DP World, as one of the world's port giants, has announced plans to expand its ground logistics network in the Persian Gulf. The Dubai-based company is seeking to reduce its dependence on the Strait of Hormuz and diversify its supply chain in light of recent conflicts in the region.
Increase in Truck Fleet and New Routes
Stephen Whittingham, Executive Director of Freight Transport Operations in Europe, stated that DP World intends to increase its truck fleet by 40 percent and launch new land routes to connect Europe, the United States, and Asia to the Persian Gulf. Given the uncertain geographical situation, the company is looking to create new options to mitigate potential risks.
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These developments have come after Iran's closure of the Strait of Hormuz, which is recognized as a vital shipping route. DP World has quickly launched new road services from Western Europe to the Persian Gulf via Turkey, averaging 50 trucks loaded per week.
High Transportation Costs and Investment in Infrastructure
Transporting goods from Europe to the Persian Gulf by land is typically three to four times more expensive than maritime transport. However, Whittingham predicts that some customers will continue to use these services even after the reopening of the Strait of Hormuz. He noted that currently, customers find trucking services more reliable due to the existing fluctuations in maritime transport.
DP World is also investing in its port networks and has plans to develop two deep-water terminals on the eastern shores of the United Arab Emirates. These investments aim to strengthen logistical infrastructure and increase loading capacity in the region.
Considering that DP World operates in 84 countries, including China and South America, the company is seeking to mitigate the negative impacts of regional developments on its operations. Additionally, the company is exploring new opportunities to create sustainable services in the medium and long term in the region.
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