DP
World Moves Over 1 Million TEU Through Alternative Land Corridors Amid Strait
of Hormuz Closure
Calls at flagship Jebel Ali port to take
one to three months to recover after Hormuz re-opening, says Ahmad Yousef Al-Hassan
CEO of DP World GCC.
1.
Alternative Logistics Corridors
·
DP World has transported over 1 million TEU
since the first week of March 2026 through alternative land corridors
connecting the UAE's east coast ports with Jebel Ali.
·
The arrangements were established to maintain trade
flows following the closure of the Strait of Hormuz.
·
DP World activated a bonded land corridor and expanded
its truck fleet from zero to 3,000 trucks, under its management and
operation.
·
Cargo has been transported through both road and
rail networks.
·
In August 2026, the company had reported moving
500,000 TEU through GCC alternative corridors.
2.
Regional Connectivity
·
DP World has coordinated with port operators,
government authorities and customs agencies to establish alternative logistics
routes.
·
Additional corridors have been developed through
Oman's Sohar and Duqm
ports, providing access to the UAE and wider Gulf markets.
·
The disruption has highlighted the need to
accelerate cross-border railway connectivity and develop contingency logistics
arrangements.
3. Sharp
Increase in Freight and Logistics Costs
·
Container freight rates from China to Dubai have increased
sharply:
o
Before disruption: approximately $2,000 per
container.
o
During disruption: $10,000–$12,000 per container.
·
Longer trucking distances, congestion and higher
diesel prices have further increased transportation costs.
·
DP World has absorbed some transportation expenses
and worked with shipping lines to reduce costs, including repositioning empty
containers from alternative ports.
4. Jebel
Ali Port: 90.1% Decline in Container Volumes
·
Jebel Ali remained operational throughout the
conflict, closing for only six hours since the beginning of the war.
·
However, its container volumes declined by 90.1%
in Q2 2026 due to disruption of maritime access.
·
The port has an annual handling capacity exceeding 20
million TEU.
·
DP World has continued maintaining equipment and
operational readiness in anticipation of the return of shipping services.
5.
Expected Recovery of Jebel Ali
·
DP World expects a strong recovery in container
traffic once safe passage through the Strait of Hormuz resumes.
·
Shipping lines have indicated that services could
return within 1–3 months, depending on the repositioning of vessels and
shipping networks.
·
Meetings with nine shipping lines in Asia
reinforced DP World's confidence in the recovery.
·
Jebel Ali's established shipping connections and
its surrounding Jebel Ali Free Zone, housing more than 12,000 companies,
are considered major competitive advantages.
·
The Free Zone has maintained occupancy above 90%
despite the disruption.
6.
Investment in Fujairah and Dibba Ports
·
DP World announced investments of AED 2–3
billion in two new terminals in July 2026.
·
The projects comprise:
o
Fujairah: A container terminal near
Fujairah Airport with a planned capacity of 2.5 million TEU.
o
Dibba: A second
terminal focused on general cargo.
·
Initial phased operations are targeted within 18–24
months, although completing the project within 18 months would be
challenging.
·
The investment is intended to establish an
integrated UAE port system rather than replace Jebel Ali.
·
Fujairah will be integrated with Jebel Ali's
existing logistics and free-zone infrastructure.
7.
Potential Long-Term Cargo Sources for Fujairah
·
East African transshipment
cargo that does not necessarily need to pass through the Strait of Hormuz.
·
Cargo destined for the Northern Emirates.
·
The new terminal is intended to remain commercially
viable even after the Strait reopens, rather than depending exclusively on
emergency cargo diversions.
8. Saudi
Arabian Ports Benefit from Trade Diversion
·
DP World's South Container Terminal at Jeddah
Islamic Port has recorded successive throughput records.
·
Record monthly volumes were achieved in July and
October 2026, as regional trade increasingly shifted towards Red Sea ports.
·
DP World has expanded the terminal's capacity to 4
million TEU through investments over the past four to five years.
9. Other
Regional Investments
·
DP World is preparing to open a $250 million
logistics park in Jeddah in Q1 2027.
·
Development of a Special Economic Zone on the
Oman–UAE border is also continuing.
·
The company has not suspended any major regional
investment projects despite the conflict.
Overall
Significance
·
The Strait of Hormuz disruption has accelerated the
development of alternative road, rail and maritime logistics corridors across
the Gulf.
·
DP World's strategy is shifting towards an integrated,
multi-port UAE logistics network, combining Jebel Ali with Fujairah and Dibba.
·
While alternative corridors have helped maintain
trade flows, sharply higher freight costs demonstrate that land transportation
cannot fully substitute for normal maritime shipping.
·
The crisis is also strengthening the importance of
Red Sea gateways, particularly Jeddah, and accelerating investment in regional
logistics infrastructure.
DP
World has moved more than 1 million teu through alternative
land corridors since the first week of March, establishing new logistics connections
between the UAE's east coast ports and Jebel Ali to maintain trade flows during
the closure of the Strait of Hormuz.
Speaking
at a media roundtable in Dubai, Ahmad Yousef Al-Hassan, CEO of DP World GCC, said
the company had rapidly established a bonded corridor connecting ports outside the
Strait with Jebel Ali, scaling up the truck fleet under its management and operation.
