By: AGBI

The Port of Neom, located within Saudi Arabia’s planned industrial city of Oxagon, is set to become a new gateway for trade into Iraq and northern Saudi Arabia, the project’s chief executive told AGBI.

Vishal Wanchoo, who heads Oxagon, said the port could cut transit times to Iraq by up to 12 days.

Advanced automation and digital systems are being built in to reduce turnaround times and boost efficiency, enabling the Port of Neom to compete with major regional hubs such as Dubai’s Jebel Ali.

It requires large investments, both in the port’s infrastructure as well as the almost 1,000 mile land route connecting Neom – the multi-billion giga-project of which Oxagon is a part – to Baghdad.

Wanchoo said that Oxagon is working closely with the government to begin receiving 1.5 million TEUs (20-foot containers or equivalents) annually by 2027, the bulk of which could go on to Iraq.

The port ran a trial earlier this year between Cairo and Erbil in northeastern Iraq and claimed to cut down transit time by 50 percent compared to the next-best alternative route.

“Iraq is a very attractive destination for the Port of Neom,” said Wanchoo. The country has only one deep-water port of its own, Umm Qasr, which receives 600,000 TEUs a year and can only handle small-to-medium sized ships.

It makes Iraq dependent on transhipping from Jebel Ali and Salalah in Oman or overland cargo through Turkey. “They don’t really have many options,” said Wanchoo. “And markets want options.”

About 55 percent of the shipping that the Port of Neom is looking to capture are boats carrying perishable supplies to Iraq.

“That’s the perfect opportunity for us,” said Wanchoo, adding that the boats can take advantage of the faster transit times for goods to their ultimate destination.

The port received 1,000 vessels last year, Wanchoo said, mostly serving the ongoing construction operations at Neom. It already includes large amounts of agricultural products and foot passengers going back and forth from Egypt.

To keep turnaround times down, the port will have automated terminals and cranes coordinated with a fleet management system.

It plans to deploy electric, intelligent guided vehicles (IGVs) – autonomous trucks designed to run continuously with minimal human supervision. 

The plan builds on other ports where automation has been successfully incorporated, such as Rotterdam in the Netherlands, Qingdao Port in China and Singapore’s Tuas Port.

The Houthis have changed global shipping patterns for the foreseeable
Beyond Neom though, Wanchoo said more needs to be invested in the overland connections with Iraq.

“What you want to provide are efficiencies at the port, on transport and logistics [and] in the border crossing,” he said. “If you do all of that, you have the right support to make this work. It’s an obvious choice.”

Out at sea, challenges will prove more difficult to overcome. Shipping in the Red Sea has halved amid the ongoing threat of attacks by Houthi rebels in Yemen. Almost all ships sailing north to Neom pass through the Bab al Mandab Straits, which shipping companies are still avoiding.

“That is the biggest obstacle,” said Wanchoo, adding: “We don’t really see obstacles beyond that because we control our own destiny.”