AAL is seeing tentative growth in cargo demand through the Middle East and has made a long-term commitment to operating a scheduled monthly multipurpose (MPP) sailing through the region in service of local shippers and project owners, as well as additional tramp sailings when required.
October 2020 marks five years of AAL’s Middle East Hub Office in Dubai, United Arab Emirates (UAE).
Given domestic and external headwinds, real GDP in the Middle East and North Africa (MENA) region has been projected to fall by more than 4.7 percent in 2020, reflecting the widescale economic impact of COVID-19 and subdued activity in oil exporters and related sectors. However, fiscal responses put in place by a number of countries in the region, including Bahrain, Jordan, Oman, Qatar, UAE, and Saudi Arabia, are casting a lifeline to ongoing power and civil infrastructure projects and supporting local economies.
AAL’s Chief Representative in the Middle East, Karim Smaili, explained; “Green shoots first appeared after central banks began announcing stimulus measures focused on facilitating bank lending and easing loan payments for companies and projects. One of these was the UAE’s Target Economic Support Scheme, which initially allocated USD27bn in zero-interest loans to banks and cuts in capital reserve requirements. Saudi Arabia similarly offered USD13bn to support banks and other countries have followed.”
He added; “Whereas it is difficult to judge how effective these measures will be against a prolonged pandemic, the immediate effect has been more positive for a number of our customers in the petrochemical and liquid petroleum gas (LPG) sectors looking to move forward with projects and reinvigorating trade with Europe, South East Asia, and the Far East. We are also seeing growing demand and imports of general cargoes and even exports from the Middle East of steel and project cargoes to Asia.
“This is evidenced in the growing popularity of our scheduled ‘Europe – Middle East/ India – Asia Monthly Liner Service’ which has, since its launch in 2020, established AAL as carrier of choice with a growing number of local customers. They have not only appreciated the scheduled monthly integrity of our sailings, but have benefited from the economies of scale that our larger mega-size vessels offer and strong relationships we have in place with shippers and port authorities east and west of the region – which has significantly helped during this period of unprecedented cargo and crewing restrictions.”