"We
had to activate this starting from a truck fleet of zero to today, 3,000 trucks
that we manage and operate," said Al-Hassan. "Since the first week of
March, we moved now about over 1 million teu between the
east coast and the UAE, over road and over rail."
In
August, DP World announced it had moved 500,000 teu throughout
the GCC by rail and road since March. The land operation required close co-operation
with other port operators, government authorities and customs agencies, the group
said.
The
company has also worked with authorities and port operators in Oman to develop alternative
corridors through Sohar and Duqm,
providing customers with additional routes into the UAE and wider Gulf markets.
Al-Hassan
said the disruption had demonstrated the need to accelerate cross-border rail connectivity
and establish contingency arrangements that could be activated quickly during future
crises. "I think everyone's come to the realisation that we need to accelerate
and fast-track rail connectivity," he said.
The
alternative arrangements have come at a significant cost. Al-Hassan said container
freight rates from China to Dubai had increased from around $2,000 before the disruption
to $10,000–$12,000, while longer trucking distances, congestion and higher diesel
prices had further increased logistics costs. DP World has absorbed some transportation
expenses and worked with shipping lines on solutions to reduce costs, including
the transportation of empty containers from alternative ports.
Despite
the prolonged disruption, DP World expects a strong recovery in traffic through
Jebel Ali once safe passage through the Strait of Hormuz resumes, with shipping
lines indicating that services could return within one to three months.
Al-Hassan
said Jebel Ali had remained operational throughout the conflict, closing for just
six hours since the start of the war, although container volumes had been significantly
affected by the disruption to maritime access. In DP World's second quarter 2026
results, volumes at Jebel Ali were down 90.1% for the quarter.
DP
World has spent the past nine months maintaining equipment and operational readiness
in anticipation of shipping services returning to the port, which has annual capacity
of more than 20m teu.
"We
believe the recovery is going to be very strong," he said. "It could take
one month to three months. This is from the feedback that we get from the lines,
depending on how fast they can reposition their services and networks back there."
Al-Hassan
said meetings with nine shipping lines in Asia the previous week had reinforced
his confidence that Jebel Ali would regain traffic diverted to other regional ports.
He
argued that Jebel Ali's established shipping connections and the surrounding Jebel
Ali Free Zone, home to more than 12,000 companies, would be difficult for competing
ports to replicate. The free zone has maintained occupancy above 90% across its
asset classes during the disruption, while demand for cargo imports remains supported
by major infrastructure and construction projects in the UAE.
"This
is just a short-term diversion," said Al-Hassan. "People always want the
most cost-efficient, most reliable trade route, and Jebel Ali was always offering
that."
He
acknowledged that the experience of the Hormuz closure had exposed the need for
alternative gateways, but said the Strait would remain central to regional trade
once shipping lines were satisfied with the security situation and insurance costs
declined.
Providing
a permanent alternative gateway outside the Strait forms part of DP World's justification
for a AED2bn – AED3bn investment in two new terminals in
Fujairah, announced in July, with the company targeting an initial phased start
of operations within 18–24 months. The development includes a container terminal
with capacity of 2.5m teu near Fujairah airport and a
second terminal at Dibba focused on general cargo.
Al-Hassan
said the investment was not intended to replace Jebel Ali or serve exclusively as
a contingency facility during periods of disruption.
"When
we took the decision for Fujairah, it wasn't a knee-jerk reaction to what's just
happening today," he said. "We will always look at it as one integrated
UAE port system."
DP
World intends to integrate Fujairah with Jebel Ali's existing logistics and free
zone infrastructure, allowing customers to choose between the two maritime gateways
according to their cargo requirements.
Al-Hassan
identified East African transshipment cargo, which does
not necessarily need to enter the Strait of Hormuz, and cargo destined for the Northern
Emirates as potential sources of long-term demand for the new container terminal.
The
development will be phased according to demand, and Al-Hassan acknowledged that
delivering an operational terminal within 18 months would be challenging.
"We're
targeting in 18 months. But if you speak to anyone, they'll tell you that's probably
impossible. Twenty-four months is usually what it is."
The
company is considering how Fujairah can remain competitive after the Strait reopens,
rather than relying solely on diverted cargo during periods of disruption.
"The
challenging part is: what do we do when the Strait is open?" he said.
While
Jebel Ali has suffered from the closure of the Strait, DP World's operations in
Saudi Arabia have benefited from changes in regional trade flows.
Al-Hassan
said the South Container Terminal at Jeddah Islamic Port recorded recent throughput
records, as Saudi Arabian trade increasingly relied on Red Sea ports. The company
has invested heavily in expanding the terminal over the past four to five years,
increasing its capacity to 4m teu.
"We've
seen a record month in July and now we've seen another record month in October,"
said Al-Hassan.
DP
World is also preparing to open a $250m logistics park in Jeddah in the first quarter
of 2027, alongside continuing development of a special economic zone on the Oman–UAE
border.
Al-Hassan
said DP World had not suspended any of its major regional investment projects despite
the conflict, with the company continuing to develop its port, logistics and economic
zone network to improve connectivity and resilience.