Red Sea ports are struggling to deal with large volumes of incoming cargo as war-related disruptions to Saudi shipping lanes continue.
Shipping executives warn that vessels are already facing lengthy delays, while rising cargo volumes are adding to congestion on Saudi highways.
With no freight rail link between Jeddah and Riyadh, the seasonal surge threatens to put further strain on supply chains already disrupted by the Iran war.
Ports on the country’s west coast like Jeddah and Yanbu have already registered a massive increase in traffic throughout this year following the effective closure of the Strait of Hormuz, cutting off eastern freight terminals.
The value of goods entering Saudi Arabia through Jeddah Islamic Port nearly doubled in August compared with a year earlier, rising 94 percent year on year to SAR33.5 billion ($8.9 billion), according to a report published on Monday by the General Authority for Statistics.
The Red Sea port accounted for 47 percent of the kingdom’s merchandise imports, up from 22 percent a year earlier, highlighting the shift in cargo flows towards the country’s western coast as shipping through the Strait of Hormuz remains disrupted.
Shipping companies told AGBI that Red Sea ports are now operating at capacity but demand for cargo volumes could increase. The country is approaching seasonal spikes in imports that are putting yet more pressure on ports, challenging their ability to manage inflows.
“It’s so busy. There’s already a lot of activity because of the war,” said Bassil Bassam, CEO of Bassam Shipping. And it’s increasing, he said
Saudi imports typically spike before the holy month of Ramadan, which begins on February 8, as suppliers prepare to cater for feasts and events up and down the country.
The winter months are also peak season for citrus products crossing the Red Sea from Egypt, following the orange harvest. Egypt has become the world’s third largest orange exporter after Spain and South Africa, with Saudi Arabia and the UAE accounting for almost a fifth of all purchases, according to data from the World Bank.
As disruptions to ports continue elsewhere, Bassam expects this winter to be a lot busier than usual. Last year, his company, which facilitates “ro-ro” shipping – whereby vessels carry trucks between ports for them to ‘roll on’ and ‘roll off’ – saw 160,000 trucks pass through during the winter months. This year, he expects more than 200,000, putting extra strain on ports that are already struggling.
Currently, ships can find themselves waiting for days, sometimes weeks, outside Red Sea ports, he said, as longshoremen and customs officials work to process the high volumes of incoming cargo. Shipping companies say that the ability to cope with such large volumes has improved since the start of the year, but that they are at their limit.
“The ports are heavily under pressure,” said Tobias Maier, CEO of DHL Global Forwarding Middle East & Africa. “You have long waiting times for vessels. They’re operating at maximum utilisation.”
From Port of Neom, where most of Bassam’s work is, the journey takes around two days, he said. From Jeddah, the journey is quicker, but a lot more crowded.
From the west coast to Riyadh, the highway is backed up with trucks carrying cargo into the capital. Unlike Dammam on the east coast, everything has to go by road.
“You see them all in one lane, bumper to bumper: thousands of trucks,” said Poul Hestbæk, CEO of Saudi shipping company Folk Maritime. Ultimately, more trucks means more “wear and tear of the roads and more accidents,” he said.
Shipping companies said that the Saudi officials reacted quickly to introduce measures to ease the flow of cargo. The authorities have waived certain customs requirements to get shipping moving quicker through ports and eased restrictions on companies bringing in trucks from abroad, as demand for trucking has spiked.
At the Port of Neom, Bassam said, expansion is underway. While a long-promised container terminal will open next month, new berths for ro-ro shipping have opened up, with the promise of more to follow in the coming months, he said.
“They are now doing their best to make things run smoothly,” he said.
