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Saudi Ara­bia is poised to be­come the dom­i­nant lo­gis­tics mar­ket in the re­gion, with Saudi Vi­sion 2030 ob­jec­tives that will see the do­mes­tic air, port, road and rail in­fra­struc­ture trans­formed.

Saudi Ara­bia is poised to be­come the dom­i­nant lo­gis­tics mar­ket in the re­gion, with Saudi Vi­sion 2030 ob­jec­tives that will see the do­mes­tic air, port, road and rail in­fra­struc­ture trans­formed.

Dur­ing the open­ing ses­sion at the Lead­ers in Lo­gis­tics Sum­mit, Olaf Schirmer, se­nior di­rec­tor, con­sumer & in­dus­trial prod­ucts and ser­vices prac­tice, PwC, warned that al­though Dubai is the dom­i­nant lo­gis­tics hub in the re­gion, Saudi Ara­bia is fast catch­ing up. “The UAE is on-par with de­vel­oped mar­kets in terms of the lo­gis­tics and trans­port sec­tors’ share of the econ­omy, at around 10%,” he told del­e­gates. “The UAE is also ranked at num­ber 11 on the Lo­gis­tics Per­for­mance In­dex for 2018, with Ger­many at num­ber 1, while Saudi Ara­bia has dropped to 55, be­hind Oman at 43.”

This ex­plains why the UAE re­mains dom­i­nant in terms of trans­ship­ment in the re­gion, he said, but added that with in­fra­struc­ture in­vest­ment in Saudi Ara­bia ramp­ing up for Vi­sion 2030, this was un­likely to re­main the case for long.

“King Ab­dul­lah Port was the eighth fastest grow­ing port in the world in 2017, and this and other in­fra­struc­ture im­prove­ments will help KSA in­crease its KPI rank­ing,” said Schirmer.

With the de­vel­op­ment of an in­te­grated rail net­work be­tween the two coun­tries, the UAE’s share of trans­ship­ment bound for KSA was likely to shift sig­nif­i­cantly, he added.

“We ex­pect a sig­nif­i­cant shift in cargo trans­port from road to rail in the UAE, Oman and KSA. There is a $350-bil­lion in­vest­ment in rail and port in­fra­struc­ture be­tween now and 2025,” he said.

“All th­ese coun­tries want to be lo­gis­tics hubs, but how many more can we re­ally have? In the UAE alone we al­ready have Dubai, Abu Dhabi, in Oman we have Salalah for trans­ship­ment into Africa, but King Ad­bul­lah Port is try­ing to po­si­tion it­self for that as well.

And then there’s the Saudi Land Bridge, which of­fi­cials in the coun­try have said will trans­form the lo­cal lo­gis­tics sec­tor, of­fer­ing mul­ti­modal trans­port op­tions be­tween the two big­gest ports on the west and east coast for the first time.

It will be pos­si­ble for main­lin­ers to call in Jed­dah, or King Ab­dul­lah Port just up the coast, and dis­charge cargo bound for Dam­man, Riyadh or any other city, with­out that cargo need­ing to tran­ship through Jebel Ali in the UAE.

Of course, with­out on­go­ing im­prove­ments to the coun­try’s ports and cus­toms in­fra­struc­ture, that ten­dency to­ward tran­ship­ment will re­main, lest ship own­ers find their ves­sels de­layed due to port con­ges­tion in Jed­dah. But, this is where King Ab­dul­lah Port comes in, the full-ser­vice com­mer­cial port just 90-kilo­me­tres from Jed­dah, with a unique strate­gic lo­ca­tion on the red sea, serv­ing count­less mar­kets and des­ti­na­tions in Asia, Africa and Europe.

Fa­cil­i­ties at the port in­clude mul­ti­pur­pose ter­mi­nals for con­tain­ers (a 20 mil­lion TEU ca­pac­ity is planned), roll-on/roll-off (1.5 mil­lion CEU planned) and break bulk & gen­eral cargo (15 mil­lion tons planned). Lo­gis­tics ser­vices in­clude a Lo­gis­tics Park within the port premises of more than 750,000 square me­ters and a bonded zone ad­ja­cent to the port of more than 3.3 mil­lion square me­ters.

Most im­por­tantly, the port mas­ter­plan takes into con­sid­er­a­tion a di­rect link to the Saudi Land­bridge Rail­way con­nect­ing the


ma­jor ci­ties of Saudi Ara­bia. It’s for this rea­son that Rayan Mustafa Qu­tub, CEO, King Ab­dul­lah Port, says the port and its free­zone will be a lead­ing global ex­am­ple of the in­te­gra­tion of sup­ply chains.

