Gulftainer’s USD 2 bn Khorfakkan bet, and the limits of the east coast boom

For decades, the UAE’s east coast has operated in the shadow of Jebel Ali’s 14 mn TEU ecosystem. The war is changing that pecking order. Khorfakkan, the UAE’s largest container port outside Hormuz and Gulftainer’s flagship terminal, is set for a USD 2 bn expansion that will double its capacity to 10 mn TEUs, alongside 2-3 mn TEUs of inland logistics capacity.

“This [expansion] has been on our radar since last year, but recent disruptions accelerated our plans,” Farid Belbouab, Group CEO of Gulftainer, tells EnterpriseAM in an exclusive interview. “2026 became the inflection point where Khorfakkan evolved from a transshipment hub into a key gateway on the UAE’s East Coast.”

Belbouab insists the masterplan is not a wartime land grab. “The expansion of Khorfakkan to 10 mn TEUs is not about building capacity overnight; it is about building an ecosystem aligned with demand,” he says. Phase 1 takes the terminal to 5 mn TEUs, with modular expansion to 10 mn+ TEUs “in the next few years.” The business case, he says, is underpinned by structural shifts in trade.

War puts Khorfakkan on the map

A forgotten port finds its moment: Before the Strait of Hormuz closure, Khorfakkan had lost “its anchor clients during the 2010s both to Jebel Ali and the fast-growing Khalifa Port,” Eirik Hooper, senior associate at maritime consultancy Drewry and a former DP World executive, tells us. Since the conflict began, Gulftainer has rapidly reinvigorated the vastly underused terminal and adapted it to stand in as the UAE’s primary gateway.

That conversion came with a catch. Khorfakkan was built to move boxes from ship to ship, not ship to truck. Its original transshipment capacity was estimated at 5 mn TEUs, but its practical gateway capacity was closer to 3-3.5 mn TEUs, Hooper says. After Gulftainer rapidly built a landside gate complex, throughput rose from about 8k TEUs a week to 65k TEUs, marking a 700% increase and reaching the terminal’s current capacity limit. Capacity is expected to reach 5 mn TEUs by the end of the month, allowing weekly throughput of around 100k TEUs.

From sea-to-sea to sea-to-door

Belbouab says that resilience was designed in. In 2025, Gulftainer launched the UAE’s largest bonded dry port in Sajaa, 90 km from Khorfakkan. Cargo is sealed at the port and cleared at the customer’s doorstep in Sajaa. “This shifts Khorfakkan from a sea-to-sea hub to a sea-to-door gateway,” he says.

It has since added the Al Dhaid Multi-Modal Logistics Hub and Freezone, 60 km from the port. The 150-hectare site will have an annual capacity of 1.5 mn TEUs and is designed to tie Khorfakkan physically into the Etihad Rail network. It is being developed as a public-private partnership with the Sharjah Ports, Customs, and Freezones Authority.

The growth strategy, Belbouab says, is “10 mn+ TEUs at sea, supported by 2.3 mn TEUs of inland capacity across Sajaa and Al Dhaid, including 1.5 mn sqm of logistics park.” “Customers today don’t want just a plot; they want a bonded, AI-enabled corridor,” he adds. He points to the Khorfakkan-Sharjah road, the upcoming Etihad Rail link to Khorfakkan and Al Dhaid, and GT Lines’ 15-vessel fleet serving China, the Indian subcontinent, the GCC, Iraq, and East Africa. “Our trade corridors reflect our integrated platform — from ports to shipping, shipping to inland, and inland to industrial parks.”

Fujairah adds capacity, but Khorfakkan leads

Fujairah remains the UAE’s crude lifeline on the east coast. In recent months, it has become Adnoc’s primary shuttle transfer hub, letting buyers collect crude without sending tankers through Hormuz. The Adcop pipeline carries roughly 1.8 mn bbl / d to Fujairah and ran near peak nameplate capacity in the immediate aftermath of the war. Adnoc is also ramping up a second pipeline to Fujairah, targeted for 2027. The Port of Fujairah handles roughly 7.3 mn mt of marine fuel a year, placing it alongside Singapore and Rotterdam among the world’s top three bunkering hubs.

Containers are a different story: AD Ports pushed more than 70k TEUs through Fujairah Terminals in a matter of weeks in May, but the terminal was never built for that role. Its last major upgrade was a USD 135 mn (AED 500 mn) investment, announced in 2021, to lift container capacity to 1 mn TEUs. “Fujairah currently has limited capacity to handle a substantial volume of container cargo diverted from ports inside the strait,” Hooper says.

