With the fresh resumption of the clashes between the United States and Iran, fears have emerged about the strategically important Strait of Hormuz facing new disruptions. To address this, Dubai-based ports operator DP World has acquired 700 lorries to expand its road freight network across the Gulf region as the economies in the region try to find alternative routes to keep their growth engines uninterrupted.
As per DP World, the newly added fleet will add up to 35,000 trips per month, supporting both domestic and cross-border trucking for the logistics giant’s Middle East customers. The company’s current network fleet capacity is at around 3,000 lorry movements per day across the region.
The extra fleet will cater to first-, middle-, and last-mile requirements, apart from supporting the movement of containerized and non-containerized cargo across the Gulf.
“This is a long-term investment in our multimodal network and the customers that trade in the GCC. As regional demand grows, we are scaling our capabilities to provide customers with an integrated network,” said Ahmad Al-Hassan, chief executive and managing director of DP World GCC.
Taking the new geopolitical reality into consideration, logistics providers in the UAE and the wider Gulf region have rapidly expanded into alternative routes since February 28, when the Iran war began.
The UAE itself has become reliant on the heavy goods vehicles, using them far more extensively to collect everything from supermarket staples to industrial goods from Oman and Saudi Arabia and to send out manufactured items. The Dubai administration has also established a “green corridor” with Oman, which redirects global shipments arriving through Oman, transporting them overland to Dubai through the Hatta Border Crossing using accelerated customs procedures.
The methods proved to be an instant hit, as the number of customs declarations surged from 12,000 in March to nearly 100,000 in April. The value of transported goods, on the other hand, went up from Dh1 billion (USD 272 million) to more than Dh8 billion by May. Sharjah and Oman have also launched a logistics corridor to move goods by sea and land more easily, primarily through the Khatmat Malaha Border Crossing in Kalba and the Al Madam border point. Goods are now crossing borders easily, reaching Oman’s Sohar port on the east coast, apart from Duqm and Salalah, in record time.
“DP World has also established a bonded corridor from Sohar in Oman and made use of Red Sea routing options through Jeddah Islamic Port’s South Container Terminal, routing more than 350,000 twenty-foot equivalent units (TEUs) overland following maritime disruption,” the venture noted.
Bonded corridors are customs-controlled routes that allow freight to move freely and quickly between ports and free zones. DP World has found this concept to be its new investment destination by opening fast-track lanes connecting East Coast gateways directly to Jebel Ali Port.
“Our customers want certainty, reliability, efficiency, and more sustainable supply chain solutions. These new trucks are fuel-efficient and meet the Euro V emissions standard, and we will explore green-energy vehicles in the future,” said Raveen Guliani, chief operating officer of logistics at DP World GCC.