Analysis of the Current Situation of Saudi Logistics

Although Saudi Arabia has a small population, it has strong purchasing power, supporting many Chinese cross-border e-commerce companies such as Jollychic, Fordeal, and FunMart. However, Saudi Arabia’s logistics is a very troublesome problem. This article will introduce in detail the current status and difficulties of Saudi logistics in the three links of first leg, customs clearance and domestic delivery in Saudi Arabia.

The first is the first leg. It mainly relies on freight forwarding companies and service integration companies.

In the era of traditional foreign trade, Saudi Arabia developed a group of strong traditional freight forwarding companies in the Middle East. After the development of e-commerce, it also took into account the e-commerce logistics business. Service integration companies provide all links such as receipt, first leg, customs clearance, last leg, overseas warehousing, and remittance. Some links are self-operated, and some links integrate local service resources to earn service price differences. Different companies have different advantages. But in the long run, the core competitiveness of such companies is not stable. In the end, the price war will reshuffle the entire industry, and companies that lack scale advantages and pricing power will be eliminated.

Customs clearance, Saudi customs clearance is very troublesome. Saudi Arabia has two types of customs clearance licenses. The first is a general trade license. Each order of this customs clearance requires SASO certification, so the customs clearance time is relatively slow. This customs clearance method is suitable for large enterprises that store a large amount of goods in a local inventory management model, or for high-value, large-volume, heavy household appliances and other commodities that require a lot of capital support.

The second is express customs clearance, but the threshold for obtaining this license is very high. In addition to being able to deliver orders directly to customers, e-commerce sellers can also use this channel to do more SKUs, reduce inventory, and replenish frequently. They don’t require much money, so they like this customs clearance method.

Landed delivery. This is the biggest bottleneck of Saudi cross-border e-commerce. Like many emerging market countries, the biggest feature of Saudi Arabia’s landed delivery is the low delivery rate. Landed delivery also requires a license, which is not easy to get. DHL has the strongest landed delivery strength, with both customs clearance capabilities and delivery speed. If it is an important document or high-value goods, DHL is the best choice. The company with the best reputation is SMSA, which is widely distributed and can be delivered to remote villages.