Noting a 14% increase in performance YTD and with even bigger plans on the horizon, Stephen Ogden, group director of operations for port operator Gulftainer, explains how the Khorfakkan Container Terminal is preparing to be “mega-ship ready”
Nestled in the foothills of the scenic Shumayliyah Mountains, the picturesque town of Khorfakkan, which translates as Creek of Two Jaws, in the emirate of Sharjah retains its old-world charm and laid-back tranquillity. The second largest town on the Gulf of Oman,after Fujairah, along the UAE’s eastern coastline, the Khorfakkan Port Terminal (KCT) belies the town’s serenity with its frenetic activity and lays claim to being the only full-fledged operational and busy container terminal within the UAE located outside the straits of Hormuz.
Owing to its unique strategic location, the Gulftainer-operated Khorfakkan Container Terminal (KCT) provides economical, quick turnaround and time-saving advantages for jumbo container ships and is an important trans-shipment hub for a vast hinterland comprising the Arabian Gulf, the Indian subcontinent and the East African markets. KCT also provides easy access—an important land bridge to the other Emirates in the UAE.
Stephen Ogden, group director of operations at Gulftainer, the port operator at Khorfakkan Container Terminal speaks to Logistics News Middle East About the increase in YDT performance and how the port is scaling up to be mega-ship ready
How is the Gulftainer-operated Khorfakkan Container Terminal (KCT) currently faring? How has H1-2015 been relative to H1-2014 and what is your forecast for H2-2015?
Half year performance for container movements incoming and outgoing was up 14.4% on the same period last year and we expect to maintain or exceed this growth during the second half of the year.
To what do you attribute this rise and how did KCT accomplish this growth?
There has been a general increase in demand of goods across the GCC countries, as well as growth in imports in the UAE due to investments into local infrastructure and economy by the local governments. The ease of conducting business in the UAE in particular has contributed strongly to this.
For example, Gulftainer’s success over the years has closely matched that of the emirate of Sharjah. With the predicted market potential of $496 million in 2013 estimated to rise to a remarkable $935 million in 2020, the logistics and transport sector has played a major role in Sharjah’s growth and that is reflected in the success of both our terminals in the emirate.
In our overall strategy, we believe in the power of partnerships and have developed strong ties with global shipping lines that value high productivity and service flexibility.
In addition, it is important to highlight that we have placed a strong focus on improving infrastructure at all our terminals, to offer the latest technologies and the highest standards of services. In November 2014, for example, KCT took delivery of four new state-of-the-art Ship to Shore (STS) and twelve Rubber Tyred Gantries (RTG) cranes, marking an investment of over $60 million.
This scaling up of equipment enabling KCT to be mega-ship ready has further boosted the trade dynamics of the terminal and the UAE as one of the major centres for global trade and transhipment business.
Where are the increments coming from and what product lines (nature of cargo) contributed to the surge in volumes?
KCT is predominantly a transhipment hub for Indian subcontinent, African and Upper Gulf bound cargoes. Local imports have increased from the Far East and South Asia, which has long been a key supplier to the region. However, we have also seen strong growth in imports from Europe and exports to Africa and imports of consumer products, such as food stuff and pharmaceuticals; and exports of automobile components and polymers.
Given the importance of trade and manufacturing to Sharjah’s economy—the region’s key geographical location between Africa, Asia and Europe, KCT will continue to support this market.
How significant is KCT as a transhipment hub?
Shipping lines require their vessels to have the shortest stay possible in port and they place the onus for a quick turnaround of their vessels onto port operators to provide top quality service to allow them to work and leave on their rotations on-time, or ahead of time. By offering this cost-effective and time-saving option for mega-containerships, our shipping line customers save valuable transit time by calling at KCT and enjoy a quick turnaround to continue their onward journey.
This gives the shipping lines the option to slow steam to their next port of call, saving tens of thousands of dollars in fuel costs, and still reach their destination on time. In addition, its well-earned reputation for performance and productivity, as well as flexible attitude with all customers, make it an obvious choice.
What are KCT’s advantages?
KCT is one of the fastest terminal operators in the world. Any box imported into the country through the KCT reaches a consignee’s warehouse at least two to three days prior, compared to the transit time if imported through any another container terminal within the UAE.
Popular for its excellent productivity, operational efficiency and service flexibility, it is also one of a handful of terminals capable of handling the new 18,000 TEU class and above.
The terminal’s strategic location, as the only fully fledged operational container terminal in the UAE located outside the Strait of Hormuz, has made it one of the most important transhipment hubs for the Arabian Gulf, the Indian subcontinent, the Gulf of Oman and the East African markets. KCT also provides access to hinterland traffic through the Sharjah Inland Container Depot and offers supply chain integration.
How is KCT’s strategic location outside the Strait of Hormuz an advantage for container movements?
Due to its unique location, KCT has long been one of the most important transhipment hubs for the Arabian Gulf, the Indian subcontinent, the Gulf of Oman and the East African markets. It offers a vital alternative for shipping lines and avoids the need to steam into the Arabian Gulf, which adds an additional 24 hours to the schedule, and provides a land-bridge between the northern emirates and the rest of the UAE.
