Faisal Saad Albedah, Managing Director and CEO, SAL Saudi Logistics Services: Interview

Interview: Faisal Saad Albedah

In what ways can the private sector contribute to establishing Saudi Arabia as a logistics centre linking three continents, in support of Vision 2030?

FAISAL SAAD ALBEDAH: The government has made a significant investment and put in place the mechanisms for the growth of the local logistics sector. Among the examples are improving infrastructure, making it easier to do business, and upgrading the legal framework and laws. The government’s strategy is clear: it is up to the companies to execute and leverage this support to take the local logistics industry to the next level.

Many aspects of logistics operations are being transferred from government organisations to commercial entities. As part of this process, we must develop our human capital and technical know-how to improve our competitiveness and efficiency. These will be differentiators – especially in a global climate of growing costs and supply chain challenges.

By upgrading their distribution network, fleet and quality of service, private logistics companies can compete at a regional and international level. The way forwards is to enhance door-to-door services and become a 4PL/5PL provider capable of working through the entire value chain to support the Kingdom’s ongoing mega-projects. Smaller 3PL firms may not be able to meet the demands of such significant changes, nor take advantage of the positive economic impact they will generate. To help the country’s economic progress, the local logistics sector needs market makers that can realise the industry’s potential, and utilise the capacities and capabilities of 3PL firms.

Where could logistics benefit from greater digitalisation, automation and technological innovation?

ALBEDAH: The World Economic Forum suggests that global logistics investment in digitalisation and automation may reach up to $1.5trn by 2025. The sector is moving fast, largely due to the impact of the Covid-19 pandemic and the growth of e-commerce, which is expanding in the GCC by 20% every year and has become a lifestyle choice. Customers demand faster services, with higher quality and more transparency. In Saudi Arabia, there is greater demand for local logistics firms with fully integrated services, onestop shops that work across the entire supply chain, with advanced digital technology, data analysis and automation. Investing in these areas will help local logistics companies boost operational efficiency, increase service quality and reduce costs.

Looking ahead, we expect significant and innovative developments in shared warehousing facilities that allow expenses to be divided among multiple owners and users. This is part of a broader global trend towards a sharing economy, which we are seeing in different sectors such as transport. Saudi Arabia is becoming more open and receptive to these new ideas to increase its competitiveness in the market.

How can compliance with environmental, social and governance (ESG) criteria benefit the performance and competitiveness of the sector?

ALBEDAH: The Kingdom has set a clear strategy to increase local enterprises’ adoption of ESG standards. Following these practices affects all operations of a logistics service provider, including the electrification of the fleet, reducing the carbon footprint, working with more environmentally sustainable materials, improving corporate governance and transparency, and thereby creating positive social impact.

In this respect, human capital development is essential for growth, and key to ensuring that the country becomes a logistics hub in the future. The Kingdom has established logistics academies and numerous national and international scholarships to provide the workforce with the necessary education. We expect that the private sector will continue to collaborate with the government to train and prepare logistics professionals to meet the industry’s future demand.