DP World outlines its growth strategy to CST as it braces itself for the next generation of container ships
What is your strategy for DP World this year and in the future?
As a global trade enabler, our strategy is to grow complementary sectors in the global supply chain such as industrial parks, free zones and logistics, adding further value for all our stakeholders. We have made acquisitions of port-related businesses that will enhance our position as a leading trade enabler and we look forward to leveraging our proven track record to accelerate growth.
What is your strategy for Jebel Ali this year and going forward?
Jebel Ali is a trade gateway and business hub. With the integration of the port and free zone, we look to harness synergies and bring increased value and supply-chain efficiency to our customers from shipping lines to cargo owners.
What is driving growth there? What are the market opportunities for the port?
Jebel Ali continues to operate at high levels of utilisation (83%) and the medium-term domestic and regional growth outlook is strong. Opportunities include the approach of Expo 2020 and we are developing the port in line with market demand.
Are there any challenges that the port faces and, if so, what are these and how are they being dealt with?
Increasing ship sizes and throughput result in increased infrastructure demand. Ports are expected to have deeper draughts, longer berths, larger yards and bigger and more efficient equipment. We continue to invest to bring the largest seagoing vessels in the world to Jebel Ali.
What investments and upgrades do you plan for Jebel Ali?
We have equipment replacement programmes in place for our terminals, with bigger and more efficient cranes and yard equipment. We are continuing to develop our Terminal Four to ensure we are able to provide capacity that the market demands. Our investments go beyond infrastructure into innovative technology to improve operational efficiency and enhance safety at our terminals and gates. We are also automating our processes and engagement across the port community.
What volumes in TEU has the UAE achieved so far this year, and are you able to give a forecast for DP World UAE whole year?
The UAE handled 11.6 million TEU in the first nine months of 2017 [calendar year], representing volume growth of 4.6% in nine months and 5.3% in Q3, following 6.6% growth in Q2 and 1.8% growth in Q1 2017.
That growth was due to a pick-up in global trade and new shipping alliances - and came despite uncertainty in the region. Jebel Ali continues to operate at high levels of utilisation (83%) and we remain well placed to meet FY [calendar] 2017 market expectations.
DP World on expansion drive
DP World has ordered 84 additional STS automated gantry cranes in its latest expansion drive
Regional port-management heavyweight DP World is investing in improved container-handling productivity at Jebel Ali Port in Dubai, adding 1.5M TEU/yr capacity to the 720,000 mᶾ Container Terminal Three (T3), which opened in 2014.
This expansion responds to emerging-market demand and increases the port’s capacity from 18M TEU/yr to 19.5M TEU/yr. As of October, T3 is able to handle up to 4M TEU/yr, making it the world’s largest semi-automated terminal even before its extra cranes began to come into service.
Toward the end of 2017, the first batch of 37 new ship-to-shore (STS) cranes and 47 automated rail mounted gantry (ARMG) cranes was servicing customers.
“Increasing the handling capacity at Terminal Three is in response to the high levels of utilisation at the port and, with the recovery in volumes, the medium-term outlook remains positive…” said DP World group chairman and chief executive officer Sultan Ahmed bin Sulayem.
“Our priority is to ensure that we can serve our customers efficiently and deliver the benefits of scale that the new fleet of ocean-going mega vessels offer. The new cranes and retrofitting reflect the investments we make in infrastructure, equipment, technology and training of our teams. Today, Jebel Ali has the capability to accommodate 10 mega container ships simultaneously and we are on schedule to increase this number significantly.”
The upgrade includes raising the heights of seven existing quay cranes while retrofitting them to handle the new mega container vessels. This refurbishment will improve efficiency and productivity and prolong the cranes’ lifespan.
It is not just T3 that will benefit from shore-side expansion work: all of Jebel Ali’s container terminals are seeing upgrades.
Container Terminal One (T1) now has 15 Shanghai Zhenhua Heavy Industries Co (ZPMC) replacement STS cranes, with 70 tonne twin-lift capability. They are equipped to handle the latest Triple-E mega vessels. Its capability is further strengthened by the crane-heightening project, with six cranes refitted to service new container ships.
Container Terminal Two (T2) will receive three STS and 12 ARMG cranes. The STS cranes are dual-hoist tandem types capable of lifting two 40 TEU containers or four 20 TEU boxes, with a combined weight of 100 tonnes. Three existing cranes will be retrofitted to raise their heights to handle the next-generation vessels.
The 12 ARMGs are double cantilever/double truck lane models capable of handling twin-lift containers to a combined weight of 70 tonnes.
Meanwhile, in line with market demand, Container Terminal Four will take delivery of 13 STS cranes (dual-hoist tandem that can lift a combined weight of 120 tonnes) and 35 ARMG cranes that are double cantilever/double truck lane types able to handle twin-lift containers to a combined weight of 70 tonnes.
Jebel Ali is one of the few ports in the Middle East that can berth multiple modern-era megaships that have a carrying capacity of 18,000 TEU and more. The port’s capabilities were highlighted earlier this year when MSC Eloane, one of the world’s largest container ships, berthed there.
Sohar rising: planning for growth at Oman’s gateway port
“One of the things I like most about my job is the feeling that I am taking part in something meaningful,” writes Hutchison Ports Sohar chief executive Albert Pang
Most people do not have the chance to play a key role in the restructuring of a national economy. At Hutchison Ports Sohar, we do.
When Hutchison Ports gained the exclusive right to operate a container terminal in northern Oman’s Sohar Port in 2005, it was clear that our terminal and the surrounding areas were poised for big growth, although the policy basis for this growth was still under development.
Since then, Oman has announced an ambitious National Programme for Enhancing Economic Diversification.
