LAND OF LOGISTICS

Oman 2017 | TRANSPORT & LOGISTICS | FOCUS: LOGISTICS INFRASTRUCTURE

The country is paving the way for the advancement of a well-developed logistics industry through comprehensive infrastructural overhauls.

Principal to the aims of any country that wants to become a logistics hub is its geophysical location. A country's proximity to hotbed industrial and economically developing areas, as well as its position along major shipping lines, can many times boil down to plain luck. Oman is privileged to find itself in one of the most interesting locations for logistics in the world. Across the ocean from India, one of the fastest-developing countries on earth, and right on one of the busiest shipping lanes in the world at the Strait of Hormuz, Oman's desire to become a logistical hub seems like a foregone conclusion based on its positioning alone. Prime location, however, does not always translate into an effective or efficient logistics sector. Data from the most recent Logistics Performance Index from the World Bank ranked Oman behind all of the other members of the GCC, coming in 59th out of 160 countries. Oman is now taking steps to change this.

To make sure these infrastructural improvements take place and remain in line with the country's domestic vision, the Oman Global Logistics Group was created under the Ministry of Transport and Communications. In addition to the brick-and-mortar infrastructural developments made in logistics, the group also focuses on so-called “soft” infrastructure measures to increase the efficiency of the sector. This includes many different aspects that go into running world-class logistics, such as technology, trade facilitation, employee training, human capital, marketing, and education.

One of the most interesting recent announcements that it poised to further the logistics industry of Oman is the creation of the South Al Batinah Logistics Area, now marketed as Khazaen. The Khazaen project will be located in the South Al Batinah Governorate, just 45 minutes outside of Muscat and two hours from Sohar, and will serve as the country's first logistics-based city. Khazaen is especially impressive due to its magnitude; it is planned to cover a sprawling 95sqkm area, making it a sizable city in its own right. As the cornerstone in the logistics plan, Khazaen will be the home of the country's first-ever inland dry port and contain many warehouses and other logistics infrastructure. The overall plan is to turn Khazaen into a fully integrated urban community.

The special economic zone of Duqm is also taking steps toward developing its logistics infrastructure. The Port of Duqm recently signed a 25-year land-lease agreement with Duqm Ahlia Development to construct warehousing and transport capabilities at the port. Speaking to TBY about this agreement to increase the logistics capacity at the port, Port CEO Reggy Vermeulen remarked, “It is a milestone in the port because it will be the first big private warehouse to be constructed.” Local logistics company Truck Oman also announced plans to build a 2.3ha integrated logistics center in Duqm. The airports of Oman can also play large roles in increasing the airfreight logistics in the country. The new Muscat Airport is slated to open at the end in 2017, Salalah Airport was just commissioned in June of 2015, and there are airport plans in different stages of development in Duqm and Sohar. Oman Shipping Company also initiated a cargo feeder service that connects the Omani ports of Duqm, Sohar, and Salalah to regional powerhouse Jebel Ali Port in the UAE. This service tries to address one of the underdeveloped aspects of ports in Oman in its logistics framework, namely connectivity with foreign ports.

Although the project has been temporarily sidelined in Oman due to low oil prices and its effect on the government's reserves, railway infrastructure is also part of the national effort to increase the viability and cost-effectiveness of transporting goods in the country. ✖