There are a number of challenges faced by the sea freight in Oman. Some of these include lack of shipping containers, the lack of Omani nationals, and competition with other Gulf ports. The government and other stakeholders are working to overcome these challenges, and the government is developing a long term plan to help guide the industry.
Lack of shipping containers
Lack of shipping containers for sea freight in Omen is not a new issue. In fact, the situation began during the early stages of the coronavirus pandemic. After the World Health Organization declared the disease a pandemic, many containers stopped moving and were held at ports or inland storage facilities. As a result, demand for sea freight dropped, and ocean freight shippers cut back on the number of vessels available to transport cargo. This, in turn, led to a lack of empty shipping containers.
Lack of shipping containers for sea freight in Oman has many implications for local and international businesses. Container shortages have led to price increases and a decline in volume loading at sea. Fortunately, the world’s largest container manufacturers announced their intention to increase the supply of shipping containers. However, this will not have a noticeable effect until there are more shipping vessels in the region.
Lack of Omani nationals
Despite its high degree of internal stability, the Sultan of Oman has continued to invest heavily in its military. In 2003, the Sultan of Oman allocated $2.53 billion to the country’s defense budget, about 28 percent of the total budget. Oman has a small, but professional, armed forces. Most of the armed forces’ equipment is British, but the country also imports items from other countries. The armed forces are staffed with Omani officers. The percentage of Omani officers in the military has increased steadily in recent years.
The country’s judicial system is based on Shari’a, which is based on the laws of the Islamic Prophet Muhammad and the Quran. The courts have traditionally been under the ministry of justice, the Ministry of Awqaf, and the Ministry of Islamic Affairs, although the first criminal code was not enacted until 1974.
Competition with other Gulf ports
Oman is pursuing an ambitious strategy to make Duqm a major sea freight hub and an industrial city. The country has partnered with the United Kingdom to build a dockyard and dry dock. South Korea has also invested in the port and opened a dry dock, while China plans to invest $10.7 billion in an industrial park that will include manufacturing facilities, pipelines, oil fields, and a hospital. In addition, Iran’s automakers plan to invest $200 million in Duqm to build a joint car manufacturing facility.
The aim is to lure a greater share of international sea freight. It hopes to draw dollars away from neighboring ports, including the UAE’s Jebel Ali. It is also hoping to attract money from the U.S. Navy, which has money to invest in the Gulf. The Navy invested $580 million in the port facilities of Bahrain between 2010 and 2017. Investing in the port’s infrastructure will bring more dollars into Oman.
Importance of attracting individuals to the logistics sector
In Oman, there is ample scope for expansion in the logistics sector. The government is actively supporting these industries with policies aimed at economic diversification and employment. With the help of strong governmental support and infrastructure improvement, these sectors are contributing more than four percent of the country’s Gross Domestic Product. According to experts, this percentage is expected to grow to six percent by 2020. The logistics sector of Oman is highly dependent on the Port of Duqm, and local companies are trying to establish business relationships with port representatives in order to utilize the Port of Duqm as a main transportation means.
The logistics sector is a vital industry for the development of the country’s economy. The country is working toward a less oil-dependent future through diversification. This plan also includes attracting foreign and local investments. However, limited research has been conducted in Oman to determine the impact of logistics and supply chains.
Mistrust between Gulf states
Oman is one of the world’s most important maritime hubs, but its logistic sector is in its infancy. Jebel Ali port is the world’s 11th largest, handling over 13 million 20-foot equivalent unit containers by 2020. Salalah port handles three times less volume and ranks 43rd. While Sohar’s port infrastructure is growing, it is underutilized.
The two countries have strong trade ties, but the two countries have not signed a labor accord. Despite this, Kenyans are increasingly working in the United Arab Emirates. However, they are not protected by national labor laws.
Need for a lean supply chain
A lean supply chain can help to reduce costs and increase efficiency. Overstocked inventories and deadstock cost merchants time and money in the form of extra rent and storage fees. Inefficient inventory management can also lead to inventory shrinkage, which hurts the bottom line. Lean supply chains incorporate inventory management strategies to keep costs low and inventory at the optimal level. This helps to free up time for other aspects of the business.
To make your supply chain leaner, consider implementing basic warehousing best practices. For example, you might implement a regular warehouse audit to reduce waste and increase throughput. Another method is to improve picking strategies. A more efficient picking process reduces the time and effort needed to pick and deliver items.
