Farnborough Air Show

Strategic Location and Experience Spur Sea-Air in Dubai

 - July 17, 2022, 10:00 AM
Issa Baluch launched Dubai's first sea-air products in the late 1970s.

With air freight accounting for about 1 percent of the total volume of global freight but over a third by value and seaborne freight accounting for over 90 percent by volume and taking weeks instead of hours in transit, the viability of sea-air cargomoving goods using a combination of the twomight seem counterintuitive. As an old sage who formerly resided in the Middle East once put it: “The idea of sea-air is like Father Christmas, as far as I’m concerned; freight transport is either slow and cheap or fast and expensive!”

Although Professor Issa Baluch, chairman at Transport Logistics USA and member of the Dean’s Council of Harvard Kennedy School, credits U.S.-based concerns with operating the first-ever sea-air cargo ventures five decades ago, he took a lead role in launching the product in Dubai and the Middle East. An imbalance in capacity between oil industry project cargo flights into Dubai and those returning westward empty in the late 1970s begged for a way to blunt the resulting inefficiencies. 

“That’s where the initiation of sea-air combined transit via Dubai was ideal,” Baluch told AIN. “I was in Dubai at the right time in the late 1970s, when there was huge congestion and imbalance in transportation—freighters bringing project and oil-related goods and returning empty. I initiated a solution by taking advantage of that concept.”

The fact that air cargo bound for Africa from Europe could sit for weeks or even months in transit as local exports took priority gave him the idea for sea-air cargo. “If you booked a shipment, it would sit at the airport for weeks before it could be picked up,” he said. “The argument we put forward was: let it sit on water coming to Dubai, and then save yourself money.”

In 1979, Baluch’s operation moved 175 tons. In 1980, he predicted he'd move 1,000 tons. “When we closed 1980, we had 2,500 tons,” he said. “That was really time to celebrate for everyone.” In his 2005 book Transport Logistics—Past, Present and Predictions, Baluch explains how throughput continually rose to reach 45,000 tons per year in the late 1990s.

Jean-Paul Rodrigue, Department of Global Studies and Geography at Hofstra University in Hempstead, New York, said high levels of maritime and air connectivity supported the emergence of sea-air logistics as well as the coordination of related customs procedures. “Locations at the convergence of maritime shipping networks and acting as air transport hubs such as Hong Kong, Singapore, Dubai, and Panama are well-placed to benefit from integration,” he wrote in a 2016 paper.

“I assume that sea-air integration exists in a number of ports, but it tends to be more coincidental than planned,” Rodrigue told AIN. “My assumption is that port congestion in Europe and a lack of shipping capacity have increased the use of locations such as Dubai as an alternative to route cargo into Europe. During the Suez Canal blockade, there could have been an uptick in this activity.”

As a result of his earlier success, Baluch said sea-air became an integral part of the planning for Dubai’s second airport, Al Maktoum International (DWC), located only 12 kilometers from Jebel Ali Port. “I was on the planning committee right from inception in the early 2000s," he noted. "We spent time with the appointed consultants to discuss the modality of sea-air. Sea-air was really a part of the whole scheme.”

Several meetings and road shows demonstrated the importance of locating the airport close to the port. “We were very clear that this was going to be one of the only facilities in the world with a combined port and airport operation,” he said. DWC saw its first flight—a freighter—in 2010.

Speaking with AIN on the eve of the November 2021 Dubai Airshow, Emirates divisional senior vice president of cargo Nabil Sultan said sea-air had become a significant element of the airline's SkyCargo business. “There is a government committee with various stakeholders, and it’s quite progressive, actually,” he said. “We are quite active in sea-air movement, using Dubai as a major hub.

“We almost invented sea-air movement in Dubai, and then we built on it. Today, we are quite active in that area. We’re probably one of the few hubs in the world today where we are able to connect cargo coming on sea freight into air freight within literally three to four hours. That’s just unheard of globally. It normally takes days. That, to me, is a huge achievement.”

Jebel Ali Port, which opened in 1979, can trace its success largely to the industrial zones established adjacent to it. With Abu Dhabi envisioning a much larger masterplan for industrial zones at the more modern Khalifa Port, Jebel Ali might in time need to specialize in certain areas of logistics to remain viable.

While it has remained an ad hoc solution, Serge Tripet, a management board member at Switzerland-based ATS-Hellmann Worldwide Logistics, believes that Dubai could turn sea-air into a more robust product in the future. “I think it could well be that this becomes official policy in Dubai," he told AIN. "If you ask me whether it will be months or years, it’s very difficult to say. The moment the whole industry—ocean freight and sea freight—regulates itself, and you have normal wait times and capacity situations, it might well be.”

Tripet said Singapore had always moved short-sea freight from Asia using quick air transfers into Europe. “Incheon in South Korea is also a hub into the U.S.,” he said. “Meanwhile, Los Angeles is working with Panama’s sea-air hub; they also have that capability. In Dubai, I think we are more at the beginning, and it is more opportunistic. Will they adopt an official sea-air policy in future? I would say yes, but I don’t know when.”