Expanded operations of FedEx in Saudi Arabia fueled by expansion of trade relationships
Saudi Arabia's logistics sector is poised for significant growth, with projections indicating a 6.5% annual rate and a value of $199 billion by 2030. This upward trajectory is evidenced by the recent entry of global logistics giants into the market.
FedEx Corp. has taken the lead in this expansion, launching its first dedicated all-cargo flight from the United States and Europe to Saudi Arabia. The inaugural flight departed from FedEx's hub in Paris and landed at King Khaled International Airport in Saudi Arabia, operating six times per week.
The new flight will use a Boeing 777 cargo jet and will have onward connections to Guangzhou and Shanghai, China. This move is part of FedEx's new Orange network, designed for the heavy airfreight market with a deferred schedule.
In a strategic move, FedEx Corp. has secured a license to operate as a foreign air carrier to regional destinations. The company has also taken full ownership of its customs clearance and pickup-and-delivery operations in Saudi Arabia. To further solidify its presence, FedEx Corp. has established a FedEx Logistics division in Saudi Arabia, offering freight forwarding services across all modes.
FedEx Corp. has also opened a regional office in Riyadh to oversee business in the region. The company plans to build a regional air hub at King Salman International Airport in Riyadh, scheduled for completion in 2030.
The growth in Saudi Arabia's air cargo sector is not limited to FedEx. In June, China-based JD Logistics launched parcel delivery operations in Saudi Arabia. DHL Group, another global logistics giant, took a minority stake in a Saudi Arabian last-mile delivery company last month.
Saudi Arabia's economic growth is also a driving factor in this logistics boom. The country's real gross domestic product grew 3.4% in the first quarter, 3.9% in the second quarter, and 1.3% in 2024, largely due to a 4.3% increase in non-oil activities.
In 2024, Ceva Logistics expanded its presence in Saudi Arabia through a joint venture with a local logistics company. Shipments destined for northern Gulf states will be distributed via FedEx's Middle East road network or by regional air service.
As the logistics sector in Saudi Arabia continues to grow, it is clear that the country is becoming a significant player in the global logistics market. With the entry of major players like FedEx, DHL, and JD Logistics, the sector is set to experience rapid growth and development in the coming years.
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