What have been some of the major developments at the Port of Salalah over the past year?
It has been such an unpredictable year. We have to break Port of Salalah into two main segments: general cargo and containers. We are a Hub port, therefore our volumes are driven by what goes on globally. What has happened globally due lockdowns is that consumers have been spending more of their disposable income on things for their homes and less on services and going out. Many of these items go into containers which has driven volumes up in our industry. That has created some congestion around the world, where supply chains were not able to keep up, because at the same time supply chain players were dealing with their own COVID-19 challenges. In Port of Salalah, we handled record volumes in 2020, with 4.3 million TEUs last year. We had a slight disruption in the middle of the year due to some COVID-19 cases within the port and frontline staff stuck in other parts of the world due air transport disruptions, however we recovered fantastically due great teamwork. We managed our volumes in close coordination with our customers to avoid any kind of disruptions which worked very well. What also helped us was that very early on in the pandemic, we established our clear priorities, of which number one was always making sure our people are kept safe. This meant, among other things that we got them the best possible PPE. The second was ensuring that supply chains were not disrupted meaning we needed to continue to operate as much as possible. The third priority was to ensure we run a sustainable business, i.e. that we get paid on time and that we pay our suppliers and staff on time on time too. We were able to protect the business through these guiding principles, and, even though we had a slight drop in capacity in the middle of 2020, at the end of 3Q and 4Q we had a strong recovery and performance which led to an annual volume record. On the general cargo side, dry bulk cargo exports namely gypsum and limestone are our mainstay. COVID-19 related challenges in the importing markets, mostly in the middle of the year meant that we did not achieve our volume targets however recovery in Q4 meant that we came close which was impressive.
How significant is having the free zone for the success of the port?
Salalah has been successful in the last two decades in trans-shipments, which goes back to the Hub concept. With our commercial strategy going forward, we need to consider more container integration logistics and the integration of logistics in general. This is where the free zone comes into play. We run separate business units, as we are not integrated like in other parts of the world, though that is not holding us back. We are in close coordination with the FZ in terms of how we market Brand Salalah for the future. This is central to our commercial strategy for the future, in which we will promote our overall very strategic locations as opposed to three separate business units, if we include the Airport too when Sea-Air opportunities exist. We need to integrate our services as much as possible in order for us to offer the product that our customer want. We have to replicate much of the success we have had on the transshipment side toward more integrated service offerings to customers. When supply chains have been disrupted over the last year, many customers had issues getting their products from one end of the world to the other. The pandemic taught us that we need to shorten some of those supply chains, and that is where Salalah comes into play. We have world-class infrastructure in the free zone, port, and airport, and we are on the doorstep of massive consumer markets such as South Asia and East Africa so we have the ability to act as a staging area toward some of those key markets. We need to act in unison for this to happen and maximize our potential. Collaboration will take us to a new level regarding that.
How important is it to continue investing in modernizing the infrastructure of the port?
Businesses the size of ours require continuous investment on all fronts and there definitely are expansion plans, as our business is growing. We are in discussions with the government as well about how we do this together because we are a public-private partnership, where the government is also a shareholder, along with private investors. A big theme that we are embracing a lot more is digital, for example blockchain technology. We are also busy investing significantly in internal digitalization too, by retrofitting many of our assets to make ourselves more efficient – for example equipment is being fitted with all kinds of sensors which ensures the effective running, deployment and maintenance helps us control our costs better. There is also a whole piece on our more customer-facing aspects—including our webpage, issue resolution, and services offered to customers. We have the two pillars—the internal efficiency and the customer part. In general, the ports industry has some catching up to do compared to the rest of the world, and we realize that.
What is your assessment of the current state of the maritime in Oman?
Oman is already a global hub on an international scale. Salalah is the second-largest hub in the region and around 50th in the world in terms of container volume throughout. We are also the world's leading exporter of Gypsum and therefore we have a strong market position already with excellent market coverage, which would not have happened without strong and clear leadership from the Government of Oman. We need to continue to capitalize heavily on our geographical location and proximity to key markets. We will continue to work closely with the Government who have a clear logistics vision for the future. Diversification of the economy is central to the 2040 Vision, with logistics being a key sector, and we need to make sure we maintain that position and capture more commercial opportunities.
What does growth mean for the Port of Salalah?
The growth of Port of Salalah means we need to expand beyond the pure transshipment side, although this will always be the backbone of our operation and therefore gives us the launching pad that we need to start new services. As a Hub, we play a vital role for shipping lines in terms of the network coverage, and keeping supply chains fluid which we need to protect as we grow around ever increasing customer demands. Growth for us also means growing our capacity. The vessels in the world are getting bigger, so growth for us means physical growth of the ships we handle and the cranes we operate too. We also need to grow the integrated logistics section of the business, which is linked to growth of Brand Salalah