DP World is growing its truck fleet by 40%, to 1,000 vehicles from 700, to move more Gulf-bound cargo around the Strait of Hormuz by land, per Bloomberg.
A shipper or forwarder moving freight into the Gulf now decides whether to pay three to four times the ocean rate for a guaranteed truck slot or hold cargo and wait for sea capacity to recover.
The busiest route runs from Europe through Turkey into the Gulf, handling as many as 50 trucks a week. A one-way trip from Amsterdam to Dubai via Turkey covers more than 4,000 miles. Shipping by land costs three to four times more than by sea. The trucks mostly carry automotive parts and consumer goods.
Dubai’s Jebel Ali port, DP World’s flagship hub inside the strait, saw volumes drop nearly 60% in the first half of the year from a year earlier, per Bloomberg. The decline pushed the port down to 32nd-biggest in the world by volume.
DP World also committed about $800 million to upgrade terminals at Jeddah, Saudi Arabia and Tartus, Syria, funded in part by a $1.6 billion bond sale.
“I think we'll never get back to the original normal," Stephen Whittingham, DP World's chief operating officer for freight forwarding in Europe, told Bloomberg. "Having options is really where DP World has said we're going to be able to mitigate risk."
The truck expansion follows a 50-year concession DP World signed with the Fujairah Ports Authority to build two new terminals on the UAE's east coast, outside the strait. The Al Rugaylat and Dibba terminals will raise DP World's UAE container capacity from 19.4 million to almost 22 million TEUs.
The Fujairah terminals could take up to 30 months to build, per The National.
