The UAE Freight Market Updates (August 2024).

Since the beginning of 2024, congestion at major ports has been felt acutely in the United Arab Emirates (UAE), particularly port Jebel Ali and Mina Khalifa. Yet, there are some market  updates businesses must be aware of. We summarize below the current status of the key gulf freight market, the UAE, as of August 2024.

Container Ports

Latest data shows major delays at terminal 1 and 2 at Jebel Ali port, impacting both inbound and outbound shipments. Several vessels are avoiding the port from their regular schedules. Major shipping lines shifted to Abu Dhabi port for transshipments, resulting in containers being omitted from this process. Similarly, transhipments to GCC ports are experiencing the same issue. The data in early 2024 shows a significant increase in congestion at Jebel Ali Port between the first and second quarters of 2024. The 38% rise in average congestion, equivalent to an additional 0.87 days, mainly due to operational challenges, including the impact of two cranes being out of service.

However, the overall performance of the port has been improved compared to the previous few months! Interestingly, despite the worsening congestion earlier this year, June 2024 saw a marked improvement than in May, with congestion decreasing by 1.14 days. In July 2024  the port was categorized as “heavily congested” both at the berth and at container yards, delaying inter-terminal transfers; However, as of August 2024, the situation at the port has improved further, with real-time congestion down to just 1 day.  The data points to an overall positive trend as of August 2024, with real-time congestion reduced to manageable levels.

Air Shipments

Due to congestion at Jebel Ali Port, many have switched to air shipping, leading to increased congestion and delays in booking confirmations, now taking 3-4 days. The holiday season has further slowed regular cargo shipments as passenger and high-value cargo are prioritized. Despite these market trends, Etihad Cargo reported a 17% increase in cargo tonnage during the first half of 2024, including a 15% rise in the UAE and even higher growth in the surrounding regions. Overall, UAE airports managed 2,162,786 tons of cargo in H1 2024, comprising 528,430 tons of imports, 245,217 tons of exports, and 1,389,136 tons of transit cargo, with national carriers accounting for 68% of the total traffic.

Ground Shipping 

Ground shipping from Dubai to Gulf destinations has surged due to soaring sea freight costs from Jebel Ali to Jeddah, which have risen from $450-$500 per TEU to around $2,500 amid the Red Sea situation and port congestion. As a result, shippers from the UAE are now increasingly using overland routes to Dammam, now a crucial hub for timely deliveries to KSA. However, with Dammam Port also facing congestion in addition to FASAH appointments and clearance can take up to 4 days, particularly at the Al Batha crossing, shippers are exploring alternative routes via the Bartha border, despite similar delays. The cost of trucking from Jebel Ali to Dammam averages around Dh5,000, including Saudi border charges, and while there is ample truck capacity, challenges persist for out-of-gauge cargo, which requires convoy escorts for scanning at Dammam.

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