With the most difficult warehouse challenges in Saudi Arabia that presume difficulties that this market faces, we should consider the market’s growth markets growth. At the same time if we read the report about the growth of this market and details that will affect the development. It is a fact that shipping and logistic companies use this model for many reasons and occasions. The warehouse industry has become a leading field in this country as an answer to the rapid growth of the automotive industry, road transportation, and other shipping models. As an answer to the changes in this market, warehouses should become better equipped and more open to the novelties in this country. Before concluding what to change in this industry, let’s examine the wonders this mode will face.
The report about warehousing as a business model
Challenges, and changes that will affect the market during this and next year, professionals in this job can follow the changes. The report gave a comprehensive analysis of the warehousing market in Saudi Arabia. Researchers concluded that warehousing is in its growth stage in Saudi Arabia, which is emerging as a transshipment hub where customers need modern solutions for lower costs. Warehousing includes more than one model of services so that you can also get packing, grading, and container stuffing. Companies offer it to stay competitive and organize jobs more accessible and more relaxed to clients which is one of the challenges in warehousing Saudi Arabia.
The warehousing market has become a leader in demand as a business model that attracts most clients and competitors. 2018 is dominated by the tendency to increase in years to come. Among the packed goods are food and beverages, which lead to improving climate-controlled storage, and more investments in that area.
The type of warehouses
Although we are used to seeing storage for robust goods, there are a lot of different storage options and types.
- Closed – the temperature-controlled warehouse is a leading segment in the Saudi Arabia warehousing market that has contributed 35% revenue share in past years;
- Cold storage – similar to previous, but different by usage and size;
- Closed non-temperature controlled storage – for other types of goods where the temperature is not essential for keeping items safe;
- Open yards – one of the most critical warehouse challenges in Saudi Arabia will be improving those simple storage with high efficiency.
Where are the most critical storage units in Saudi Arabia?
Let’s look at the cities in Saudi Arabia with the highest storage number. Jeddah is the place with the largest share in generating revenue for the warehousing market – even 34% in terms of revenue. It has better infrastructure, easy availability, and well-developed ports.
Riyadh is the second highest revenue share, followed by Dammam. One of the essential warehouse challenges in Saudi Arabia will be changing the approach to storage, improving infrastructure, and educating the workers involved in this job. It is possible to avoid top challenges warehousing Saudi Arabia
What should the future of the warehousing market look like?
The warehousing market in Saudi Arabia is highly fragmented, and the companies involved in this job have almost the same amount of employment and earnings. However, companies do not compete for the clients and profits but mainly improve the offer and quality of the job. One of the top warehouse challenges in Saudi Arabia will be to enhance the space size, types of warehousing options, and new value-added services.
The overall conclusion is that warehousing has an excellent future, primarily because of its popularity and importance in the shipping industry. However, companies have to recognize top warehouse challenges in Saudi Arabia and improve the offer and quality of the work. Along with the burgeoning international trade, companies must manufacture activity, relax government regulations, and raise domestic consumption. One of the most significant changes will be the adoption of warehouse automation technologies.
What should the growth in the industry look like?
If we talk about the warehouse industry changes and top warehouse challenges in Saudi Arabia, the most important is to predict changes and improvements. Knowing that the warehousing industry occupies a revenue share of 50%, they owe a rapid expansion in the retail sector. It is also anticipated that the industrial warehouses will contribute 45% revenue share by the end of the following year.
One of the most significant changes and undoubtedly one of the warehouse challenges in Saudi Arabia is the increasing number of owners. The predictions claim they will contribute 80% revenue share by the end of 2023. It will improve warehousing, and avoid most challenges in Saudi Arabia challenges, thanks to the better control of the storage, and undoubtedly one of the best models in operations connected to storing.
Warehouse challenges in Saudi Arabia
Among the top warehouse challenges that are recognized in Saudi Arabia are those that affect the quality of the job. People that use storage for their jobs are mostly disappointed with the space, approach, and price of renting. However, companies have to learn about all those problems and invest in improving the quality.
Emergence as a transshipment hub
If you have been informed about the problems in providing storage services, you will be glad to hear that Saudi Port Authority signed a long-term memorandum of understanding. This document should expand the Red Sea Gateway Terminal at Jeddah Islamic Port, turning warehouse Jeddah into a transshipment hub for the Middle East. This step should increase customers’ demand for modern warehouse solutions at a cheaper cost.
Rising foreign investment
Since Saudi Arabia has opened doors to investments in industry, retail, and logistics, it should increase the warehouse industry, too. International investors seek industrial premises in Saudi Arabia, requiring larger warehousing space. Currently, they prefer renting the storage facilities, but in years to come should increase the number of owned storage. In that way, enormous warehouses Saudi Arabia should improve the offer and usage of the storehouses.
Rising number of logistic players
As the growing logistic market of Saudi Arabia and logistic Saudi Arabia has become a leading field in this country, there is a higher number of new players on the market. All should be one of the top warehouse challenges in Saudi Arabia that businesses have to recognize. In Riyadh, for example, a company that became a second warehousing facility in July 20118 increased its total warehousing space to 15,000 Sqm. It should be the model that will follow leaders in this industry and undoubtedly one of the changes worth concerning for the years to come.
