Berthing woes

DP World’s much publicised Jebel Ali Port is already congested. But there’s hope in the form of a second phase

Jebel Ali hasn’t had the easiest of years, with Dubai’s ongoing growth and the closure of Port Rashid causing berth congestion at DP World’s flagship port. Reports of ships being kept waiting up to 10 days just to find a slot have made it a trying period for shippers and carriers alike.

DP World’s volumes for Jebel Ali and Port Rashid topped 5.8 million TEU in the half year to June, a 17 per cent increase, with rising loads from Australia, India and Middle East. Jebel Ali’s volumes alone rose by 22 per cent in the six months to June 30, a rate which any port globally would find hard to sustain.

The decision by the Dubai government to redevelop Port Rashid for urban real estate and maritime activities, such as cruise tourism, prompted its closure and the switch of traffic further south – and this understandably further increased pressure on Jebel Ali’s operation.

Nothing stays the same for long in Dubai though, and respite may not be too far away. The port will continue to roll out the second phase of new capacity, totalling five million TEUs by February, taking overall capacity to 14 million TEUs. With its 17 metre draft capacity, Jebel Ali can cater to the next generation of ‘mega ships’ that exceed 13,000 TEUs – and with more emphasis on large vessels, that should mean fewer ships calling and theoretically, less congestion. One ship alone, the Grete Maersk, docked in July with a capacity of 8,200 TEU.

Remember Jebel Ali isn’t just serving growing container volumes. With all the major development projects on the go, including the construction of the AED121.2 billion (US$33 billion) Dubai World Central close by, the Middle Eastern hub is also dealing with increasing heavylift cargoes such as steel rebars, coils, plates, channels, angles and pipes. Dubai’s non-oil direct foreign trade jumped by 54.3 per cent during the first half of this year, and Jebel Ali is very much at the ‘coal face’ of dealing with this growth.

It’s not alone in facing challenges. Jebel Ali’s trials are all part of a wider GCC picture, in which the chief challenge facing port operators is providing enough capacity quickly enough to serve the region’s booming economies.

The Pearl Oil Project is requiring huge volumes to be delivered at Qatar’s Ras Laffan Port, which is struggling to keep pace with demand, and business leaders have been calling for urgent action to improve congestion at Jeddah Islamic Port, which is forcing many vessels to find alternative routes.

None of this is much consolation for shippers though, who are not only having to deal just with capacity constraints but also rising costs. A 20-foot container at Jebel Ali now costs AED750, up from AED380 in February last year, and 40-footers have risen to AED870, compared with AED460 at the start of the year.

Importers were additionally hit, as they weren’t able to raise the cost of goods following a decree by Dubai Municipality not to hike prices during the holy month of Ramadan.

All of which means logistics companies are having to put on a brave face at the moment. But with more capacity coming on stream, the tide should start turning by next year.