Ports tackle challenge facing $7.3bn logistics sector

GCC logistics sector piles pressure on region’s ports.
Maritime, Ports, Seatrade, NEWS


The tightrope between booming trade demand and current overall port capacity in the region, as witnessed by growth of 15.4 percent since 2013, will headline a panel discussion at the Seatrade Middle East Maritime conference in Dubai next month.

While multi-billion dollar investment into the region’s ports and plans for GCC-wide multimodal transportation systems is underway, there is the immediate challenge of logistics management for port owners and operators across the Middle East, to contend with as trade demand outpaces physical expansion.

According to the Agility Logistics Emerging Markets Index 2014, Gulf countries, along with Jordan, are riding high in the table of international locations offering favourable conditions for business and trade.

In this year’s index, Saudi Arabia climbed one place to third spot, with the UAE at number six followed by Qatar, Oman, Kuwait and Bahrain at 12, 13, 18 and 22 respectively.

This has been achieved as a result of ongoing committed infrastructure spend, with the index also noting that Qatar, Oman, and Chile are all small economies that are outperforming their peers and larger emerging economies based on the strength of their accessibility, vibrant service sectors and world-class transportation infrastructure.

“The GCC has at least 35 major ports and is pursuing an ambitious expansion strategy as the logistics sector, and burgeoning non-oil trade, continue their growth trajectory to further position the region, and its key ports, as a global hub for trade between Europe, Africa and Asia,” said Chris Hayman, chairman of Seatrade, organiser of Seatrade Middle East Maritime, which is participating in Dubai Maritime Week, hosted by Dubai Maritime City Authority (DMCA).

Now in its seventh year, Seatrade is held from 28 to 30 October under the patronage of His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, UAE.

In 2013, the UAE’s non-oil trade grew by 5 percent to $435 billion with the Federal Customs Authority (FCA) reporting total trade exports registering around $50 billion in 2013 with re-exports growing by 11% to touch $121 billion.

“Petrochemicals aside, the region is seeing huge movement in gold, automotive, precious gems, telecommunications hardware, crude aluminium, copper products, iron scrap and a wide array of items both for import and export, and so its ports play a pivotal role in global trade movement,” reported Hayman.

“Global container movements are not slowing down and the order book for ultra-large container vessels is also growing, so this is where regional infrastructure investment has had to rewrite the book in terms of new operational requirements and the development of an integrated network of next generation facilities in order to handle the estimated $35 billion value of the GCC logistics sector.”

In addition to approximately $36 billion-worth of sector investment, regional economies are set to benefit from the proposed GCC rail network, which will connect key locations from Saudi Arabia to Oman.

Industry estimates suggest that with port expansion programmes reportedly set to increase regional capacity to more than 65 million TEU by 2016, new industrials zones such as the US$7.2 billion phased Khalifa Industrial Zone Abu Dhabi (KIZAD) and Jebel Ali’s recently debuted Terminal 3, with its connectivity to the Dubai World Central super-hub, already providing welcome relief and much-needed facilities.

The expansion tally includes Abu Dhabi’s Khalifa Port, with its $5 million terminal scheduled to open in 2015, Oman’s $4 billion Sohar Industrial Zone, which will be linked to the GCC rail network, and the $143 million sea-air hub expansion at Salalah.

Saudi Arabia is active with a series of ongoing projects including the $750 million second terminal at Dammam’s King Abdulaziz Port, two further terminals totaling $40 million for King Fahd Industrial Port in Al Jubail and the soon-to-be-unveiled Portside Logistics Facility at Jubail Commercia Port.

In Qatar, the new $7 billion mega-port located close to Mesaieed Industrial Zone will be up-and-running in 2016 while Kuwait’s contentious $1.2 billion, 60-berth Mubarak Al-Kabir seaport (Boubyan) is reportedly set to be privatised according to a Kuwait Financial Center (Markaz) report.

The Port Investment & Logistics session is scheduled to take place on 29 October 2014 at 9.30am with a panel of distinguished speakers.


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