A Miracle Berth
Dubai has long been known as the maritime leader in the region, with by far the busiest port in the Middle East. Today, the Emirate has proved, without a doubt, that it is a maritime leader internationally. The rate of the industry’s growth in the Emirate is nearly unprecedented, growing as much as 25% in recent years. Recent reports show the sector making up approximately 7% of Dubai’s GDP, valued at just under AED27 billion.
As if numbers alone were unable to cement the Emirate’s position worldwide, Dubai was named among the world’s top five in the International Shipping Center Development (ISCD) Index in July 2018, knocking out Hamburg. Dubai earned the coveted spot due to a number of indicators, including its top-notch logistics and maritime infrastructure, building an environment highly conducive to trade and investment, and housing some of the world’s finest free trade zones. With the maritime industry receiving full support from the Ruler of Dubai in an effort to make it a key sector in its post oil economy, Dubai is poised to displace other top-five shipping centers like London, Hong Kong, and Oslo.
Outside of what have traditionally been the world’s largest and busiest ports—Shanghai, Hong Kong, and Singapore—the UAE has the largest ports. In 2015, UAE ports in total handled more than 25 million TEUs, with Dubai’s Jebel Ali Port carrying much of the weight. Opened in 1979 to ease increasing pressure on Port Rashid, Jebel Ali port is now by far the largest port in the Middle East and among the largest in the world.
To get an inside perspective on why Dubai is increasingly becoming a hub of choice for companies in the sector, TBY sat down with Keramat Sharokhi, the Managing Director of logistics service provider Dark Blue Shipping. “Dubai is like a bridge between different parts of the region and it is open to all countries,” Sharokhi said. “There is a great opportunity to share and exchange information and knowledge with different nationalities in Dubai. This is why Dark Blue Shipping opened its head office here. Transshipment makes up 90% of the cargo movements happening through Dubai; it is one of the largest logistics hubs. The UAE does not have a great deal of its own manufacturing base and instead imports goods from countries to export to others. This is Dubai’s main business—being a trading hub.”
Dubai has been able to turn Jebel Ali into one of the most popular ports in the world despite the Emirate’s lack of a manufacturing industry due to the highly developed transport infrastructure it has built for itself. Dubai established itself as a link between Europe and Asia all while building itself as a maritime hub. The government’s dedication to transportation and infrastructure projects is nearly equal to the effort it puts into the port.
In 2016, Jebel Ali Port handled just under 15 million TEUs, and the port is gearing up for what is expected to be a significant increase in light of Dubai Expo 2020. The port recently underwent a significant expansion by adding 1.5 million TEUs to its Container Terminal 3. The expansion increases Jebel Ali’s overall capacity from 18 million TEUs to 20.5 million. With current capacity of 4 million TEUs, Container Terminal 3 is now the world’s largest semi-automated terminal. The 720,000-sqm terminal has already received the first shipment of 37 new ship-to-shore cranes, as well as 47 new automated rail-mounted gantry cranes.
It is not just terminal 3 receiving upgrades. Several existing cranes are being retrofitted to meet requirements of new super large container vessels, improving overall efficiency while expanding the cranes’ lifespan. All three terminals will also be receiving shore-side expansion work. Terminal 2 is set to receive three new ship-to-shore cranes, as well as 12 new automated rail mounted gantry cranes, while Terminal 4 is in line for 13 new ship-to-shore cranes and 35 new automated rail-mounted gantry cranes. Jebel Ali is among the handful of ports in the region capable of berthing more than one of the megaships with a carrying capacity of 18,000 TEUs that have entered the market in recent years.
Leading the industry in Dubai is DP World, a public company founded in 2005 following the merger of Dubai Ports Authority and Dubai Ports International. DP World has a diverse portfolio of business lines and is among the largest port managers in the world, totaling 50 related business in more than 40 countries. In 2017, the company handled more than 70 million TEUs across its portfolio. While the company currently maintains a gross capacity of 88 million TEUs between its nearly 80 operating marine and inland terminals, current and anticipated projects are poised to grow DP World’s capacity to over 100 million TEUs by 2020. With more than 36,000 employees, more than 108 shipping lines utilize DP World’s facilities, linking more than 140 ports internationally with over 90 weekly services.
In mid 2018, DP World entered an agreement with global trade giant Zhejiang China Commodities City Group to build a new traders market within the Jebel Ali Free Zone. The market is poised to include merchants from around the world providing a variety of products, including food and beverage, cosmetics, household goods, building materials, and more, all divided by sector. The project is set to increase trade ties between China and the UAE, with DP World offering Chinese businesses its highly developed logistics solutions, as well as further access to a regional market of more than 2 billion people, provided by DP World’s extensive global network.
TBY recently met with the Group Chairman and CEO of DP Word, Sultan Ahmed bin Sulayem, who shared insights in what the Emirate can do to further enhance the momentum the maritime industry is seeing. “Economic diversification in line with the Dubai Plan 2021 and preparation for Expo 2020 will be major drivers,” he said. “Dubai’s 2018 general budget unveiled an AED56.6-billion budget for the year with a focus on infrastructure projects led by Expo 2020. The budget also features a rise in infrastructure spending, which makes up 21% of total government expenditure. Construction material, electronics, new tech and goods for the growth of industry sectors will come through our flagship Jebel Ali Port. Maritime trade will continue to be fueled by such growth plans in the coming years.”
In building itself as a world class maritime hub, Dubai has made sure to leave out nothing, such as easy access to the country’s highway system and state-of-the-art logistics systems. But this also includes services such as arbitration. The Emirates Maritime Arbitration Centre (EMAC) was established to provide the industry an alternative to what can frequently be an expensive and lengthy process. Based in the Dubai International Finance Center, EMAC conforms to English Common Law and nulls any parallel action in courts. In an industry that is time sensitive and that benefits from quick turnaround times, EMAC is hoping to fill a sort of arbitration time-zone gap between London and the Far East.