Too Many Ports, Not Enough Trade

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Apparently the capacity at seaports and airports in the Middle East is growing faster than it needs to. Faster than regional trade. This could potentially jeopardize billions of dollars worth of new investment in transportation infrastructure. Government-led investment in the logistics and transport sector of the region has really taken off in the past decade. It has been driven by the Gulf Arab countries whom are energy-rich and whom are trying to carve out trading posts between Africa and Asia. Dubai has seen success with its Jebel Ali port and now its neighbors are trying to copy this success. The huge overflow of investment in cities like Abu Dhabi in the UAE, Doha in Qatar or Jeddah in Saudi Arabia has resulted in seaport capacities increasing from 40 million 20-foot container units per year to 100 million in the next decade or more. Airport cargo capacity should grow from 8 million tons a year to 14 million tons by 2020. So, whats the problem? Trade would basically have to grow about 10% annually to fill that capacity. While growth is high in some ports, expansion still seems to be inadequate for the capacity that is being created with Gulf money. Read more about this precarious situation at the Wall Street Journal.




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