I was shocked when I read in a local newspaper that after a drop of 13.6 percent in container handling, Jeddah Islamic Port had handled 261,339 containers in the early months of 2001. This represents an increase of 3.3 percent over 2000. Using this figure as a base and expanding it accordingly, we estimate that Jeddah port will handle some 1.5 million containers annually. Compare this with Salalah in Oman which though it only opened a few years ago, has already handled 224 million containers.
Governments in neighboring countries allocated vast sums of money for port development so that they could compete with Jeddah. The race for attracting maritime trade has drawn a number of players — various Egyptian ports, Aqaba, Aden and Djibouti. Led by Dubai the Gulf ports have succeeded in crippling Dammam and until Jeddah wakes up from its current nap, the Gulf ports will no doubt keep attracting more and more of Jeddah’s share of maritime trade.
This situation should drive the authorities in charge of collecting revenues to intervene. They must realize that the revenues expected from privatization have not been realized and must also accept the fact that agreements governing purchasing and contracting operations do not conform to what is accepted as port activity. The practice is a continuation of how things were done in the past and which led to the emergence of numerous local companies competing for a job at prices so low that the standard of service was compromised. Unless there is a change, vessels will not be attracted to the port and we might well see a situation where the goods are not being handled locally.
I hope these fears will not see the light and that we will not see an economic nightmare with unknown consequences.
My concerns about Jeddah port are great; the situation demands careful scrutiny and then eliminating the problems. Otherwise, the volume of work and traffic at the port will decrease drastically as happend in Dammam. The easiest explanation for the situation is that the cost of container service in Jeddah port is higher than in the UAE. The fees in Jeddah are SR560 for a 20-meter container and SR840 for a 40-meter container while in the UAE, charges are SR300 and SR700 respectively.
This does not even mention the big difference in the quality of service between the ports. There are also great variations in flexibility with Jeddah still using outdated and obsolete measures as if they had never heard of quicker, more efficient and more modern techniques. Every employee at Jeddah port is doing his best to serve his own department with no cohesion among them or any team spirit. The decision to expand transit trade and allow for the maximum use of Saudi ports’ available capacities is most welcome. It will allow Saudi traders and importers the choice of clearing their goods at ports other than Jeddah. They would naturally like to see their goods cleared at ports which ensure that their interests are protected and their goods are secure from damage and losses.
A series of regulations and decisions have been issued over the past four years; they aimed at privatizing the ports, removing the obstacles and improving performance. Unfortunately, the opposite seems to have happened at Jeddah port. Most, if not all, major shipping companies have suspended regular journeys to Jeddah and some have confined their activities to carrying loads for others. The bulk of the work at Jeddah port is with goods being imported into the Kingdom. Shipping companies are also concerned about long delays in the port which add substantially to the costs incurred by the operators of large container ships.
In a few years’ time, today’s container ships will pale in comparison with vessels capable of carrying between 600 to 800 containers of the 20 and 40 feet size. A journey by such a giant ship, crossing the world from east to west, will allow for a maximum of five calls at American, European, Middle Eastern, Asian and Far Eastern ports. What concerns me here is the ability of Jeddah port to face strong competition from ports along the Red Sea and the Arabian Sea as well as Egyptian and Gulf ports. If efforts to revive maritime trade fail, then Jeddah port will be marginalized and relegated to the status of a local port with no role in international trade or transit commerce. It might also even lose control of the country’s imports and exports which would be handled by other more efficient ports in the region; this of course would result in serious losses to the national economy. Jeddah also stands to lose its share of the international container trade, currently estimated at 10 million containers and expected to increase to 22 million by 2008.
What can be done to solve the problems before it is too late? For sure, a coordinated effort involving all government bodies at the port is an absolute necessity. The port itself must work as one body armed with knowledge, science and modern technology. It must be capable of doing the job professionally and in accordance with international standards. What it does — or does not do — has a direct influence on the country’s security and stability.
