Saudi Arabia’s ports grow in significance

Saudi Arabia is the Middle East’s largest economy, and many of the Kingdom’s big businesses rely heavily on the transportation of cargo—both in the form of bulk and containers. The Kingdom’s government is determined to foster the growth of its port infrastructure beyond internal needs, turning Saudi Arabia into a global logistics hub.

Occupying most of the Arabian Peninsula, the Kingdom of Saudi Arabia has 13 major ports, strategically located along its Red Sea and eastern coasts. The Saudi Ports Authority (Mawani) is the most central player in the sector.

Mawani’s activities have significantly sped up the export and import of cargo to Saudi Arabia over the last few years, thus contributing to the economy in a big way. Saudi Arabian ports are currently among the world’s quickest in terms of cargo handling, and their capacity is on the rise, according to Mawani’s President, Omar Hariri.

Saudi Arabian ports have been ahead of the region since the end of the pandemic in 2021-2022, with their vessel calls and cargo throughput steadily increasing in 2022. Cargo volumes have shown as much as 50% growth this year.

This trend is accelerated by the implementation of a series of market strategies. Most importantly, Mawani has exhibited a high degree of openness to forming partnerships with the private sector and international investors, a virtue that cannot be taken for granted in the region.

International partnerships are quite common in the Kingdom’s logistics sector. Mawani began a major partnership in 2021, when it teamed up with DP World to build the Middle East’s largest logistics park in the Kingdom. The USD133 million deal is likely to transform the Jeddah Islamic Port over the next three decades, turning it into a global hub of cargo services. The result will be visible soon, as the region’s first integrated logistics platform takes shape.

More will be revealed to the world about the nature of the proposed platform in late September, 2022, during the Saudi Maritime Congress in Dammam. But it is already clear that digital solutions such as IoT, AI, and 5G technologies will feature in the discussions. Mawani’s Omar Hariri will also be in attendance, along with fellow industry insiders. Hariri is a big believer in the power of digitalization, and Mawani has adopted a wide range of digital technologies during his term as president.

In March, 2022, for instance, Mawani signed MoUs with tech giants such as Huawei and Ericsson to explore the implementation of its Smart Ports initiative. The use of technologies such as 5G and IoT for the smart handling of cargo has allegedly been a top priority for Mawani since at least 2020.

It is expected that issues such as sustainability and safety will also feature in the conference. Mawani has for several years promoted a shift to electric and gantry cranes, which are more eco-friendly and safer than old-fashioned cranes. Under Mawani’s supervision, Saudi ports are increasingly switching to gantry cranes. Only a few weeks ago, a contract was signed between Saudi Global Ports (SGP) and the Shanghai-based Zhenhua Heavy Industries Company (ZPMC) for the manufacturing of three next generation cranes, which will be installed at King Abdulaziz Port in Dammam.

“The three new quay cranes are part of SGP’s commitment under the concession agreement with Mawani to invest SAR7 billion to modernize King Abdulaziz Port in Dammam and make it a competitive container hub,” reported The Maritime Standard.

Saudi Arabia launched its National Transport and Logistics Strategy (NTLS) this year, which will act as a roadmap for the sector’s modernization. The document makes modernization a necessity, rather than a choice, for all stakeholders across the sector. Mawani will play a central role in realizing the objectives of NTLS in the coming years.