Bahrain among world’s most cost-effective distribution hubs

Kingdom’s strategic location and technology-enabled processes helped it post growth in cargo arrivals last year

  
Bahrain. Manama. Mosque and Bahrain world trade ce.

Bahrain. Manama. Mosque and Bahrain world trade ce.

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MANAMA: Bahrain has topped a global ranking of 79 locations, making it one of the most cost-effective distribution hubs in the world.

The Hidd area, which is home to not only Bahrain’s main seaport – the Khalifa Bin Salman Port – but also the Bahrain Logistics Zone and the Bahrain International Investment Park, has ranked first globally under the ‘transport and warehousing cost-effectiveness’ category by fDi Intelligence – a specialist division of the Financial Times.

Data was collected for 79 locations, under five categories – Economic potential, Business friendliness, Cost effectiveness, Human capital and lifestyle and Connectivity – in compiling the Transport and Warehousing Locations of the Future 2020/21 ranking, said the publication.

To measure ‘cost effectiveness’, a range of data points were examined such as the cost of construction permits, fuel prices, electricity prices, and tax rates amongst others.

The kingdom’s strong performance in a sector traditionally dominated by the Asia-Pacific region comes in spite of a global supply chain disruption owing to the Covid-19 pandemic.

Bahrain was also ranked in the top 10 under the ‘economic potential’ category.

According to the KPMG Cost of Doing Business Report 2019, Bahrain offers up to 43 per cent operational costs savings, and 33pc savings in living costs when compared to the region, as well as zero corporate and income tax and no free zone restrictions.

Expressing delight on the ranking, Transportation and Telecommunications Minister Kamal Ahmed said: “Bahrain has long prided itself in offering global manufacturing and logistics players a place to call home with some of the most competitive setup and operating costs in the GCC.”

Surge

The minister said the kingdom’s strategic location and technology-enabled processes helped it post growth in cargo arrivals last year, despite the disruption to global trade caused by the pandemic.

“The year 2020 has been challenging for transport and logistics globally, but thanks to Bahrain’s strategic location at the nexus of the Middle East and our technologically streamlined customs processes, we have been able not just to maintain the continued flow of cross-border trade but enhance it, seeing a 13.5pc year-on-year surge of shipments into KBSP in the first nine months of 2020.”

Mr Ahmed added: “In 2021, we look forward to building on the successes of 2020, and welcoming many more global transport and logistics players seeking an efficient and cost-competitive gateway to the region’s largest market and beyond.”

Located at the nexus of the Middle East, Bahrain has earned a reputation as the region’s transport and logistics hub and is fast emerging as the main regional distribution and fulfilment centre.

The Covid-19 pandemic has catalysed the uptake of technology in these sectors, including the launch of a first-of-its-kind ‘SmartHub’ logistics warehouse for pharmaceuticals and food to be headquartered in Bahrain to serve the GCC market.

The fDi rankings are based on data collected using the online tools – Benchmark and Markets – as well as other sources such as the World Bank.

avinash@gdn.com.bh

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