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RISING TO THE COMPLEXITY CHALLENGE
ENERGY UPDATE OPPORTUNITY MIDDLE EAST
One of the largest project cargoes handled through Jebel Ali: four mega polyethylene reactors, carried by CMA CGM to Port of Rotterdam.
CREDIT: GOVERNMENT OF DUBAI MEDIA CENTRE
handling increasingly complex and challenging project and breakbulk cargoes, with demand growing as nations embark on huge infrastructure investment projects.
King Abdullah Port, or KAP, continues to act as a ‘value-centric’ enabler within Saudi Arabia’s sea freight logistics and cargo shipping network and prioritizes infrastructure development in its operational strategy, said head of marketing Khaled Shalha. The port was recently named ‘Best Bulk & General Cargo Terminal’ at the International
Finance Transportation Awards, he noted, “a strong testimony to its reputation as one of the fastest-growing RISING TO THE seaports worldwide.” COMPLEXITY “King Abdullah Port’s state-ofthe-art technologies, large cranes and highly skilled staff have helped the port to handle huge volumes of cargo CHALLENGE for the megaprojects currently under way in the Kingdom,” he said. “The influx of investment in Saudi Arabia’s non-oil sectors, driven by the import and export needs of the country’s 35 Middle East Ports Invest to Serve Industry million citizens and residents, give leeway for KAP to accrue investBY FELICITY LANDON ments and help guide the flow of P orts in the Middle East took four out of the top five places in the 2021 Container Port Performance Index published by the World Bank and S&P Global products domestically and through out the MENA and East African regions.” Region: Middle East Market Intelligence earlier this year. Problem: Growth and diversity Saudi Arabia’s King Abdullah Port of projects test the mettle of the took top spot, with Salalah in Oman, Hamad in Qatar and Khalifa in Abu region’s port Dhabi also in the top five. Solution: Terminals are
Containers, of course, generally expanding to meet surge in take the headlines – but across the infrastructure projectsMiddle East, ports and terminals are
OPPORTUNITY MIDDLE EAST
The port’s location makes it an important player in largescale public and private developments across KSA, he said. It has 18 meter-deep water berths, uses some of the world’s most advanced mobile cranes, and has the ability to expand and develop logistics solutions within its 17.4 square kilometer area, while its one million square meter Bonded and Re Export Zone offers lower fees and streamlined cashflow to incentivize new contracts. “The port maintains ongoing collaboration with multinational organizations, including MSC, Maersk, Almarai and others, to offer efficient and effective logistics solutions on premises that ensure smooth and efficient trade flow,” Shalha said.
This year, multinational dairy and food manufacturer Almarai opened a new automated facility that makes KAP the base of its operations in KSA and the region. The facility consists of two chain conveyor unloaders with a discharge capacity of 600 tons per hour each, along with six 20,000-ton capacity silos for corn and a 50,000ton capacity warehouse for the storage of bulk soya.
This year has also seen the opening of the Maersk Integrated Logistics Hub at the port, a 100,000 square meter non-bonded warehouse covering the logistics requirements for KSA’s petrochemical exporters.
“As Saudi Arabia continues to grow momentously and diversify its economy into non-oil sectors, KAP remains a key enabler of the domestic ambitions laid out in the Vision 2030 strategic framework,” Shalha said.
SUPPORTING THE ENERGY TRANSITION
Shipping and logistics companies worldwide require innovative thinking and solutions to overcome energy conservation challenges, Shalha emphasized, giving as an example KAP’s handling of 3,200 tons of general cargo for the Petro Rabigh petrochemical expansion project. Steamers, splitter condensers, heat pump desuperheaters and debutanizer reboilers were handled during the two-phase operation. “This required very accurate handling and transport techniques. The port cooperated with several large multinational companies to help transport the cargo from outside Saudi Arabia, through King Abdullah Port and on to the Petro Rabigh Project.”
The port also recently launched the ‘MSC Indus 2’ initiative with MSC, to support KSA’s export market, facilitating trade between North America and the Indian subcontinent. MSC Saudi recently handled two breakbulk shipments from the port to Rio De Janeiro.
The port is seeing an upward trend in out-of-gauge cargo and there are several large cargo projects in the pipeline, Shalha added, and it continues to upscale to meet the market’s requirements.
“Enhancing the country’s logistics capabilities and further developing its ports sector are among the ongoing top priorities for Saudi Arabia in line with the objectives of Vision 2030 and the National Transport and Logistics Strategy to transform the Kingdom into a global transport and logistics hub.”
Pointing to the strong emphasis that KSA’s leadership puts on bolstering the nation’s maritime assets and competence, he said this signified that the port sector and KAP will see substantial investment in the coming years.
“KAP is near King Abdullah Economic City’s Industrial Valley, which is home to more than 100 multinational and Saudi companies. Because of its location, the port can offer direct, uninterrupted access to the main highways linking it to Mecca and Madinah, in addition to Jeddah, the main trade center in the Kingdom. King Abdullah Port is also easily accessible to the industrial cities of Rabigh and Yanbu, which experience remarkable trade in the petrochemical industry.” In addition, the port provides access to the upcoming Saudi Railway Landbridge, one of the largest projects in the region that will connect the west shores of Saudi Arabia with the east shores through the capital city, Riyadh.
