The transportation and logistics sector inAl-Madinah has followed an upward growth trajectory over the past five years, benefiting from the increasing demand for the sector’s services, thanks to the growth in the number of visitors to Al-Madinah, and the remarkable development of the infrastructure system in the region’s road and transportation sector.
A report issued by the Madinah Chamber of Commerce reviewed the data and stages of growth witnessed by the transportation and logistics sector in Madinah during the period from (2019 AH) and (2024 AH), highlighting the increase in activities within the transportation and warehousing sector, based on the number of commercial registrations, which rose from 970 for businesses operating in the sector in 2019 to 2,817 by the end of (2024), with a total growth rate of (190%) over the five-year period, representing an average annual growth rate of (38%), driven by the expansion of Hajj and Umrah service projects, and the increase in the number of visitors to Madinah, which required an expansion of transportation and storage services to meet the growing demand for logistics services. This led to an increase in the registration of companies specializing in transporting visitors via buses, taxis, or smart transportation services.
Supporting Various Economic Sectors
The report highlighted the importance of the transportation and logistics sector for its role in supporting various economic sectors by facilitating the movement of goods, raw materials, and various production inputs, highlighting Madinah’s outstanding infrastructure for supporting commercial activity and tourism, as well as the measures taken by the Madinah Chamber of Commerce in this regard, which included expanding the establishment of car rental company branches, organizing job fairs to increase the sector’s contribution to the Saudization rate of workers in this vital sector, expanding smart warehouses and distribution centers, and accelerating e-commerce through international shipping companies, which has bolstered efforts to improve product delivery efficiency and reduce shipping times.
The report indicated that the road network covers approximately 24,000 kilometers in Madinah, served by public transportation buses that provide regular services covering most of the city’s attractions, It highlighted the heavy reliance on buses and taxis to provide services in the sector, and the transportation and logistics sector is open to further investments in more advanced modes of transportation, such as: the metro or tram, which can help improve passenger mobility and reduce traffic congestion, while the transport of goods relies heavily on trucks.
Growth of the Transportation and Logistics Sector
The report attributed the growth of the transportation and logistics sector in Madinah to projects to develop and improve the city’s transportation infrastructure in recent years, such as: the expansion of major roads, the development of transportation hubs, and the enhancement of connectivity between the airport and the central area through shuttle services, in addition to the contribution of the “City Buses” project in stimulating demand for local transportation services, which encouraged companies to invest in the sector.
The report highlighted several factors that contributed to the growth of warehousing and logistics activities, capitalizing on Medina’s central location among the Kingdom’s regions, which has made it an important hub for warehousing and distribution, especially for goods related to pilgrims and Umrah performers, in addition to the boom in the retail, food products, and hotel supplies sectors, which has led to the registration of more warehousing and logistics companies, not to mention the contribution of development and rehabilitation projects in the central area surrounding the Prophet’s Mosque, and the expansion of surrounding hotels and facilities, to increase demand for freight transport and hotel supplies services, which has encouraged new companies to enter the market to capitalize on growth opportunities in transport and distribution services.
The report highlighted the promising investment opportunities in the transportation and logistics sector in Madinah, including the potential for expansion in smart and sustainable transportation services relying on electric buses, shared mobility, and on-demand transportation services; investment in sustainable transportation projects to alleviate congestion and support tourism; and the potential to establish transportation companies specializing in transporting pilgrims and Umrah performers using a modern, smart fleet, and the development of truck management systems using artificial intelligence to improve the efficiency of transportation operations.
Promising investment opportunities in the sector —according to the report—in establishing warehouses near Medina to support the growth of e-commerce and accelerate delivery operations; launching luxury transportation companies targeting tourists and Umrah pilgrims; and developing innovative tourism transportation services such as: self-driving vehicles within the central area, as well as the potential to leverage the “Imdad” logistics city project as an integrated logistics hub for the storage and distribution of goods, and to stimulate the establishment of smart warehouses and specialized shipping companies.
