Even as global trade dries up and pinches the balance sheets of the world's maritime transport companies, imports to Gulf ports continue to rise. "We have not seen any dips in volumes yet," says Mohammed Sharaf, the chief executive of DP World. "This is an emerging market, and the growth is continuing here." With shipping accounting for about 95 per cent of the world's trade, Mr Sharaf has a bird's-eye view of declining global economic health. Still, he believes that with growing populations dependent on imported goods, the Gulf's prospects look good. That is not to say he expects smooth sailing for the firm, the world's fourth-largest ports operator. A tempestuous 2008 is likely to lead into an equally volatile 2009, as falling demand among the consuming nations of the West continues to drag down the daily charter rates that shipping companies charge. In the past six months, shipping rates have plummeted by as much as half for container transport and about 90 per cent for dry bulk cargo, with chemicals and oil tankers experiencing a much smaller drop of about 10 per cent. But for DP World, at least, the problem this year was too much traffic - namely, heavy congestion at its flagship port in Jebel Ali. Ships had to queue for hours, even days, outside the port as the existing infrastructure struggled to cope with the demand. Port officials said facilities were simply overwhelmed by shipping's explosive growth. By the end of the year, DP World had installed more cranes and equipment to add capacity for another 2 million standard 20-foot containers a year. Even the economic slowdown helped to keep the bottleneck in place as importers, who may have been in financial difficulties, used the yard for free storage. That strain was alleviated only after DP World raised storage rates, the company says. Although the economic meltdown hit shipping volumes, cargo levels continued to increase at Mina Zayed Port, which is managed by Abu Dhabi Terminals, a joint venture between DP World and Abu Dhabi Ports Company. Between January and October, the latest statistics available, the number of containers handled at the terminal rose 11 per cent over the same period last year, to 307,536. Of those containers handled, the number carrying imports rose 19 per cent. Imported cars increased 35 per cent to 72,615, while foodstuffs rose 58 per cent to 33 metric tonnes. Materials used in the construction industry experienced even greater demand. Steel and iron volumes rose 99 per cent to 2.1 million metric tonnes compared with last year, plywood was up 509 per cent and general "bulk commodities" rose 120 per cent. Mohammed al Mannaei, the chief executive of Abu Dhabi Terminals, says container traffic growth, with the exception of materials for the construction industry, has continued at the same pace, according to unofficial figures for the past two months. "There is some slowdown in projects in the UAE and this is why general cargo is slowing down a little bit." Shipping companies are being hit hard by the slowing global economy and this year will be remembered among professionals in the marine transport industry for bringing the five-year shipping boom to an end. Maersk, the Danish shipping giant, has eight large container ships capable of handling 6,500 standard containers lying idle because of falling demand. Locally owned shipping firms transport only a small amount of the dry and wet bulk being moved in and out of the Gulf. These firms say they are protected from the plummeting spot rates for ship chartering through long-term contracts of up to 15 years. "Most of our fleet is on long-term time charter, but we will see a major impact on some owners who are playing the market on a higher percentage on the spot, rather than short and medium-term," says Abdullah al Shuraim, the chairman of Gulf Navigation, a Dubai-based company operating 18 chemical and oil tankers for clients such as Royal Dutch Shell and Saudi Basic Industries Corporation (SABIC). Looking ahead, Mr Sharaf says next year will be a challenge. DP World's stock price has not fared well, and after being pummelled by nervous investors it now stands 75 per cent down from its public listing in November last year. At the least, DP World can take comfort in the fact that of the major ports companies, its terminals are the most geographically diverse, while some of its rivals are heavily concentrated in the more affected regions of Asia and Europe. In what could be a portent of things to come, the number of ships calling on Singapore's ports and the number of containers handled there fell last month, compared with the previous two months. firstname.lastname@example.org
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