Abu Dhabi Ports open to discussions on tariffs

Migration of supply chains from China unlikely, official says

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Abu Dhabi Ports would be willing to look at offering preferential tariffs to support companies that have had their economic activities disrupted by the Covid-19.

“Abu Dhabi Ports works continuously with our customers to make sure services are commercially well positioned,” said Robert Sutton during a webinar event. “In terms of specific incentives, that would be on a case-to-case basis — but we’re very happy to engage with customers in the spirit of partnership on those discussions.”

Abu Dhabi had set up a Dh550 million fund to support the export sector through its Exports Office, thus helping out cash-strapped overseas buyers of UAE products and the national companies that sell them.

China factor

Sutton poured cold water on prospects of businesses exiting China to set up supply chain bases elsewhere.

“I don’t expect an immediate reaction linked to Covid-19 — it’s just not feasible, Supply chains have been built around a China supply … that will continue.

“Maybe to a lesser degree by [a few] percentage points, but largely it’s still a major sourcing and consumption point.”

Sutton said there would be a shift towards more automation of low-cost labour, with the current crisis highlighting how low cost services can be heavily disrupted.

“We’ll see a gradual realisation that low cost labour [and] low cost resources are perhaps not the silver bullet everybody through it was,” he added.