Hormuz uncertainty puts Saudi landbridge options back in focus, but challenges loom

Security risks around the Strait of Hormuz continue to disrupt shipping operations with Maersk recently announcing suspending all bookings from most Gulf ports. Thus, logistics teams across the Gulf are increasingly assessing alternative corridors to keep cargo moving, as the rest of the global markets have been rattled by the disruptions of supplies from the Middle East.

Hormuz uncertainty puts Saudi landbridge options back in focus

As security risks around the Strait of Hormuz continue to disrupt shipping operations, logistics teams across the Gulf are increasingly assessing alternative corridors to keep cargo moving.

One scenario gaining renewed attention is the potential diversion of cargo within Saudi Arabia from the Eastern Province to western gateways. Under such a setup, export cargo originating from industrial clusters around Jubail and Dammam could be transported by truck across the kingdom and shipped out via Red Sea ports such as Jeddah Islamic Port, King Abdullah Port or Yanbu.

Developments in the energy sector suggest this type of east-west diversion is already being considered. Saudi Aramco has reportedly begun redirecting some crude shipments away from Gulf terminals toward Yanbu on the Red Sea, using the kingdom’s East-West pipeline to bypass the Strait of Hormuz amid rising security concerns.

For containerized cargo and petrochemical exports, however, such a shift would rely primarily on road transport, effectively turning Saudi Arabia’s highway network into a temporary landbridge between the Gulf and the Red Sea.

Petrochemical geography adds to the challenge

Saudi Arabia’s polyolefin production is heavily concentrated on the Gulf side, meaning most exports typically rely on shipping routes passing through the Strait of Hormuz.

With the bulk of PP and PE capacity located in Jubail, exporters could face significant logistical challenges if Gulf shipping routes remain constrained. Diverting cargo to the Red Sea would require inland transport across roughly 1,300 km, linking the Eastern Province with western ports.Potential logistics pressures

Should export volumes begin moving along this corridor, several operational pressures could quickly emerge. Market participants warn about the following:

• A sudden surge in inland cargo flows could lead to shortages of available trucks, particularly for long-haul container transport.
• Rising demand could also push trucking rates higher. Traders reported inland freight has already doubled to $100/ton recently while it is prone to further price spikes in the days ahead. On top of this, shipping lines have already started applying surcharges of at least $100-150/ton for containerized shipping.
• Increased cargo volumes may create congestion risks at key Red Sea gateways, considering the huge export capacity of Saudi Arabia in PP, PE, MEG, ammonia and urea.
• Shipping companies will also adjust their vessel deployment in response, like Maersk already reporting that Jeddah and King Abdullah Port in Saudi Arabia remain operational and they continue to accept new bookings from these locations.

While no widespread shift has yet been confirmed for petrochemical cargoes, logistics providers say Saudi Arabia’s Red Sea gateways are increasingly being viewed as alternative exit points for regional trade if maritime disruptions in the Gulf persist.