Oman: Port of Salalah Showcases Growth Potential

Port of Salalah has welcomed executives and representatives from the shipping world’s largest shipping lines and principal customers in the local market to the handling of its 30 millionth TEU (Twenty Foot Equivalent Unit) container recently.

The distinguishing aspects of Port of Salalah, the second largest port in the region, including its direct connections to the world and shortest transit times to the major markets in Europe, Asia, Africa and the US from the region, were conveyed during a thorough tour of the port’s Container Terminal.

The tour of Port of Salalah also substantiated its unique position to benefit customers through the Salalah Free Zone and Free Trade Agreements (FTA) accessing United States and Singapore, as well as sea-land-air agreements with local businesses and faster connection routes to GCC markets. The Port of Salalah serves as an engine of growth to the country’s economy in line with the progressive vision from the government of Oman to diversify the economy from oil exports and generate meaningful Omanisation and employment, as an estimated five jobs are created for logistics, shipping or the local economy for every one job in the port.

A milestone achievement

Over the past two years Port of Salalah has attained resilient growth in productivity and market growth amid the downturn of the global containerships industry, as well as significant progress in the company’s safety record and technology investment, to better serve some of the largest vessels in the world.

“We’re happy to bring together our local valued customers and all our partners onboard, as well as our people, to mark this achievement which is made possible through your support and dedication,” said Peter Ford, CEO of Port of Salalah. Port of Salalah’s customers include the world’s blue-chip names in ocean carriers such as Maersk Line, APL, CSAV, Shipping Corporation of India and the newly formed G6 alliance.

The 30 millionth TEU milestone was a tribute to the port’s strength in container handling coinciding with the first eastbound call of Hyundai Force of the G6 alliance, a new service line that increases Port of Salalah connections to Asia and Europe to over 30 sailings every week.

The newly formed G6 alliance unites six ocean carrier firms into one of the largest vessel networks and operates 90 ships each with capacities up to 14,000 TEU covering 40 ports. The G6 includes members of the Grand Alliance — Hapag-Lloyd, NYK and OOCL — and the New World Alliance — APL, Hyundai Merchant Marine and MOL.

In honor of the first call by Hyundai Force, the vessel captain was met by Mr. Ford who presented a plaque to the captain in upholding the traditional seafaring commemoration of a vessel’s first call at port.

Touring Port of Salalah

The Port of Salalah has invested over RO 300 million (US$ 800 million) in infrastructure that ranges from some of the world’s largest cranes to handle vessels, 2.4 km worth of container berth quay with depths of 18 meter, and plenty of yard capacity to ensure growth in line with demand.

Customers were escorted throughout the port to survey the port’s day-to-day operations and stopped at safety zones to get a firsthand experience of the size and scale of Oman’s largest port and second largest port in the region.

The tour included a stop at the MV Altonia, the latest vessel added to the Oman Shipping Company subsidiary company, Oman Container Lines (OCL). At 1,730 TEU, MV Altonia is OCL’s newest product meeting growing interest in connecting Salalah and Jebel Ali.

“We expect to add Port Sultan Qaboos to the Gulf Express feeder service as well starting weekly this month. With this connection, Omani ports will be connected like never before and it will finally be possible to ensure Omani cargo passes through Omani ports rather than through the UAE,” said Nicholas Fisher, CEO of Oman Shipping Company. “As we go forward we look to expand the network which will include Indian subcontinent, and potentially East Africa, connecting through the Salalah hub, to offer the ability for Omani cargo to reach the world through Omani ports. At the end of the day it’s about Omani transportation solutions for the country,” Mr. Fisher concluded.

Mr. Ford added, “We believe significantly in this considering the improved product it can give to customers looking for new transportation ways to get to and from Muscat and the Sohar area, as right now the transit times are fairly poor, but with this connection they can decrease by a week to ten days at a minimum.”

In pursuing further solutions and connectivity for Oman’s businesses, Port of Salalah is also working closely with the Salalah Free Zone to provide opportunities for local businesses to flourish, supported by a recently awarded RO 55 million (US$ 143 million) contract from the Ministry of Transport and Communications to develop the General Cargo Terminal.

“The strategy is to provide opportunities for our customers to grow and prosper by having further downstream activities from their core business. And progress has been positive, we’ve signed a Port Facilities Agreement with a logistics distribution company that we expect construction to start within this year, and some progress on agro-business going from bulk to container items,” added Mr. Ford.

Port of Salalah is also pursuing a course as a center of activity for Oman’s top-quality limestone, which is equivalent to what is found in Thailand and is used primarily for coal fired steel manufacturing, as well as serving liquid bulk commodities produced in Oman including methanol, fuel, Mono ethylene glycol, and caustic soda.

With over 2100 employees, Port of Salalah has also heavily invested in improving safety and productivity, as Mr. Ford added, “One of our success stories is a momentous reduction in safety incidents, improving safety record by double digits or even triple digits depending on what year of comparison. LTIF (Lost Time Injury Frequency) was previously in the 40’s, where today we are 0.62 and reducing. Safety isn’t just something we believe in, it is in our DNA now.” Port of Salalah recently achieved a safety record 2.5 million manhours without LTI, which is equivalent to 137 days for the port’s 24-hour, 7 days a week, 365 days a year operations.

Following the rising concern in piracy attacks, Port of Salalah has closely aligned with all the navies involved in Anti Piracy activities,which includes Oman, Japan, United States, Britain and Russia among others, adding to the port’s responsibility towards safety.

Strategy for Sustainability

The tour concluded with a review of Port of Salalah’s 20 year vision, infrastructure development and technological investment that will improve efficiencies, reduce waste, and advance automation at the port.

Port of Salalah hopes to invest jointly with the Omani government on a valuable proposal to convert its RTG cranes (Rubber Tyred Gantry) from diesel to electricity, which would reduce carbon emissions by at least 17,000 tonnes per year, and the company is optimistic in winning endorsement on this project within this year.

Port of Salalah is also increasing its attention on meaningful Omanisation, training and career development, and community responsibility activities. Currently Omani nationals account for over 70% of skilled workers and the company is investing in new incentives to increase motivation and job satisfaction.

“We’ve talked about the expansion plans that we expect to see in the next two years, and what we can see in the coming 20 years, that will be part of the formula for consistent growth for our government, businesses and community stakeholders depending on execution of the plan,” said Mr. Ford, adding, “diversification in our activities for both general cargo and container cargo needs to be in place and we’re building on our strategic location and relationships to make sure that happens.”

The Port of Salalah, also Salalah Port Services Company SAOG, is a public company traded on the Muscat Securities Market with 70% locally ownership and 30% foreign ownership. The group is managed by the APM Terminals who are 30% shareholders, while the government of Omani is a 20% shareholder in the port’s ownership structure, institutional investors account for 21% of shares and the remaining 29% are held by pension funds and the general public.

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Dredging Today Staff, May 9, 2012; Image: salalahport