Bahrain opens sea-to-air logistics hub to cut costs

Bahrain launched the region's fastest sea-to-air logistics hub on Wednesday, as the kingdom seeks to diversify its economy. The hub is expected to cut costs by 40 per cent and reduce the turnaround time for containers, allowing customers to get their shipment in half the time.

The facility will streamline clearance procedures, improve logistics and digitise operations to handle containers in less than two hours for goods transiting between Bahrain International Airport and Khalifa bin Salman Port, according to a statement on Wednesday.

The launch of the global hub is a “real opportunity not only for global logistics companies but also for exporters across the world”, said Kamal bin Ahmed, Bahrain's transport minister. “This service can lead to 40 per cent cost savings compared to air freight only and 50 per cent faster lead times than pure sea freight.”

Bahrain, the smallest economy in the Gulf, faced economic headwinds during the Covid-19 pandemic. Its economy is estimated to have shrunk 5.4 per cent in 2020, driven by a sharp contraction in non-oil output, which according to International Monetary Fund projections, contracted 7 per cent. The fund expects Bahrain’s economy to expand 3.3 per cent this year on the back of its quick response to minimise the economic fallout of the pandemic.

The country’s non-oil economy will grow 3.9 per cent in 2021 as widespread vaccine distribution revives economic activity towards pre-crisis levels, according to the IMF.

Bahrain will capitalise on its geographic position between Europe and Asia as well as on its proximity to regional target markets through its new multi-modal trans-shipment hub.

“We can only do this because of our unique position, the proximity of our ports, as well as our regulators, operators and port authorities working closely together and our state-of-the-art digital processing solution," Mr bin Ahmed said.

The hub’s reductions in cost and time for transporting containers will make it a "valuable alternative" for manufacturers and freight forwarders, particularly during the ongoing shipping crisis, according to the statement.

The Covid-19 pandemic-induced surge in container shipping rates is expected to continue throughout 2021 and the price hike will be passed on to consumers, a United Nations report said in April.

Bahrain’s new hub will boost the growth of the country’s logistics sector, which will help to diversify the kingdom's economy further, according to the statement.