Ports are never a quiet place to work: no matter how well they are run or how effectively they are built, they are, by definition, hubs of activity. In these recent times, in particular, that activity has come with its challenges, and the greater the port, and greater the challenges that have been presented. Salalah Port – the largest port in Oman – was no exception. We interviewed Mohammed Al Mashani, the Port’s Chief Corporate Affairs Officer, to learn about how a port this established and prolific responded to the Covid pandemic, as well as catching up on the port’s impressive overall services and success.
Situated in the Dhofar Governorate on the Arabian Sea, Salalah Port is located at the heart of a trade crossroads between Asia and Europe. This ideal location is one that the Port has embraced. Over 3000 vessel calls dock and depart from the port, sailing to over 50 ports around the world. From here, there are strong trade links to the Indian Subcontinent, East Africa, Red Sea/Levant and the Arabian Gulf and access to key regional markets including Asia and Europe.
We spoke with Mohammed Al Mashani, Chief Corporate Affairs Officer for Port Salalah, about the port and how it rises to meet both the opportunities and responsibilities of its location. He had this to say:
“Salalah does not just provide port advantages but an entire suite of opportunities that, when combined, create a true value proposition like none other in the region. Its strategic location has almost zero deviation from the major trade lanes of Asia-Europe, ISC-Europe and Middle East-Europe, which provides our customers with transit times that are better than other competing ports in the Gulf and Indian Ocean. The proximity to these major trade lanes and the rapid growth markets of East Africa and India serve as major leverages for companies looking to take advantage of both markets with one efficient and secure location.
“This is supplemented by the fact that the port’s infrastructure is world-class; we can serve any size or type of vessel, be it container, cargo, crude carriers or even cruise ships. On top of this, the nearby airport provides the current ability for efficient air cargo connectivity globally and, since 2014, upgraded passenger capabilities. Meanwhile, on the airfreight front, our model offers extremely flexible and agile logistical solutions to customers based on their short-term needs. Lastly, our connectivity will further be strengthened by the completion of the GCC rail network, which will make Salalah the fastest connection point between the GCC market and the rest of the world.”
The GCC Railway development (so named for the Gulf Cooperation Council countries that conceived it) has been a project long in the making: first planned and agreed to in 2000, it was originally set to be complete in 2018, with the current estimated completion date being 2023. This railway has been planned in many separate parts within the involved, to-be-connected countries, and once complete, it will be a game changer for trade in the region. “If our success as a hub stems from the port’s integration with Oman’s world-class, multimodal (sea-air-road) transport infrastructure,” Mohammed tells us, “Then imagine the growth opportunities likely to emerge after Salalah’s integration with this proposed national rail network.”
The GCC Railway is a project shared by the Government of Bahrain, the Government of Kuwait, Etihad Rail, Oman Rail, Qatar Rial and the Saudi Railway Company. It is a multibillion-dollar project that, for Oman, will open up huge prospects for freight forwarding through the Port of Salalah, among other advantages. “When the network comes into service, Salalah has the potential to become a major gateway to the GCC for fast moving consumer goods and other high value commodities. We also anticipate a significant upsizing of our capabilities as a liquid hub serving the markets of East Africa and India.”
These transport links aside, there is another element of Salalah Port’s location that makes it a profitable and enviable destination: the Salalah Free Zone. Free Zones are always an extremely advantageous neighbour to any port; in the case of Salalah, a US-Oman Free Trade Agreement has provided 0% tariffs on over 80% of the goods traded between the two countries, and Oman has further sweetened this by offering additional Free Zone incentives. Land is available at the lowest rates in the region, with 0% corporate tax for the first 30 years, and 100% foreign ownership possibilities that don’t exist outside of the Zone. This Free Zone has already experienced industrial investments of over US$3.5 billion, with the aim that this figure will reach US$15 billion by 2028.
We asked Mohammed to share where these projected investments would occur: “The Free Zone is focusing on the key areas of Chemicals and Materials Processing, Manufacturing and Assembly, and Logistics and Distribution, and it is poised for further growth with several new ventures. These ventures include a major caustic soda project and an LPG plant, which will inevitably give rise to opportunities in upstream and downstream units, promising further volumes growth.”
