudi Market Research, the Kingdom plans to inject $147 billion into the development of the transportation and logistics industry to turn the country into a transportation hub. (AFP)
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Updated 26 June 2022
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Global supply chain impairs even as Saudi logistics industry shows signs of recovery

  • China’s COVID-19 restrictions, surge in oil prices and demand shock have shaken global services

RIYADH: China’s stringent rules to curb COVID-19, the surge in oil prices and the worldwide demand shock have shaken the tectonic plates of the international supply chain and cast a long shadow on the global logistics business.

The troika has exposed not only the fault lines in companies’ distribution strategies but also the lack of resilience among logistics firms to cope with the vagaries of the global economy.

“China is sadly passing through another lockdown, impacting our volumes. The challenge has nothing to do with us; it is from China itself,” Abdulaziz Busbate, country general manager of DHL Saudi Arabia, told Arab News.

The leading logistic firm has seen a 20 percent rise in the cost of operations since the outbreak of the universal pandemic. The same holds true even for smaller supply chain companies. 

“Before the pandemic, it took about $2,000 to import one container from China. Now it takes almost $7,000. Product prices are increasing daily,” said Muhammad Omer, co-founder and CEO of Aiduk Trading, a Riyadh-based company established in 2015.

According to Bloomberg Economics, a leading macroeconomic research service, China’s supply chain significantly dropped since April and is expected to worsen. What’s even worse? China’s port activity has fallen back to 2020-lockdown levels.

Global inflationary winds

The Russia-Ukraine conflict has impacted inflation rates of many food, commodities and raw materials. Countries neighboring Russia and Ukraine have been hit the hardest — Lithuania, Estonia, and Latvia have endured inflation rates of 14 percent, 12 percent and 10 percent, respectively.

“The combination of the war and the supply and demand imbalances, especially in energy, will push up base metals, precious metals and energy together,” Paul Christopher, head of global market strategy at the Wells Fargo Investment Institute, told Bloomberg Television.

According to Jadwa Investments’ inflation report, the Kingdom’s inflation is expected to rise 2.4 percent in 2022 as the Russia-Ukraine war, COVID-19 lockdowns in China and higher food consumption will add to the price pressure.

“Inflation globally is impacting us as well as the increase of fuel prices,” Busbate added. 




Abdulaziz Busbate, country general manager of DHL Saudi Arabia.

The lockdowns in parts of China are adding more challenges to the already affected global supply chains, resulting in higher import costs from key trading partners such as Saudi Arabia.

Although the Kingdom’s inflation rate is expected to increase to 2.7 percent in 2023 — a 0.5 percentage point increase from 2022 — it will achieve the lowest inflation levels among the G20 economies and the third lowest worldwide, following Japan and Switzerland.

Within the G20, the Kingdom outperformed its peers, decreasing the annual inflation rate from 3.1 percent in 2021 to 2.2 percent in 2022.

Changing market dynamics

According to Busbate, the sector is seeing a growing demand in the business-to-consumer segment.

“During COVID-19, we took advantage of our e-commerce and B2C services as most people wanted to purchase online, while consumer behavior has completely changed in this current scenario,” he said.

DHL Saudi Arabia had a successful year in terms of revenues in 2020, thanks to a remarkable increase in their B2C operations. 




Mohammed Omer, co-founder and CEO of Aiduk Trading.

Aiduk Trading also booked a significant increase in sales during the pandemic as people could not go out, and the online delivery market was booming.

“The industry of last-minute delivery during the pandemic was working day and night delivering goods to different consumers,” the CEO of Aiduk told Arab News.

However, business-to-business demand decreased heavily in 2020 as most industries were negatively affected by the pandemic.

“In 2020, we were 90 percent performing in B2C, while B2B was nearly 10 percent,” DHL’s Busbate said.

In 2021, businesses started to get back on track, and the B2B volume increased to 40 percent of their operations.

The company nearly doubled its crew in the call center to accommodate the number of calls they received and increased its drivers’ network by about 60 percent to deliver their shipments daily, pointed out Busbate.

