The Hormuz blockade is proving a catalyst for alternative supply chains including a landbridge across Saudi Arabia and Egypt to the Mediterranean.

Saudi Arabia and Egypt are working on a new logistics corridor between Arabian Gulf countries, the Red Sea, Egypt, and the Mediterranean to provide a new bilateral route that would bypass the Strait of Hormuz and facilitate the movement of millions of tonnes of non-energy cargoes via landbridge.

The landbridge will link Gulf nations via rail across Saudi to Red Sea ports including Jeddah Islamic Port,  King Abdullah Port, and the Port of Neom. Cargoes would then be shipped across the Red Sea to the ports of Sokhna and Safaga and thence by rail to Egypt’s Mediterranean coast port of Damietta. An existing roro service from there to Trieste and new container services would complete the supply chain between the Gulf and Europe. 

The landbridge is also expected to link with the 2,117-kilometre GCC Railway project between all six Gulf states which is due for completion in 2030. The rail link is intended both for passengers and freight and will include a high-speed 785-kilometre track linking Riyadh and Doha. 

The landbridge with Europe has received a major boost recently with new port developments. The Red Sea Container Terminal opened for business in Sokhna on Egypt’s Red Sea coast in January. Phase One of the new terminal consists of a 1,200 m quay with a draft of 18 m and the terminal opened for business with the 13,000 teu container ship, CMA CGM Iron.

Meanwhile, the 93-hectare Damietta Alliance Container Terminals (DACT) on Egypt’s Mediterranean coast began operations in February. The 3.3m teu facility is a joint venture between Hapag-Lloyd Damietta GmbH, Eurogate GmbH, and Contship Italia, and will be capable of handling large container ships of up to about 20,000 teu with 25 rows across deck. Its deepwater berths have a chart datum depth of -18m. 

Other port developments on Saudi’s Red Sea coast continue. The Red Sea Gateway Terminal at Jeddah Islamic Port is undergoing a Phase 1 expansion that will enable vessels of up to 19,000 teu to call there and a fully autonomous container terminal is being developed at the Port of Neom.

The projects illustrate analysts’ projections that the Iran conflict will lead to permanent adjustments in supply chain management as shippers seek to manage greater risks. Experts at Drewry pointed out recently that shippers would be assessing strategies to minimise both the higher costs and escalating disruption to supply chains that rely on so-called chokepoints including the two straits and the Suez Canal.