The excess capacity among ports in the GCC has resulted in more competitive port fees and charges, which is benefitting shipping and third party logistics (3Pl) firms, according to Bassel el-Dabbagh, CEO of Agility Middle East.

“There is excess capacity, which means the ports are competing against each other to win business,” El-Dabbagh tells MEED.

He cited the adoption of new technologies, which allows the port operators to pass on cost savings to customers. Newer ports, such as the Khalifa Port Container Terminal in Abu Dhabi, tend to offer improved levels of service, including shorter turnaround time for clearing container freight at a competitive rate.

The executive also views the increased presence of Chinese and Asian port operators in the region as a positive development that is putting the region’s ports in a good position to benefit from China’s Belt and Road Initiative (BRI).

The 30-year concession agreement, which Abu Dhabi Ports awarded in 2016 to China’s Cosco Shipping will enable Khalifa Port to attract more volume. “The Chinese manufacturing firms that will be based in Khalifa Industrial Zone (Kizad) will have to import raw materials for production. They will then need to export these products to selected destinations using Cosco’s shipping services,” the executive explains.

Overall, the Kuwait-headquartered logistics firm is expecting a recovery in the growth of global seaborne trade in the second half of 2018. “We might still be sliding sideways in the first six months of the year, but things look like they will be improving in the second half,” Grant Wattman, president and CEO of Agility Projects Logistics tells MEED.

Wattman, who said Agility remains largely cautious in terms of its short-term business outlook, points out to the gradual pick up in the signing of new project contracts and relatively easier access to finance as factors that could ultimately facilitate the recovery in global trade volumes in 2018.