Wading off the headwinds

Starting in 2015 with a 1,000- square-meters warehouse, Aiduk’s warehouse today is more than 20,000 square meters, offering e-commerce fulfillment services to their clients.

Meanwhile, DHL built three gateways in the major cities of Riyadh, Jeddah and Dammam, investing more than $50 million in the Kingdom since 2014.

A gateway is a point at which freight moving from one territory to another is interchanged between transportation lines.

The gateway in Jeddah is around 15,000 square meters, while Riyadh is about 12,000 square meters.

The German logistics behemoth is in no mood to stop as it plans to invest $8.5 million in its expansion plans in Riyadh.

The new expansion is expected to come into operation by the end of the year, said Busbate.

DHL today has a 58 percent market share in the Kingdom, managing around 20,000 shipments daily.

Turnaround strategy

According to Riyadh-based Saudi Market Research, the Kingdom plans to inject $147 billion into the development of the transportation and logistics industry to turn the country into a transportation hub.

Saudi Arabia’s strategic location has attracted foreign players into the Kingdom’s logistics industry.

For instance, the US logistics giant FedEx has announced its decision to invest $400 million into domestic logistics operations to attract other foreign players to contribute to the vast developments, said the report.

The Kingdom is already the leading transportation and logistics operator in the Middle East and North Africa, earning $27.6 billion annually.

Also fueling the Kingdom’s supply chain ambitions is the development of new trade zones such as Jazan Economic City, NEOM Airport, SPARK zone, and the Red Sea Gateway Terminal.

The forecast exceeds the Kingdom’s pre-pandemic levels and is expected to continue its growth until 2025, when the industry reaches $50 billion in value.


Closing Bell: Saudi main index closes in red at 11,364 

Updated 08 May 2025
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Closing Bell: Saudi main index closes in red at 11,364 

RIYADH: Saudi Arabia’s Tadawul All Share Index dipped on Thursday, losing 34.63 points, or 0.3 percent, to close at 11,364.11. 

The total trading turnover of the benchmark index was SR4.71 billion ($1.25 billion), as only 65 stocks advanced, while 173 retreated. 

The MSCI Tadawul Index decreased by 3.77 points, or 0.26 percent, to close at 1,452.01. 

The Kingdom’s parallel market, Nomu, rose, gaining 153.78 points, or 0.55 percent, to close at 27,931.49. This comes as 40 stocks advanced, while 34 retreated. 

The best-performing stock on the main market was Al Majed Oud Co., with its share price surging by 9.88 percent to SR129. 

Other top performers included Saudi Arabian Cooperative Insurance Co., which saw its share price rise by 4.38 percent to SR15.24, and MBC Group Co., which saw a 3.79 percent increase to SR42.45. 

Gulf General Cooperative Insurance Co. recorded the largest decline of the day, with its share price slipping 9.98 percent to SR7.76. 

United Cooperative Assurance Co. saw its shares fall by 9.23 percent to SR8.06, while Middle East Healthcare Co. recorded a decline of 8.91 percent, closing at SR64.40.  

On the announcements front, ACWA Power Co. reported its interim financial results for the first three months of the year, posting a net profit of SR427.1 million — a 14.9 percent decline compared to the previous quarter. 

The company attributed the drop in net profit to an impairment recovery recognized in the prior quarter, higher financial charges, and a lower deferred tax credit. 

ACWA Power Co.’s shares on the main market rose 0.54 percent in today’s trading session, closing at SR299.40. 

In another announcement, Gas Arabian Services Co. also announced its financial results for the same period with its net profit rising by 46.9 percent to SR31.3 million compared to the same period last year. 

The company credited the growth to substantial growth in revenue and savings in cost of revenue. 

The GAS’s share price traded 0.89 percent higher to reach SR15.80. 

During the first quarter of the year, Saudi Reinsurance Co.’s net profit after Zakat reached SR35.4 million, up by 11.3 percent compared to the same period in 2024.  

