Maersk to establish petchems logistics hub in Saudi Arabia

The Danish company will invest in 100,000 square metres of warehousing space during the first two years of operations

Maersk’s new logistics hub at King Abdullah Port on the Red Sea coast should reduce booking and loading time for the kingdom’s chemical exporters. Maersk

Danish shipping company Maersk’s Saudi Arabian subsidiary will set up a logistics hub for petrochemical exporters at King Abdullah Port.

The company will develop a non-bonded warehouse providing a range of logistics services for chemical producers around the privately held port at King Abdullah Economic City on Saudi Arabia’s Red Sea coast.

The planned logistics hub will cater to those who already have access to the Danish company’s services such as “land-side movement of cargo, customs clearance and ocean logistics”, it said in a statement.

King Abdullah Port is among the world’s 100 largest ports and second biggest on the Red Sea. It occupies a total area of 15 square kilometres. The port handled 2,153,963 TEU (twenty-foot equivalent units) shipping containers last year, 6.6 per cent more than 2019. Once fully completed, the port will have the capacity to handle 25 million TEU and 15 million tons of clean bulk cargo annually.

The Maersk hub will be within a two-kilometre radius of the terminal yard, next to the port’s customs inspection zone, which Maersk said would save exporters time.

Exporters also currently have to wait wait between 14 and 18 days between making a booking and loading chemicals on to a vessel, but this will be shortened to six to eight days, Maersk said. The new site is 200km away from the large chemicals manufacturing hub at the Yanbu refinery – about 150km closer than the Jeddah Islamic port currently used by many of them.

Maersk will invest in 100,000 square metres of warehousing space during the first two years of operations at the hub to meet estimated demand totalling one million metric tonnes of throughput from nearby chemicals suppliers.

“The Maersk Integrated Logistics Hub at the King Abdullah Port is an important milestone on our journey of providing logistics solutions for our customers in Saudi Arabia,” said Mohammad Shihab, managing director at Maersk Saudi Arabia.

“The multi-carrier origin hub for petrochemical exporters is an affirmation of our commitment to serving Saudi Arabia’s trade and simplifying our customers’ supply chains.”