Saudi Arabia and other countries are rapidly climbing the logistics ladder. How can they continue moving up? The answer lies in soft public-private partnerships (PPPs), the multiplier of logistics performance, IRU detailed at the Riyadh Supply Chain and Logistics Conference.
Latvia, Uruguay, Greece, Peru and Saudi Arabia have made the biggest gains in the World Bank’s Logistics Performance Index rankings in recent years, mobilising PPPs to develop their transport and logistics sectors.
Saudi Arabia jumped 17 places to 38th between 2018 and 2023.
“IRU is proud to have been part of Saudi Arabia’s logistics journey since the launch of Vision 2030 in 2016, working with many actors as the reforms and investments gathered pace,” said IRU Senior Director for Strategy and Development Vincent Erard at the Supply Chain and Logistics Conference.
“We are employing the same effective PPP approach with many other countries across the globe,” he added.
Soft PPPs: powerful tools
One way to think about PPPs is through four flows behind any logistics system: money, risk, data and skills.
Hard PPPs tackle the first two: mobilising money for infrastructure and sharing risk between public and private partners.
Soft PPPs add the other two flows: they structure how data is shared and used, and how skills are developed and recognised.
“PPPs build roads, ports and airports that help countries climb the logistics ladder. But infrastructure-focused PPPs are not the whole story,” said Vincent Erard. “Soft PPPs are the missing multiplier that propel countries into the global top ten. Soft PPPs deliver results.”
An example of a successful soft PPP is the global TIR transit system: containers are being transported from Dubai to Poland, via Saudi Arabia, in 10 days by trucks with TIR, instead of 24 days by sea.
Building effective soft PPPs
Successful soft PPPs in transport and logistics are based on three key principles.
Firstly, existing global standards should form the basis for any soft PPP.
“Supply chains are global. Even national and regional trade hubs rely on global standards to be successful,” said Vincent Erard. “Basing soft measures on global standards, such as TIR, CMR and ADR, ensures efficient and robust processes that are easily replicated and scaled up.”
“If a proposed PPP is not anchored in an existing UN or international standard, that’s a red flag,” he added.
Secondly, end-to-end digitalisation is key.
In many countries, large parts of international logistics, particularly government processes, remain non-digital. A process digital on only one side of a border is still not truly digital.
Thirdly, effective PPPs involve the private sector from the start, rather than seeking input only at the end. PPPs are valuable in road transport because they bring together different cultures, values, capacities and expertise.
Soft PPPs and the big picture
Global supply chains are not just about transport time or cost.
They are about connecting people, ensuring safety, and advancing sustainability.
That's why it is essential to understand the ultimate outcomes – not only for the industry, but for the broader economy and society – for PPPs to be successful.
“IRU stands ready to continue working with Saudi Arabia and countries across the globe to design and implement soft PPPs for efficient and secure transport and logistics. Soft PPPs are the true multipliers of logistics performance,” concluded Vincent Erard.