Saudi Arabian Airlines has corporatized its logistics and ground handling services by founding Saudi Arabian Logistics Co (SAL). The newcomer will start its business activities immediately, offering a broad range of logistics and ground handling activities. Its key aim is to create more economic and development opportunities by forging strategic partnerships with various local and global logistics service providers. A demanding role in order to pave the way for the oil-rich Arabian country to strengthen its position as a logistics hub for global cargo operations.
Saudi Arabia is located at the crossroads of major international trade routes between three continents: Asia, Europe and Africa, enjoying a huge natural geographical advantage coupled with its
geopolitical prevalence. Hence, it is no wonder that, in recent times, places like Jeddah, Riyadh or Dammam have grown into distinctive logistical gateways. These are predominantly for air
traffic, but also act as multimodal hubs (King Abdullah Port / Jeddah) linking the East with the West, complemented by expanding air and ocean networks to regional markets in neighboring
Africa.
Gradual transition from oil to other businesses
The government’s decision to push logistics and traffic activities up front, coupled with ambitious infrastructure
projects such as the formation of the King Abdullah Economic City at the shores of the Red Sea, therefore seems to be a very plausible political and economic program. This is all the more the
case, because Dubai, Abu Dhabi or Qatar – each in their own way – have successfully demonstrated how such a development concept can work – paving the way for a gradual transition from the
dominant oil sector to trade and transport, as well as taking steps towards becoming centers for science.
Part of “Vision 2030”
Fawaz Al-Fawaz, Chairman of the SAL Board, recalled this holistic picture in his speech on the occasion of the company’s official announcement, by underscoring the Kingdom’s “Vision 2030”
objectives. Its main pillars, besides social programs, are the diversification of the economy and key efforts to reduce its dependence on oil revenues by facilitating multiple lines of business.
SAL is part of this ambitious diversification program, its CEO Omar Talal Hariri explained in his introductory remarks: By providing integrated logistics operations and ground handling services,
the newcomer “acts as a link between land and sea shipping and the Saudi airports in line with the National Industrial Development and Logistics Program, which is one of the pivotal themes of
the Vision 2030, especially in the light of the gigantic economic transformation the Kingdom has been seeing,” the manager stated. He went on to say that SAL will improve the quality of
logistics operations and support the Kingdom’s vision towards transforming the country into a global logistics hub handling all types of cargo and shipping operations.
SAL raises high expectations
According to Saudia Director General Sami Sindi, “SAL will contribute directly to enhancing and developing the logistics infrastructure including all types of cargo platforms, warehouses and
equipment as well as e-commerce cargo and shipping facilities.” The company will improve the efficiency of logistics operations and ground handling services through integrating land and sea
transportation operations and linking them with the Saudi airports in order to enhance logistical services across all stages.
However, it remained unclear what specific advantages SAL offers customers in comparison to the previous handling services. Also, whether private, non-Saudi providers would be permitted licenses
to provide their services to freight carriers and shipping companies all across Saudi Arabia.
Instead, Mr Sami Sindi confirmed that SAL’s role as an independent entity within the Saudia Group will be to act as the main cargo gate and ground handling and logistics services hub at all Saudi
airports.
He also assured that the company will launch its operational activities in the course of January.
Heiner Siegmund
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