The country is facing a number of internal and external challenges, but is implementing a number of supply chain and logistics sector plans across the country. These plans aim to diversify the economy and increase economic activity. Despite these challenges, the country is looking forward to growth and expansion in the air freight industry.
The Sultanate of Oman is addressing connectivity challenges for its air freight service by strengthening its Sea-Air connectivity. In a bid to meet these challenges, the Sultanate has signed a Joint Venture agreement with Cargolux, which will enable the carrier to handle more air freight in Oman.
The new partnership is expected to improve connectivity and pricing while helping the Sultanate develop a more efficient air freight service. While recovery times have improved from pre-COVID-19 conditions, demand is still high in air freight. This is expected to increase in March and Q2, and congestion is likely to return.
The region’s asymmetric patterns of trade pose many challenges for international air cargo operators. These challenges arise from different factors, including natural market imbalances and institutional factors. These factors limit the maximum use of aircraft capacity. In addition, limited fifth-freedom rights may make services in some areas unviable.
Rising energy costs
The recent global economic crisis is forcing Oman’s government to diversify its economy and create new avenues for investment. This includes investing in advanced energy projects and cultivating new relationships with new partners. Moreover, connectivity is a key factor for diversifying the energy sector. Ultimately, this will help the Sultanate’s economy rebound.
The Sultanate of Oman is boosting its trade with India. The two countries have signed a Maritime Transport Agreement (MTA) in December 2019. The agreement strengthens the regional role of Oman as an Indian shipping hub. In addition, the Indian Navy has acquired access to Duqm, Oman’s main port. In addition, Indian companies have made investments in Duqm’s special economic zone. Additionally, an Indian-Oman joint venture is constructing a massive sebacic acid bio-refinery plant. In addition, India is a key market for Omani LNG. The country’s growing demand for LNG can support the export of Omani LNG to Asia.
Oman is a member of the Gulf Cooperation Council, which is contributing to high GHG emissions. The transportation sector in Oman is a key driver of this emissions. Oman’s road network accounts for over 92% of Oman’s GHG emissions. To reduce these emissions, the Sultanate should reform its fuel subsidies policy and encourage public transport.
Time sensitivity of shipments
A trial shipment of a 40 FT Maersk container loaded from Antwerp and delivered to Muscat airport took place in a time-sensitive manner, exceeding Oman’s current best record of 15 hours. During the process, the shipment was monitored by ROP, which provided exceptional support. As a result, the Sea-Air connectivity was seamless and the shipments were on time.
A new air cargo facility opened in March, with a capacity of 350,000 tons of cargo per year. This facility has helped boost the volume of cargo during the first half of this year. The facility features 367 pallet and 734 container storage positions, as well as 2,208 skidded pallet positions. Elevating Transfer Vehicles (ETV) are also available for cargo handling.
Competitiveness of industry
The air freight industry in Oman is highly competitive. The country has a large network of air links, which make it an attractive location for air cargo operations. It has recently entered strategic cooperation agreements with Emirates SkyCargo and Nippon Cargo Airlines, as well as its own Oman Air fleet.
The country’s government is also trying to promote growth and competitiveness, which are key to developing a thriving industry. It is encouraging direct imports and exports, and implementing a scientific research and development system in the sector. Oman also aims to become a global logistics hub and promote integrated supply chains.
As part of the overall government strategy to develop the economy, the Omani government is expanding its public transport network. The government is also promoting the benefits of public transport and expanding the road network. The government also has ambitious plans to promote Oman through international events and through advertising. The government is also working to empower the private sector through the privatization of existing Government-owned transport companies. Furthermore, it is seeking to expand the container terminal at Salalah Port and develop a general cargo terminal in Duqm Port.