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SA22_TR_MAWANI Omar Hariri

SAUDI ARABIA - Transport

Omar Hariri

President, Saudi Ports Authority

Bio

Omar Hariri was appointed as President of Saudi Ports Authority in July 2021, where he leverages his deep knowledge of the region’s transport and logistics sector to oversee the development and implementation of the Authority’s strategy for the growth of the Saudi maritime and ports ecosystem. Prior to joining Mawani, Mr. Hariri served as CEO of Saudia Cargo and Saudi Logistics Services (SAL). He successfully steered both companies through an ambitious program of modernization, leading the development of infrastructure and overhaul of systems in line with the highest international standards. He also played a key role in both organizations’ efforts to attract and retain national cadres, with localization rates increasing to 95% during his tenure.

"In line with the National Transport and Logistics Strategy, Mawani is playing a pivotal role in transforming Saudi Arabia to achieve its ambition of becoming a global logistics hub."
TBY talks to Omar Hariri, President of Saudi Ports Authority, about turning the country into a global logistics hub, the “smart port” concept, and encouraging foreign investment. Can you provide an overview of the trends and dynamics emerging within the industry you are representing? Can you share the main indicators that prove the positive performance of KSA ports?

The port industry is currently undergoing a significant transformation with several key trends emerging. One such trend is the rise of “Smart Ports,” leveraging AI and digital technologies to enhance efficiency. This trend reinforces the port industry’s vital role in the logistics and supply chain ecosystem. We’re witnessing an upward trend in the demand for port services, indicating growth in the Ports and Terminal Operations Market. However, the industry also grapples with volatility in port demand, highlighting the sector’s susceptibility to global events and developments. Automation and digitalization are transforming freight transportation, further shifting the dynamics within shipping and logistics sectors. Moreover, the global port infrastructure market is projected to reach USD243.1 billion by 2030, underscoring the port’s stature as an engine of growth and a crucial lifeline for the global economy. These trends and developments underscore the dynamic nature of the port industry, emphasizing its direct link to other transportation means and susceptibility to both positive and negative impacts of various global events. As for KSA ports, their positive performance is evident in several key indicators. The sector has grown at an impressive rate of 8.7%, the highest among G20 countries, reflecting the Kingdom’s government’s efforts to upgrade and diversify the sector. Maritime activity plays a critical role in our nation’s trade, handling 70% of imports and 90% of exports. Furthermore, digital transformations and strategic partnerships have attracted significant investments, bolstering national industries and exports, and expanding our competitive solutions portfolio. Our emphasis on innovation and modernization has yielded impressive KPIs. For instance, we added 24 new shipping services in 2023, leading to a 15.12% increase in container throughput and a 12.19% surge in transshipments. These strides have improved our global standing. This is evidenced by our 17-place jump in the World Bank’s Logistics Performance Index, moving us to the 38th position among 180 countries. We also made an 8-place leap in the 2023 Lloyd’s List 100 Ports, reaching the 16th position in terms of annual throughput. Additionally, our score in the UNCTAD’s 2023 Liner Shipping Connectivity Index (LSCI) increased to 77.66 points in Q3, up from 76.16 points in Q2. It’s clear that Saudi ports are making significant contributions to both national and global trade.

Saudi Arabia aims to become a global logistics hub. How is Mawani contributing to this goal?

In line with the National Transport and Logistics Strategy, Mawani is playing a pivotal role in transforming Saudi Arabia to achieve its ambition of becoming a global logistics hub. Our efforts are focused on serving as conduits for international trade, bridging the gap between terrestrial and maritime transportation networks. This involves facilitating the smooth transit of goods across nations, thus enabling exports, imports, and transit consignments. We have been focusing on facilitating trade by simplifying, modernizing, and harmonizing export and import procedures. Continuing to upgrade our port infrastructure, establishing logistics parks, and expanding throughput and storage capacity, we’ve made trade across efficient, and more predictable. These enhancements have resulted in a remarkable performance during the first half of this year, with container throughput rising by 15.12% year-on-year, and a 12.19% annual spike in transshipments. We have enhanced our transshipment services by forging strategic partnerships that attract major ocean liners to our ports. This has considerably increased our container throughput and transshipments, reinforcing our position as a critical global logistics hub. Moreover, we have expanded our network of trade routes to 97, linking Saudi Arabia to 348 global destinations. This extensive connectivity allows us to handle an increasing volume of trade and transshipments, further solidifying our position in the global logistics landscape. In addition, we are actively attracting investments into the Saudi maritime sector, contributing to our goal of becoming a leading player in the global logistics industry. We are committed to implementing high environmental standards across all operations, in line with the Saudi Green Initiative. Looking forward, under the guidance of Vision 2030, we aim to double our current annual throughput capacity, increase our market share in the regional transshipment market by nearly 45%, and secure a top-ten position for the Kingdom in the Logistics Performance Index. All these efforts underline Mawani’s unwavering commitment to facilitating trade, enhancing transshipment services, and contributing significantly to Saudi Arabia’s goal of becoming a global logistics hub.