This growth was attributed to an increase in reinsurance revenue by 56 percent, coupled with a rise in net profit of reinsurance results and net investment profit. 

Moreover, the National Shipping Co. of Saudi Arabia and Bupa Arabia for Cooperative Insurance Co. also announced their financial results for the first quarter of 2025, with net profits reaching SR532.8 million and SR380.2 million, respectively. 

Bahri’s shares on the main market declined by 3.55 percent to close at SR29.90, while Bupa Arabia’s shares fell 0.56 percent to SR178.20. 


Saudi Arabia, France set to deepen industrial, mining ties

Updated 08 May 2025
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Saudi Arabia, France set to deepen industrial, mining ties

JEDDAH: Mining, critical minerals, aerospace, and manufacturing took center stage as Saudi Minister of Industry and Mineral Resources Bandar Alkhorayef concluded a three-day visit to France aimed at enhancing bilateral cooperation and securing strategic investments.  

Alkhorayef met with senior French officials and executives from leading companies such as Airbus, Safran, and Orano Mining to explore opportunities for collaboration, particularly in the areas of critical minerals, which are vital for clean energy, and advanced aerospace manufacturing, the Saudi Press Agency reported.   

The discussions also aimed to strengthen ties in the broader industrial and manufacturing sectors, central to the Kingdom’s push for technological localization.  

The visit, which began on May 5, underscores Saudi Arabia’s ongoing efforts to diversify its economy and align its industrial strategy with the ambitious goals of Vision 2030. 

In a statement posted on X, Alkhorayef said: “I concluded my official visit to the French Republic, during which I held constructive meetings with leaders in the public and private sectors, aimed at enhancing industrial and mining cooperation, and discussing opportunities for technology transfer and attracting qualitative investments to localize several strategic industries in the Kingdom, in order to achieve the goals of Vision 2030.”   

A key focus of the visit was on securing a stable supply of critical minerals, such as lithium and cobalt, essential for Saudi Arabia's green energy initiatives and the growing electric vehicle sector.  

Alkhorayef met with France’s Interministerial Delegate for Strategic Minerals and Metals Supplies, Benjamin Gallezot, to discuss ways of ensuring global supply chain resilience and promoting sustainability within the mining sector. 

“We also emphasized the importance of international partnerships in enhancing the sustainability of the global mining sector,” the minister added. 

The visit included a tour of Airbus Helicopters’ Marignane facility and meetings with Airbus CEO Guillaume Faury where Alkhorayef explored advanced aircraft manufacturing technologies. 

The minister also mentioned discussing mutual opportunities with the CEO “to exchange expertise and transfer knowledge and technology, which will enhance the localization of the aviation industry in the Kingdom.” 

Alkhorayef met with leaders from Orano Mining, Bel Group, Sidel, and Safran to explore joint investment opportunities across multiple industries, including food production, satellite technologies, and high-tech manufacturing.  

The focus was on leveraging Saudi Arabia’s favorable investment climate, which includes substantial capital support and long-term growth enablers, to attract foreign direct investment. 

Alkhorayef’s visit also included discussions with Airbus executives in Toulouse, where the minister noted the rapid growth of Saudi Arabia’s aviation sector. He stated that Saudi Arabia’s aviation sector is witnessing rapid growth with the expansion of national airline fleets and supporting infrastructure. The Kingdom’s National Aviation Strategy aims to increase passenger traffic to 330 million annually and air cargo to 2.5 million tonnes by 2030. 

As part of its industrial expansion, Saudi Arabia launched a SR10 billion ($2.67 billion) incentive program designed to attract investments in sectors including aerospace. The program offers up to 35 percent coverage for eligible capital expenditures, with a cap of SR50 million per project. 

The Kingdom also unveiled its first aviation-focused industrial hub, covering 1.2 million sq. meters and offering direct access to seaports, airports, and railways to support global collaboration. 

