Reshaping Middle East's container trade, supply chain dynamics

Within the Gulf Co-operation Council (GCC) countries, massive investments are being undertaken across all sectors from telecoms to health care as nations diversify their formerly oil -dependent economies. Oil itself, of course, still plays a hugely important role - except today the focus is on multi-billion dollar petrochemical refining projects as sophisticated process industries migrate from their previous hubs in Western Europe. Burgeoning exports from GCC countries have been underpinned by the increased containerisation of petrochemical cargo. A suggested 50% rise in exports by 2015 could mean an additional 2 million TEU volume growth. And it's not just petrochemicals - new forms of aluminium products are also playing their part to drive container exports.

Oman dominant supply route for GCC
Oman has the potential to become the dominant entry and exit point for goods for the GCC. The logistics and supply chain sector in Oman continues to grow and benefit from significant investment in infrastructure, warehousing and transportation. The growth prospects and job opportunities in this positive sector are considerable as Oman seeks to take advantage of its strategic location outside the Straits of Hormuz and close proximity to major shipping routes.

The proposed GCC railway network will open up new, efficient and cost effective transport routes into the GCC market, particularly the region's dominant market of Saudi Arabia. The development of the railway network is perceived as a "game changer" by the logistics industry. A proposed GCC customs union, which is currently scheduled to happen in 2015, will be vital to allow the free movement of goods within the GCC, and the continuing development of Oman's ports, roads and airports is constantly increasing Oman's logistics efficiency and capabilities.

And, the recent decision to move freight traffic for northern Oman via water from Port Sultan Qaboos to Port of Sohar is a positive step which provides greater structure and certainty for the development of the light industrial and logistics sector in the Sultanate.

Logistics growth leads to real estate investment
The current and projected growth of the sector is and will result in significant real estate requirements as evidenced by the on-going development of international quality warehousing along the highway between Naseem Gardens and Barka. We see particular growth and potential in several industrial/logistics hubs. Following on from the development of the industrial port at Sohar, the adjoining freezone is now developing rapidly and the PEIE industrial estate has recently announced a further expansion (Phase 7) of 8.5 million square metres. We see a significant and increasing demand for warehousing in Sohar, particularly as freight traffic is pushed up from Port Sultan Qaboos and the freezone develops. Port of Salalah has developed rapidly to become a major global transhipment hub. With the focus now shifting to further development of the neighbouring freezone, Cluttons sees a significant opportunity for warehousing development.

The development of Duqm as a new industrial port and city is still in its nascent stages but Cluttons sees increasing interest in this location as the development plans become clearer. We would expect large scale logistics facilities demand and development in Duqm over the coming years. The current development of Muscat International Airport includes increasing the freight handling capacity from 100,000 to 260,000 tonnes per year. Proposed development includes a logistics hub in the Eastern Sector which will require extensive development of warehousing. Barka has already seen the development of several international warehousing facilities andMen's Sneaker Hub Online