How Jebel Ali Port helped transform Dubai into a global trade hub

Situated between Asia and Europe, and just 30 kilometers from Dubai’s city center, the Jebel Ali Port has transformed what was once a desert beach into one of the busiest container ports in the world.

Today, the Jebel Ali Port defines how Dubai does business.

“Jebel Ali opened in 1979 as the largest man-made harbor in the world and continues to remain so. It was envisioned as the commercial gateway to a region of 2 billion people,” said Sultan Ahmed Bin Sulayem, group chairman and CEO of DP World.

Nasdaq Dubai-listed DP World, which has a portfolio of 77 operating marine and inland terminals across the world, maintains the Jebel Ali Port as its flagship facility.

 “It is the biggest between Rotterdam and Singapore and is able to accommodate the largest vessels afloat and on order– despite a doubling of the average container ship-size over the last 10 years,” Sulayem says, adding that Jebel Ali has been named among the most productive ports globally.

Trade Hub

Jebel Ali has played an important role as “a trade enabler” in changing the economic landscape of not just Dubai, but the region as a whole, Sulayem said.

Since starting operations, the port has directly and indirectly contributed to Dubai’s non-oil foreign trade, which was valued at AED 1.3 trillion in 2015.

Along with Jebel Ali Freezone Area (JAFZA), the port contributes to more than 20 percent of Dubai’s gross domestic product (GDP).

“The bond between the port and the free zone resulted in the organic growth of Dubai’s trade and industrial infrastructure,” says Sulayem.

Over 7,300 businesses that are based in JAFZA use the port, which provides connectivity for their import and export operations with its more than 90 weekly services to over 140 ports worldwide.

Dubai Logistics Corridor

Past developments aside, the Jebel Ali port has moved on to new collaborations that promise better trade links for the emirate.

The port is now part of the Dubai Logistics Corridor (DLC), which also includes JAFZA and the new Al Maktoum Airport— linking sea, land and air (with rail in the offing).

“At some 200 square kilometers, (the DLC) connects and integrates more than 6,500 companies, providing shippers with a 30-minute link between port and airport,” Sulayem said.

DP World has also planned further expansion for Jebel Ali, which will bring the total handling capacity of the port to 19.5 million TEU (twenty-foot equivalent unit) in 2017.

Infrastructure is in place for developing Container Terminal 4, which when complete is expected to add up to 7,840 million TEU, taking the port’s total capacity to 22.1 million TEU. Phase 1 capex is approximately $750 million.

Beyond Oil

Sine mid-2014, oil prices went into a nosedive, pushing oil-dependent economies in the Gulf to look for alternatives sources of revenue.

Despite the ongoing turbulence, Dubai has been held steady by its expanding logistics sector, along with retail and tourism. Being mainly a container port, Jebel Ali was indirectly affected by oil price fluctuations.

“Despite the challenging operating environment in the first half of 2016, the UAE handled 7.4 million TEU, which was down 6.0 percent year-on-year due to a reduction in lower-margin trans-shipment cargo, general macro weakness and tough comparable (H1-2015 was strong),” Sulayem says.

“The port continues to operate at high levels of utilization, approximately 87 percent,” he added.

Write to Nadeshda Zareen at Nadeshda.zareen@argaamplus.com