Crisis dents profits of Saudi ports.
The global economic crisis has substantially reduced the profits generated by Saudi ports, said a Saudi shipping business expert. "A report by the National Shipping Company for Saudi Arabia (NSCSA) shows that Saudi ports suffered a 51 percent fall in profits for the year 2009 compared to 2008. Saudi ports including Jeddah Islamic PortJeddah Islamic Port
and King Abdul Aziz Port in Dammam registered a considerable fall in the handling of cargo and the number of ships arriving there in the third quarter of 2009," said Capt. Muhammad Babaidan, chairman of the Muhammad Aboud Center for Shipping Consultancy in Jeddah.
Babaidan stressed the need for concerted efforts by the public and private sectors to tide over the current crisis faced by the shipping sector.
He added that Saudi and UAE ports are, however, the least affected by the current economic crisis as none of them have crashed or announced bankruptcy.
The NSCSA report said the UAE's Gulf Shipping Company suffered a 70 percent fall in revenue in 2009. The performance of the United Arab Shipping Company (Gulf countries) was also no different in the same period.
According to Babaidan, the Saudi and Gulf companies that withstood the economic crisis were the companies with "strong foundation and an administration with an enlightened vision, and because of this they have not been forced to accept zero rates for freights just to cover their operation costs as many international shipping companies are presently doing in the battle to survive.
"Shipping companies in Saudi Arabia and the Gulf have not suffered a crash or bankruptcy because of their long-term contracts with giant companies such as Saudi Aramco and Saudi Basic Industries Corp. (SABIC) which cover their operating and fuel costs and allow them to make profit."
Discussing the situation in the region in general, he said Dubai's flagship company, DP World, which operates 31 ports in six continents employing thousands of employees, was hit hard by the global financial crisis.
Regarding the ports and shipping business in Egypt, he said that according to Egyptian ports authorities there has been a considerable fall in freight handling in all of the country's major ports. "Shipping in the Suez Canal fell from 155 million tons in 2008 to 101 tons in 2009 while the number of Chinese shipping carrying cargo from Asia to European countries was 52 percent less in 2009," he said.