Deal to establish Maersk’s first petrochemical hub in the Kingdom
Maersk Saudi Arabia recently announced that it has entered into a strategic partnership with King Abdullah Port, the region’s first privately owned, developed and operated port, to enhance the Kingdom’s logistics capabilities by adding state-of-the-art services and technologies to the port’s offerings.
As part of the partnership, both the entities signed a deal to set up Maersk Integrated Logistics Hub, a non-bonded warehouse, to provide comprehensive logistics services and benefit local petrochemical exporters.
The agreement was signed by Mohammad Shihab, Managing Director, Maersk Saudi Arabia, and Jay New, CEO, King Abdullah Port, in a ceremony held at King Abdullah Port. The signing ceremony was attended virtually by Richard Morgan, Regional Managing Director, Maersk West & Central Asia.
Logistics hub
The Maersk Integrated Logistics Hub at King Abdullah Port will cover an important logistical requirement of exporters who already have access to Maersk’s solutions such as landside movement of cargo, customs clearance, and ocean logistics, thus ensuring a truly integrated logistics offering.
The hub will serve as the focal supply chain solution, primarily for Saudi Arabia’s petrochemical exporters, through the large space allocated for handling and storing cargo. It will play an important role in facilitating the storage of export cargo and enable pallet handling, stuffing and shuttling.
Major initiative
The establishment of the hub is part of a major initiative aimed at increasing the performance efficiencies and competitiveness of Saudi Arabia’s logistics sector. It is also in line with the objectives of Vision 2030, which include transforming the Kingdom into a top global logistics hub connecting Asia, Europe, and Africa, increasing the non-oil exports, and improving the Kingdom’s global ranking on the Logistics Performance Index from 49 to 25.
Located within a two-kilometre radius from the terminal yard and directly adjacent to the customs inspection zone, this hub’s strategic location will greatly benefit the exporters by saving time. Furthermore, most of the exporters based out of the manufacturing hub of Yanbu have had to truck their cargo almost 350 km to Jeddah for loading onto vessels.
With the Maersk Integrated Logistics Hub at King Abdullah Port, this distance has been drastically reduced to 200 km. Exporters currently require 14 to 18 days from receiving the booking to loading the material on the vessel.
New capabilities
With the new hub, this process will now take only 6 to 8 days, given material availability, thus reducing the turnaround time, increasing efficiency, and improving competitive advantage through reduced logistics costs. The reduction in trucking wills also positively contribute towards environmental sustainability through reduced emissions.
Maersk is initially investing in 100,000sqm. of warehousing space during the first two years of operations at the hub, to cater to the annual throughput that will reach 1 million metric tons by third year as demand from exporters grows over the years.
“The Maersk Integrated Logistics Hub at the King Abdullah Port is an important milestone on our journey of providing logistics solutions for our customers in Saudi Arabia,” affirmed Shihab.
“The strategic partnership between Maersk and King Abdullah Port is an important step in raising the efficiency of the Kingdom’s logistics sector and boosting our capabilities in logistics and trade in line with the Vision 2030 objectives. We are confident that this will significantly enhance the port’s outstanding operational capabilities by enabling us to provide sophisticated services seamlessly,” asserted New.
