[banner id="411"]
Blog
TruKKer for Business Uncategorized

Advantage KSA! Post COVID 19 GCC Cross Border Trucking!

There have been rarely such events that have caused more disruption than COVID 19 has to our way of life. There is the world B.C. — Before Corona — and the world A.C. — After Corona. We have not even begun to fully grasp what the A.C. world will look like, but there are some trends worth noticing in the GCC cross border trucking space where TruKKer is a market leader.

Before Corona, the GCC cross border trucking industry i.e movement between lanes such as UAE – KSA, UAE – Oman, KSA- Oman, KSA – Bahrain was dominated by UAE registered trucks. This was primarily due to expat friendly policies for drivers and ease of doing business for small and medium enterprises.  Data suggests that the UAE trucks on such international lanes dominated 78% market share. This also caused significant competition among the trucks originating from UAE taking loads to different destinations across GCC, this offering significantly lower prices as compared to their KSA/ Omani peers. TruKKer’s data suggests that for a similar route for example moving cargo between Riyadh to Dubai, UAE registered trucks were 52% cheaper than the competition.

During Corona scenario and its related land border closures resulted into something peculiar which might result into a transformative shift across the GCC cross border trucking. While the UAE trucks are banned entry into KSA (only essential cargo permitted), all KSA registered trucks are allowed entry into UAE. This has also been the case with other GCC countries such as Oman, Bahrain, etc. The shortage in supply of UAE cross border trucks resulted in a steep increase in tariffs. This was further validated by TruKKer’s pricing engine which suggested an increase as high as 227% in the most common lanes such as Riyadh – Dubai,  Jubail – Abu Dhabi, etc. KSA trucks that were primarily catering to domestic KSA demand shifted to cross border movements due to it being high revenue and high margin due to supply constraints. TruKKer has recently witnessed supply impacts in KSA domestic lanes also resulting in an increase in domestic freight charges across KSA by 28% due to supply constraints.

This transformative shift has resulted in skyrocketing participation of KSA registered trucks from a meagre 8% to a staggering 72% in the GCC cross border trucking space. Another interesting trend to be observed is inclusion in the form of Saudization. While most of the UAE based trucks (99.6%) were driven by expat drivers, KSA trucks currently engaged in cross border comprise of 37% Saudis.

After Corona – The post lockdown world in the GCC trucking industry especially when the borders open up will be an interesting play. KSA trucks having tasted international trucking success will compete with their UAE peers on the state of the art TruKKer load board, an automated bidding engine for driver partners to bid for client loads. TruKKer is a strong advocate of free movement of GCC trucks within the region with minimum protectionist measures by local regulators. This promotes transparent competition resulting in high asset utilizations, better customer experience and improves efficiencies. 

Historically, increased competition has always brought efficiencies. It would be fascinating to see the changing landscape of the trucking industry of the region with a bird’s eye view and from the best seats possible!

Leave a Reply