With modern ports, proximity to large neighbouring markets, and a liberal Customs regime, Bahrain has a strong bid to become one of the leading trans-shipment hubs in the Gulf region. While other leading ports, namely Dubai’s Jebel Ali, may have higher capacities, Bahrain’s relatively quick Customs clearance and various onward transport options make it a competitive contender for time-sensitive cargo like pharmaceuticals and food. However, one missing piece in the Kingdom’s effort to position itself as the regional shipping centre of choice is the relative scarcity of quality warehousing space.
Logistics firms interviewed by OBG remarked that until recently, the warehousing market was greatly under-served: three years ago, there was little excess capacity in the sector, and chilled storage space was almost nonexistent. However, Bahrain has already made significant investments in its warehousing capacity in recent years, with over 15,800 sq metres of new capacity entering the market since 2010.
NEW CAPACITY: One of the of the most important building projects in this effort is the Majaal warehousing project at the Bahrain Investment Wharf (BIW), located adjacent to Khalifa Bin Salman Port (KBSP). The facility, which is principally oriented towards industrial small and medium-sized enterprises, boasts 12,000 sq metres of storage space, a figure due to rise over the course of the project’s development. First Bahrain, the firm behind Majaal, plans to build the facility over three phases, covering a total area of 57,200 sq metres of land. Each phase will introduce 12,000-15,000 sq metres of storage space. Majaal reached full occupancy within 18 months of its debut in early 2010.
On the consumer front, the leadership of BIW is also looking to expand service to individuals and retail SMEs. Takhzeen, a project from Al Khaleej Development’s Tameer, recently opened up a secure self-storage facility at BIW for local businesses and individuals.
The neighbouring Bahrain Logistics Zone (BLZ), a logistics park located in the KBSP area, has also made moves to add to its warehousing capacity. In late 2010 it inked a 20-year agreement with Almoayed Wilhelmsen to add a 4000-sq-metre warehousing facility to the zone; this space was opened in early 2012. The facilities in the BLZ focus on re-export and logistics value-adding activities, with a variety of specialist services, including 24-hour Customs clearance and a large number of temperature-controlled warehouses.
Agility, a logistics firm which entered into Bahrain in 2004 as part of a joint venture with Jawad Business Group, is now an independent group with a 18, 500-sq-metre temperature-controlled and bonded warehouse – one of the few bonded warehouses outside of the BIW and BLZ. It has attracted large firms such as Kraft, British Tobacco and BASF to use its facilities to distribute to Saudi Arabia and the GCC, and has announced plans to build another 18,500 sq metres of warehousing space within the next year.
SECURE SPACE: While actual capacity is a primary concern, so too is the quality of warehousing space on offer. Bahrain’s global connections, in particular its free trade agreement with the US, make it especially important that the country maintains high security standards in its warehousing and logistics sectors. To that end, a number of providers of warehousing space have sought certification from the Transported Asset Protection Association (TAPA). The TAPA seal of approval asserts that companies have undergone a rigorous examination of their physical premises and security systems. Warehouses can be rated on compliance with a number of freight security requirements, which specify the minimum standards of security.
The growth in warehousing capacity bodes well for the future growth of the Bahraini logistics industry in the short to medium term. While there are still some factors that constrain its position as a shipment hub – congestion on the King Fahd Causeway and the seasonal strain on warehouse capacity during Ramadan chief among them – the Kingdom’s growing industrial sector, and that of its larger neighbour, will help Bahrain maintain its status as a transport and logistics hub.
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