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An aerial satellite image showing the coast of Fujairah, United Arab Emirates (UAE), taken on June 6 of last year. / Photo by Reuters, Yonhap

The Financial Times (FT) reported on July 13 that Dubai’s state-owned global port operator, DP World, is pushing forward with plans to build a new port and container terminal on the eastern coast of the United Arab Emirates (UAE). This is interpreted as a defensive measure to secure logistical stability by bypassing the Strait of Hormuz, where transit has been disrupted due to recent geopolitical crises in the Middle East.

According to sources familiar with the matter, DP World is in talks with authorities to develop a new multipurpose port on the coast of Fujairah and establish a new terminal within the existing Port of Fujairah.

DP World's strategy is to utilize the eastern coast of the UAE, which faces the Gulf of Oman, to bring cargo in and out without passing through the Strait of Hormuz, and then transport it by land to Dubai, Abu Dhabi, and neighboring countries.

Historically, the core pillar of DP World and Dubai's economy has been Jebel Ali Port, the region's largest container hub.

Jebel Ali Port, which handled 15.6 million TEUs (twenty-foot equivalent units) last year, has served as a global export hub connecting China and Africa. However, it faces the critical limitation of requiring all vessels to pass through the Strait of Hormuz.

Following the recent conflict between the United States and Iran, the closure of the Strait of Hormuz and consecutive attacks on shipping vessels have reportedly caused cargo volumes at Jebel Ali Port to plummet by as much as 90% to 95%.

"Our expansion to the eastern coast does not mean the closure or downsizing of Jebel Ali Port," a senior DP World official explained. "We will maintain our vast existing free trade zone and heavy industrial infrastructure." The official added, "This investment is a defensive measure in case conditions worsen, and is part of our plan to overcome supply chain disruptions through diversification."

The initial investment for the project is expected to be around several hundred million dollars, and the new port could be completed within a year and a half after breaking ground, the FT reported.

                                                                                                          Lee Jeong-eun