“King Abdullah Port continues to actively contribute to Saudi Arabia’s efforts to boost the volume of non-oil exports and transform the Kingdom into a global logistics hub,” Shalha said.
BREAKBULK BOUNCE BACK
DP World signed an agreement in June with Saudi Ports Authority (Mawani) to build a “state-of-the-art, port-centric logistics park” at Jeddah Islamic Port. It also signed a new concession agreement in April 2020 to continue operating and managing the South Container Terminal at the port for the next 30 years, committing to invest more than US$800 million to expand and modernize the terminal.
“The overhaul project, which will take place over four phases and is set to be completed by 2024, will see infrastructural upgrades, including the broadening of draft depth and quay, and the installation of advanced equipment and technologies, automation and digitalization programs, in addition to decarbonization initiatives. Discussions on breakbulk facilities are ongoing,” said a spokesperson.
He noted: “The breakbulk industry has always played a vital role in cargo movement across countries and borders. Post pandemic, it is bouncing back stronger than expected. We see a lot of opportunities coming in for the sector.”
The UAE government’s focus on investments in domestic infrastructure to support renewable energy sector projects is gathering speed, resulting in the revival of the breakbulk sector, said the spokesperson.
“Jebel Ali Port has been a gateway for Dubai’s expansion and legacy projects such as Burj Khalifa, Dubai Mall, the New Maktoum Airport, EXPO 2020 Dubai and many more in the future.”
Last year, Jebel Ali had an “outstanding year” for non-container performance, including handling 3.9 million tonnes of breakbulk.
“Big retailers shifted their trade from containers to breakbulk to maintain their operations and cash flow.
OPPORTUNITY MIDDLE EAST
This trend is expected to continue until the normalization of the global market, which may take another two years.”
Last year saw one of the largest project cargoes handled through Jebel Ali: four mega polyethylene reactors, the largest weighing 227 tons, on route to Rotterdam, carried by CMA CGM.
The shipment, totaling 839 tons of cargo and measuring 35 meters in length, 7 meters in height, and 7 meters in width, occupied 424 twentyequivalent-unit slots. Handled with the help of a floating crane from Drydocks World, it was loaded on two consecutive sailings.
“DP World also accommodated and attracted new cargo by driving business more efficiently across its gateways in the UAE, be it Jebel Ali Port, Mina Hamriya or Deira Wharfage,” said the spokesperson. “Our breakbulk volumes rebounded back to historic times, averaging growth of 20-30 percent against past years, which adds up to 9 million metric tonnes of breakbulk cargo across our portfolio in the UAE.”
Looking ahead, he said the breakbulk and project cargo industry is set to play a significant role in making alternative energy projects become a reality, with governments adopting policies to make renewables a priority and meet targets to reduce global warming.
DP World’s marine services businesses, such as P&O Maritime Logistics, are deploying specialist multi-carrying vessels, or MCVs, to the region; three MCVs will be working with Mammoet, which is working with the Red Sea Development Company to transport and install the Sheybarah Island Resort villas in KSA. “We will be transporting the pod villas for the sustainable hotel, which is embracing an eco-friendly design that preserves and enhances the biodiversity and the environment of its surrounding natural habitat,” said the DP World spokesperson.
King Abdullah Port acts as a ‘value-centric’ enabler within Saudi Arabia’s sea freight logistics and cargo shipping network.
CREDIT: KING ABDULLAH PORT
WORKING IN PARTNERSHIP
DP World’s partnership with government authorities and its reduction in manual processes have been crucial, he added.
“Jebel Ali is a perfect example of the collaboration and digitization needed to prevent supply chain disruption. It can happen anytime. Today it’s the pandemic, tomorrow it could be something else. The early adoption of digitization at Jebel Ali Port enabled us to handle medical and essential goods seamlessly when the world went into shutdown mode.”
Digital solutions give greater flexibility to cargo owners as to how they move their products from factory to the project site or a customer’s door, he added.
“Our initiatives to create online platforms from SeaRates to CARGOES that connect various stakeholders in the entire supply chain with real-time visibility of tracking shipments have proven very effective during these times. Our recent launch of CARGOES Customs is another step that will assist customs authorities of various countries to automate their end-to-end clearance process.”
At Sohar Port and Freezone, developments this year have included a lease agreement with Integrated Solutions Plant and Land Services to establish a OMR2.2 million (US$5.7 million) liquid fertilizer plant, with the potential for further expansion, and a lease agreement with Sohar Steel Rolling, which is investing OMR7 million (US$18.1 million) in the construction of a steel rod manufacturing unit.
In June, Sohar Port and Freezone signed an agreement with general cargo terminal operator C. Steinweg Oman to expand its storage area by 27 hectares in anticipation of further growth in demand for minerals as well as for supporting the development of mega projects across the region. BB
Felicity Landon is an award-winning freelance journalist specializing in the ports, shipping, transport and logistics sectors.
