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Sun 15 Feb 2009 04:00 AM

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Ask the expert: Captain Dag Froehmcke

Question: Is there a need for the Middle East to continue investing in port facilities?

Question: Is there a need for the Middle East to continue investing in port facilities?

Expert:Captain Dag Froehmcke, Terminal manager, Khorfakkan Container Terminal

History of Gulftainer

The UAE will continue to be a major business hub and will emerge even stronger when the upturn takes place.

Gulftainer was established in 1976. Its primary role is to manage and operate two modern container terminals (Khorfakkan and Sharjah), plus an inland container depot, on behalf of Sharjah Port Authority in the UAE.

The company is a privately owned UAE enterprise and has an excellent track record of performance stretching back over 30 years.

Gulftainer recently established Momentum Logistics, which offers its clients a complete package of 3PL and supply chain management solutions. In addition, we have overseas port operations and transport and logistics ventures in Kuwait, Pakistan, the Comoros Islands and Turkey.

Financial impact

Clearly there will be an impact from the current global crisis. Having said that, we believe that while trade volumes both locally and for the region will be affected initially, the ‘real economy' is fundamentally solid.

This will ensure that volumes remain sound overall, and that the UAE will continue to be a major business hub despite the current challenges and will emerge even stronger when the upturn takes place.

Looking at the effects on the region's ports, changing world trade patterns will mean more and bigger container ships, a fact that is already causing problems, as many terminals in the area are ill-equipped to deal with such large vessels.

Bigger ships could also result in longer handling time, which, if not carefully planned, has the potential to result in costly delays and increased congestion. In December, Khorfakkan received one of the largest ships ever to dock in the region.

Sensible strategies

As the effects of the global financial crisis make themselves felt the world over, shipping lines, along with every other industry, are looking at ways to cut costs and increase revenues as volumes decline.

Shipping firms also have to cope with the fact that nearly 200 large container ships sized 10,000 TEU-plus are currently set to be delivered over the next four years.

So the sector will have to cope with lower volumes at the same time as taking delivery of very large new container ships. Terminals will therefore have to get used to dealing with these large ships and the pressure will be on to handle them efficiently to keep costs down.

Expansion plans

Gulftainer and Sharjah Ports Authority have continued to expand container throughput capacity, to keep pace with demand and allow even larger vessels to call at the terminal.

The first phase of expansion was completed in 2006, while the latest new berth development will be finished by early 2009. We have also ordered new super-post-Panamax quayside gantry cranes and they will be delivered by Liebherr in 2009.

Investing in the UAE

In addition, Gulftainer has developed Sharjah Inland Container Depot (SICD), which handles containers moving to and from the terminal in a location close to the Sharjah and Dubai industrial zones.

We are constructing 24 additional warehouse units to provide storage and to cater for the growth in UAE business. In addition to Khorfakkan Container Terminal (KCT), Gulftainer also operates the Sharjah Container Terminal (SCT), which has experienced a further increase in traffic this year.

APL vessels of around 4000 TEU now call at SCT, and considerable investment in infrastructure and equipment is being made to ensure that SCT can handle such large mother ships even more quickly and efficiently.

Eastern projects

Firstly, Momentum will be developing a logistics city in Sharjah and is planning to provide a logistics hub for the emirate and the region. It will be known as International Logistics City and will be 700,000m².

The city will house distribution centres offering temperature-controlled solutions, warehouses, a transportation park, a container freight station, offices, personnel accommodation blocks and a food court. Also, in Turkey, Gulftainer recently set up a venture with Demas International which will focus on transport and logistics.

It will combine Demas' Turkish expertise in logistics, trucking and warehousing with Gulftainer's terminal, port, transport operations and longstanding links with various shipping lines. We are really excited about this project and are confident it will be a success.

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