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    Infrastructure

    Booming GCC trade logistics presses demand for new ports

    As the $35bn regional logistics industry crosses 15% growth, vested parties are warily watching the speed of upcoming port and hub supply
    October 8, 20143 Mins Read
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    Ahead of one of the largest maritime trade gatherings in the Middle East, the industry’s Chris Hayman, highlights the ‘tight-rope walk’ between business through the region’s ports and the demand this is creating for ports with higher specifications and better integration.

    “Global container movements are not slowing down and the order book for ultra-large container vessels is also growing to handle the estimated $35bn value of the GCC logistics sector,” said Chris Hayman, chairman of Seatrade Middle East Maritime, from 28-30 October. The GCC has at least 35 major ports and is pursuing an ambitious expansion strategy as the logistics sector.

    The GCC has at least 35 major ports and is pursuing an ambitious expansion strategy as the logistics sector, and burgeoning trade, continue a growth trajectory now positioning the region, and its key ports, as a global hub for trade between Europe, Africa and Asia.

    However, while multi-billion dollar port investments and plans for a GCC-wide, multi-modal transport systems are well underway, the immediate challenge and concern for port operators is logistics management as trade demand, which witnessed 15.4% growth in 2013, outpaces physical expansion.

    In the UAE, non-oil trade grew by 5% to $435bn in 2013, with the Federal Customs Authority registering exports of around $50bn, and re-exports growing by 11% to touch $121bn. Related article Qatar Airways route to Ghana foreshadows rise in trade volume

    Gulf carrier plans Accra fights from April, building on the successful introduction cargo operations and strong business optimism

    In response, industry estimates suggest that with port expansion programmes will increase regional capacity to more than 65m TEU by 2016, while the phased $7.2bn Khalifa Industrial Zone Abu Dhabi (KIZAD) and Jebel Ali’s recently debuted Terminal 3, with its connectivity to the Dubai World Central aerospace hub, also providing welcome additional facilities.

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

    Saudi Arabia is similarly active, with projects including the $750m second terminal at Dammam’s King Abdulaziz Port; two further terminals worth $40m at King Fahd Industrial Port in Al Jubail; and an imminent Portside Logistics Facility at Jubail Commercial Port.

    Qatar is meanwhile working on a $7bn mega-port located close to Mesaieed Industrial Zone, set to be running by 2016, while Kuwait’s $1.2bn, 60-berth Mubarak Al-Kabir port (Boubyan) is reportedly set to be privatised according to a Kuwait Financial Center (Markaz) report.

    In addition to $36bn-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.

    Assuming a timely delivery of these facilities, the region’s trade should be well covered, but the industry will be feeling the pressure for several years as it waits for the implementation.

    Nevertheless, for the moment the Gulf countries continue to rank highly as international locations favourable to trade according to the Agility Logistics Emerging Markets Index 2014, with Saudi Arabia climbing one spot to 3rd place, followed by the UAE coming in at 6th, and Qatar, Oman, Kuwait and Bahrain placing at 12, 13, 18 and 22, respectively.

    The GCC has at least 35 major ports and is pursuing an ambitious expansion strategy as the logistics sector.

    Al Jubail Boubyan Chris Hayman Dammam Dubai World Central Federal Customs Authority gcc GCC rail network Jebel Ali Jubail Commercial Port Khalifa Industrial Zone Abu Dhabi King Abdulaziz Port King Fahd Industrial Port Kuwait Financial Center logistics Markaz Mesaieed Industrial Zone Middle East Mubarak Al-Kabir port oil Portside Logistics Facility Seatrade Middle East Maritime Sohar Industrial Zone UAE
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