Tuesday, December 11, 2018

New Container Terminal Set to Become Hub for Shipping Company Global Network

Middle Eastern Port Aims for Key Position in Belt and Road Initiative
Shipping News Feature
UAE – COSCO Shipping Ports and Abu Dhabi Ports have officially opened the new container terminal at Khalifa Port, the CSP Abu Dhabi Terminal, positioning Abu Dhabi as the regional hub for COSCO’s global network of 36 ports and further connecting the Emirate to the major trade hubs along the Belt and Road Initiative, as the port looks to almost double its current capacity over the next five years.

The deep water, semi-automated container terminal includes the largest Container Freight Station (CFS) in the Middle East, covering 275,000 square metres. This state-of-the-art facility offers provisions for full and partial bonded container shipments, the full range of container packing services, short-term warehousing for de-consolidated cargo as well as easy connectivity with container terminals in Khalifa Port. The terminal is also the first international green-field subsidiary of COSCO Shipping Ports, a subsidiary of China COSCO Shipping. The port management arm has so far invested AED1.1 billion in capital expenditure on construction and machinery at the terminal.

The partnership with COSCO Shipping Ports is part of a five-year strategy by Abu Dhabi Ports aimed at strengthening the maritime sector in Abu Dhabi and driving economic diversification, in line with Abu Dhabi Economic Vision 2030, by increasing regional trade and attracting foreign direct investment. Abu Dhabi Ports has earmarked AED10 billion in investment that will increase capacity at Khalifa Port from the current 5 million TEU to 9.1 million TEU, which also includes boosting capacity at Terminal 1 to more than 5 million TEU.

The CSP Abu Dhabi Terminal has a design capacity of 2.5 million TEU and will begin with a handling capacity of 1.5 million TEU, with 1,200 metres of quay. The water depth of the terminal is 16.5 metres, allowing it to accommodate mega-vessels typically carrying in excess of 20,000 TEU. Zhang Wei, Vice Chairman and Managing Director of COSCO Shipping Ports, said:

“We are launching this semi-automatic terminal to serve vessels of all sizes and to help ensure a promising future for this region. CSP Abu Dhabi terminal will be equipped with value-added services such as feeder service network and easy connectivity with container terminals in Khalifa Port. It’s our broader strategy to develop Abu Dhabi as a regional logistics and trade hub and link it with industrial free zones to expand and diversify the economy. Backed by our parent company, we will harness our unparalleled strengths to turn Abu Dhabi into a regional hub and a competitive shipping service centre.”

China is the UAE’s largest non-oil trade partner. In 2017, bilateral trade between the two countries increased by 15% to more than US$53 billion, representing 14.7% of the UAE’s total foreign trade. During the same period the UAE accounted for nearly 30% of total Chinese exports to Arab countries and about 22% of total Arab-China trade. Bilateral trade is expected to increase to US$70 billion a year by 2020.

The new terminal will ease the way for companies seeking to establish, expand or enhance their trade by using local manufacturing, warehousing or logistics operations within Abu Dhabi and, through them, service regional, Middle Eastern, African and international markets. Captain Mohamed Juma Al Shamisi, CEO of Abu Dhabi Ports, said:

“CSP Abu Dhabi Terminal connects Khalifa Port to COSCO’s global network, making it not only one of the largest ports across the Middle East and Indian subcontinent, but a global maritime hub. Abu Dhabi’s strategic location as a gateway to the MENA region makes it an important partner for China’s Belt and Road Initiative, connecting Asia with Africa and Europe via land and maritime networks along six corridors.”

In addition to attracting investors from Eastern Asia, the intention is to increase Khalifa Port’s competitiveness and act as a catalyst for investment by foreign companies to set up in the free zone of Khalifa Industrial Zone Abu Dhabi (KIZAD), the region’s largest industrial, manufacturing and logistics hub and free zone. KIZAD, which comprises 410 square kilometres, has to date attracted more than 200 tenants and AED65 billion (US$17.7 billion) in investment. So far, a total of 19 Chinese companies have signed lease agreements for land in the demonstration zone established within the Khalifa Port Free Trade Zone in August 2017 by the Chinese Jiangsu Provincial Overseas Cooperation and Investment Company (JOCIC).

The CSP Abu Dhabi Terminal is the result of the 35-year agreement between Abu Dhabi Ports and COSCO Shipping Ports whose terminal portfolio also covers the five main port regions in Mainland China, Southeast Asia, Europe, the Mediterranean and the Black Sea. The new terminal is part of Abu Dhabi Ports’ five-year growth strategy to increase Khalifa Port, with its two container terminals, to a combined total capacity of 9.1 million TEUs. The addition of CSP Abu Dhabi Terminal has already moved Khalifa Port up from being the 89th largest container port in world rankings to within the top 25. Captain Xu Lirong, Chairman of COSCO Shipping, commented:

“The completion of CSP Abu Dhabi Terminal is just another milestone in the successful partnership between China and Abu Dhabi, and it will prove to be a fruitful cooperation between the two countries. Port business is one of the important parts of COSCO; we will support the development of the terminal to the fullest extent of our capability by developing shipping routes and transhipment network to drive the volume growth of CSP Abu Dhabi Terminal. The terminal is set to be a pivot for us to develop a global maritime hub for international transhipment and logistics.”

Photo: A plethora of UAE and Chinese officials attended the official opening of the terminal.