On the first day of his visit, Alkhorayef also participated in the “Industrial Day” event at Airbus Helicopters’ headquarters, where he emphasized the Kingdom’s strategy to localize technologies, enhance international partnerships, and leverage Saudi Arabia’s mineral resources to establish itself as a global industrial hub.  

The visit concluded with the signing of a memorandum of understanding between Sidel and Saudi Arabia’s National Industrial Development Center. The MoU aims to establish a regional service hub, training center, and human capital development initiative in Saudi Arabia, further advancing the Kingdom’s industrial goals. 


Saudi Arabia sees 13% rise in patent filing to reach 8,029 in 2024


Updated 08 May 2025
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Saudi Arabia sees 13% rise in patent filing to reach 8,029 in 2024


RIYADH: Saudi Arabia’s intellectual property landscape continued its robust growth in 2024, with patent filings rising by 13.33 percent year on year to reach a record 8,029, according to the Saudi Authority for Intellectual Property.

The authority’s annual statistical report highlighted significant expansion across all key IP categories, underscoring the Kingdom’s ongoing transformation into a knowledge-based economy.

Patent applications from individuals surged by 62 percent, while filings by foreign applicants rose 15 percent to 4,921. The increase reflects rising global interest in protecting innovations within the Kingdom.

Trademark registrations totaled 31,834 in 2024, marking a 15.72 percent increase, while design filings grew by 8.75 percent. Voluntary copyright registration also saw a notable 63.15 percent jump, indicating greater public engagement with IP rights.

SAIP issued 4,355 patent certificates, 1,578 design registrations, and 1,504 copyright certificates throughout the year.

The report also noted that 96 percent of granted patents originated from institutions, highlighting the active role of universities and research centers in the innovation ecosystem. Individual inventors filed 2,139 patent applications — up from 1,320 in 2023—showing growing grassroots participation.

In terms of technical fields, information technology and software accounted for 25.77 percent of total patent filings. Library and document management comprised 57.16 percent, and applied technical inventions followed at 12.46 percent.

Public understanding of intellectual property also improved, with SAIP reporting an 8 percent rise in the national IP awareness index. This was attributed to expanded electronic services, streamlined procedures, and national initiatives aimed at safeguarding innovators’ rights.

Internationally, Saudi Arabia’s efforts have not gone unnoticed. The Kingdom recorded a 17.5 percent improvement in its score on the 2025 Global Intellectual Property Index, placing it among the top-performing countries out of 55 economies evaluated.

Saudi Arabia also ranked 24th globally in artificial intelligence patent output, with 1,189 AI-related patents filed—further cementing its commitment to technological advancement and innovation-led growth.

The Kingdom’s achievements are the result of sweeping reforms to its IP framework, including enhanced legal protections and enforcement strategies that aim to foster a more competitive, innovation-driven economy.


Saudi Arabia sees 73% surge in e-commerce sales using MADA cards

Updated 08 May 2025
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Saudi Arabia sees 73% surge in e-commerce sales using MADA cards

RIYADH: Saudi e-commerce sales via MADA cards surged 73.4 percent year on year in March to a record SR27.55 billion ($7.34 billion), reflecting rapid growth in the Kingdom’s digital payment ecosystem. 

According to the Saudi Central Bank, also known as SAMA, online transactions using the national card network reached 147.6 million during the month, up 54.5 percent compared to March 2024.

The figures reflect transactions completed through websites, mobile apps, and e-wallets linked to MADA, and do not include those carried out using Visa, MasterCard, or other international networks.

MADA — the Kingdom’s domestic debit card network — underpins a growing portion of Saudi Arabia’s non-cash economy by enabling secure, contactless payments through NFC technology both online and at retail locations. This growth in digital commerce reflects rising consumer trust, expanding fintech ecosystems, and national investments in financial technology integration. 

In a step toward digital expansion, SAMA signed an agreement in April with Google to introduce Google Pay in Saudi Arabia using the MADA infrastructure. The integration, expected to launch later in the year, will allow users to add and manage their MADA-linked cards within Google Wallet, offering seamless and secure transactions across physical stores, mobile apps, and websites.

