Over recent years, Bahrain has emerged as one of the most efficient and cost-effective logistics gateways in the Gulf Cooperation Council (GCC), offering up to 43% operational cost savings compared with its neighbours as well as the shortest transit time between seaport, airport and logistics zones.
Now, its ambitious National Logistics Strategy, which is part of a wider National Economic Recovery Plan, aims to increase the sector’s GDP contribution to 10% and place it among the top logistics hubs on the planet.
The plan’s targets include tripling the air freight volume and doubling the sea freight volume by 2030. For Bahrain Airport Company (BAC) CEO Mohamed Yousif Al Binfalah, this has meant a shift in focus from passenger operations to two key logistics projects: a new Cargo Village made up of upgraded warehouses, aircraft parking and modern infrastructure, which will allow the airport to receive more than one million tonnes of extra cargo per year and has already attracted investment from logistics giant FedEx; and Bahrain’s Global Sea-to-Air-Hub, a multimodal logistics hub set to slash cost and turnaround times for containers transiting between Bahrain International Airport and Khalifa Bin Salman Port.
State-of-the-art logistics facilities
In December, BAC received the go-ahead to begin phase one of the Cargo Village project. It was the first time the airport operator has invested in cargo facilities. Until now, the capital for logistics-related projects at the airport had come from third parties. FedEx has signed a ten-year contract to operate a 9,000m2 facility at the new Cargo Area, becoming the first anchor tenant for phase one. This phase will also include warehouses for other tenants, a central processing unit, and security and customs buildings. The aim is to complete FedEx’s facility by the end of 2023.
“There is very positive interest in Bahrain as a business environment for logistics,” says Al Binfalah. “Once we break ground with phase one, we believe interest will increase further. The project and the land allocated to it is significant and we have the flexibility to grow more.”
BAC is also in discussions with DHL, which has been a partner and operated regional headquarters in Bahrain International Airport since the 1980s, about upgrading its facilities and expanding its footprint as well as increasing and renewing its aircraft fleet. “The opportunity is now materialising for them to build something state of the art, responding to the latest trends in cargo and logistics, such as artificial intelligence and blockchain,” Al Binfalah says. “These technologies are starting to make a big impact in running a logistics operation.”
“An exciting time”
Al Binfalah is equally excited about the recent launch of Bahrain’s Global Sea-to-Air Hub, which, thanks to streamlined clearance procedures, will offer a two-hour end-to-end bonded lead time between Bahrain International Airport and Khalifa Bin Salman Port, meaning products can be with customers in half the time and at 40% of the cost.
The hub’s use of cutting-edge technology will all but eliminate paperwork and create new opportunities for logistics and delivery companies seeking quick, cost-effective access to the GCC and global markets. “There are many positive signs restoring confidence in the eye of supply chain issues around the world,” says Al Binfalah. “It is an exciting time for the cargo and logistics sector at the airport, but more than that, the logistics and cargo sector is likely to be a key driver for economic growth not only in Bahrain, but further afield.”