The 2024 Leading Maritime Cities report, a joint initiative by DNV and Menon Economics, highlights the significant role of Middle Eastern maritime cities in implementing effective policy measures, initiatives, and support. Notably, Dubai achieved a high ranking of 11th place, Abu Dhabi advanced to 22nd and both Jeddah and Doha secured spots in the top 50.
To gain deeper insights into the development of Middle Eastern cities in the maritime industry, Robban Assafina interviewed Benjamin Dineshkar, Director of Maritime Advisory - Middle East & Africa and co-author of the LMC 2024 report. Benjamin attributes this significant progress to the strategic locations of cities like Dubai, Abu Dhabi, Doha, and Jeddah, along with strategic public policies and sustained investment. Future projections also suggest further advancements driven by ambitions to enhance the region's maritime industry.
Singapore leads the way as Middle Eastern cities rise in the rankings
In the final results, Singapore came first due to its top ranking across 3 pillars of the five: Attractiveness and Competitiveness, Shipping Centres, and Ports and Logistics alongside a significant climb in Maritime Finance and Law.
Rotterdam, in second place, excels in Ports and Logistics, and Attractiveness and Competitiveness. London, third overall, regained the top spot in Maritime Finance and Law. Shanghai maintains fourth position with strong performance across multiple pillars, while Oslo, now fifth, benefits from its emphasis on green and digital initiatives.
Meanwhile, cities from Middle East are also elevating their stand with Dubai’s improved ranking of 11 and Abu Dhabi making a remarkable jump of 10 places to 22nd this year. There were sharp climbs by Osaka, Vancouver, and Barcelona, and new top 50 entrants include Jeddah, Shenzhen, Madrid, Gdansk, and Naples.
Middle Eastern Maritime Hubs
The report states that four Middle Eastern cities have made it to top 50. Abu Dhabi has climbed 10 places to rank 22 making it the highest jump globally, and Dubai has also improved its position by moving from 13 to 11. This is a result of strategic public policies and consistent investment, making the city a magnet for talent and companies.
Doha is also making progress, went 2 ranks up from 43 place to 41. Jeddah is a newcomer in the top 50 ranking, coming in at 44. Doha & Jeddah contribute to the region’s overall connectivity and economic diversification, both cities serve as a vital gateway for trade, allowing goods to be redistributed to various global destinations efficiently, also offering the largest free zones in the world, business-friendly regulations, tax incentives, and world-class infrastructure.
According to Benjamin, Dubai and Abu Dhabi have effectively leveraged their strategic locations to enhance their roles in global maritime trade. Dubai’s Jebel Ali Port, with its extensive connectivity and state-of-the-art facilities, serves as a pivotal transhipment hub linking major trade routes.
Abu Dhabi’s Khalifa Port, integrated with KIZAD, complements this by providing a deep-water port strategically positioned to support regional trade and industrial activities. Both cities have embraced innovation, sustainability, and digital transformation, solidifying their status as leading maritime hubs and driving significant economic impact in the Middle East and beyond.
Significant trends and changes noted in the recent years
The report noted a steady increase in the volume of world trade carried by sea, projected to grow by 2.1% per year from 2023 to 2027, driven by demographic shifts and economic factors. Additionally, the ageing world fleet, especially in the tanker segment, and limited new building capacity are expected to lead to a capacity crunch, resulting in higher revenue and profitability for segments with imbalanced supply and demand.
Stakeholders are also shifting focus towards cities that actively support the adoption of green and sustainable financing initiatives. And several world leading projects including Ammonia Bunkering Safety Study, supply chain integrity for biofuels and LCO2 offloading. Shipyards also increasingly leveraging design and manufacturing advancements to create ships with minimal carbon emissions.
Smart port technologies and key challenges
The key challenges faced by the leading maritime cities include navigating geopolitical tensions, managing supply chain disruptions, coping with the rise in container freight rates, addressing talent scarcity in the industry, managing regulatory pressures, and intensifying efforts towards decarbonisation and digitalisation.
Moreover, advances in digitalization by ports will be crucial in serving the wider decarbonization of shipping. Cities are integrating digitalization and smart port technologies by embracing innovations such as Internet of Things (IoT), cloud computing, data analytics, and robotics to enhance operational efficiency and effectiveness across vessels, ports, and associated infrastructure.
Smart Ports are also utilizing digital technologies to optimize cargo handling processes, streamline logistics operations, and enhance security measures. However, different cities have varying levels of digital capability, meaning some are better positioned to deliver this than others.Vessels equipped with sensors and communication systems enable real-time monitoring, predictive maintenance, and improved navigation. For example, the Port of Singapore and Port of Rotterdam use IoT sensors for monitoring ship movements, optimizing berthing, and managing cargo handling.
Autonomous shipping initiatives, like Yara Birkeland and the AUTOSHIP project, demonstrate cutting-edge technology in reducing crew requirements, optimizing fuel consumption, and ensuring safer navigation through AI algorithms and autonomous operation.
Digital twins are also employed for better monitoring, maintenance, and performance optimization of ships and port infrastructure.
Expanding the maritime industry
Returning to the Middle East and addressing these initiatives, the report highlights a determined effort in Dubai and Abu Dhabi to advance the maritime sector. Significant strides have been made in enhancing port infrastructure and capacity to accommodate a diverse range of vessels. In Abu Dhabi, Khalifa Port's expansion includes broadening capabilities from container and cargo handling to encompass vessel repairs, maintenance, and dry docking services. The maritime industry is also currently experiencing a significant transformation propelled by digitalization. Ports in UAE are exploring initiatives to explore automation, blockchain & integrated business environments.
Challenges
However, there are challenges to overcome like complex geopolitical tensions in the region influencing maritime routes, regulations, and market dynamics. Benjamin explains: “As the focus on digital transformation increases, the threats from cybersecurity also increase at an alarming rate. These cyberattacks compromise sensitive information and system control, leading to reputational damage and increased legal costs. Cyberattacks also have the potential to disrupt supply chains, affecting cargo movement, port operations, and global trade”.
According to the Leading Maritime Cities Report, Dubai and Abu Dhabi have solidified their positions as benchmarks for maritime excellence in the region. They are distinguished by their advanced infrastructure, progressive policies, and substantial economic influence.
As Benjamin quotes: "Dubai and Abu Dhabi rank high and have emerged as the preferred choices for relocating depicting their confidence towards the cities as prominent shipping centres. While Jeddah is advancing rapidly with its process of expanding and modernizing its maritime sector as part of broader economic reforms, there is still room for improvement."
Success factors
Dubai & Abu Dhabi’s achievement is propelled by several key factors. Firstly, the Middle East Region’s growing trade demands have elevated both cities prominence, strategically positioning between Asia and Europe to facilitate global commerce through its ports. Secondly, Dubai & Abu Dhabi’s ability to attract and retain skilled professionals has been crucial, owing to its cosmopolitan environment, liberal working visa policy and advanced infrastructure that draws talent from around the world. Thirdly, governmental support plays a pivotal role, with government actively fostering an environment conducive to international investments through incentives, policies, and strategic initiatives that encourage businesses to establish their operations in the city.
Robban Assafina, Issue 92, July/ August 2024, Shipping, pg. 53