Can you highlight key projects that are significantly contributing to enhancing Saudi Arabia’s maritime infrastructure?

Central to our strategy has been a focus on upgrading our port infrastructure, understanding its critical role in meeting investor requirements and raising throughput capacity. In this regard, we have secured concession agreements valued at 17 billion riyals. These agreements will lead to a substantial increase in capacity at two of our major container terminals: Jeddah and Dammam. Specifically, we anticipate a surge in capacity by 70% to 13 million TEUs at Jeddah Port and a remarkable 120% increase in capacity to 7.5 million TEUs at Dammam Port. In partnership with our strategic partners, we have devised a comprehensive plan to rejuvenate and enhance the infrastructure and marine services at Saudi ports. One notable achievement is our ability to accommodate cruise ships through the newly established cruise berths at Jeddah Islamic Port. This initiative was launched in collaboration with Cruise Saudi, reflecting our commitment to enabling cruise tourism in Saudi Arabia. These initiatives, among others, underline our unwavering commitment to bolstering Saudi Arabia’s maritime infrastructure, paving the way for the Kingdom to become a global logistics hub.

The maritime industry is evolving rapidly, with the concept of a “smart port” is gaining prominence worldwide. How is Mawani incorporating smart technologies and data-driven solutions to optimize port operations and enhance the overall logistics ecosystem in Saudi Arabia?

In alignment with the emerging global prominence of ‘smart ports’, Mawani is leading the way in incorporating advanced technologies and data-driven solutions to enhance port operations and the wider logistics ecosystem within Saudi Arabia. In 2022, we launched the Smart Ports initiative, a strategic endeavor to automate and optimize port operations through the adoption of Fourth Industrial Revolution technologies. This involves leveraging the capabilities of Artificial Intelligence, Internet of Things, and 5G technology, which have been realized through our partnerships with key industry players such as STC, Ericsson, and Huawei. As part of our strategy, we plan to utilize AI in operating cranes via remote control, a move expected to increase productivity by 25%. Further, we are digitizing the process of unloading containers from vessels and their registration, which is anticipated to enhance performance by 15% while concurrently reducing operating costs by 25%. We are also monitoring forklift operations through the 5G network, an action that should result in a 15% reduction in errors. These initiatives collectively contribute to the transformation of Saudi ports into competitive destinations in terms of container handling and services for importers and exporters, both regionally and globally. Through these efforts, Mawani is not only keeping pace with the evolution of the maritime industry but is also driving forward the vision of Saudi Arabia as a global logistics hub.

What steps is Mawani taking to attract foreign investments and foster a business-friendly environment within Saudi ports, thus encouraging international businesses to operate and invest in the Kingdom?

Mawani is fully committed to fostering a business-friendly environment within Saudi Arabia’s ports that encourages international businesses to invest and operate in the Kingdom. We are actively working on this through several strategic initiatives. We are investing heavily in state-of-the-art infrastructure. Our ports are equipped with the latest technology and systems to ensure efficiency, reliability, and top-tier performance. This includes advanced IT infrastructure for diagnostics and monitoring which is critical for maintaining smooth and efficient ports operations. We are also expanding our facilities to cater to the increasing demands of the logistics sector. Mawani has initiated measures to streamline operations within the ports. This includes simplifying customs procedures to expedite clearance times, reducing the grace period for returning containers, and decreasing vessel unloading times. These changes have made it easier and more cost-effective for businesses to operate within our ports.
We are fostering partnerships with key stakeholders within the transportation and logistics ecosystem. By working closely with these entities, we aim to create synergies that will benefit all parties involved and contribute to the overall growth and development of the logistics industry in Saudi Arabia. Through these steps, Mawani is positioning the Kingdom not just as an attractive destination for foreign investments but also as a leading global trade hub.

