Salalah Port, a key logistics hub in Oman, is bracing for a significant decline in container volumes as the Red Sea crisis continues to disrupt global maritime trade. The port is expected to see a 25% drop in container throughput for the remainder of 2024, driven by ongoing blockades and rerouting of shipping lanes.
The crisis, now in its sixth month, stems from the Houthi movement’s blockade of merchant vessels in response to the conflict in Gaza. This has forced many shipping companies to divert their routes, significantly impacting global trade flows and, consequently, operations at Salalah Port.
During the first quarter of 2024, Salalah Port already experienced a 17% decrease in container volumes compared to the same period last year, a decline largely attributed to the Red Sea disruptions and capacity constraints at the port due to ongoing upgrades. The port handled 878,000 TEUs (twenty-foot equivalent units) in the first quarter, down from 1.056 million TEUs in Q1 2023.
In response to the crisis, Salalah Port has initiated several mitigation strategies aimed at minimizing the impact of the reduced transshipment volumes. These include introducing multimodal solutions to offer alternative routing options for shipping lines and beneficial cargo owners. One such solution involves an overland route from Salalah to Jeddah, Saudi Arabia, bypassing the more dangerous areas of the Red Sea. From Jeddah, cargo can continue its journey through the Suez Canal to Europe or the U.S. East Coast, reducing transit times compared to rerouting around the Cape of Good Hope.
Additionally, Salalah Port is offering a sea-air option for time-sensitive cargo, where goods are discharged at the port and then transferred to nearby airports for quicker delivery to Europe or other destinations. These measures are expected to reduce transit times by 20-40% and provide a cost-saving of up to 20% compared to traditional air-freight solutions.
Despite these efforts, the outlook for container volumes at Salalah Port remains uncertain as the resolution of the Red Sea crisis appears unlikely in the near term. However, port officials remain committed to mitigating the impacts and maintaining the port’s role as a critical transshipment hub in the region.
The ongoing challenges underscore the broader vulnerabilities in global trade routes and the importance of adaptive strategies in the face of geopolitical crises.
Sources: Oman Observer, Times of Oman.
