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Global Downturn Hits Saudi Ports Throughout

JEDDAH — There has been an 11.39 per cent year-on-year (y-o-y) decline in the kingdom’s ports throughout, according to the Saudi Ports Authority in its Q1 2009 figures, which said that the global downturn had hit throughput levels at the kingdom’s ports.

The country’s largest ports, the Jeddah Islamic Port (JIP) and Dammam’s King Abdul Aziz Port, recorded y-o-y declines of 31.46 per cent and 25.24 percent, respectively.

The largest decline in throughput, of 79.8 per cent, was at the Yanbu Commercial Port.

The only port in Saudi Arabia’s maritime sector to record growth was the King Fahd Industrial Port in Yanbu, where total cargo handled grew by 
11.37 per cent.

According to the report this port was able to maintain growth because it is Saudi Arabia’s main port for the export of crude oil, refined products and petrochemicals. Export of these, unlike other exports, continued growing despite the global economic downturn, with petrochemicals loaded at the country’s ports seeing the largest Q1 2009 y-o-y increase of 23.11 per cent. Container throughput fell in Q1 2009 at JIP 
and Dammam.

In the latest Saudi Freight Transport Report, BMI concluded that the kingdom’s freight tonnage traffic, across all modes, is likely to grow by an annual average of 1.6 per cent over the next five years. It explained that various factors underpin its prediction.

“We now think that Saudi GDP growth in 2009-2013 will reach an annual average of 3.3 per cent (lower than the 4.3 per cent achieved over the preceding five years). Albeit at a reduced rate, oil and gas exports will be the drivers of foreign trade. Although the pace of trade growth will ease, tanker exports will remain important. Large infrastructure projects will also help to expand transport capacity and boost demand for cargo,” it added.

The report said that by transport mode, the fastest growing is rail at 4.5 per cent, followed by airfreight at 4.3 per cent, road haulage at 3.6 per cent, pipeline throughput at 2.3 per cent and sea cargo at an annual average of 1.1 percent. The slower growth of oil and gas pipeline throughput will reflect the cooling of the oil price boom.

Saudi Arabia scores moderately in terms of its growth forecast for freight transport across all modes through to 2013, with an annual average of 1.6 per cent. However, with its oil revenues, the kingdom has demonstrated a commitment to reforming and improving its transport sector, and the current policy agenda (including greater private sector involvement) should 
bring results.

Saudi Arabia’s overall freight rating at 59.1 out of 100 is a little below the average for the Middle East and Africa (MEA) region.

“It scores well in terms of its economic outlook because of its abundant natural resources, principally oil and gas. However, it does less well in terms of its freight-transport growth projections over the 2009-2013 period and its current regulatory environment,” said the report.

For the 2009-2013 forecast period, it expects the transport and communications sector to continue outpacing the economy as a whole in GDP growth terms. “It will achieve average annual growth of 3.8 per cent, versus 3.3 per cent for overall GDP.

The total value of transport and communications GDP will rise to $32.9 billion in nominal terms by 2013, representing 5.7 per cent of Saudi Arabia’s GDP,” it added.

Meanwhile, it may be noted that Saudi Arabia is to invest SR30 billion to modernise and develop the kingdom’s seaports so as to bring them on par with their international counterparts.

There are eight seaports in the kingdom — six commercial and two industrial — located on the Red Sea and 
Arabian Gulf.

Besides the Jeddah Islamic Port, the ports in the kingdom include Yanbu Commercial Port, King Fahd Industrial Seaport, Yanbu; Duba Port, King Abdulaziz Port in Dammam, Jizan Port, King Fahd Industrial Port in Jubail, and Jubail Commercial Port.

These ports have 186 berths of 11 to 32 metres water depth, and an annual cargo capacity of 266 million tons.

JIP, which handles nearly 60 per cent of Saudi Arabia’s seaborne imports, will thus get a facelift and expanded on modern lines sooner than expected.

In 2007, the JIP achieved a record growth in the handling of containers with about four million containers, which marked a sizeable increase over 2006. — habib@khaleejtimes.com