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Maersk in Saudi Logistics Partnership

08.07.2021 - Maersk Saudi Arabia, part of Danish shipping and logistics giant A.P. Moller – Maersk, has entered into a strategic partnership with King Abdullah Port to provide services for the Kingdom’s petrochemical exporters. The partners will set up the Maersk Integrated Logistics Hub, a non-bonded warehouse for handling and storing cargoes.

The port is on the Red Sea coast and located close to the key cities of Jeddah, Holy Makkah, Al Madinah and Yanbu, as well as having direct access to extensive transportation networks.

“The Maersk Integrated Logistics Hub at the King Abdullah Port is an important milestone on our journey of providing logistics solutions for our customers in Saudi Arabia. The multi-carrier origin hub for petrochemical exporters is an affirmation of our commitment to serving Saudi Arabia’s trade and simplifying our customers’ supply chains,” said Mohammad Hihab, managing director of Maersk Saudi Arabia.

Maersk will initially invest in 100,000 m2 of warehousing space during the first two years of operations at the hub, catering for an annual throughput that will reach 1 million t by year three as demand from exporters grows.

The partners said the facility’s strategic location will cut the distance that truck drivers currently have to spend transporting cargoes from Yanbu to Jeddah from 350 km to 200 km. In addition, exporters, which currently require 14-18 days from receiving a booking to loading the material onto a vessel, will now only need 6-8 days at the hub, thereby reducing turnaround times, increasing efficiency and also improving competitive advantage through lower logistics costs.

Owned by the Ports Development Company, King Abdullah Port is the region’s first port to be owned, developed and operated by the private sector. The establishment of the hub is part of a major initiative aimed at increasing the performance efficiencies and competitiveness of Saudi Arabia’s logistics sector.

It is also in line with the objectives of Vision 2030, which include transforming the Kingdom into a top global logistics hub connecting Asia, Europe and Africa, increasing non-oil exports and improving the country’s global ranking on the Logistics Performance Index from 49 to 25.

Author: Elaine Burridge, Freelance Journalist

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