Container volume handled by ports in Dubai and Fujairah declined by 5.9 per cent
Gross container volumes handled by DP World in the UAE declined by 5.9 per cent year-on-year in the first quarter of 2016. DP World operates four ports in the UAE, including the regions largest at Jebel Ali.
The decline is attributed mainly to a loss of low-margin or transshipment cargo in line with DP Worlds strategy to focus on high-margin cargo globally.
In other regions, the strategy has produced solid growth. It was 13.4 per cent in the Americas and Australia, where the total volume of containers handled in those ports is significantly smaller compared with other regions. Container volumes handled by ports in Asia Pacific and India, where volumes handled are similar to those recorded for the Europe, the Middle East and Africa (EMEA), increased by 4.7 per cent.
In contrast, the volume of containers handled by ports in the EMEA remained flat year-on-year, or declined slightly like-for-like, or when the volumes from newly commissioned or acquired ports are excluded.
On average, the UAE accounts for close to a quarter of DP Worlds total container volumes and close to 60 per cent EMEAs.
This probably means that while the slowdown may be mainly attributed to the companys strategic decision to focus on high-margin cargo, the trend may not also be entirely divorced from the softness in the emirates overall economic activities, which began in 2015.
After all, the UAEs non-oil foreign trade declined by close to 5 per cent in 2015 to reach AED 1.56 trillion, according to data from the Federal Customs Authority (FCA). Of these, re-exports mainly comprised by transshipment or low-margin cargo, which DP World is trying to avoid accounted for 27 per cent, or close to AED420bn ($114.4bn).
In Dubai, the private sector economic index dipped to 48.9 in February, marking the first time in five years that the index fell below the neutral score of 50. The index, which tracks the construction, hospitality and retail sectors, declined 1.8 points from the previous month, signalling a marginal deterioration in the private sectors overall performance.
It is worth watching if a stronger correlation between these data sets can be established over the coming months.
|DP World gross volumes||First quarter 2016||First quarter 2015||% change (year-on-year)|
|Thousand TEUs||2016||2015||% change (like for like)**|
|Asia Pacific & India Subcontinent||7,211||6,885||4.7|
|Europe, Middle East and Africa*||6,403||6,405||0.0|
|Americas & Australia||1,903||1,678||13.4|
TEU=twenty-foot equivalent units; *=The UAE accounts for 3.66 and 3.88 million TEUs for the first quarter of 2016 and 2015, respectively; **=Excludes volumes at Yarimca (Turkey), Stuttgart (Germany), Rotterdam (Netherlands) and Prince Rupert (Canada). Source: DP World
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