Identifying warehousing challenges and finding solutions
When talking about the warehouse challenges in Saudi Arabia, the most crucial step in that process should be finding and identifying the challenges. Only in that way can you be able to find a resolution and improve the work of your storage and avoid challenges in Saudi Arabia challenges. One of the ways to resolve the problems is to learn the changes that affect the market. Some of the challenges are caused and limited by changes that happened during 2020, while others are closer to day-to-day challenges that every company faces.
It seems that Saudi Arabia faces a lack of labor availability. Like many countries at this moment, troubles happened during 2020, and pandemics, current economic crisis, and global political changes led to the lack of workers at every stage. The resolutions are different depending on the problem itself. While companies should consider recruiting more workers, along with education and training, the other answer is the automation of the process. Each warehouse Riyadh already has a best-in-class system integrated with all MHE processes, reducing the demand for current workers.
As one of the fastest-growing markets, Saudi Arabia has invested in the technology and e-commerce market significantly. Changes in customer expectations give new demands but also limit supply chains. The biggest warehouse challenges in Saudi Arabia are resolving problems with long distances between warehouses and residential areas, scattered urban centers, and challenging transport routes between warehouses and residential areas. A professional logistic company Dammam should resolve this problem, but many others. The solution could be improving the warehouse and supply chain processes, transport management, and shorting customer wait times.
Labor communication, training, and onboarding
A Global, diverse workforce for those fluent in English simplifies to get warehouse labor in any field. For new locals and residents, delivery is much harder to ensure that language barriers and training are efficiently managed while maintaining the pallet racking Saudi Arabia. However, there is a resolution to this problem, too. It is possible to use many tools to communicate with the warehouse staff. There are great adjustable methods, so language-specific material can be easily shared among employees. You should use a user-friendly interface, so learning the software and new processes is much easier to avoid top challenges in warehosing Saudi Arabia. Management can be trained to train the employers, but only by effectively translating knowledge to the non-English workers.
Global warehouse challenges to consider
When discussing the warehouse challenges in Saudi Arabia, we forget that some affect companies worldwide. It could affect how international moving companies calculate the moving costs. We should consider those problems since they happened for the same reasons. Most of them happened due to pandemics, and economic crises, so the issues co-occurred. Understanding those challenges and changes could significantly help resolve many countries’ problems.
One of the best resolutions for problems in the warehousing industry is using artificial intelligence. Automation is undoubtedly a trend in many sectors and brings significant changes in this field. However, it is not easy to implement a completely new model of working. Especially in the business used on the old models of working. The resolution is educating, training, and improving the technology. Using data from past operations improves automatization and eliminates the possibility of human errors. It does not mean that humans we will not need anymore, though. Clients can use it for more complex tasks.
The end-to-end IoT
It is another technology that the supply-chain industry adopted and could also be effectively used in warehousing. Internet of things (IoT) works in the direction of boosting transparency across the supply chain. It uses GPS sensors to fit in modes of transportation like trucks to offer live location tracking. Those sensors help visibility in inventory management and those help in gauging demands. Clients can use model within the entire supply chain, from beginning to end, resolving top warehouse challenges Saudi Arabia. Thanks to that, companies can increase efficiency, minimize downtime, and proactively respond to customer demands.
Although it sounds like a futuristic movie, it is possible to use robots to control and manage one of the essential warehouse challenges in Saudi Arabia. We should learn how to explain robotic process automatization. Robots do not limite their serice to just the operations but the manual tasks. The first two quarters of 2019 have investments of $869 million on robotic automation in North America alone. The companies also use drones to deliver light-weight goods, and driverless vehicles will be available soon. Drive productivity is one of the biggest challenges, so resolving these problems will help improve the whole industry.
Those protocols should execute when certain conditions clients met automatically. When talking about the supply chain, it means automatically generating an invoice when the shipment reaches the destination. Smart contracts have started to settle payments using cryptocurrency automatically. They remove the need for arbitration from a trusted party and make the process faster if appropriately used.
As we have seen various technologies adopted by the supply-chain industry. We should move further and expect the layering of multiple technologies. This industry has understood that it can no longer rely on technology as an isolated service but as a part of the critical service model for the warehousing industry. Technology will become essential support of the supply chain industry and, indirectly, the warehousing industry. To resolve the problems in this process, you should choose comprehensive solutions and easy integrations to resolve some of the top warehouse challenges in Saudi Arabia.
According to all the above, we should be concerned about human usage in this industry. Some countries, like Saudi Arabia, have problems with labor usage. It could be an excellent resolution to these problems. However, it could lead to economic issues, with high unemployment rates in many countries. The best solution is to replace humans only with small automatized jobs while they will keep working on more complex jobs. As the warehousing industry grows, there are more and more warehouse challenges in Saudi Arabia to resolve.