The big operators are moving to close that gap:

• DP World has reached an “agreement in principle” with Fujairah Ports Authority to develop new container and multipurpose terminals at Al Rugaylat, plus a general cargo facility in Dibba. Al Rugaylat is designed for 2.5 mn TEUs, nearly three times the capacity of Fujairah’s existing container terminal;
• AD Ports is wiring Fujairah into Abu Dhabi’s industrial base. Its rail-linked network of dry ports and cargo depots, announced in May, connects Fujairah Terminals and Khalifa Port to Kezad’s Industry City of Abu Dhabi, meaning industrial cargo can now land on the east coast and reach Kezad without transiting Hormuz. Emirates Global Aluminium, Emsteel, Al Ghurair Iron and Steel, and Tenaris have signed on as anchor clients.

Those projects point to Fujairah playing a much broader role in the UAE supply chain, Hooper says, “though for the container market it will be secondary to Khorfakkan.” Across the border, CMA CGM and Oman’s Asyad Group have signed a framework agreement for a USD 400 mn logistics terminal at Sohar, which has become an alternative route for Gulf trade during the war.

The economics: a longer road that still pays

Rerouting through the east coast is not cheap, but it is cheaper than the current alternative. Every box landed at Khorfakkan or Fujairah has to cross the Hajar mountains by truck, or eventually by rail, to reach Dubai, Abu Dhabi, and the UAE’s industrial centers. A Hormuz port call avoids that leg entirely, but a rise in breach-of-warranty premiums and war-risk surcharges beat the additional costs of overland rerouting — which, according to a study, reached 2.4- to 4.2-fold per ton-km.

Hooper says premiums are not even the main deterrent. “The majority of shipowners cannot risk their vessels getting stuck behind the strait, even if they could afford the war risk premiums being applied for both the hull and cargo,” he says. Until there is a resolution that the insurance market believes in and shipowners trust, Khorfakkan, Fujairah and Sohar will remain the primary maritime gateways for the UAE and northern Oman. That resolution looks distant, with Iran intensifying attacks on ships in recent days.

Hooper says rapid normalization and the removal of Hormuz from war-risk classifications would delay phases 2 and 3 of Khorfakkan’s terminal expansion; “otherwise, the masterplan is likely to proceed quickly to meet demand.”

Drewry’s verdict is that the east coast terminals and inland hubs “can be made to work” as the gateway for UAE and northern Oman consumption. They can also serve as a corridor transshipment platform for some Upper Gulf needs, “though certainly not all,” but only at a higher cost base and with some stress on existing rail and road infrastructure. Ports inside the strait will keep serving Upper Gulf trades, where Hooper expects them to stay cost-competitive against routings via Red Sea ports, which carry much longer overland legs.

Why Jebel Ali keeps its crown

Regional transshipment “won’t return to the Gulf in its pre-2026 form,” Hooper concludes. Jebel Ali “will be relegated to Gulf transhipment plus re-export, a materially smaller, though still substantial, market,” he says.

But the east coast cannot dethrone Jebel Ali: DP World’s Jebel Ali is a completely different weight class for container volume — handling roughly 14-15 mn TEUs annually, backed by a capacity exceeding 19 mn TEUs — tied directly into Jafza, which hosts over 10k businesses and accounts for nearly 36% of Dubai’s GDP. Jebel Ali “will still retain its preeminence in the region largely due to Jafza, the freezone, warehousing, industrial cluster, and cargo airport around Jebel Ali, which took four decades to build and cannot be easily replicated or relocated,” Hooper says.

That is the crux of the economics. A port earns a handling fee once per box. A freezone cluster earns rent, services and re-export margins from the businesses that own the cargo, year after year. The war can move the ships, but it cannot easily move 10k companies. Gulftainer’s answer to Jafza is Al Dhaid, but at 150 hectares, it is starting four decades behind. The more immediate trend is east coast ports plugging into the freezones that already exist. The inland logistics investments by Gulftainer, DP World, AD Ports, and CMA CGM “are geared toward moving cargo as efficiently as possible between the east coast ports and the existing logistics hubs at Jebel Ali and Khalifa,” he adds.

Turning three emirates’ worth of competing operators into one network will not happen by decree. “There is no substitute for competitive pressure and time to develop a cohesive logistics system among separate commercial organizations each working toward its own goals,” Hooper says. When it does take shape, he expects it to bend toward Dubai. “The Jafza logistics cluster should remain the preeminent force in the UAE, and I expect the network will be incentivized to arrange itself to prioritize Jafza’s customers’ needs.”