UAE's box volume growth rates expected to rise faster than global ports

THE United Arab Emirates' and member states of Gulf Cooperation Council (GCC), are expected to continue to see robust port and shipping growth, according to Peter Richards, managing director Sharjah-based Gulftainer.

Growth over the last decade has been encouraging at over 12 per cent and, with more trade with the fast growing Brazil, Russia, India, China (BRIC) nations, he anticipates the Middle East is set to enjoy continued success.

"With the predicted GDP growth in the Middle East over the next five years ranging between four and 10 per cent and with container volumes typically in excess of GDP growth, we will see a continued and strong progression in the Middle East, said Mr Richards.

"There may have to be some rationalisation of capacity or co-operation of lines together, but this will not mean a reduction and it will most likely lead to larger vessels and the need for terminal operators to plan for this."

This spells good news for the United Arab Emirates, a nation that generates around 14 per cent of its GDP through the supply chain and logistics sector, according to estimates. With the UAE acting as a transit point for the global movement of cargo, by sea, land, and air, the importance of the shipping and ports and cargo industries cannot be underestimated, reports AMEinfo.com.

Global demand for seaborne containers is forecast to increase by four to six per cent in 2012, with Asia-Europe trades likely to show lower increases, while higher increases are expected on north-south trades.

The increasing size of vessels deployed on the Asia-Europe port calls are expected to further strengthen the position of the UAE as a major transshipment hub in the region. Shipping lines would consolidate container distribution at a hub port like Khorfakkan and feeder these containers to final destinations in a bid to cut costs.

World Bank statistics show that at the start of the global financial crisis in 2008, the total container throughput of UAE ports was 14.7 million TEU, the following year box volumes had risen to 14,425,039 TEU. In 2010 the throughput was up again to 15,174,023 TEU, an increase of 748,984 TEU.

Amid the downturn in all the major world economies and the Eurozone crisis beginning to affect demand out of China, the annual growth rate of cargo handled by ports in the Middle East, dropped from nine per cent in 2010 to six per cent in 2011, far less dramatically than the decline in global growth rates, which fell from 14.7 per cent in 2010 to 7.2 per cent in 2011.

"Fast-forward to 2012 and the prospects for the UAE's shipping and ports industries are definitely looking more than merely promising," the report said. "With the global economy finally showing signs of stabilising and the increase in globalisation and offshore sourcing, supply chain management is becoming an increasingly important segment of many businesses."