A logistics hub in Saudi Arabia thrives as the world continues to adapt to the impact of Covid-19
With tighter margins, reduced capacity, and lengthier supply chains, there are not many businesses that have been immune to the challenges of Covid-19. However, a young Saudi logistics hub is bucking the trend. Despite being in operation for just 18 months, The Eastern Gateway has seen substantial growth since the start of the pandemic.
The secret behind the hub’s success has been its road freight operation, specifically its ability to rapidly reduce clearance times for vehicles entering Saudi Arabia from the UAE. Each year over 245,000 trucks enter Saudi Arabia from Dubai alone, many of which will transit through Saudi onto other countries. Before the pandemic, processing at the UAE-Saudi border tended to be a lengthy affair, far from ideal for businesses transporting time-sensitive goods. Unless these trucks had Saudi number plates, they would often spend 2-3 days awaiting clearance.
Once Covid-19 arrived, it was clear to the Saudi authorities that there was an urgent need to reduce delays within the supply chain. So, an exemption was given allowing companies working with The Eastern Gateway to send sealed trucks from the UAE, straight through the Saudi border and onto the hub. With this system the trucks are unloaded and make the same return route to the UAE border.
Aside from the customs exemption, there are a number of factors that further increase the speed at which vehicles are processed. The Eastern Gateway has its own internal team of customs officers, where each individual only works with specific customers, creating effective relationships and smoother processes. Another important factor is the hub’s ability to virtually preclear trucks. As soon as a vehicle from the UAE crosses the border on route to The Eastern Gateway, the clearing process can start remotely, removing much of the time-consuming paperwork by the time the truck arrives.
With imports via sea taking at least nine days, and import via air proving too expensive for lower ticket items, the faster alternative provided by The Eastern Gateway has certainly appealed to businesses during the pandemic. In the hub’s first year of trading, over 8,000 trucks were processed which amounts to 192,000 tons of road freight, around double the amount processed at Dammam airport.
Speed is undoubtedly The Eastern Gateway’s USP, and a key reason why businesses are joining the hub. It also has ambitious plans to enhance its 3PL capabilities and have more global companies flying their products directly to the hub for distribution across the region.
The burgeoning hub is an exciting addition to KSA’s logistics sector, and definitely one that Saudi businesses should keep an eye on.
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