Sail Your Ships Around Me

The course of Omani maritime trade was changed forever just forty years ago. Long connected with the wider world by the dhow, the vessel of choice for countries on the Arabian Sea and throughout the region, the limitations of traditional seafaring became apparent as Oman began to engage economically and politically with a host of new countries following its independence, and authorities recognized the need for a dedicated and modern seaport. Inaugurated in 1974, Port Sultan Qaboos, formerly Port Mina Qaboos, has since served as the Sultanate’s principal harbor. But with the opening of the Port of Salalah in 1998, followed by Sohar in 2002, and then Duqm in 2013, the focus of the country’s shipping infrastructure has moved away from the capital to form a more balanced, decentralized model. With each port catering in different ways to the demanding international shipping sector, investment has poured in to create a world-class port network.

The winding down of commercial activity at Port Sultan Qaboos has become noticeable over the past year, with a 4.5% drop in total cargo handled over the first seven months of 2014. Total unloaded cargo fell from 2.57 million DWT tons at end-July 2013 to 2.42 million at the same point in 2014. In contrast, the Port of Salalah, Oman’s largest, saw a 28.9% jump in total cargo handled from 4.68 million DWT tons to 6.03 million in the same period indicating an upward trend. The latter facility is located 15 kilometers from Salalah in the southern region of Dhofar, and serves ships that transit the East-West shipping line connecting East Africa with the Gulf and the Subcontinent. A broad expansion of the harbor’s capacity for both dry and bulk cargo means it is gaining a strong reputation in the international shipping community. In August 2014, the largest container ship to ever dock in Oman berthed at Salalah port, with a capacity of 16,652 TEUs.

The Port of Sohar has also achieved record-breaking arrivals in 2014, with the harbor receiving its first 10,000 TEU vessel in May. Managed jointly between the government and the Port of Rotterdam, Sohar, at just 200 kilometers from the capital, is set to grow in importance. The throughput of merchandise is expected to continue rising in the coming five years, particularly after commercial activities at Port Sultan Qaboos are transferred to the port in 2015. As explained by HE Said bin Hamdoon bin Saif Al Harthy, Undersecretary of Ports and Maritime Affairs, in a TBY interview, “Port Sultan Qaboos is at full capacity, and hence its relocation to Sohar, where today’s capacity utilization rate for petrochemicals is reaching 80% and at roughly 30% for containers.”

In 1Q and 2Q2014, Sohar had 397 and 451 vessel calls, respectively. In the second quarter alone, the port put through 55,388 TEUs of cargo. Its container terminal is being considerably expanded, with total TEU capacity expected to grow from 800,000 TEU to 1,500,000 TEU at a cost of $130 million. Sohar has the added benefit of its attached free zone, which is encouraging major companies to berth their ships here, attracted by incentives that include 100% foreign ownership, 25-year corporate tax holidays, and Free Trade Agreements (FTAs) with the US and Singapore. In addition, 0% tax on import or re-export duties, and the facility’s proximity to both Muscat and the UAE border,make the port and free zone of Sohar a promising commercial transport option in the Gulf.

Separately, the mammoth Port of Duqm project, operated by the Port of Antwerp, will continue to drive the Omani shipping sector once its refinery comes online in 2017. Its location on the central eastern coast of the country will make it as accessible as Salalah, and will contribute significantly to the economic development of this region of the country. The sector will remain buoyant as these ports begin to fully utilize their capacity and become connected through the national railway system. As a key element of the broader diversification of the Omani economy, maritime commerce has once again emerged as a vital determinant of the nation’s course, as was the case in the heyday of dhow trading.