Saudi pivots to land logistics as doubts over Hormuz linger

The Kingdom’s trucking corridors are proving vital in times of regional instability. As the US-Iran war has kept the Strait of Hormuz in a state of limbo, Bloomberg explores how logistics providers are turning to land routes to circumvent the maritime corridor, and Saudi Arabia is poised to capture the upside of this shift.

“Alternative routing such as land bridges and smaller ports may be more cumbersome, but it is working,” freight intelligence platform Xeneta’s Peter Sand told the business information service. The strategy has paid off for German industrial giant Siemens Energy: the firm identified a 2k-km overland route linking Jeddah to Dammam that helped it keep its business running despite shipping disruptions, gas services head Karim Amin said. And Siemens wasn’t alone: MSC alerted customers back in March of inland alternatives connecting King Abdullah and Jeddah ports to ports on the Arabian Gulf, allowing cargoes to bypass the Strait of Hormuz on their way to Asian destinations.

The pivot could become permanent: “Even if the Strait of Hormuz reopens, shippers will be cautious about returning to an over-reliance on ports [...] because the geopolitical situation will remain fragile and a sudden deterioration puts them back to square one,” Sand said.

^^ Want to read more? Check out our deep dive into how Gulf supply chains rerouted overland when Hormuz went dark.