Khorfakkan is easily accessible by a modern multi-lane highway, which dramatically cuts the time to move cargo from the east coast to the industrial areas of the country. Goods coming into Khorfakkan now can be in customer’s warehouses within three to six hours, shaving at least 50% off of the journey time to the west coast.
30 April 2015 marked an important date for Khorfakkan. Tell us why?
Gulftainer set a new record for the handling of the largest single unloading and loading of a single vessel call at its KCT, at 19,561 TEUs.
The terminal staff completed the record breaking call of the ‘CMA CGM Jules Verne’ 11 cranes in only 54.5 hours. The 396 metre long and 54 metre wide vessel was able to leave the port well ahead of schedule to her next port of call.
With this new record KCT demonstrated its ability to accommodate these large container volumes and to keep pace with the increasing volumes generated by the ULCC’s (Ultra Large Container Carriers) that operate in this region.
KCT has played host to several giant ships, some of the largest in the world. Why did they choose to come to Khorfakkan Port?
KCT is a strategic hub port for several shipping lines and is a vital part of their global network, being one of the few ports in the world that can accommodate the modern day mega vessel.
With its natural deep-water berths and state of the art equipment, the port is well equipped to manage the largest container vessels currently in service.
Describe the role of Gulftainer in KCT’s port operations?
Gulftainer was awarded the concession to operate the Khorfakkan Container Terminal on behalf of the Sharjah Port Authority at Khorfakkan Port in 1986 and the concession agreement was recently extended in view of the high level of productivity and container business generation over the past 30 years.
What are the expansion plans for KCT?
As a pioneer in container terminal operations in the region, Gulftainer is at the forefront in investing in new technologies that further optimise operations and strengthen efficiency. We recently made a $60 million plus investment in four state-of-the-art Ship to Shore (STS) and twelve Rubber Tyred Gantries (RTG) cranes, reach-stackers, empty container handlers and tug-master and trailer combinations at KCT.
The yard capacity of the terminal has also been enhanced significantly by 55,000 sqm. of additional container stacking area. The expansion has increased the terminal stacking capacity to over 50,000 TEUs. Gulftainer plans to develop additional quay facilities and create further yard area, to reach an annual capacity of 6 million TEUs by 2016 and 8 million by 2020.
Among other improvements, the layout has been revised for more efficient space utilisation. A new container freight station (CFS) has also been created for additional container packing and unpacking services, with additional handling equipment to support these activities.
The expansion of KCT is an ongoing project. We constantly review and monitor requirements with the Sharjah Port Authority and will continue to upgrade services and introduce new technologies as and when demand determines the need, to further under-line our industry leadership credentials.
Which major international shipping lines regularly use Khorfakkan Port?
The terminal attracts regular mainline and feeder services from major shipping lines including CMA CGM, United Arab Shipping Company (UASC), Emirates Shipping, Hanjin Shipping Line and China Shipping Container Lines (CSCL).
Are more shipping lines expected to use KCT?
The shipping lines and alliances that use KCT are revising their schedules and services and we are ready for additional services from both existing Gulftainer customers and new shipping lines to utilise the facility in the near future.
Which are the top five destinations for outbound and in-bound freight through KCT?
The top five destinations for both outbound and inbound freight services through KCT are Saudi Arabia, Kuwait, Iraq, Pakistan and India.
What implications will the development of the Etihad Rail project have for KCT when functional? How will it impact the port’s operations?
Gulftainer has played a consistent role in contributing to the UAE economy for many years and any connection with the planned rail link would develop that even further.
We see the development of a railway network in the UAE as one of the most exciting and beneficial projects for our region, and an innovative project on a global stage. The introduction of the rail link will have a dramatic effect on the time scale in which shipping lines and cargo carriers will be able to connect to the country’s key centres of trade and industry, maximising the effectiveness of Gulftainer’s vital role within the supply chain.
Gulftainer’s goals and objectives for future operations and commercial targets, as well as the integration of Gulftainer logistics facilities would be advanced tremendously.
What are the future opportunities and challenges for award-winning KCT going forward?
Gulftainer has recorded consistent growth over the past decade, averaging over 12% compared to global market growth of 8.6% during the same period. We expect positive growth will continue and our throughput to increase to 7 million TEUs globally in 2015.
We have set an ambitious target to triple our global cargo capacity in the next ten years across five continents through organic growth across existing businesses, exploring green field opportunities and potential M&A activities. In the meantime, we expect to keep growing through aggressive investment in new infrastructure to enhance operational efficiency, as we have done in the past.
One of the key opportunities is that of Iran sanctions being removed which will greatly benefit our business. Also the conscious effort by GCC countries to switch from oil based to a non-oil based economy will greatly enhance the way business is conducted. We are already seeing the UAE take a lead by deregulating oil prices to be linked to global indices. Other opportunities we foresee are the stable socio-political economy in GCC countries and the World Expo Dubai 2020.
One cannot deny the challenges we will face which are primarily increasing size of vessels, continuous improvement in productivity requirements and several competing facilities in the region.
