Middle East ports at critical turning point
Chronic port overcapacity hangs heavy over the Middle East region, with capacity growth more than double that of throughput growth.
Figures from ASCELA ADVISORS’ (ASCELA) infrastructure advisory team flag up handling capacity at the region's ports that has grown by more than 10% against container throughput over the last seven years that has only risen by 4%.
“Putting it in perspective, back in 2011 the average utilisation rate was around 75%, but it had fallen to 66% by 2017. That's not good,” said Nivesh Chaudhary, director of transport and logistics in ASCELA’s infrastructure advisory team.
Regional overreliance on transhipment is noted as a “dangerous game” by Mr Chaudhary, and one that has already blighted the UAE's beleaguered Khorfakkan, which suffered a sharp reversal in its fortunes when United Arab Shipping Company shifted over from the Ocean Alliance to THE Alliance, meaning that the port lost over 40% of its volumes to Jebel Ali.
Giovanni Moscatelli of the Boston Consulting Group added that the region is at a “turning point”, noting that while investing heavily in top infrastructure has so far paid off, growing overcapacity means that regional ports must now consider how to consolidate their inland position to be able to truly differentiate their offerings.
“While inland connectivity solutions are generally regarded as having lower margins than port handling operations, they are worth considering on a case-by-case basis in the Middle East,” said Mr Moscatelli.
Read more about the Middle East’s turning point in the December issue of Port Strategy. Click here to register for your free copy.
LATEST PRESS RELEASES
LiSIM Simulator for Port Nelson in New Zealand Read more
The online tool announced upgrades to functionality for working with BAPLIE files, providing increas... Read more
December 2018 OPCSA successfully migrated its operation to NAVIS N4 and at the same time went live w... Read more
The Marseille Fos port authority is among financial backers of a Blockchain technology pilot scheme ... Read more
Cargotec enhances Kalmar's growth opportunities by reorganising its businesses and appointing Stefan Lampa as President of Kalmar Mobile Solutions
To enhance Kalmar's growth opportunities, Cargotec reorganises it into three strategic business unit... Read more
Over the past decade online shopping has escalated at a phenomenal rate in the UK resulting in a dem... Read more