In early February, Abu Dhabi Terminals (ADT), the manager of Abu Dhabi’s four main commercial ports, signed an agreement with a consortium of shipping lines to start direct services between Khalifa Port and the ports of Mundra and Nhava Sheve on the west coast of India. The deal reflects the emirate’s growing ambitions to become a major trans-shipment hub for the Gulf.

Shipping firms Orient Express Lines, Simatech and X-Press Feeders will provide direct services between the ports, offering both trans-shipment customers and Abu Dhabi’s exporters and importers direct links to India.

Increased volumes

The volume of cargo and containers handled by Abu Dhabi’s ports has been on a general upward trend and, following the opening of Khalifa Port at Taweelah in September, the emirate is looking to carve out a share of the Gulf’s trans-shipment business.

Across Abu Dhabi’s ports, container volumes totalled 787,048 twenty-foot equivalent units (TEUs) in 2012, compared with 767,713 TEUs in 2011. General and bulk cargo also increased by almost 9 per cent last year, reaching 9.5 million tonnes. The old Mina Zayed port in the centre of Abu Dhabi only had a capacity of 750,000 TEUs, and was being pushed to capacity.

“Mina Zayed served the domestic market, but by having excess capacity at Khalifa Port and being able to better serve shipping lines, we are introducing this trans-shipment element,” says Mohamed al-Shamisi, executive vice-president for ports at Abu Dhabi Ports Company, the owner of ADT.

Khalifa Port was built to support the growth of Abu Dhabi’s industries, serving companies such as aluminium producer Emirates Aluminium, as well the firms due to set up in the adjacent 51-square-kilometre industrial zone. The industrial zone has been a victim of the global financial crisis, with fewer industries moving there to date than had been expected.

The port is now widening its focus, says Al-Shamisi, and tapping into the growing trade flows in and out of Asia is part of this initiative. “Since Khalifa Port opened, we have received many mainliners and bigger ships, and we are eager to receive bigger-sized vessels,” he says.

Previously, Mina Zayed received mainly feeder vessels. Khalifa Port is well-equipped to handle larger vessels, offering a capacity of 2.5 million TEUs. It is also a fully automated deepwater port.

Al-Shamisi believes that Khalifa Port can play an important role in supporting the strengthening trade flows between Asia and Africa. “I see the GCC playing a huge role in interconnecting those areas,” he says. 

Khalifa Port will also connect to the UAE’s federal railway, which is currently under construction and will further support the port’s efforts to be a transit hub. “[The railway] is very important and that’s why we took a proactive step and invested in the infrastructure to accommodate it,” says Al-Shamisi. “We have reserved corridors for railway, which will cross all the industrial zones and connect to the port island.”

When we benchmark ourselves, we look at other major international ports, not the regional ports

Mohamed al-Shamisi, Abu Dhabi Ports Company

The target is for Khalifa Port to reach 1 million TEUs of container throughput by the end of 2013. “[Reaching 1 million TEUs] would be a big jump from 2012, a 30 per cent growth rate, when gross domestic product is growing at 4-6 per cent,” says Al-Shamisi. “So that’s a big jump for us and a tough target, but the management is confident it will achieve such targets.”

Despite Khalifa Port’s ventures into the trans-shipment business, Al-Shamisi emphasises that the port is not competing against Dubai’s Jebel Ali port. He says the facility is positioning itself more as an industrial port rather than just focusing on container shipping, and that having the ports of Khalifa and Jebel Ali so close together, combined with their respective industrial zones, would benefit the entire UAE economy. 

Potential expansion

Khalifa Port’s infrastructure has the potential to provide 5 million TEUs of capacity, although the port has so far only invested in sufficient equipment to provide 2.5 million TEUs.

The first batch of equipment is already in place and covers six gantry cranes and 30 automated stacking cranes (ASCs). This machinery was supplied by Finland’s Konecranes and China’s ZPMC, and allows the port to handle 1.2 million TEUs. A second batch of equipment, which includes 12 further ASCs, is expected to be delivered in mid-2013.

A third batch comprising three gantry cranes and 10 ASCs will be ordered in the middle of the year. The port will then expand to its full capacity as and when demand requires it.

Inevitably, in its mission to move into the trans-shipment market, Khalifa Port will encounter competition from other ports in the region embarking on their own expansion plans. The question of a future overcapacity problem often raises its head.

However, Al-Shamisi sees Khalifa Port, equipped with the latest technology and a high level of automation, as one step ahead of the regional competition. “When we benchmark ourselves, we look at other major international ports, not the regional ports,” he says.