Paralyzing congestion in Saudi Arabian ports due to a seemingly insolvable bottleneck in customs clearance is delaying the release of imports to the market, creating scarcity and raising prices, traders said. Customs officials said Saudi Seaports Authority (SSA), in a bid to ease the crisis, is planning to divert ships bound for Jeddah Islamic Port, the country's largest and worst affected, to less congested ports like Dammam and Jubail. However, “that's no solution at all,” said Saleh Al-Darawish, president of the Moayed Saleh Al-Darawish Trading, a leading customs clearance company in the Eastern Province, “because Dammam and Jubail are also congested.” “Besides, it entails additional costs in transportation, handling, and insurance, which are most often passed on to consumers,” he added. Ports congestion is an annual occurrence towards the year-end when importers place more orders in preparation for inventory taking and stocking for the coming year. “The authorities have not been able to solve this problem because of the increasing volume of imports every year,” Darawish said, blaming SSA for not anticipating the annual crisis and taking remedial measures. “All the players – the seaport authorities, importers, customs clearance and transportation companies – are being stretched to their limits now at the major ports like Jeddah, Dammam and Jubail,” he said. At Dammam port, over 20,000 containers have been stalled at the docks for months, according to representatives of customs clearance companies. “The Dammam Seaport Authority is able to unload for clearance and inspection only 1,000 containers per day,” a customs broker said. “But even as they are cleared every day, more shipments are coming in and the congestion is not easing up at all in Dammam. The situation is the same in all the major ports in the Kingdom,” he said. SSA recently announced a phased plan to improve seaport facilities, including expansion of terminals to accommodate more containers. A short-term plan, costing about SR540 million, to overcome the congestion particularly at the Jeddah Islamic Port and Dammam's King Abdul Aziz Port, is currently being implemented. The second phase of the expansion plan, which will be implemented next year, will cost SR1.6 billion. It will increase the annual capacity of the terminals to an overall six million containers. The long-term solution under consideration includes construction of more terminals to handle four million containers annually in the initial phase. In the first quarter of 2008, the country's total cargo volume rose to around 36.1 million tons, an increase of 9.94 percent over the same period in 2007. Imports have increased by 10.36 percent, while exports by 9.63 percent, according to SSA. Jeddah Islamic Port registered the biggest increase with 4.36 percent, and took the biggest cargo share of 11.4 million tons (including containers of food and construction materials). King Abdulaziz Port in Dammam came second in volume with 5.4 million tons, a 6.18 percent growth. King Fahad Industrial Ports in Jubail and Yanbu handled 9.9 million tons and 7.4 million tons, respectively, of mostly petrochemicals and refined products. Container traffic increased in units (TEUs) by 14.56 percent. By the end of March, Saudi Ports handled around 1.12 M TEUs. Transshipment continued its growth with 384,427 TEUs, a 9.31 percent increase. __
