Port operators can gain advantage

15 February 2009
The short-term fall in traffic offers a good opportunity for operators to focus on efficiency.

Maritime trade has always been critical to the economic development of the Middle East. Over the past two years, however, ports have struggled to keep pace with the speed of growth in the region’s economy.

Despite adding capacity on a massive scale, the booming construction industry’s need for raw materials has put a huge strain on the region’s ports infrastructure.

Add to this the ever-increasing demand for consumer goods from a growing middle class and many ports have been operating at full capacity for the past two years, with ships facing severe delays in loading and unloading cargo.

With economic activity now falling, port owners and operators face a critical decision on whether to continue with expansion plans forged during the years of growth, or put the plans on hold until the downturn is over.

Although the $100bn that is due to be invested in the sector looks like a daunting figure in the current climate, most analysts predict that Middle East shipping will bounce back by the second half of 2010. Ports need to be able to cope with a renewed surge in traffic when it comes.

This is not to suggest spending should be reckless. If the economic crisis forces a reappraisal of which infrastructure schemes should go ahead, so much the better. Much has already been wasted on vanity projects around the region.

The short-term fall in traffic offers a good opportunity for operators to focus on efficiency to get the most out of the existing facilities, something that shipping lines have been urging them to do for some time.

But sensible, targeted investment also offers the industry the chance to get ahead of the curve for the first time in years.

If it manages to do so, the region’s economy will reap the long-term benefits.

You might also like...

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications