Southern timing: The city of Salalah aims to become a major trans-shipment hub

Although relatively isolated in Oman’s southern region of Dhofar, the city of Salalah has become a major hub for trans-shipment. Built in the late 1990s, the Port of Salalah is Oman’s largest seaport and among the 30 biggest container ports in the world.

The port is a joint venture between APM Terminals (30%), a Denmark-based shipping and logistics firm; pension fund holders as well as investors among the general public (29%); institutional investors (21%); and the Omani government (20%). According to recent data provided by authorities at the port, the Port of Salalah employs nearly 2200 people, making it the region’s largest employer.

An Extensive Terminal

The port’s container terminal stretches over 876,000 sq metres and offers 2200 metres of quay wall in addition to 25 super-post-Panamax cranes. Its harbour depths measure from 16 to 18 metres and the terminal operates with a capacity of 5.8m twenty-foot equivalent units (TEUs). With almost 1400 metres of quay, the Port of Salalah’s general cargo terminal operates with a capacity of 6.5m tonnes per annum (tpa) and provides shippers with six mobile cranes, 13,800 sq metres of covered storage space and 200,000 sq metres of open storage.

Container traffic at the port has risen significantly over the past several years. In 2008, the port handled around 3.1m TEUs, and the port estimates that it will handle 3.9m TEUs in 2012, representing an increase of almost 25% over the period. The growth in general cargo traffic has been more dramatic, jumping from nearly 3.5m tonnes in 2008 to a projected 7m tonnes in 2012 – a rise of 100%. The port has noted that container traffic should increase by some 665% between 1999 and 2012, and general cargo traffic growth should reach 600% over the same period.

Major Expansion Planned

Significant expansion projects are also in the pipeline. The port aims to add 1200 metres of general cargo berths, increasing general cargo capacity by over 200%, from 6.5m tpa in 2012 to nearly 20m tpa in 2014. Construction on the project is scheduled to be finished by the end of 2013. The Port of Salalah is also looking to become a regional hub for liquid bulk and plans to expand its liquid bulk capacity by almost 500%, from 1m tpa in 2012 to nearly 6m tpa in 2014.

Further efforts have been made to increase storage capacity. The port recently signed a lease with a large Spanish logistics company, which is planning to build a 12,000-sq-metre warehouse near the port.

Measuring 18 metres in height, the facility will be used to distribute grains and other commodities around the region, according to the Port of Salalah.

Another project includes shutting down the 70 or so radioisotope thermoelectric generators (RTGs) currently used to power port operations and procuring power instead through the Omani electric grid. The port recently estimated that the project should reduce carbon emissions by 17,000 tonnes and should be finalised in late 2013 or early 2014.

Shutting down the port’s RTGs should aid Salalah’s tourism industry, which relies on a green city for attracting visitors. In addition, the move will be beneficial for shippers looking to reduce the carbon emissions footprint of their supply chains, thus making the Port of Salalah a more appealing trans-shipment hub.

Bound For Foreign Markets

A substantial amount of shipping that comes through Salalah is either bound for Africa or is returning from the continent. Notably, this traffic is on an upward trajectory; recent port figures indicate that container traffic between Salalah and Africa has increased by approximately 38% during the first eight months of 2012 in a year-on-year comparison with the first eight months of 2011. Shipping to or from the MENA region makes up another significant segment of traffic at Salalah.

As with Africa, inbound and outbound shipping to the MENA region has grown substantially. In fact, container traffic running between Salalah and the rest of the region looked to have increased over the same comparison in 2011 and 2012 by approximately 20%.