Could you share specific examples of successful partnerships or collaborations that Mawani has engaged in to bolster Saudi Arabia’s position as a global logistics hub?

Mawani has been pivotal in fostering strategic alliances with global industry leaders, aligning with Saudi Arabia’s mission to become a prominent logistics hub. In 2023, a groundbreaking collaboration with Maersk, a maritime and logistics sector leader, resulted in the Middle East’s most extensive integrated logistics zone at Jeddah Islamic Port. This ambitious project involved a substantial investment of 1.3 billion riyals and spans over 225,000 square meters. In partnership with LogiPoint, we inaugurated a new logistics zone at Jeddah Islamic Port, covering 72,000 square meters with an investment of 150 million riyals. Our collaboration with France’s CMA CGM group, a global shipping leader, led to a significant integrated logistics zone spanning 130,000 square meters at the same port, backed by an investment of 500 million riyals. We’ve partnered with the Globe Group and Bahri to establish integrated logistics areas at Jeddah Islamic Port, with investments of 220 million riyals and 300 million riyals respectively. Additionally, we’ve joined forces with DP World for a similar project at the same port, involving an investment value exceeding 500 million riyals. These efforts are part of Mawani’s commitment to advancing Saudi Arabia’s position on the global logistics stage and serve as a testament to our dedication to enhancing operational efficiency, promoting human capacity development, driving digital transformation, and elevating the global competitiveness of Saudi ports.

Mawani’s website emphasizes sustainability and environmental responsibility. Could you elaborate on the organization’s efforts toward sustainable practices within the ports and how this contributes to the global perception of Saudi Arabia as a responsible logistics hub?

Mawani is steadfast in its commitment to sustainability and environmental responsibility, as evidenced by our strategic initiatives that balance operational requirements with ecological preservation. One of our key initiatives, implemented in collaboration with our strategic partner, Red Sea Gateway Terminal, is the establishment of artificial coral reefs. This initiative aligns well with global efforts to preserve and enhance marine biodiversity and ecosystems. We also prioritize energy efficiency in our operations. This is embodied in our approach to lighting – we ensure the integration of LED systems across our ports facilities, which significantly curtails energy consumption and reduces greenhouse gas emissions. Furthermore, the ports are equipped with state-of-the-art technologies such as remote-controlled STS cranes and hybrid equipment. These technologies not only enhance operational efficiency but also promote sustainability. The hybrid equipment, for instance, switches to battery power from diesel when possible, reducing both fuel consumption and emissions. In addition to these measures, our forward-thinking approach to port operations includes the development of smart ports. By leveraging advanced technologies and digital solutions, we’re optimizing efficiency, improving cargo handling, and enhancing the overall customer experience. All these initiatives underscore Mawani’s dedication to sustainable operations and position Saudi Arabia as a responsible logistics hub in the global arena. Our actions align with global best practices and contribute towards the nation’s broader sustainability goals.

In your opinion, what are the biggest challenges and opportunities for the logistics sector in Saudi Arabia, and how is Mawani addressing these challenges to maximize the potential for growth and development?

Mawani is proactively navigating the dynamic landscape of Saudi Arabia’s logistics sector by enhancing port connectivity, establishing integrated logistics zones, introducing new services, and forging strategic partnerships. This strategy extends to attracting international shipping lines, offering improved facilities for exporters and importers, streamlining transport modes, and investing in human resources development. The logistics sector acts as a vital link to the global economy and plays a crucial role in diversifying Saudi Arabia’s economy. Currently contributing 6% to the nation’s GDP, it is projected to account for 10% by 2030. Despite this, the sector faces challenges such as infrastructure development, employee training, technical advancements, digital solution implementation, and service quality enhancement. Mawani is tackling these issues head-on with robust government backing and strategic alliances.

Can you share your main targets and priorities set in Mawani 2024 agenda?

For 2024, Mawani has outlined key objectives that include developing a comprehensive governance model, enhancing port efficiency and infrastructure, fostering trade and export movement, solidifying partnerships, improving container handling processes, increasing the transshipment market share, and improving our standing in international rankings. These ambitious targets underscore our commitment to transforming Saudi Arabia into a global logistics hub.

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