Maersk to establish carbon-neutral logistics park in Middle East

Danish shipping giant A. P. Moller – Maersk has signed an agreement with Saudi Ports Authority (Mawani) to set up an integrated logistics park at the Jeddah Islamic Port in Saudi Arabia.

As disclosed, the 205,000-square meter center will serve as a hub for transshipments, petrochemical consolidation, air freight and less than container load (LCL) cargo. Maersk plans to make the facility carbon-neutral eventually with an investment of $136 million over the period of 25 years.

The bonded and non-bonded warehousing and distribution (W&D) facility will cover more than 70% of the total area while the remaining part will act as a hub for transshipment, air freight and LCL cargo. The W&D part will have several different sections to accommodate general warehousing and cold chain storage. To cater to the rapid penetration of eCommerce in Saudi Arabia, the facility will also have a dedicated eCommerce fulfillment center.

The integrated logistics park will be able to handle annual volumes of close to 200,000 TEUs across different products, according to the company.

“The strategic partnership between the authority and Maersk is an important step to achieve our ambition for Jeddah Islamic Port to become among the top ten ports in the world by 2030, with the volume of container handling reaching 18 million TEUs. I am confident that this partnership will greatly enhance the distinguished operational capabilities of Jeddah Islamic Port,” Omar bin Talal Hariri, President of the Saudi Ports Authority, commented.

“The authority’s new strategy supports the maritime transport journey in the Kingdom and enables the authority to continue developing a sustainable and prosperous maritime transport system,” Minister of Transport, Saleh bin Nasser Al-Jasser, added.

What is more, Maersk will also be investing heavily in renewable energy to power this facility. The warehouses, cold storage and office buildings will all be powered with renewable solar energy. Even the yard machinery including forklifts, reach stackers, empty container handlers, trucks and other vehicles deployed for the movement of cargo will be electric.

“The vision for the Kingdom to diversify its economy beyond the oil sector is an important one to enable long term growth for Saudi Arabia. At Maersk, we not only believe in this vision, but are also committed to play a role by upgrading the logistics infrastructure through our integrated offering and thus opening more avenues for traders in Saudi Arabia,” Mohamad Shihab, Managing Director, Maersk Saudi Arabia, added.

Danish shipping major has been investing in the renewable sector over the past couple of months. Last month, the company, through its corporate arm Maersk Growth, decided to invest in Dutch start-up Vertoro, a company focused on developing liquid lignin technology which can be used as a marine fuel. Furthermore, the firm invested in WasteFuel, a start-up focused on turning waste into sustainable aviation fuel, green bio-methanol, and renewable natural gas.

The investments in new fuels were made following the company’s announcement to add eight methanol-powered containerships set to be completed in the first quarter of 2024.

Meanwhile, the Saudi Ports Authority (Mawani) laid the foundation stone with DP World Jeddah for the expansion and modernization of the South Container Terminal at Jeddah Islamic Port last month. The revamp of the facility comes in line with Saudi Arabia’s strategy to develop ports infrastructure to unlock the Kingdom’s maritime logistics and transportation potential.