Last month I was fortunate enough to visit Kuwait and was fascinated to by the differences – and similarities – in warehousing and logistics in the region compared to the UK.
With 500km of coastline, a relatively open political system and a history as a trading nation, Kuwait is well placed to serve the logistics needs of the Gulf Region. The World Bank ranks Kuwait amongst the wealthiest nations and its currency has the highest unit value in the world. The absence of any railways might make this small country appear ill-suited as a logistics hub, but other modes are strong.
The main container port at Shuwaikh handles 500,000TEU each year. The second port, Shuaiba, is managed by Kuwait National Petroleum Company and dedicated to oil. Kuwait is estimated to hold 10 percent of the world’s oil reserves but has few other natural resources, so whilst Shuwaikh’s traffic is largely inbound, Shuaiba is devoted to exports. A new port development to serve the wider Gulf region has been mooted since 2014, but not yet built. It is part of an ambitious mission to construct a metropolis in the north of the country: Silk City. The main achievement thus far is a 22-mile causeway across the Bay of Kuwait, completed in 2019 and said to have cost over 3 billion US dollars.
Land ownership is reserved for Kuwaitis here, so although foreign developers can build warehouse facilities, they will be beholden to a landlord for the plot and security of tenure is not always clear. Consequently, few warehouses exceed 100,000sq ft. Standards of warehouse construction and management vary considerably and some – for example within pharmaceutical supply-chains – are as clean and systematic as anything you would find in the UK. Even ambient storage has to be temperature-controlled though, to keep it below 30 degrees. In 2016 the Mitribah weather station recorded a reliable 53.9 degrees although locals claim to have experienced even higher temperatures. This August it never dropped below 34 and that was at night!
Kuwait’s warehouses tend to be small, but their dedication to shopping is huge. Unlike the UK, however, traditional shopping booms compared to online ordering. In the main built-up area, (about the size of Leicester), there are at least 16 shopping malls. At 4m sq ft and with over 800 stores “The Avenues” is the largest, whilst the newest Kuwaiti mall, I was delighted to discover, is called “The Warehouse”. Visiting the mall is a way of life for the 4.3 million inhabitants, so although hundreds of Talabat mopeds zip around delivering takeway food, other forms of online shopping are barely available.
It will be interesting to see whether ecommerce penetrates society here, as it has done in the UK, and what that might mean for the warehousing sector in Kuwait.
Clare Bottle
UKWA, CEO
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