How to make Aqaba a hub port!

Seaports are considered the main economic artery of any state, since more than 80 per cent of goods around the world are carried by sea.

Seaports around the world vary in size, capability, equipment and depth of wharfs. Traditional seaports were created to load and discharge goods, but they cannot keep up with the modern logistical developments for the process. However, standard seaports, such as Aqaba port, are keeping pace with some of the required logistical developments, but they do not reach the level of being considered as a hub port.

Only hub ports can accommodate giant vessels, which usually carry more than 12,000 containers, since they are equipped with advanced wharfs and can accommodate regular shipping lines. At the same time, seaports need logistical development for a rapid land carriage of goods at a low cost to become a major distributor of goods within a country and abroad.

Thus, hub ports or so-called smart ports not only depend on their size, capability, equipment and depth of their wharfs for the loading and discharge of large amount of goods, but also depend on the development of surrounding logistics for the purpose of reducing logistical costs on commodities, which ultimately reduces the prices of commodities borne by consumers.

Logistical costs on commodities are known as managing the flow of the goods from the production area to the market area by determining the cost of their transport, inventory, storage and packaging. In developed countries, logistical costs on commodities are approximately 8-11 per cent of the commodity’s value, while in developing countries, such as Jordan, they approximately constitute 30-40 per cent of the commodity’s value, which affects the economy and ultimately Jordanians.

At present, Aqaba port has been developed by establishing 32 terminals which are expected to increase to 40 terminals by the year 2022, the most important of which is the containers terminal, besides the establishment of the Aqaba logistics village.

Such a development is extremely outstanding but, unfortunately, does not transform Aqaba port to a hub port, since whatever the size would be to accommodate giant vessels and regular shipping lines, it is necessary to develop surrounding logistics to be able to distribute goods within the Kingdom and to neighboring countries, especially Iraq, Syria and Saudi Arabia.

The creation of a fast railway for the carriage of goods, and even passengers, from Aqaba to the Kingdom's northern border is the crucial challenge in shifting Aqaba port from a traditional port to a hub or a smart port.

Such a railway could link Jordan to Iraqi and Syrian borders, in addition to linking the main cities within the Kingdom. It is important to keep in mind that Jordan is planning to create a commercial-military airport in the northeastern Mafraq Governorate to serve as a logistics centre to handle the various goods and services of Iraq and Syria. Yet again, whatever the size of such an airport would be, it needs to develop the surrounding logistics, and consequently, needs a fast railway which reaches the Tureibil border crossing with Iraq as well as Ramtha and Jaber border crossings with Syria.

The creation of a fast railway in Jordan is a must if we are thinking of making Aqaba a hub or a smart port to salvage the national economy. The volume of Jordanian exports to Iraq and Syria has fallen by more than 35 per cent. Thus, it is necessary to focus on the creation of a fast railway as soon as possible to transform the Kingdom into a central hub for the carriage of goods to and from  Iraq, Syria, Saudi Arabia and other countries.

The Singapore experience is the best model to follow. At present, Singapore port is the world’s busiest hub port in terms of total shipping tonnage and transships and is connected to more than 600 ports in 120 countries.

The writer is professor of Maritime Commercial Law at the University of Jordan. He contributed the article to The Jordan Times