“In addition, the Salalah Free Zone has been successful in signing up a major cocoa bean importer and chocolate processor. Such investments, including a proposed grain storage terminal at the port, hold out the promise of an agro-foods industry taking root at the free zone. Studies also point to the potential for investment in cold-chain logistics catering to flowers and agro-products being exported out of Africa.” With hydro-farming revolutionizing both flower and crop farming in African, it is no surprise that these markets are looking to push their export potential.
However, for all this growth and excitement, there have, of course, been recent bumps in the road. For anyone, but for trade hubs in particular, the past 18 months of so have been complicated, and called for swift decision making – especially in an industry that could not afford to halt, and also had such potential for spreading the Covid virus if operations were not handled carefully.
Mohammed explained to us that it was essential for Port Salalah to keep cargo moving, not only for their own viability, but that of everyone sending and relying on receiving these goods. However, the port was therefore fast to establish a crisis management committee, whose responsibility it would be to keep the port safe and its personnel protected. One solution was to divide its workforce in half, having employees working in two shifts – on one week, off the next. Where possible, such as in the case of admin staff, they kept working at home for these ‘off’ weeks. This response was taken by several quick-thinking countries, and was a highly effective response to the crisis: given the virus’ seven-day incubation period, this allowed staff, in the time before tests were readily available, to be regularly isolated for the required seven days for symptoms to show, without the rhythm of the port being affected at all.
As it continues to respond to the pandemic, as of 1st September 2021, Salaah Port has announced that it is mandatory to show evidence of being vaccinated before entering the premises. This sort of measure is the subject of discussion and controversy in many places, with debates going back and forth over safety vs people’s medical rights and rights of movement. However, when it comes to a location like a port terminal, with ships entering and leaving from all over the global, stringent levels of caution and safety are extremely important. As a global crossroads, a pandemic puts a pressure on ports, airports and other hubs of trade and travel that is even greater than that put on other locations.
Hand in hand with this, the port also introduced another new measure in 2021, this one geared towards user experience. With heightened measures, processes and concerns during this strange period of time, the port saw fit to create a more direct and dedicated way for customers’ concerns and questions to be answered and responded to. The port created a case management system with a dedicated team geared solely towards answering these concerns, operating on a ‘single point of contact’ basis, to make a smoother experience for customers and to avoid confusion and frustration for everyone. This is a commendable touch: not only should it greatly improve customer experience of the port and bring far swifter resolutions to questions and concerns, but it also frees up the time of its wider staff, allowing them to focus on the rest of their jobs and thus, by extension, again improving the effectiveness of the port.
All of this should, really, be no surprise, as another stand-out factor about Salalah Port has long been its high standard of security measures. Existing in politically peaceful waters, the port uses this advantage to serve as a hub for an anti-piracy task force. “We also steadfastly adhere to international maritime safety and cargo security charters, notably the CSI and ISPC codes. Salalah Port has been rated a US government’s Secure Freight Initiative Charter port and Pilot site.”
Even though its assets are mostly angled towards cargo (including eleven speed loaders, nine fork lifts, 25 super post panamax cranes, four tugs, almost 200 each of tractors and trailers – you get the idea), the port does also play a role in tourism. It often serves as a stopover for cruise liners as they make their way through the Indian Ocean, and as such, the port has plans to develop its own dedicated cruise terminal – a development that would also open up yet further investment opportunities, this time from small to medium businesses who wanted to open facilities or shops in this vacation hub. Already, the port offers some small luxuries for those passing through, including a tennis court and swimming club in its hilltop social venue, a bowling alley and a tasty lunch and dinner menu from the Port’s Oasis Club.
Of course, tourism slowed to a halt lately, but it is gradually getting back on its feet, and will undoubtedly soon be back to usual levels, if not an even greater surge as people make up for lost time. Either way, one area that never rested was shipping and logistics, and therefore, places like Port Salalah. Whilst it has only been in operation since 1998, it has managed to establish itself as one of the best in the world for crate handling, and is highly competitive and well-developed across the board, with plans to make this even truer in the near future. With a responsible approach to safety and security during this difficult year and a half, and its sights still ever-set on expansion, this Port was able to weather some rough seas and should soon be back to plain sailing.