News / K+N doubles-down on Gulf landbridge viability

Kuehne+Nagel (K+N) appears less convinced than its peers of the long-term prospects for the Gulf landbridge, which has emerged in the wake of the US/Israeli war against Iran, despite growing belief among other operators that it is here to stay.

At the start of July, CEO of the Swiss multinational Stefan Paul told the UK Financial Times that, given the “sheer mass” of regional boxship activity prior to the war, and the effective closure of the Strait of Hormuz, “a trucking solution can never be sustainable”.

Mr Paul’s comments came at a brief reprieve in the conflict and hot on the heels of several forwarders and transport operators telling The Loadstar they thought the landbridge offered “long-term viability” in a region that for three years had proved unstable.

Asked if the re-escalation of the conflict had changed Kuehne+Nagel’s way of thinking about the landbridge, a spokesperson stressed that while the company believed its long-term prospects were limited, and K+N was offering such a service.

“Kuehne+Nagel is operating air-road solutions via airports in Saudi Arabia, Dubai, and Oman with cross-border trucking into Middle East countries,” a spokesperson told The Loadstar. “This solution is an alternative gateway into the Middle East countries. Should the situation change, we will evaluate with our customers what the best solution is to keep their cargo moving.”

Together with the sheer capacity available via ocean freight, it appears part of the problem for operators like K+N is that the region’s infrastructure limits the volumes that can be handled by the landbridge.

Shortfalls in rail and road infrastructure, not suitably equipped to offset even a fraction of the volumes that are moved each week by box ships, is where the concern lies, but sources said cooperation between Gulf states suggested this could be addressed.

One haulier source in Saudi Arabia noted that the governments had been swift in ensuring that trucks could transit borders without the usual level of checks.

As a result, Saudi Arabia, in particular, experienced a boom in its logistics activities, which has led many to believe that the government is looking for ways to “normalise” the landbridge.

One source agreed with K+N to an extent, telling The Loadstar they did not expect to see “full normalisation” of the route, but also believed it had proved itself a viable alternative for those shippers acutely sensitive to disruption.

Among those to see a long-term future for the landbridge route, Saudi Automobile & Touring Association’s executive manager, Hasan Almanasif, pointed out that one need only consider how the Houthi siege of the Red Sea had reordered sea freight routings.

“Bab el Mandab 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 that I believe the Hormuz crisis will see these new routings maintained.

“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.”