Opening of Jebel Ali Port and Free Zone
The dredging of Dubai Creek in 1959 and the opening of Port Rashid in 1972 had preserved Dubai’s position as a regional trading hub. Volumes, however, continued to grow rapidly and container ships were becoming larger and larger with increasingly sophisticated handling requirements.
In 1976, therefore, Sheikh Rashid ordered the construction of the world’s largest manmade port. When completed in 1979, Jebel Ali famously became one of only three manmade objects, along with the Great Wall of China and the Hoover Dam, to be visible from space.
Another major milestone was crossed in 1985 when Jebel Ali Free Zone was opened, allowing companies to base their warehousing operations right next to the port. Now, goods could come into port, be shifted to a nearby warehouse and then loaded into a truck for redistribution across the GCC.
Companies based in the zone would pay no tax and would be free to hire who they wanted. The free zone model has since been replicated across the region and underpins the UAE’s economic success.
Port Rashid and Jebel Ali
If I can clarify some of your story:
Jebel Ali Port was built as an industrial port with the intention of attracting industry to Dubai. Port Rashid was built specifically to handle Dubai's cargoes.
Jebel Ali Port attracted only a few light industries. Jebel Ali Free Zone was conceived to make Jebel Ali more attractive to industries. Sony and Aiwa saw the benefits of JAFZ for regional distribution and established in JAFZ. Port Rashid remained the centre for cargo handling in Dubai. Its Container Terminal was the main entry point for cargo traffic and Dubai's growing logistics industry. Innovations such as air/sea cargo put Dubai on the world map. Around 70% of Port Rashid's cargo was re-exported. Dubai became the "first point of entry" for much of GCC and Oman cargo. By late 1980s Port Rashid needed significant investment to cope with the growth which Dubai's Government were reluctant to invest given they had Jebel Ali Port which was under utilised. In 1990 their solution was to amalgamate the two ports and have them operate as a single port. Traffic was relocated from Port Rashid to Jebel Ali Port but it was tyoo small to accommodate all of Dubai's cargo traffic. Until about 2 years ago containers were transported between Port Rashid and Jebel Al Port on a daily basis to provide a seamless service to Customers. Port Rashid eventually closed once Jebel Ali Port had been expanded. Port Rashid had a significant influence and impact on development of GCC Logistics and is worthy of mention in your article.
Marwan Alfadl (Nov 2, 2009) Jeddah Saudi Arabia
GCC Logistics Development
While your article is heavily UAE-centric it largely represent reality. Gulf based developments have provided the major macro impetus for logistics becoming a significant economic feature in the region.
The article, though, presents a historical perspctive. It would be nice to continue the article with current and forward looking analyses of the market. What are the global and regional trade, economic, and other development drivers of the logistics industry in the region?
Such an essay will cover the impacts of the new economic cities under development in Saudi Arabia, the projected impact of KSA and GCC railroads under construction, new investments in downstream production, and possibly even the GCC power grid, all of which will contribute to the reshaping of commerce in general, and the logistics industy in particular, in the region.
faysal (Oct 3, 2009)
United Arab Emirates
10 events that shaped the GCC logistics industry
Excellent information and succinctly laid out. I think what may also have contributed to the 'need for the industry to grow exponentially' was substantial industrialization of Saudi Arabia with Jubail/Saudi Aramco/Sabic on the one side and companies such as Modern Products, Aujan etc also contributing heavily to the need for a robust logistics sector. Similarly in the UAE, massive import/export by companies like DUBAL and RAK Ceramics have certainly done their share to cement the nations 'need' for a strong logistical infrastructure. Given the erstewhile figures of 30/70 % of cargo arriving in Dubai being for local versus transshipment (to regional markets including the subcontinent, Iran, Iraq and north africa) and the establishment in the late 90's of Salalah as a major deep sea port, the UAE ports grew from 2 million to 11 million teus/annum in the space of about 10 years only! One can possibly argue that the market pulse can be furthermore felt by burgeoning investments in the warehousing sector; companies like Mohibi, Liberty, Momentum, Global, RSA Logistics and others are accounting for billions of dirhams being spent over the past 48 months.
F.Khan/Storall LLC (working in Dubai since 1994 in the Shipping & Logistics sector)
PAUL DAVIES (Sep 26, 2009) DUBAI United Arab Emirates
10 EVENTS THAT SHAPED THE GCC LOGISTICS INDUSTRY
Whilst your editorial team have done an excellent job in identifying many of the reasons for both the growth and success of the Logistics Industry within the GCC I would like to add 2 more which I believe may have been equally as important.
1. The civil war in Lebanon led to the demise of what was then the Region's leading all cargo airline namely TMA whose base in Beirut was the 'hub' for aircargo coming into the Region. When it became impossible for Beirut to continue functioning Dubai and to a lesser extent Bahrain stepped in to fill the gap.
2. Dubai's decision to allow consolidation services by air in 1977 (the only other GCC State allowing this at the time was Bahrain)made it attractive to consolidators to use Dubai instead of Beirut and the proliferation of carriers using Dubai gave it the edge on Bahrain.
This writer claims no credit for point one but was directly responsible for the second by convincing the then Director of Cargo at the Airport that by allowing consolidations Dubai would in the long run benefit, as has been proven.
Paul Davies currently MD of DSV AIR & SEA LLC Dubai.
Krishna Moorthy (Sep 26, 2009) Dubai United Arab Emirates
10 events that shaped GCC logistics Industry
in my opinion,even the personnel laws, no personal taxation on individuals has helped in attracting the best talent across the globe who have further contributed in growth & developmentof the logisitcs industry in GCC
Prof Philbert Suresh (Sep 25, 2009) Toronto Canada
Events Impact Investment Proposals for Dubai Logistics City
Congrats for putting together this research article - so well done that all eyes will turn to the leadership vacuum in the Dubai Logistics City. There is no doubt that logistics will drive trade and investment flows. It is all in the stakeholders who have a hand in the pie now. All the best to them and the new generation of Logistics Leadership.
www.gust.edu.kw/glf
Alex Borg (Sep 24, 2009) UAE United Arab Emirates
Logistics Industry
This 10 events that shaped the GCC's logistics industry - research is very good and it gives an insight not only to those who are already hands on in the industry but to those who are new recruits and those who are studying logistics and supply chain management.
The concept of creating a profile for the logistics industry is very important and such initiatives add more value. CILT is always behind such initiatives. Alex Borg - Regional Director for CILT International UAE & GCC Region
FEATURED COMMENT
If I can clarify some of your story: Jebel Ali Port was built as an industrial port with the intention of attracting ind