Qatar: Impact on Transportation

By: Melvin Garfield Smith

At around midnight Sunday night (1/21/2018), I read a BBC article reporting that Saudi Arabia, Bahrain, the UAE as well as Libya and Egypt and Yemen have cut diplomatic ties with Qatar. The land, air, and sea routes are cut off with immediate effect. No transportation within these countries for the foreseeable future. This has occurred as reported by the Guardian, due to those nations accusing Qatar of supporting terrorism. As Muslims around the world are observing Ramadan, the residual effect of exports into Qatar, specifically, will be delayed. To what extent, remains to be seen. Sources on the ground expect surface cargo to Qatar to move in the interim via Kuwait or Iran. The latter being a “non-starter” for Americans or projects involving American money.

Having spent a year in total over the breadth of 15 trips in a three-year period, I’ve gotten to see Qatar grow and develop and change at an unimaginable pace. The CIA World Fact Book ranks Qatar’s GDP number 1 in the world (May 1, 2017). With a population and 2.7 million of which the Qatari population is roughly 10 % of the total. Qatar also enjoys an unemployment rate of .7% which ranks it number 2 in the world (CIA World Fact Book). This two statics underlie the fact that Qatar is at full capacity. The majority of Qatar’s sea imports are transited routed through the UAE with onward transit to Doha. The container port in Doha is remarkably small, a paradox to its financial strength. Air transportation into an impressive Hamad bin Khalifa airport is the nation’s primary way to receive goods.

The short-term prospect will be frustrating delays for its biggest commercial trading partners -outside the Gulf, China, South Korea and Japan. For America, whose most significant import is Human Capacity in the form of education, administrators, engineers, and consultants the considerations and impact may be more Geo-political, but could also impact our industry throughout the GCC and the Levant. The Qatar Foundation and Education City, employee dozens of Americas from world class Universities, such as Northwestern, Georgetown, VCU and Weill Cornell Medical College.

The military presence in Qatar appears solid for the U.S. Al Udeid Air Base is the home of the U.S. Air Force Central Command. Supplies and logistic support for U.S. military should continue, hopefully without interruption.  The other countries in the region: Bahrain is “home” to the U.S. Fifth Fleet, Egypt is forecast the receive US$1.46 billion in 2017 (Foreignassistance.gov) The Washington Post reported Egypt was scheduled to receive US$1.3 billion (Max Bearak and Lazaro Gamio, Oct. 18, 2016); President Trump recently returned from Riyadh announcing a “historic” US$110 billion arms deal.

All these factors suggest to me that the investment in the region means that America will have to be a part of any resolution of political conflict because it is our “best interest” on more than a financial level. The interdependence of these nations could affect us. American movers and forwarders must be aware of the needs of our intuitions and investments in these regions. We must be proactive and informed to mitigate any negative impact on our own businesses and our nation’s economy our diplomatic community and military.

I believe taking a regional approach to investment, understanding the nuances of the cultures in the Gulf and diversifying the “mix” of services is key to transportation in the Gulf. Each of the countries mentioned is not for the risk-averse. Do your “homework” before you get involved and remember it is a “long-term” process.