Despite the global recession, Sharjah's ports will continue to develop, in anticipation of the projected recovery volume growth, says Gulftainer. When it occurs, Sharjah's ports will be part of only three ports in the whole region that will have the ability to handle the largest container ships in the world, according to Peter Richards, Director and General Manager, Gulftainer Company, which manages and operates the container terminals in Port Khalid and also Khorfakkan on behalf of Sharjah Port Authority.
The operator anticipates heavier traffic as trade may switch to this area as other regions slow down, resulting in greater competition, bigger ships, and bigger feeders, all of which will affect the region's ports, Richards told Emirates Business in an interview.
Amid this global financial crisis, how has the current trend in the shipping industry affected port operations?
There has been a definite shift towards larger vessels in order to consolidate shipments and cut costs in the wake of the financial decline. Fortunately, our strategy has been focused on expanding and upgrading our ports and we are already well-equipped to handle substantial amounts of traffic.
I think we can expect to see a number of new ports across the region and beyond to follow suit as these changes sweep through the shipping industry.
However, 2009 is going to be a very tough year for the ports and shipping industries. Only those ports and shipping lines with a strong financial base and the stamina to outrun this global recession will be successful. Our ports in Sharjah will be among those that will weather the storm.
Sharjah's ports were the least affected in the region with regards to congestion, and shipping lines did not impose a congestion surcharge on these terminals as they did on other UAE ports. Despite the global recession, Sharjah's ports will continue to develop, in anticipation of the projected recovery volume growth. When it occurs, Sharjah's ports will be part of only three ports in the whole region that will have the ability to handle the largest container ships in the world.
Are you planning any new investments in 2009 and beyond for any new facilities and expansions within and outside the UAE?
We are already in the process of expanding and upgrading both KCT and SCT. We anticipate heavier traffic as trade may switch to this area as other regions slow down, resulting in greater competition, bigger ships, and bigger feeders, all of which will affect the region's ports. The development of both KCT and SCT will continue after the present expansion is complete. His Highness Sheikh Dr Sultan Bin Mohammed Al Qassimi, Supreme Council Member and Ruler of Sharjah, has tremendous foresight and appreciates that the continued development in a staged orderly fashion of Sharjah's gateways is of paramount importance to the emirate. Gulftainer continues to develop and expand the land-side logistics of the group and are always evaluating opportunities outside the UAE.
What is the status of your plan for setting up Momentum Logistics, a new logistic company and the International Logistic City in Sharjah?
Momentum was launched in October of last year and things are moving along as planned, with levelling of the site for International Logistics City currently under way and expected to be completed soon.
We look forward to sharing all the latest related news and developments as the company grows over the coming years.
The container handling by Gulftainer has grown by 15 per cent in 2008. Do you expect to maintain that pace in 2009 given the current situation?
As I said earlier, shipping lines are increasingly using larger vessels, consolidating shipments in order to cut costs, which translate into greater volumes being handled at ports. However, no one should be under any illusion that the same growth will be experienced in 2009. People who believe the global recession will not affect this region have simply buried their heads in the sand.
On the positive side I believe that this region will be the one that is least affected and its recovery time will be far shorter.
You have invested in a new warehousing depot on the outskirts of Sharjah-Dubai border, how is it useful to you?
Well, it is because of the enormous amount of activity on the logistics front that Momentum was established and Trucktainer and Speedtrux now fall under that banner. Momentum is doing exceptionally well and we could not be happier with the progress made. The utilisation of the new Phase 2 warehouse facility is very encouraging despite the slowdown in trade through the UAE. The first 12 warehouses will be complete in April and are already booked. The remaining 12 will be completed in November.
Dubai is already building a railway network. Where will Sharjah be positioned in this area and do you think the emirate needs to be part of the rail network linking the GCC countries?
To clarify, Dubai is building a passenger monorail not a railway network. Once the study of a railway network in the GCC has been completed, evaluated and authorised I am sure Sharjah will be a leading participant.
Yes, I believe the GCC would benefit greatly from a railway network as far more volumes of cargo can be transported more efficiently using rail. Although I believe there will always be a requirement for trucks to distribute the cargo from the rail stations.
You have formed joint ventures in Pakistan, Kuwait, Turkey and the Comoros for transport and logistics services. How is the business performing in these markets given the economic and political turbulence in some of the countries?
The current global financial crisis has definitely caused a shift in the standard operating basis for most players in the shipping and logistics industry, but it has certainly not brought it to a standstill.
Additionally, every market will have its own challenges, which is why any firm looking to expand beyond its home borders will do extensive research before opting to set up operations in a particular area.
Our strategies take into account the general climate of the areas in which we operate, so that we are never caught unawares. We are pleased with the progress that has been made in our ventures abroad thus far, particularly in Turkey and the Comoros, where we continue to achieve excellent results.
Pakistan is a different scenario due to the political and financial turbulence, which has increasingly burdened the country for the past two years. We will be evaluating our continued ventures in Pakistan during the first half of 2009.