News / Saudi logistics lifeline 'won't go back in the box' post-war

War in Iran has expedited development of a new trade route, the Gulf land bridge, with expectations that repeated Israel/US aggression against the government in Tehran has cemented the route for the long-term.

Panellists participating in an IRU-convened discussion on land transport across the Gulf Cooperation Council (GCC) countries praised the speed at which its governments and private sector had worked to make the route a viable alternative to air and sea freight.

Saudi-based Flow Progressive Logistics CEO Achraf Ellili said: “Every authority has contributed to have the entire ecosystem working together, meaning things we thought would take ages have happened in 47 days.

“The level of GCC work is something I’ve not seen before. I expect full normalisation of this route after the war, but I do not expect things to return to normal, either. Saudi as a logistics hub has been facilitated by the crisis and it is not going back in the box.”

Central in that push has been the development of the Saudi International Corridor, which has offered transit options for ocean freight to reach either final destination within the GCC, or be trucked to airfreight hubs for onward transport.

Difficulties in sourcing truck capacity also created an opening for rail operators, with Saudi Arabia Railways launching its own corridor between King Abdulaziz Port, King Fahd Industrial Port, and the Jubail Commercial Port, to Al-Haditha Port.

Sharing Mr Ellili’s belief that the new transport options were here long-term, Hasan Almanasif, the Saudi Automobile & Touring Association’s executive manager, noted how the Houthi siege of the Red Sea had reordered sea freight routings.

“Bab el Mandeb is partially open again, and yet the alternative routings developed to get around the trouble there continue to be used, and it is because of this I believe the Hormuz crisis will see these new routings maintained,” he said. “And I think that can only be a good thing. The new routes need to be used.

“But the issue now is ensuring there is the capacity to provide a balance between supply and demand to address the imbalance with pricing very, very high at the moment.”

Asked why they saw long-term success for the route, the panellists pointed to a belief within the wider logistics community that even when the war finished, there would remain “a perception of risk”.

Consequently, they said, they expected to see shippers shift a percentage of their volumes to the alternative transport offering as a means to mitigate risk, and also to shore-up capacity on the routing for the long-term.

Mr Ellili said: “The real risk for shippers now is not disruption of the war itself, but the perceived risk that even after the war is officially over it will not be over for logistics. They will need to plan around this perception of risk.”