Salalah Port braces for 25 per cent drop in container volumes due to Red Sea crisis
Published: 04:05 PM,May 12,2024 | EDITED : 08:05 PM,May 12,2024
Multi-modal solutions to offset impacts from Red Sea blockade.
MUSCAT, MAY 12
Port of Salalah, the leading transshipment and logistics gateway of the Sultanate of Oman, has warned that ongoing disruptions in the Red Sea could pull down container throughput volumes by about a fourth for the remainder of 2024.
However, top officials have stressed that efforts are underway to mitigate the impacts of the crisis on the port’s performance, notably in the form of alternative routing options and multimodal cargo solutions.
Now into its sixth month, the Red Sea crisis was triggered by Yemen’s Houthi movement protesting Israel’s genocidal assault on Palestinians in the Gaza Strip. By targeting merchant ships carrying cargoes to and from Israeli ports, the Houthi blockade has caused a significant redirection of maritime traffic in the Red Sea, culminating in far-reaching global trade and transport repercussions.
“The ongoing disruptions in the Red Sea are having a significant impact on global container transport, and consequently, our operations in Salalah are also being affected. Major customers have adjusted their networks, rerouting eastbound services to Cape of Good Hope or implementing suspension of some services,” commented Braik Musallam al Amri, Chairman of Board of Directors, Salalah Port Services Co SAOG.
“Forecasts for the remainder of 2024 indicate a sustained decrease in overall container volume, estimated at -20-25% driven by transshipment volume, as the resolution of the ongoing crisis remains uncertain. However, gate volume is not expected to be impacted except for longer transit times faced by customers and limited space availability,” Al Amri stated in the Chairman’s Message accompanying the Q1 2024 report on the port’s financial performance.
During the first quarter, Salalah Port posted a 17% slump in container volumes to 878K TEUs, down from 1.056K TEUs in the corresponding quarter of 2023. The decline was attributed largely to the Red Sea crisis, but also partly to capacity constraints at the Container Terminal linked to an ongoing upgrade project.
Mitigation measures
Significantly, mitigation initiatives are underway to “minimize the gap created by the decline in transshipment volume”, according to port officials.
In anticipation of the Houthi blockade dragging on for the rest of the year, Port of Salalah has unveiled multi-modal service options designed to provide a viable alternative to the costly and lengthy re-routing of traffic around the Cape of Good Hope.
In one such multimodal solution, the port is offering Beneficial Cargo Owners (BCOs) and shipping lines “cost-effective and fast alternatives” between Asia the United States East Coast and European destinations.
“From the Port of Salalah, an in-transit overland route by truck connects to Jeddah located in the safer mid-point of the Red Sea in Saudi Arabia. The overland route takes approximately 4-5 days. From this point the journey can continue by container vessel through the Suez Canal to Europe or the US East Coast reducing the overall transit time under to current routing,” the port explained in a press statement.
For time-sensitive cargo into and out of Europe, Salalah Port is offering a sea-air option. “Upon discharge in the Port of Salalah, cargo is transferred in transit to either Salalah or Muscat Airports or even Jebel Ali depending on availability of airlift capacity and connections. Salalah Airport offers state-of-the-art airfreight infrastructure, the ability to handle both narrow-and wide-body aircraft, and sufficient spare handling capacity,” it stated.
The new multi-modal service, it further noted, reduces transit times by an estimated 20-40% compared to traditional east-west trade routes and could deliver a cost saving of 10-20% compared to a pure air-freight solution.
Port of Salalah, the leading transshipment and logistics gateway of the Sultanate of Oman, has warned that ongoing disruptions in the Red Sea could pull down container throughput volumes by about a fourth for the remainder of 2024.
However, top officials have stressed that efforts are underway to mitigate the impacts of the crisis on the port’s performance, notably in the form of alternative routing options and multimodal cargo solutions.
Now into its sixth month, the Red Sea crisis was triggered by Yemen’s Houthi movement protesting Israel’s genocidal assault on Palestinians in the Gaza Strip. By targeting merchant ships carrying cargoes to and from Israeli ports, the Houthi blockade has caused a significant redirection of maritime traffic in the Red Sea, culminating in far-reaching global trade and transport repercussions.
“The ongoing disruptions in the Red Sea are having a significant impact on global container transport, and consequently, our operations in Salalah are also being affected. Major customers have adjusted their networks, rerouting eastbound services to Cape of Good Hope or implementing suspension of some services,” commented Braik Musallam al Amri, Chairman of Board of Directors, Salalah Port Services Co SAOG.
“Forecasts for the remainder of 2024 indicate a sustained decrease in overall container volume, estimated at -20-25% driven by transshipment volume, as the resolution of the ongoing crisis remains uncertain. However, gate volume is not expected to be impacted except for longer transit times faced by customers and limited space availability,” Al Amri stated in the Chairman’s Message accompanying the Q1 2024 report on the port’s financial performance.
During the first quarter, Salalah Port posted a 17% slump in container volumes to 878K TEUs, down from 1.056K TEUs in the corresponding quarter of 2023. The decline was attributed largely to the Red Sea crisis, but also partly to capacity constraints at the Container Terminal linked to an ongoing upgrade project.
Mitigation measures
Significantly, mitigation initiatives are underway to “minimize the gap created by the decline in transshipment volume”, according to port officials.
In anticipation of the Houthi blockade dragging on for the rest of the year, Port of Salalah has unveiled multi-modal service options designed to provide a viable alternative to the costly and lengthy re-routing of traffic around the Cape of Good Hope.
In one such multimodal solution, the port is offering Beneficial Cargo Owners (BCOs) and shipping lines “cost-effective and fast alternatives” between Asia the United States East Coast and European destinations.
“From the Port of Salalah, an in-transit overland route by truck connects to Jeddah located in the safer mid-point of the Red Sea in Saudi Arabia. The overland route takes approximately 4-5 days. From this point the journey can continue by container vessel through the Suez Canal to Europe or the US East Coast reducing the overall transit time under to current routing,” the port explained in a press statement.
For time-sensitive cargo into and out of Europe, Salalah Port is offering a sea-air option. “Upon discharge in the Port of Salalah, cargo is transferred in transit to either Salalah or Muscat Airports or even Jebel Ali depending on availability of airlift capacity and connections. Salalah Airport offers state-of-the-art airfreight infrastructure, the ability to handle both narrow-and wide-body aircraft, and sufficient spare handling capacity,” it stated.
The new multi-modal service, it further noted, reduces transit times by an estimated 20-40% compared to traditional east-west trade routes and could deliver a cost saving of 10-20% compared to a pure air-freight solution.