The News
UAE trucking company TruKKer was enabling the movement of more than 1,200 loads a day for petrochemical producers, steel manufacturers, and consumer goods companies when Iran closed the Strait of Hormuz at the start of the war. Since then, it has seen volumes surge by 30%, CEO Gaurav Biswas told Semafor, as customers scrambled to adjust to port disruptions and closed shipping lanes.
The strait’s closure has elevated — and complicated — the role of trucking in the logistics chain. Cargo that would have moved through Dubai’s Jebel Ali — the Middle East’s most connected container port, which is now largely cut off from global freighters — is now entering through smaller harbors in Fujairah and Oman, then moving overland.
The rules governing the flow of goods through the Gulf have changed. Saudi Arabia has begun allowing UAE-registered trucks to enter the kingdom empty — practically unheard of prewar — and new freight corridors have been formalized between Oman and the UAE.
Know More
TruKKer is an “Uber for trucks,” as Biswas put it, but that belies complexity. Unlike ride-hailing, moving cargo calls for a wide variety of vehicles: flatbeds for the heaviest loads, refrigerated units for food and medicine, tankers for chemicals. Under normal circumstances, the company runs predictive algorithms to estimate demand. The conflict has rendered such predictions useless.
A container truck that once made short trips from Jebel Ali to elsewhere in Dubai is now on a two-day journey to haul goods, leaving trucks tied up for longer with each shipment and tightening the supply of transport, according to Biswas. The cost of diesel also jumped 72% overnight in the UAE at the start of April, and contracts locked in for the quarter — or in some cases the year — could no longer be honored at agreed rates, Biswas said. Desperate customers were calling multiple brokers at once, creating the illusion of demand spikes that sent truck owners scrambling to raise prices, Biswas said.
TruKKer responded by fixing rates in an attempt to bring transparency to the market and prompt truck owners to bring down prices. TruKKer was established ten years ago and is backed by Abu Dhabi’s Mubadala, Saudi Arabia’s STV, and Bahrain-based Investcorp.
Biswas said he was surprised to see that the supply of construction materials hasn’t declined. Disruptions in other industries are more pronounced. Aluminum producers can’t import alumina and petrochemicals are piling up in Gulf ports with nowhere to go, he said.
Step Back
The challenges are not only logistical. When debris from an aerial interception struck the Khalifa Economic Zone in Abu Dhabi, TruKKer’s people were there. “We had drivers and our own employee operators within 100 meters of that,” Biswas said.
Biswas is optimistic about the long-term resilience of Gulf logistics. The region is building rail networks such as a 300-kilometer link from Oman’s Sohar port to Abu Dhabi, while Etihad Rail’s freight network is already running from the UAE/Saudi border to Fujairah.
For now, however, smaller ports are absorbing volumes they were never built for, Biswas said. Turning these nodes and land corridors into full-fledged alternatives to Jebel Ali, Biswas says, is “like asking Muscat airport to become Terminal 3 of Dubai.” A pretty big leap, in other words.
Notable
- As shipping giants like Cosco, Hapag-Lloyd, Maersk, and MSC have halted new voyages into the Gulf, some of the world’s busiest ports have become idle and new trade routes have emerged.