Can the Middle East handle another logistics hub?

Rumours surrounding Saudi Arabia’s logistics aspirations have been circulating for several months now. Although the exact details were previously unknown, the local rumour mill was grinding on overdrive with different stories about projects designed to steal the logistics crown from Dubai.

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By  Robeel Haq Published  July 30, 2006

|~|august_logistics2.jpg|~||~|Rumours surrounding Saudi Arabia’s future logistics aspirations have been circulating for several months now. Although the exact details were previously unknown, the local rumour mill was grinding on overdrive with a variety of different stories about projects in Jeddah and Dammam, designed to steal the logistics crown from Dubai. Luckily, the hearsay is finally over. The Saudi Arabia General Investment Authority recently unveiled its plans to construct a massive economic city, which it claims will become the largest transportation and logistics hub in the region. The Prince Abdul Aziz Bin Mousaed Economic City is being constructed in the Northern city of Hail. The development will cover a massive area, spanning 150 million square metres, which includes an international airport, railway station and dry ports. News of the project has spread like wildfire throughout the regional logistics industry. Some people seem genuinely excited about the opportunities being presented. After all, everything is being planned on a large scale, the location is easily accessible and strategically located, Hail can be reached from several Arab capitals within one hour by air, and the Northern region is economically strong. On the other hand, some sections of the logistics industry are somewhat unsure about the viability of locating a logistics hub in Hail. Concerns about the city not being equipped with a seaport, plus questions about the proposed airport’s ability to attract international carriers have already been raised. Regardless of the varied opinion, Prince Abdul Aziz Bin Mousaed Economic City faces serious competition throughout the region. Several countries in the Middle East have decided to develop their transportation links and construct logistics hubs to grab a share of the lucrative market. Most notably, of course, Dubai has experienced massive success with the Jebel Ali Free Zone, which is currently the most popular location for warehouse construction in the Middle East. In addition, Dubai Logistics City has received an overwhelming response too, despite the fact its still under construction. These two projects alone should provide excellent business models for investors of Prince Abdul Aziz Bin Mousaed Economic City to work around, especially in terms of innovative business incentives and simplified procedures, such as customs and clearance. Undoubtedly, the amazing growth of the Middle East logistics industry will continue in the near future, so prospects for Prince Abdul Aziz Bin Mousaed Economic City look bright. However, competition is heating up, and the project will need to provide something new to attract business from the logistics industry.||**||

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