Mohammad Shihab

Area Managing Director Saudi Arabia & Upper Gulf, A.P. Moller – Maersk

“Our Integrator strategy and Vision 2030 are very well aligned.”

Mohammad Shihab, Area Managing Director Saudi Arabia & Upper Gulf, A.P. Moller – Maersk, talks about the firm’s operations around the world, its alignment with Saudi Arabia’s Vision 2030, and short-term priorities.

With operations in more than 130 countries around the globe, Maersk is a global leader in shipping services. What is the importance of KSA for the company?

Maersk has been operating in Saudi Arabia since the 1950s. The company holds the leading market share in ocean container shipping in Saudi Arabia. The Kingdom is a crucial part of Maersk’s business, with a significant volume and customer base, particularly in the refrigerated food, petrochemical, FMCG, and retail segments. While we have been well established in Saudi Arabia for decades, our role initially was only limited to ocean container transportation until a few years ago. The company has since expanded and widened its portfolio and invested heavily in building and reinforcing its logistics and services infrastructures to better serve the Kingdom’s needs and realization of many of Vision 2030 priorities and goals. With Saudi Arabia undergoing significant transformation, Maersk is well-positioned to capitalize on the market’s dynamism and unlock the country’s enormous economic potential.

How does Maersk’s vision align with Vision 2030?

Our Integrator strategy and Vision 2030 are very well aligned. Vision 2030 aims to diversify Saudi Arabia’s economy and society by transitioning from an oil- export-based economy to a more diversified one. Under the various pillars within that vision, there is an infrastructure and logistics component, and this is where Maersk comes in. In 2018, we decided to transition from an ocean shipping line strategy to becoming an integrator of container logistics, which allows us to differentiate ourselves in the market with a differentiated and integrated strategy. Our collaboration with the Saudi Ports Authority (Mawani) is a great example of our new strategy. Together with Mawani, we broke the ground on the largest integrated logistics park at Jeddah Islamic Port, which demonstrates our commitment to the infrastructure development of the kingdom. This investment will unlock the geographical potential of Saudi Arabia, making it a logistics hub for the Red Sea, East Africa, and the Horn of Africa along with other regional geographies. Our initiative is the biggest single-site investment Maersk is doing worldwide and the most advanced logistics facility and logistics park in any Saudi port thus far. We are extremely proud of this collaboration with Mawani Saudi Arabia. Through this collaboration, we have achieved great synergy with local stakeholders, customers, and the Government, and it is an initial stepstone in achieving our goals and commitment to the Kingdom.

Maersk will operate a brand-new cold storage facility at King Abdulaziz Port in Dammam. Can you shed more light on this facility and how it embeds Maersk’s concept of sustainability?

Saudi Arabia is a significant market for Maersk. With more than a fifth of the country’s food imports coming through King Abdulaziz Port in Dammam, we wanted to establish a state-of-the-art cold storage facility that will help us serve the food industry better and connect and simplify our customers’ supply chains. To achieve this, we must be close to our customers, collaborate with trusted and reliable partners, and build a network that truly enables global trade. With our new facility in Dammam, we are setting ourselves up to achieve all three goals. The strategic location of Dammam and its strong connections to neighboring Gulf countries like the UAE, Kuwait, Bahrain, and Qatar make it a vital distribution hub for several markets. King Abdulaziz Port is also strongly connected to the hinterland through a robust road and rail network, making it the location of choice for many. This project also perfectly reflects our commitment to decarbonization. In order to minimize our greenhouse gas emissions, solar panels on the facility’s roof will generate at least 15% of the power requirement at the start of operations. We also installed an on-site water treatment plant to cater to all facility water requirements. Sustainability is at the heart of Vision 2030 across policy development and at the core of Maersk Values and service offerings and investment, to planning and infrastructure, and Maersk is perfectly aligned with the national vision. We are heavily committed to reducing and minimizing the impact of our operations on the environment.

What are your main targets and short-term priorities on the agenda?

First, our priority is to inaugurate the new logistics park in Jeddah, Maersk’s biggest single-side investment in the world and ensure it is completed according to the timeline, and quality standards. In terms of future developments, we will focus on Riyadh, where we plan to concentrate our future investments and capitalize on the increasing air connectivity of the capital. The Logistics Park at Riyadh will likely take a slightly different shape, with significantly more air freight. While Maersk will continue to have a strong presence in terms of ocean and land freight, being present in the air is our next step in terms of expanding our business and meeting the evolving needs of our customers. Snapshot of Maersk’s Logistics Park in Jeddah, key facts and figures
  • Located at Jeddah Islamic Port
  • Covers more than 229.000 square meters of land
  • Positions the Kingdom and the Port of Jeddah as a Logistics center leveraging the direct access to major trade lanes Asia, Middle East, Europe, East Coast North America with short transit times for direct shipments and transshipments.
  • Maersk Logistics Park integrates all services End-to-End for Maersk clients including Ocean, Air and Landsite transportation.
  • Serves all major verticals: FMCG, Retail, Chemical, Automotive, Technology, E-commerce
  • Provides an all temperatures Logistic center with > 110.000 sqm or more than 150.00 pallets capacity in door; > 100.000 pallet capacity for Petro chemical products and service annually > 000 TEU annually.
  • Premium storage and handling capabilities – fully climatized, refrigerated and frozen storage.
  • Premium mezzanine for B2C, ecommerce and light manufacturing (bonded/non bonded)
  • Strong enable for the 2030 agenda of the Kingdom:
    • 63,000 square meters of solar panels as the primary source of energy to power the logistics site serving > 60% of total energy consumption
    • Enabled to operate E-trucks and delivery vans
    • Salt water cooling for climatization and refrigeration (avoid potable water consumption)
  • These eco-friendly initiatives aim to reduce harmful emissions by 100% by 2030, where we will ensure integrated logistics solutions for our customers around the world using renewable sources of energy by land, sea, and air.
  • Will create a total of 2500 job opportunities directly and indirectly for the men and women in Saudi Arabia
  • This project has launched an initiative to establish a logistics academy – dedicated to females – to educate, train and qualify Saudi women to work in specialized logistics services.

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