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KSA: Global Logistics Crisis Delays Vehicle Deliveries

KSA: Global Logistics Crisis Delays Vehicle Deliveries

Monday, 3 October, 2022 - 10:45
The growing interest among Saudi women to buy vehicles coincides with the scarcity of cars in Saudi Arabia. (Photo: Asharq Al-Awsat)

Noura Al-Subaie, an employee in the education sector, paid a deposit to book her new car, which was expected to be delivered in a two-month period.

However, as soon as she left the showroom, the salesperson contacted her to inform her that the delivery would be postponed for reasons beyond their control, due to the global logistics crisis.

The growing interest among Saudi women to buy vehicles coincides with the scarcity of cars in Saudi Arabia, as the world is currently facing a disruption in the logistics chain, as a result of the effects of the Covid-19 pandemic, which led to a slowdown in transport movement in ports and international lines with the continued partial closures in producing countries.

In remarks during the Iron and Steel Conference last month in Riyadh, Saudi Industry Minister Khaled al-Falih said that the global energy crisis and epidemics have disrupted ports operations and supply chains.

The Saudi Ministry of Commerce had acknowledged months ago that there were large lists of vehicle reservations and delivery delays, due to the effects of the Covid-19 pandemic and the supply chain crisis.

On the other hand, recent statistics revealed that the unemployment rate of Saudi females decreased to 19.3 percent in the second quarter of 2022, a decline of 3 percent over the same period last year.

Speaking to Asharq Al-Awsat, Al-Subaie said that the salesperson told her that delivery delays were due to the failure of car manufacturers to fulfill their commitment, pointing to scarcity of stock and shipment supplies.

In a decision issued in September 2017, the Saudi authorities allowed women to drive, in a step that meets the objectives of societal transformation in the Kingdom and enables women to actively contribute to the economic life.

Khaled Al-Qahtani, a logistics services specialist, said that the logistics sector in the world was still facing a crisis that affects the movement of transport, pointing to three main factors in this context.

He first pointed to flexibility and the need to restructure the supply chain through a more balanced risk-taking approach.

The second factor is economic sustainability of the supply chain in particular. Al-Qahtani said that the companies’ transportation logistics budgets were consumed in a very short period of time during 2022 due to the increase of freight rates.

As for the third factor, Al-Qahtani points to the continuous imbalance between supply and demand.

A report issued by a London-based institution on the development of the Saudi car market between 2012 and 2022, showed that the market would grow to $29.3 billion by 2022 thanks to many factors, including the right of women to drive, the development of the country’s infrastructure and the growth of per capita income.

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