Petrochemical products make up one-third of Oman’s economy today and this diversification plan will bring about much greater roles for manufacturing, transport and logistics, tourism, fisheries and agriculture in the local economy.
Most of Oman’s target industries yield growth potential for container shipping, either directly, as contributors to connectivity or throughput, or indirectly, as growth engines for the local consumer economy. But it takes some understanding of another macro-plan, the Sultanate of Oman Logistics Strategy 2040 (SOLS 2040), to recognise the true implications for Sohar Port.
National Logistics Strategy
A significant portion of SOLS 2040 calls for comprehensive development of Oman’s three commercial ports, their surrounding areas and connecting infrastructure.
Salalah, in the south, is Oman’s largest port in terms of throughput. The area around it is an important petrochemical centre but Salalah Port itself is mostly a transhipment facility and a the planned port of Duqm, 600 km north of Salalah, will be situated next to a small oil city. While there are big plans for industrial development there, local market demand will be limited.
Sohar Port is another story. It is situated just two hours from the capital of Muscat, in the populous region of Al Batinah. Most of Oman’s population lives in this area, situated just on the outside of the Strait of Hormuz.
Sohar has been designated the commercial cargo gateway – located halfway between Muscat and Dubai along the brand-new Al Batinah Expressway, which will soon connect the entire northern coast.
Of course, infrastructure connectivity is only part of the story. The Sohar area has enormous potential for industrial development, to serve local and international markets. Al Batinah lies just opposite India and only a few hours over land to the UAE.
Right on our doorstep is the Sohar Freezone, a massive investor-friendly development zone, planned to stretch across 5,000 ha, with the even larger South Al Batinah Industrial Area located just two hours away.
For these reasons, we are expecting a 30% increase in shipments to and from the local market, with a much greater representation for food and consumer goods in addition to current drivers of growth from the local petrochemical, stone, metal and automotive industries. On top of that, there is potential to receive a greater share of regional transhipment cargo.
This expected growth might stress other port operators, but at Hutchison Ports Sohar we have long planned for Oman’s evolution into a regional engine of trade. In fact, our adaptability in this context is part of our value proposition.
This adaptability lies at the confluence of three different facilitating advantages:.
The first advantage is the existence of highly supportive and visionary government policy, as the previously-mentioned strategic plans suggest.
The second is our ability to expand when needed. Currently, our operations are centred on Terminal C of Sohar Port, but it was not always this way.
When we first began operating in Oman, we were at Terminal B, a facility with a 520 m quay and 28 ha of yard space. Since then, Terminal B has been designated for redevelopment as an agro-berth with planned facilities for rice, grain and sugar processing.
A few years ago, we moved to the current site at Terminal C, which has a 970 m quay with 68 ha of yard. Here, we can service the largest ships afloat along with regional and feeder vessels.
“Most of Oman’s target industries yield growth potential for container shipping”
This move was planned with long-term growth in mind. Our capacity is 1.6M TEU/yr, but we still have ample room to handle more containers as Oman’s industrial base evolves and as we continue to attract transhipped cargo. This does not include the contributions of land bands in the Sohar Port area, or our future development of Terminal D.
The third advantage is our operational excellence and access to the most advanced technology through the Hutchison Ports network. This association has supported the roll-out of several key improvements at Hutchison Ports Sohar.
At the quayside is our installation of a fleet of remote-controlled super-post-Panamax quay cranes, which handle 70% of our business. These provide a major boost to our efficiency.
This equipment contains modifications made by teams from Hutchison Ports and Hutchison Ports Sohar: the installation of an advanced KPI programme and an improved graphic user interface, adjustments to the number of cameras used and modifications to certain technical parameters, such as hoist speed.
These have allowed us to quicken the lifting cycle and enhance our ability to increase our own productivity without sacrificing safety.
In using these cranes, we have become a trend-setter in the Hutchison Ports group. Based on our crane modification experience, similar changes were made prior to the launch of remote-controlled quay cranes at Hutchison Ports Pakistan in Karachi. The group even included the changes in cranes previously installed at Hutchison Ports Dammam in Saudi Arabia and our experience will likely be useful at other ports in the future.
Just as our remote-controlled quay cranes have enhanced the efficiency at the water side, certain land-side changes have greatly sped up the flow of trucks into and out of our facility. One of these is a new truck appointment system that allows drivers to schedule collection and delivery of cargo at the container terminal in advance of their arrival by using a mobile phone app, a dedicated website or an interactive voice response number. This has enhanced our real-time resource-planning capability.
When drivers arrive, they pass swiftly through our new automated gate system using machine-readable driver identification cards, while trucks are identified and shipping codes are verified automatically at the gates. Where once it took a full five minutes for a truck to enter the terminal, the entire gate transit time is now just 30 seconds.
To tie the land-side and water-side operations together, we rely on the proven performance of Hutchison Ports’ proprietary Next Generation Terminal Management System (nGen). This contains robust platforms for ship planning, yard planning and operations monitoring. Each module is linked together, with the entirety complemented by a trunk radio system.
Finally, of great importance to port users, nGen will soon be connected to the Bayan system of the Omani customs authorities. When officials wish to inspect a container, they will be able to submit a request through their system to nGen directly.
When that happens, our staff will receive an electronic work report and will move the target container to a designated area for inspection. Once inspection is complete, importers will be notified that the container is ready for delivery.
As the Sohar region develops, these enhancements will greatly facilitate our ability to receive, process and discharge containers. In this way, Hutchison Ports Sohar will continue to play an important role in Oman’s economic transition while supporting trade in the Gulf Cooperation Council, the Middle East and the world.