It is a good time to be in a transportation company in Saudi Arabia. With its strategic position at the crossroads of Asia, Europe, and Africa, the country has a key role in the regional trade landscape and requires a booming local economy to effectively play that part. With trade diversification high up on the government’s agenda, the transportation sector is enjoying significant state investment to ensure that the growing industrial and e-commerce activities in the country remain unencumbered.
At present, Saudi Arabia boasts a massive 200,000-kilometer road network, including 5000 kilometers of highways and 6000 kilometers of bridges, that connects the country’s major cities and gives ready access to its railways, sea, and airports. This means people and goods can be transported around the kingdom rapidly — and this infrastructural boom is expected to continue at pace in the years to come.
By the end of the government’s current expansion plans in 2020, the road infrastructure would have grown by more than 3500 kilometers. Many large-scale projects, such as the construction of the mega-bridge over the Obhur Creek near Jeddah, should also have materialized.
As a result of these economic trends and developments, freight transportation is expected to thrive in Saudi Arabia. The government is actively seeking to engage business owners in the management of its sea and airports, while the privatization of many publicly operated transportation facilities is also on the cards.
The infrastructural improvements and investments made by the government have also empowered logistics companies in the private sector. As competition is high, these third-party transportation companies strive to retain clientele by providing them with high-quality services. This, in turn, helps those businesses further their growth in today’s dynamic economy.
Interested in learning more about third-party logistic services? Below is a breakdown of how transportation companies can serve businesses in Saudi Arabia today.
What is a transportation company?
Around the world, the transportation sector is huge. It spans various industries, including airlines, marine, road, and rail. The freight sector is spread across all of these industries.
While Saudi Arabia’s road network handles the majority of freight work in the country, the ongoing expansions in the rail industry suggest that it won’t trail behind for much longer. For long-distance and urgent deliveries, of course, businesses rely on air and marine freight.
Simply put, a transportation company is one that transports freight from one location, usually the producer, to another, such as the consumer. From the transfer of raw materials from its producers to manufacturing companies, and the transfer of finished goods to the consumer, transportation companies play an integral role in commercial and industrial activities at every scale. Transportation companies tend to focus on B2B operations but there are also have smaller-scale, B2C operations, such as those catering to individual clients seeking home moving services or delivery services.
Depending on the exact nature of its business, a transportation company can take many forms, ranging from a single owner-operator in the possession of a single truck to a company that owns large fleets of freight trucks and has an expansive organizational structure.
The variety of structures signifies the inherent versatility of the local logistics industry. There is a transportation company for every business’s needs. Here’s how they can help a business meet its goals:
Benefits of hiring a transportation company
The efficient transportation of goods is essential for the success of any business. Not only does timely product delivery build trust and enhance brand reputation, but smooth logistical operations also ensure that goods safely reach their intended destination. Sloppy handling can result in damages to freight, leading to financial loss and reputational damage.
So, there are numerous advantages of hiring a professional third-party transportation company to manage logistics for a company. We take a closer look at the benefits below:
1. Transportation services save businesses from making heavy logistical investments.
Different types of products require different kinds of trucks and trailers for transport. If a company makes the choice of organizing shipping in-house, it would require a significant investment compared with hiring a transportation company. Leasing or purchasing costs, multiple vehicle maintenance, driver costs, insurance bills, and an in-house logistics team are just some of the costs the business would need to budget for.
In contrast, when businesses hire a professional transportation company, they can rest assured that the contractor maintains a fleet of different trucks and trailers and can match every shipping requirement with the appropriate type of vehicle.
Instead of investing in a transportation fleet, businesses then have the freedom to divert their time and profits to meet other operational needs.
2. Transportation companies are a one-stop-shop for numerous logistical services.
When businesses engage a transportation company, they are getting more than just one kind of trucking service for their goods. Transportation services are highly specialized, offering tailor-made solutions to suit a diverse range of business needs.
Companies can choose between LTL (less than truckload) and FTL (full truckload) shipping, depending on the volume of their business. LTL shipping is better suited to smaller businesses with shipments that aren’t likely to occupy an entire truck. It allows them to share the truck with other small businesses’ shipments and divide the costs of transport with them. While this saves costs, it is more time-consuming and harder to schedule as trucks are loaded and unloaded at multiple stops.
For larger, high-volume businesses, FTL shipping offers a dedicated truck, which is higher in cost but a faster method of transporting goods. At times, small businesses do opt for FTL shipping to reserve an exclusive truck for themselves. Usually, in such cases, the businesses are transporting delicate items or high-value products to customers and cannot tolerate the risk of damaged or lost goods.
For extremely heavy items or oversized items such as industrial machinery, transportation companies offer heavy haulage services that take care of the special handling, optimized routing, and additional licensing required to transfer these kinds of goods. There is also the option of availing flatbed trucking for particularly large or wide items, where goods are transported on an open trailer that allows for quicker and easier loading.
Businesses may find many other value-added shipping services provided by transportation companies such as intermodal transport services, where a single transportation company manages cargo handling across multiple modes of transport such as air, sea, rail, and road, useful. For this, goods are placed in special standardized steel containers that can be secured to trailers on different types of vehicles. Intermodal shipping is ideal for goods that have to travel a long distance for delivery as it allows goods to reach their destination far quicker.
Transportation companies also have the resources to cater to urgent orders. Most contractors provide a same-day, and next-day delivery service, as well as expedited shipping.
3. Transportation companies can save businesses the hassle of managing their own warehouses.
Many third-party transportation companies offer additional logistical support services. They offer to handle freight management, logistics, and warehousing for their clients. This saves a business from having to maintain its own warehouse space, which in turn eliminates several costs such as warehouse rent, inventory management software, warehouse equipment, trained staff, and the warehouse utilities bills.
Therefore, when businesses take on a transportation company, they can rest assured that all their logistical needs will be met by a single contractor. This is a highly efficient way of doing business with a single investment in one relationship serving multiple purposes. These translate into cost savings for the business compared to the costs of setting up your own logistics system.
4. Hiring a transportation company is good for business growth,
Having a third-party transportation company means that a business’s managers no longer have to micro-manage the logistical end of their operations. This frees up their time and energy to focus on other aspects of the business. It also allows their company’s human resources to devote its manpower to more value-adding activities. This improved productivity can lead to higher profits and faster expansion for the business.
Modern, customer-focused transportation companies offer specialized services and work for hand in hand with their clients. They are able to adapt to their client’s changing needs as their business scales up.
In summary, hiring a transportation company is a positive step towards business growth. It allows a company to dedicate its key resources, time and manpower, to accelerate its growth and expansion. A trusted partner takes control of all its logistical needs and ensures consistent delivery of its products to its clients. This plays a key role in establishing a company as a major player in its respective market.
Are you looking for a reliable transportation company partner to help your business expand? SBT offers a wide range of logistical services for businesses in Saudi Arabia and the wider region. For more information on logistics services and freight services offered by SBT, click here.