According to SAMA, this move is part of a broader push to establish a robust digital payments infrastructure and reduce the country’s dependence on cash transactions. 

The central bank’s efforts also include licensing new fintech players such as Barq, launching e-wallet platforms, and facilitating the operational launch of STC Bank, all aimed at bolstering financial inclusion and consumer convenience.  

Earlier this year, the eSAMA portal also entered trial phase, providing digital access to a range of central bank services. 

Alongside e-commerce growth, point-of-sale transactions using MADA also expanded, reaching SR65.67 billion in March — a 10.02 percent increase year on year. 

E-commerce sales using MADA cards were equivalent to 42 percent of POS transaction value in March, up from 27 percent a year earlier — underscoring the faster growth of online spending compared to in-store purchases.

POS transactions — which cover physical card usage at retail stores, restaurants, gas stations, and service outlets — do remain a critical pillar of everyday consumer spending. 

With Saudi Arabia aiming for over 70 percent of all transactions to be non-cash by 2025, the latest data signals that the Kingdom is fast approaching its digital transformation benchmarks — with MADA at the heart of this evolution. 


UAE gross banking assets climb to $1.26tn in February

Updated 27 min 51 sec ago
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UAE gross banking assets climb to $1.26tn in February

RIYADH: The UAE’s banking sector witnessed continued momentum in February, as key indicators of liquidity and credit expanded steadily.

Gross banking assets, including bankers’ acceptances, rose by 1.6 percent to 4.63 trillion dirhams ($1.26 trillion), according to data from the Central Bank of the UAE.

Gross credit also saw an uptick, increasing by 0.9 percent to 2.21 trillion dirhams, driven by a 17.1 billion dirham jump in foreign credit and a 1.7 billion dirham rise in domestic credit.

Meanwhile, M1 — the narrowest measure of the country’s money supply — climbed 1.8 percent to 982.9 billion dirhams, supported by gains in both currency in circulation and demand deposits.

The monthly increase was driven by a 13.5 billion dirham gain in monetary deposits and a 4.1 billion dirham rise in currency outside banks. 

M1 — comprising physical currency and current account balances — is a key measure of liquidity immediately available for household and business spending.

The pickup in M1 comes amid a broader expansion in liquidity across the UAE’s financial system, reflecting stable credit conditions and sustained economic activity. The UAE has been supported by robust non-oil growth, rising investment, and steady financial sector performance heading into 2025.

Broader money aggregates also advanced, with M2 — which includes savings and time deposits in addition to M1 — rising 1.8 percent to 2.36 trillion dirhams, supported by a 25 billion dirham increase in quasi-monetary deposits.

M3, which includes M2 and government deposits, grew 0.8 percent to 2.81 trillion dirhams. The rise was primarily driven by the M2 expansion, offsetting a 19 billion dirham decline in government deposits.

The UAE’s monetary base rose 3.1 percent to 816.6 billion dirhams. The increase was supported by an 11.4 percent rise in overnight deposits and current accounts held by banks and financial institutions at the central bank. 

Monetary bills and Islamic certificates of deposit rose 6.2 percent, while currency issuance increased 3.4 percent. These gains outweighed a 6.1 percent drop in reserve account balances.

Within domestic credit, lending to the private sector rose 0.7 percent, and loans to non-banking financial institutions jumped 5.2 percent. These increases offset a 2 percent decline in credit to government-related entities and a 1.4 percent drop in lending to the government sector.

The country’s total bank deposits climbed by 1.2 percent, reaching 2.87 trillion dirhams at the end of February, up from 2.84 trillion dirhams in January.  

This growth was driven by a 0.8 percent rise in resident deposits and a 5.1 percent increase in non-resident deposits.  

The increase in resident deposits was attributed to higher deposits from government-related entities by 3.8 percent, private sector by 1.4 percent, and non-banking financial institutions by 5.6 percent, which outweighed a 4 percent decline in government sector deposits.