LOGISTICS

SAUDI TURNS ITS LOGISTICS HUB DREAM INTO A REALITY

The Saudi Ports Authority is developing a logistics park and re-export zone at Dammam’s King Abdulaziz Port, with an investment of more than USD 27 million in a bid to enhance its ports and logistics infrastructure.

The project is part of a series of developments undertaken by the Saudi Ports Authority (Mawani) to reach targets set out in the National Transport and Logistics Strategy (NTLS), including the creation of a global logistics hub.

Mawani and MEDLOG, the logistics arm of the Mediterranean Shipping Company (MSC), will oversee the project, which is being built in an area spanning over 100,000 square metres. It will have a handling capacity of 300,000 twenty-foot equivalent units (TEUs) alongside a logistics solution to ease freight transportation between the kingdom’s Central and Eastern Regions and the rest of the country.

The project’s close proximity to Jubail Industrial City and major urban centres in the Eastern Region makes it a prime location for cost-efficient services to the domestic market.

The NTLS aims to expand the number of world-class logistics parks and re-export centres to 30 as well as improving the kingdom’s score in the Logistics Performance Index to 4.01 by 2030.

Mawani has established partnerships worth SAR 2 billion over the past two years with domestic and international players to develop six modern logistics parks. These deals have the potential to create 6,000 jobs.

                  

In a similar development in January, Mawani laid the foundation stone for upgrading and developing two container terminals at King Abdulaziz Port in Dammam under the build-operate-transfer (BOT) concession signed with Saudi Global Ports (SGP) valued at over SAR 7 billion.

“The concession will work on refurbishing berths and facilities across the port’s first container terminal, besides expanding berths and overhauling the container yard within the second container terminal to enable the Arabian Gulf hub to handle giant containerships,” according to the company. “The development works will also add a custom-built sandbox to test cutting-edge technologies and conceptualise new processes before going online.

Apart from generating over 4,000 jobs in the local economy, the project is expected to raise the port’s overall capacity by 120% to 7.5 million TEUs and strengthen the nation’s supply chains, boost its foreign trade, and improve the kingdom’s ranking in global indices.

As part of its long-term developmental strategy to deploy 160 high-impact projects at a total cost of over SAR 4 billion, Mawani is keen on partnering with leading industry players to transform Saudi ports into engines of growth and investment in the shipping and transportation sectors.

2022 represented a monumental year for King Abdulaziz Port in Dammam and its operator SGP, with record-breaking annual performances across various indicators yielding the port’s highest container throughput in its history at over 2 million TEUs. 

 

Separately, an industrial alliance led by Saudi Aramco is under way to establish King Salman International Complex for Maritime Industries and Services, said to be one of the largest maritime industry complexes in the Middle East and North Africa.

The infrastructure works of the complex were heavily supported by the state with approximately USD 3.8 billion. The project is expected to yield significant investment returns and contribute more than USD 17 billion to the country’s GDP, cut imports of marine equipment and services by up to USD 12 billion, and provide many direct and indirect jobs by 2030.

Last year capped an impressive performance by the country’s logistics sector. It included a major milestone as Saudi Arabia led the World Bank’s Container Port Performance Index (CPPI) for 2021, with King Abdullah Port occupying the first position after coming in second in 2020. However, it was Jeddah Islamic Port and King Abdulaziz Port that had registered the greatest leap among Saudi ports in the annual list, with the Red Sea hub soaring to the eighth spot from a modest 53rd position last year and the Arabian Gulf port landing in the 14th place after finishing 102nd in the previous edition.

Mawani also tendered 14 lucrative investment opportunities to develop and operate multipurpose terminals last year.

In addition, the company boosted its services to 150 from 46, and accelerated the push towards digitalisation, with the Smart Ports initiative automating operations and deploying 5G technologies across Saudi ports.

“Last year saw the kingdom’s maritime regulator received the Qualified by EFQM recognition by the European Foundation for Quality Management (EFQM), becoming the first recipient of this honour in the national transportation sector, besides acquiring the ISO 22301 and ISO 31000 certifications in business continuity and risk management, respectively,” according to the Saudi Press Agency.