Mediterranean / Middle East / Africa Ports & Trade - Despite congestion, DP World expands in Gulf region By Karen E. Thuermer, AJOTIn the early 1990s, Dubai was already hailing itself as the Hong Kong of the Middle East, although at that time, the UAE-emirate was virtually unknown. The reason, promoters contended, was its strategic geographic location halfway between Europe and the Far East. Up until then, this sandy desert city, founded only in the 1970s, contributed its success to a deeply rooted and colorful tradition of wooden dhows arriving from Persia, merchants welding their goods, and souks selling everything from glistening gold jewelry to spices. Its promising future was contingent on a well-planned infrastructure. By 1991, its Port Rashid, located close to downtown, was operating as Dubia’s most successful deepwater port as well as the busiest and fastest growing port in the Middle East. Back then, officials reported it handling on average 720,000 twenty-foot equivalent units (TEUs) per year. The new Jebel Ali Port, one-half hour west of Port Rashid, was deemed one of the most modern man-made harbors in the world with 67 berths on over 9 miles of quays. While at the time its claim to fame was being one of two man-made structures visible from outer space (the Great Wall of China being the other), its growth remained dependent on the Jebel Ali Free Trade Zone. Compare this to last year where Port Rashid handled 10.65 million TEUs, a 19% increase over 2006 volumes, and Jebel Ali where its current level of 11 million TEUs is expected to expand to 16 million TEUs by February 2009 and 80 million TEUs by 2030. “The Middle East today is one of the fastest-growing regions in the world,” observes Jamshed Safdar, senior vice president of marketing for Dubai-based Emirates Shipping Line. Its economic boom is attributed to primarily oil revenues and organic business growth, which are being reinvested within the region itself. In fact, imports into the Gulf region reached some $320 billion, according to area statistics. Jebel Ali has been acting as a gateway for most of the region’s volumes. TODAY’S CONGESTION ISSUES While volume on the Asia-Europe trade lane is lower than expected for this peak season, Jebel Ali is experiencing serious congestion. “The root cause of the congestion we have seen in recent months is the unprecedented growth in volumes in the region, which is causing vessel delays,” reports Sarah Lockie, spokesperson for DP World, operators of Jebel Ali and Port Rashid. “This is having a knock on effect in Jebel Ali.“ In June, for example, Evergreen and COSCON each launched six new weekly sailings that call on Jebel Ali and other ports in the China and Arabian Persian Gulf. Each ship has the capacity for 3,400 TEUs. Today, 80% of all ships are arriving outside of their scheduled times, thereby resulting in containers being left at the terminal for much longer than normal. Consequently, they are stacking and taking longer to clear. The congestion is raising concerns that the bottlenecks in the flow of goods could severely constrict the future growth of the region’s logistics industry. To help improve the situation, DP World is working with its customers, both the shipping lines and local traders, to try to move the boxes off the terminal more quickly. “We are bringing in more equipment to increase capacity,” she says. As a result, on September 22nd eight new tandem lift cranes and 20 rail-mounted gantry cranes (RMGs) were delivered to Jebel Ali’s new Container Terminal 2, thereby doubling its number of tandem lift cranes and increasing its RMGs to 38. “Six of the tandem lifts and 18 of the RMGs have been commissioned and are now operational, with the balance coming on line in the next few days,” Ms. Lockie remarks. “Further new equipment will be added to the terminal in coming months.“ Phase I of Container Terminal 2, which was launched in August 2007, increased the capacity of Jebel Ali Port by 2 million TEUs. The te