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JEDDAH: As companies in the global supply chain find ways to tackle the worst shipping congestion, the world’s most efficient port is emerging as a safe harbor to relieve global logistical pressures.
King Abdullah Port recently achieved a major milestone by handling 15 million twenty-foot equivalent units in a record time of less than nine years since its container terminal began operations. This milestone follows a 31% increase in container throughput in 2021.
“We attribute this to our state-of-the-art infrastructure and facilities built to global standards, as well as our highly efficient public-private partnership business model,” KAP CEO Jay New said in an exclusive interview with Arab News. .
Established in 2010, KAP is the first privately owned and operated port in the Middle East and is the flagship project of Ports Development Co.
PDC is a joint venture between Emaar Economic City and Huta Marine Works Ltd., two of the largest infrastructure developers in the Middle East.
“PDC’s decision to introduce this concept was not easy as it was difficult to convince stakeholders, many of whom were unfamiliar with this business model. The concurrent development and operation process was equally demanding,” New said.
According to a report by the World Bank and S&P Global Market Intelligence, KAP tops the most efficient container ports among 443 ports globally in the 2021 Container Port Performance Index.
“King Abdullah Port is only 15 minutes from the anchorage, which allows easy and quick access to the berths. This, combined with our exceptional density of cranes, has helped us to remain one of the fastest growing and most efficient ports with remarkable volume growth,” said the CEO.
Survive the pandemic
The port has achieved the feat despite the COVID-19 pandemic wreaking havoc on maritime traffic in 2021, including global supply chain disruptions, high freight rates and inconsistent business models.
“At King Abdullah Port, we are very proud of the work we have done to revitalize the logistics industry and maritime trade throughout the global supply chain disruptions of the pandemic and post-pandemic periods” , said New.
The CEO attributed the success of these efforts to the better operational readiness of the port’s stations and terminals, which were equipped during the pandemic to receive a wide variety of food, medicine and medical equipment.
At King Abdullah Port, we are very proud of the work we have done to revitalize the logistics sector and maritime trade throughout the global supply chain disruptions of the pandemic and post-pandemic periods.
Jay NewCEO of King Abdullah Port
In 2020, the port achieved an import growth rate of 16%, where imports of pharmaceutical and medical supplies increased by 72%.
“During this period, we have designed and implemented innovative ways to continue working around the clock without interruption,” he added.
Partnership with Maersk
In June 2021, KAP partnered with Maersk, a global logistics and supply chain services provider, to launch the Maersk Integrated Logistics Hub inside the port.
This decision aims to cover a critical logistics requirement of exporters who already have access to Maersk solutions, such as land movement of goods, customs clearance and maritime logistics, thus ensuring a truly integrated logistics offer.
The hub serves as a central supply chain solution for petrochemical exporters in the Kingdom, facilitating the storage of export goods and enabling the handling, stuffing and shuttle of pallets.
“The establishment of the hub is part of a major initiative to increase the performance efficiency and competitiveness of the Saudi logistics sector,” the CEO said.
New believes that automation and digitization are increasingly essential for a thriving port industry.
“We believe that new investments should focus on harnessing the potential of new technologies to improve service offerings and efficiency. We have continued to develop our procedural and operational efficiencies through digital transformation,” added New.
The port personal communications service developed by IBM has a unified one-stop gateway, document conversion services, real-time visibility, alert notification and advanced analytics, providing users immediate access to a range of important vessel and cargo information.
Its Smart Gate System has been integrated with PCS to create a more efficient interface between gate operations and government authorities such as Zakat, Tax and Customs, and Border Guards.
“This extensive automation has dramatically improved operational efficiency and turnaround times,” he said.
Global supply chain designs
All of the Kingdom’s ports now handle around 20% of the region’s transhipment market, but the authorities aim to increase this figure to 50% by 2030.
With the creation of four new special economic zones in the Kingdom, national ports are benefiting from the resulting increase in foreign direct investment, commercial activity and trade flows in the areas of logistics, manufacturing, financial services , technology, etc.
New believes that KAP is competitively positioned in the industry due to several factors, such as its location on the Red Sea on the main East-West trade route, which accounts for 13% of all global trade.
The port is part of the King Abdullah Economic City, which gives the port another strategic advantage.
“Our proximity to the Industrial Valley, which is part of KAEC, allows companies to have a base near the port and gives them direct access to extensive external transport facilities, including a state-of-the-art road network and the new Haramain high-speed iron,” he said.
The city recently hosted Lucid’s first electric vehicle factory outside the United States, which will produce up to 150,000 electric vehicles per year.
KAP also offers access to the future Saudi Landbridge project, which will directly link Riyadh, Dammam and the rest of the Gulf Cooperation Council countries.
The project will connect the western and eastern parts of the Kingdom and could see costs soar to around SR100 billion ($26 billion) once all factors are taken into account.
The contracts will be signed within a year, and the implementation of the project will take five to seven years, said Transport and Logistics Minister Saleh Al-Jasser.
KAP launched a new international freight-in-transit service last May, backed by land transport between Saudi Arabia and GCC countries, reducing the time from 13 to 16 days by sea to four to six days by land.
The move includes a streamlined three-hour process from when the cargo arrives at the port until it is shipped to the final destination, which will also reduce storage costs, according to a statement released by KAP.
“With state-of-the-art processing facilities, one of the deepest water berths in the world, and a fully integrated personal communications service, KAP is well on its way to achieving its goal of becoming the ‘one of the best ports in the world,’ said New.