“This in­dus­try suf­fers from a lot of legacy equip­ment and de­vel­op­ments that hin­der ef­forts to en­hance the lo­cal sup­ply chain and im­prove its ef­fi­ciency and ef­fec­tive­ness. By build­ing the port and free­zone from scratch, we’re chang­ing this en­tirely,” he says. “This is why 2018 has been such a strong year for us, we saw growth in traf­fic of 50.5%, and we want that to grow even more.”

Ac­cord­ing to Qu­tub, with 26% of global trade pass­ing through the Red Sea, the op­por­tu­ni­ties for tran­ship­ment in King Ab­dul­lah Port are huge. “At present Saudi Ara­bia is only cap­tur­ing 16% of that mar­ket, so we see ma­jor op­por­tu­ni­ties for growth.”

Will this mean that King Ab­dul­lah Port will be com­pet­ing with tran­ship­ment hubs like Khor­fakkan and Jebel Ali? Ac­cord­ing to Qu­tub its about col­lab­o­ra­tion not com­pe­ti­tion. “There’s po­ten­tial for the re­gion as a whole to be a global lo­gis­tics hub,” he says. But in or­der to take full ad­van­tage of th­ese fac­tors, port op­er­a­tors and other lead­ers in the lo­gis­tics in­dus­try must col­lab­o­rate to achieve the ‘mas­ter plan’.

“There is a need for greater co­or­di­na­tion be­tween the stake­hold­ers in the in­dus­try, we need to col­lab­o­rate on the mas­ter plan and this is on­go­ing,” he says. “We’re in touch with all the big play­ers and are look­ing to com­pli­ment rather than com­pete.”

Col­lab­o­ra­tion ver­sus com­pe­ti­tion is an ap­proach that has been adopted by Saudi Cus­toms as well. “Our aim is to es­tab­lish Saudi Ara­bia as the premier lo­gis­tics hub in the Mid­dle East and one of the most im­por­tant world­wide,” says Faisal Saad Albe­dah, deputy gover­nor for Trade Fa­cil­i­ta­tion, Saudi Cus­toms, echo­ing the sen­ti­ments ex­pressed by Qu­tub.

“We are work­ing to en­hance ties with our coun­ter­parts abroad to fa­cil­i­tate in­ter­na­tional trade and im­prove the King­dom’s rep­u­ta­tion in this re­spect. The agree­ments com­prise of pro­vid­ing cus­toms co­op­er­a­tion, man­age­rial sup­port, and in­for­ma­tion ex­change be­tween the in­volved na­tions,” he adds.

An ex­am­ple of this is Saudi Cus­toms re­cent sign­ing of the United Na­tion’s TIR con­ven­tion (Con­ven­tion on In­ter­na­tional Trans­fer of Goods), along­side 74 mem­ber states, in­clud­ing the UAE. This con­ven­tion aims to unify and fa­cil­i­tate cus­toms pro­ce­dures and en­hance over­all se­cu­rity through the tran­sit of goods within se­cured con­tain­ers.

It there­fore eases tran­ship­ment, which will help Jebel Ali re­tain its po­si­tion as the key tran- ship­ment hub in the re­gion, es­pe­cially for over­land trans­port into Saudi Ara­bia, but Saudi Cus­toms is work­ing to en­hance di­rect ship­ment into the coun­try as well.

“The 24-hour Clear­ance Pro­gram that was launched in late 2017 has im­proved cus­toms pro­ce­dures mech­a­nisms and their over­all flex­i­bil­ity. It is based on five main pil­lars and has dras­ti­cally im­proved busi­ness op­er­a­tions,” says Albe­dah. “This re­duced the num­ber of doc­u­ments re­quired for im­port­ing and exporting goods. More­over, Saudi Cus­toms now ac­cepts man­i­fests writ­ten in English with­out re­quir­ing their trans­la­tion into Ara­bic and au­then­ti­ca­tion, and has can­celled penal­ties im­posed on chang­ing or up­dat­ing th­ese doc­u­ments.”

More than 80% of all im­ported goods are now clear­ing cus­toms within 24 hours, which is a huge im­prove­ment on the 7 to 14 days that was com­mon just five years ago, and which has sup­ported Jebel Ali’s dom­i­nance as the lead­ing tran­ship­ment port for Saudi-bound goods.

The Land Bridge, con­nect­ing the ports of Dam­mam and Jed­dah, will trans­form do­mes­tic lo­gis­tics in KSA.

Faisal Saad Albe­dah, deputy gover­nor for Trade Fa­cil­i­ta­tion, Saudi Cus­toms.

King Ab­dul­lah Port plans to even­tu­ally have a TEU ca­pac­ity on-par with Jebel Ali.

Rayan Mustafa Qu­tub, CEO, King Ab­dul­lah Port.

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