{"id":113272,"date":"2026-03-16T00:00:00","date_gmt":"2026-03-16T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/menaplus\/?p=113272"},"modified":"2026-04-13T18:30:11","modified_gmt":"2026-04-13T18:30:11","slug":"saudis-overbuilt-red-sea-port-capacity-is-suddenly-a-lifeline-for-the-gulf","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/menaplus\/2026\/03\/16\/saudis-overbuilt-red-sea-port-capacity-is-suddenly-a-lifeline-for-the-gulf\/","title":{"rendered":"Saudi\u2019s \u201coverbuilt\u201d Red Sea port capacity is suddenly a lifeline for the Gulf"},"content":{"rendered":"

Logistics operators and customs officials on the Red Sea are working <\/strong>around the <\/strong>clock<\/strong> as Saudi Arabia looks to take advantage of something the UAE doesn\u2019t have<\/strong>: Spare port capacity \u2014 and lots of it \u2014 as this third week of war in the Gulf grinds on.<\/p>\n

Maybe overbuilding wasn\u2019t folly, after all? <\/strong>Ports along the Kingdom\u2019s west coast have annual capacity exceeding 18.6 mn TEUs, and they\u2019ve been running well below that. Jeddah Islamic Port alone has capacity north of 10 mn TEUs but handled just over 3 mn TEU in 2024. King Abdullah Port adds another 5 mn TEUs. That means Saudi\u2019s Red Sea ports were operating at roughly 40-45% utilization before the crisis.<\/p>\n

Why it matters:<\/strong> The Gulf imports 85% of its food \u2014 and more than 70% of it came through the now-shut Strait of Hormuz. Rice, cereals, meat, medicine, construction materials, and the industrial inputs that keep desalination plants and factories running all funneled through there until two weeks ago.<\/p>\n

How it works now: <\/strong>Companies and customs officials have scrambled to reposition trucks, customs operations, and specialists at Red Sea-coast facilities to haul cargo into and out of (but mostly into\u2026) the Kingdom while Hormuz remains shut. Cargo arriving via the Suez Canal or around the Cape of Good Hope now lands at Jeddah, King Abdullah Port, or Yanbu, then moves overland by truck into the Kingdom and onward to neighboring GCC states. <\/p>\n

This is traffic the UAE is losing.<\/strong> Jebel Ali, DP World\u2019s flagship hub, handled 15.6 mn TEU last year. UAE ports outside Hormuz \u2014 Khorfakkan at c. 5 mn TEU capacity and Fujairah at under 1 mn \u2014 cannot compensate. Saudi\u2019s under-used Red Sea ports are absorbing what the Gulf\u2019s established hubs can\u2019t currently handle.<\/p>\n

That could create \u201chealthy\u201d competition:<\/strong> Saudi Arabia\u2019s investment in inland logistics zones and Red Sea gateways will narrow the perceived gap with operations in the UAE, the former head of supply chain and transport industries at the World Economic Forum Wolfgang Lehmacher tells EnterpriseAM.<\/p>\n

This could signal a long-term shift: <\/strong>Logistics routes in the region are likely to become more diversified to hedge against geopolitics, markets, or climate-driven volatility, Lehmacher told us. \u201cBy shifting part of the flow away from the Gulf and toward the Red Sea and the Mediterranean, these corridors do not make Hormuz irrelevant, but they do change the geometry of power in the region: market access, risk, and bargaining leverage will no longer be concentrated in a single narrow waterway,\u201d Lehmacher said.<\/p>\n

There\u2019s more value for everyone <\/strong>\u2014 Jeddah, Yanbu, Dammam, Dubai, Abu Dhabi, Salalah, Aqaba \u2014 in a Mideast platform of interoperable hubs<\/strong>, Lehmacher argues, than there is in any one center becoming \u201cthe\u201d undisputed hub. When the conflict ends, he says, operators should compete on performance, but collaborate on standards, data and interoperability. The goal: To make the region indispensable to global shippers and investors \u2014 and more resilient.<\/p>\n

As with anything governmental, it needs a name before it can be declared real:<\/strong> Saudi Transport Minister Saleh Al-Jasser <\/a>has dubbed it<\/a> the \u201cWestern Coast Logistics Corridors Initiative.\u201d He made the announcement in Jeddah Islamic Port, flanked by the heads of the customs authority and the national port authority. <\/p>\n

It\u2019s a land bridge \u2014 but not <\/strong>the<\/strong> Landbridge:<\/strong> The Saudi Landbridge railway, a c. USD 7 bn Vision 2030 project linking Jeddah to Riyadh and Dammam, is still under construction, with operations not expected until the late 2020s. What\u2019s running today is tires-on-asphalt. Trucking is slower, costlier per TEU, and harder to scale than the rail network the Kingdom is building.<\/p>\n

The Red Sea is getting a second act \u2014 and carriers are already repositioning.<\/strong> DP World \u2014 which operates the South Container Terminal at Jeddah Islamic Port \u2014 expects rising volumes at its Red Sea terminals, Group CEO Yuvraj Narayan <\/a>said<\/a> on an earnings call last week, though he stopped short of saying how much volume or what cargo types were moving. <\/p>\n

Worth noting:<\/strong> APM Terminals, Maersk\u2019s terminal subsidiary, recently acquired a 37.5% minority stake in that same Jeddah terminal, meaning the world\u2019s two largest port operators are now co-invested in the facility positioned to become the Gulf\u2019s primary relief valve.<\/p>\n

Shipping lines are building new routes around the Hormuz blockade.<\/strong> The Gemini Cooperation (Maersk and Hapag-Lloyd) launched AE19, a new Asia-Europe service that sails from Chinese and Korean ports to Tanjung Pelepas, rounds the Cape of Good Hope into the Mediterranean, then calls at Jeddah. The first westbound sailing departed Xingang on 13 March. That it routes via the Cape rather than Suez \u2014 just weeks after Gemini had returned its ME11 service to the Red Sea in mid-February \u2014 tells you how fast the security picture shifted once Israeli and US warplanes started flying.<\/p>\n

BACKGROUND-<\/strong> Saudi Arabia has been working on supply chain hedges for some time. The launch of Folk Maritime in 2024 was part of that drive: Focused on feeder connections in the Red Sea, the company is basing a core part of its business strategy on offering a Plan B (shipping option) or \u201cbackup offer\u201d for shippers, a consideration often neglected by large global industries in the past, CEO of Folk Maritime Poul Hestbaek previously <\/a>told us last year<\/a>.<\/p>\n

What to watch for next: <\/strong>We\u2019ll be keeping an eye on Jeddah\u2019s throughput numbers over the next 30 days \u2014 and for signs that Maersk, Hapag-Lloyd, and others add more AE19-style services routing via the Cape to Jeddah. War-risk insurance pricing on Gulf-bound routes \u2014 and what the still largely-silent Houthis do \u2014 are also on our radar.<\/p>\n","protected":false},"excerpt":{"rendered":"

Fallout from the US-Israeli war on Iran is stress-testing Saudi\u2019s logistics hub ambitions in real time<\/p>\n","protected":false},"author":1,"featured_media":113273,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2608],"tags":[2538,2631,2717,2563,2609,2607,2552],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-113272","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-lede","tag-enterpriseam","tag-gcc","tag-logistics","tag-saudi-arabia","tag-shipping-maritime","tag-the-lede","tag-trade","wpautop","entry"],"acf":{"mongo_id":"9e0dc565-cb4a-4325-87ed-01ece6bdf12c","order":"2","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2026\/3\/831.jpg","photo_position":"above","homepage_title":"","full_issue_title":"All 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