Maersk Saudi Arabia, an integrator of container logistics, announced that it has entered into a strategic partnership with King Abdullah Port, the region’s first privately owned, developed and operated port, to enhance the Kingdom’s logistics capabilities by adding state-of-the-art services and technologies to the port’s offerings. As part of the partnership, both the entities signed a deal to set up Maersk Integrated Logistics Hub, a non-bonded warehouse, to provide comprehensive logistics services and benefit local petrochemical exporters. The agreement was signed by Mohammad Shihab, Managing Director of Maersk Saudi Arabia, and Jay New, CEO of King Abdullah Port, in a ceremony held at King Abdullah Port. The signing ceremony was attended virtually by Richard Morgan, Regional Managing Director for Maersk West & Central Asia.
The Maersk Integrated Logistics Hub at King Abdullah Port will cover an important logistical requirement of exporters who already have access to Maersk’s solutions such as landside movement of cargo, customs clearance, and ocean logistics, thus ensuring a truly integrated logistics offering. The hub will serve as the focal supply chain solution, primarily for Saudi Arabia’s petrochemical exporters, through the large space allocated for handling and storing cargo. In addition, it will play an important role in facilitating the storage of export cargo and enable pallet handling, stuffing and shuttling.
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 the non-oil exports, and improving the Kingdom’s global ranking on the Logistics Performance Index from 49 to 25.
Located within a two-kilometre radius from the terminal yard and directly adjacent to the customs inspection zone, this hub’s strategic location will greatly benefit the exporters by saving time. Furthermore, most of the exporters based out of the manufacturing hub of Yanbu have had to truck their cargo almost 350 km to Jeddah for loading onto vessels. With the Maersk Integrated Logistics Hub at King Abdullah Port, this distance has been drastically reduced to 200 km. Exporters currently require 14 to 18 days from receiving the booking to loading the material on the vessel. With the new hub, this process will now take only 6 to 8 days, given material availability, thus reducing the turnaround time, increasing efficiency, and improving competitive advantage through reduced logistics costs. The reduction in trucking will also positively contributing towards environmental sustainability through reduced emissions.
Maersk is initially investing in 100,000 sq. mt. of warehousing space during the first two years of operations at the hub to cater to the annual throughput that will reach 1 million metric tons by the third year as demand from exporters grows over the years. Mohammad Shihab, Managing Director, Maersk Saudi Arabia, commented, “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.” He added, “At Maersk, we are integrating logistics and providing our customers with single-window access to multiple solutions that will solve their supply chain challenges. We are really excited about bringing our strategy to life and looking forward to serving more and more customers in the future.”
Commenting on the partnership and the agreement to establish Maersk Integrated Logistics Hub, Mr. New, CEO of King Abdullah Port, said, “The strategic partnership between Maersk and King Abdullah Port is an important step in raising the efficiency of the Kingdom’s logistics sector and boosting our capabilities in logistics and trade in line with the Vision 2030 objectives. We are delighted to partner with the world’s leading integrated container logistics company to establish the Kingdom’s first petrochemical hub. We are confident that this will significantly enhance the port’s outstanding operational capabilities by enabling us to provide sophisticated services seamlessly amid the challenges of the current economic situation and the rapid changes in the industry. The hub will also help our exporters to achieve considerable savings in terms of time and costs besides significantly reducing risks, helping them serve international customers better.”
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. Ranked as the world’s second-most efficient port by The World Bank in 2020, the port emerged as one of the world’s top 100 ports within four years of operation. With its strategic location in King Abdullah Economic City – a modern city with a pro-business ecosystem and infrastructure – King Abdullah Port leverages the city’s advanced facilities and services, particularly the Industrial Valley, which has attracted many logistics projects as well as light and medium industries.
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