Business & Economy

Mawani ports authority flexes Saudi Arabia's maritime muscles

An overhaul of the Jeddah Islamic Port is on the way, alongside integrated logistics parks, as sea transport takes a leading role in the Vision 2030 revolution

From multi-billion dollar contracts to boost port capacity to new shipping lines and logistical parks, maritime transport is at the forefront of Vision 2030 plans to transform the Kingdom’s economy
Andrei Cojocaru
From multi-billion dollar contracts to boost port capacity to new shipping lines and logistical parks, maritime transport is at the forefront of Vision 2030 plans to transform the Kingdom’s economy

Mawani ports authority flexes Saudi Arabia's maritime muscles

Shujaa Albogmi
last update on

Saudi Arabia’s ports are increasing their contribution to the country’s economy.

The Kingdom is capitalising on its strategic geographical location for traffic between Asia, Africa and Europe by developing local ports to enhance its position as a global logistics hub.

Updated facilities will help offer greater flexibility to Saudi business and the Kingdom’s commercial activities. They will improve the private sector's ability to channel global demand for various products and commodities, as well as meeting the world’s wider needs for better transport and logistics.

The Vision 2030 policies identify the Saudi transport and logistics sector as a significant driver of commercial activity, with global reach for trade flows. A large-scale package of projects also covers airports, roads, customs ports, and logistics services alongside seaports, all of which will contribute to the transformation.

Mawani and Vision 2030

Mawani, the Saudi Ports Authority, is charting a course to turn the Kingdom’s maritime transport into a leading ecosystem with reliable and effective operations as part of the Vision 2030 strategy. The sector’s contribution to the economy has risen to about 30 billion riyals ($8 billion) and is expected to reach 45 billion riyals by the end of the year.

The authority aims to double the capacity of its ports, from the current 20 million containers to more than 40 million. It intends to grow the market share of regional transhipment from around 32% to 45% and to lift the port occupancy rate to 70%.

Diana Estefania Rubio

There has already been progress. The Kingdom’s ranking on the World Bank’s Logistics Performance Index (LPI) has improved, reaching tenth place from 49th. Its international classification in the Liner Shipping Connectivity Index run by the United Nations Conference on Trade and Development (UNCTAD) improved to 80 points from 71 points.

To ensure the Kingdom is the sector’s regional leader, Mawani is raising the number of its re-export centres from seven to 30, as well as bringing the Kingdom’s classification in the Trading Across Borders indicator up, to 35th place.

More than 100 upcoming initiatives have been announced to reach these goals by upgrading the Kingdom’s ports, including 11 pioneering projects.

The authority signed 10 agreements in 2022 with local and international partners to launch Smart Ports, which will automate operations and deploy 5G technologies. Mawani also introduced its new Port Community System and several other development projects.

At the Jeddah Islamic Port, Mawani will deepen the approach channels, turning-basins, waterways, and southern terminal basin. It has signed two contracts for the work, worth 640 million riyals ($170.4 million), with Modern Building Leaders, in cooperation with Huta Hegerfeld Saudia and PC Marine Services.

Once fulfilled, the port will be able to receive large container ships with a capacity of 24,000 twenty-foot equivalent units (TEUs), boosting its competitiveness.

The port will be able to receive large container ships with a capacity of 24,000 twenty-foot equivalent units (TEUs), boosting its competitiveness

Harnessing the power of the private sector

Mawani is also establishing eight integrated logistics parks, set up with strategic partners in the private sector at both national and international companies.

With total investments exceeding 3 billion riyals ($800 million), these partnerships will provide more than 16,000 direct and indirect job opportunities with Maersk, CMA CGM, LogiPoint, DP World, Bahri, Globe, Medlog, and the Jeddah Chamber.

Mawani added 24 new shipping services between 2021 and the end of February 2023 as it strengthened its relationships with major carriers, helping improve the Kingdom's connections to the east and to the west.

As the global maritime industry has grown, Mawani has also improved operational efficiency and established an improved regulatory environment via upgraded procedures and automated operations, establishing a leading position in the sector.

The authority also harnessed the latest technology to cut the container turnover rate to 3.4 days, from 16 days in 2016. It plans to get it down further, to two days by 2030. Ship unloading times have also been reduced from 60 minutes to 15 minutes after docking.

Mawani also worked with its strategic partners to reduce the clearance period from two weeks to two hours and reduce the demurrage time from 10 to seven days to support vital sectors and secure supply chains and enhance the experience of its port customers.

All this helped set up the authority's crowning achievement, when Saudi Arabia topped the World Bank's Container Port Performance Index (CPPI) for 2021, with King Abdullah Port taking first position after coming second in 2020.

The Jeddah Islamic Port and King Abdulaziz Port also made great leaps, jumping to 8th and 14th place respectively up from positions 53 and 102 respectively.  

Saudi Arabia topped the World Bank's Container Port Performance Index (CPPI) for 2021, with King Abdullah Port taking first position after coming second in 2020.

The Kingdom also ranked as the fifth fastest in the world in container ship handling per hour, according to the UNCTAD annual index for 2021.

Mawani, represented by the Jeddah Islamic Port, was also awarded the 2022 Port of the Year and Digital Transformation awards at the 7th edition of the International Green Shipping Summit.

AFP
A picture taken March 1, 2022 shows a view of cranes and shipping containers at a loading dock of Jeddah's Islamic Seaport on Saudi Arabia's western Red Sea coast.

The authority also obtained international recognition via ISO 31000 and ISO 22301 certifications, meeting all relevant standards in risk management and business continuity management.

Setting sail to boost economic growth

The maritime transport sector provides vital support for economic growth in Saudi Arabia, with Mawani of central importance through increased national exports and imports and helping facilitate non-oil state revenues.

As a key player in the commercial and industrial exchange between the Kingdom and the countries of the world, the authority also helps boost regional and international trade to aid the Kingdom in its development plans.

And since regional and global economic growth reflects positively on local economies, Saudi ports are working to stimulate this growth and secure supply chains. The Ras Tanura Port in the east handles much of the world's oil sales. Direct navigational services link the Kingdom to 112 global ports, while indirect services reach 250 more destinations.

The Jeddah Islamic Port is the Kingdom's largest in terms of handling goods and containers, with a share of 57% of all maritime trade and transhipment operations in Saudi Arabia.

King Fahad Industrial Port in Jubail is the largest specialised industrial port in the world for the export of petrochemical products, oil derivatives, and solid materials, with a capacity of up to 63 million tons.

Vision 2030's ambition for Saudi Arabia to enhance its position in global logistics is central to the plans to achieve a balanced public budget, better government and an improved quality of life.

font change

Related topics Saudi Arabia Vision 2030 Economy
Related Articles
Editor's Pick