Beating the insurance hike: Why specialist road transport is outperforming maritime

“When the war is over, it does not mean the war is over for logistics” stated Achraf Ellili, the CEO of Flow Logistics Saudi Arabia, on the IRU webinar exploring “war, transport and supply chains”, a fascinating look at how logistics operators and regional governments in the Middle East have come together and created real solutions to supply chain issues in a matter of days. 

Demonstrating how transport operators always find a way forward to challenges Achraf went on to summarise Flows response; “Forty-seven days into this disruption, the story is no longer the closure of a strait. It is the speed and coordination of the GCC's response, and the fact that what we have built in six weeks is not a contingency. It is the new spine of Middle East trade, with Saudi Arabia at its anchor. At Flow Progressive Logistics, we have lived this firsthand: scaling fleet, activating new cross-border corridors, and standing up committed multimodal capacity for tier-1 global carriers within one week of the disruption.” 

The response of multiple gulf countries and the private sector coming together as one and delivering a combined logistics strategy has led to a never been seen before rapid opening of new land bridge cross border corridors that has kept regional freight moving overland, every stakeholder has done something to create a new model that has been stress tested at scale. 

It appears that single mode corridors are over, with Saudi potentially establishing itself as the new regional logistics hub, building on its ability to pivot, integrate alternative corridors and leverage multimodal networks. The facilitator to this historic road transport response is the TIR Carnet which is the only means by which trucks can cross borders without transhipping cargo and use established fast border transit. 

The unprecedented level of demand for road transport has led to some temporary resource issues, and Saudi is looking to onboard more hauliers to ensure the challenge is met, with over 1000 trucks being used to support Dubai’s Jebel Ali port alone. TIR is also providing the means of moving freight overland once again from the UK to the gulf countries, of which specialist hauliers are seeing unprecedented demand in both directions. 

Road transport movements are not currently seeing the huge transit insurance price hikes that traditional maritime carriers are facing, and we have reports of freight moving safely from UK to Riyadh door to door by road in 10-12 days. 

The revival of the Silk Road routes, particularly the Middle Corridor Road connecting Europe to the Middle East and Asia was also discussed on the webinar, with transport again being enabled by TIR. The Middle Corridor, also known as the Trans-Caspian International Transport Route, is a significant trade route and is also the shortest route from China to Europe, and is an alternative to the Northern route via Russia and the Suez Canal maritime route, and is already seeing Chinese trucks on it.