Saudi port limitations said to send costs spiralling

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Jeddah Port (for illustrative purposes only).

Jeddah Port (for illustrative purposes only).

Severe capacity constraints at Saudi Arabia's Jeddah Islamic Port (JIP) have caused container transportation costs to almost double and waiting times to reach 15 hours, the Saudi Council of Chambers and Industry has reportedly said.

The cost of moving goods in and out of the port has increased from SR700 ($186) to SR1,200 and had been as high as SR2,000 on occasion, the council claimed.

“We have to wait from 9am till midnight sometimes waiting for our turn, and this has sent the transportation costs spiralling,” Saed Al-Bassami, vice president of the National Transportation Committee at the Saudi Council of Chambers and Industry, told Arab News.

“The delay in moving goods from Jeddah Port is mainly an organisational matter. There has to be a centralised system in place with better coordination between all departments to ensure smooth function, as is being done at other ports.”

The rising costs would lead to higher consumer prices, head of the Customs Clearance Committee at the Jeddah Chamber of Commerce and Industry, Ibrahim Al-Iqeili said.

“Increasing transportation cost does not really solve the [capacity] problem since the additional costs are passed on to the consumers by the importers,” he said.

“Eventually, it is the consumers who pay a higher price for imported goods.”

Restricted entry and access points have been highlighted as a major contributing factor to the congestion.

Al-Iqeili said port authorities were assessing the situation and several meetings had been held with port officials and the Customs Department.

They were considering increasing the number of gates to allow more trucks to enter the port from the beach storage area without having to pass through the city centre, which would increase distribution capacity because trucks are banned from the CBD during peak hours.

Additional entry and exit points also were being discussed.

Port authorities announced in April $266.6m would be spent upgrading the facilities to handle an increasing amount of cargo.

The port handles more than 65 percent of the traffic entering the kingdom from the sea and saw 62m tonnes in 2012, an increase of 20 percent on the previous year.

The upgrade would include expanding Route 8, upgrading the electric power system, construction of a multi-storey car park to accommodate more than 17,000 cars.

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