Convoys of heavy-duty trucks barreling across the Arabian desert have become an escape valve for the global economy. In a mechanized revival of the caravans of goods-laden camels that once sustained Arabian commerce, highways, railroads and ports in Saudi Arabia, the United Arab Emirates and Oman have been transformed into an emergency logistics lifeline, circumventing the Strait of Hormuz waterway.
After the U.S. and Israel attacked Iran, Bob Wilt, CEO of Saudi Arabian state-controlled mining company Maaden, dispatched executives to Red Sea ports and, within two weeks, lined up rail and truck operators to move fertilizer across the kingdom. The key ingredient: Lots of trucks, mostly running around the clock, with two drivers each. “Six hundred became 1,600, became 2,000; now we’ve got 3,500 trucks running from the Gulf to the Red Sea,” said Wilt, a former executive at aluminum producer Alcoa.
Maryland-born Wilt said Maaden will have caught up on its export backlog by the end of May. “Whether I truly believed we could do it or not, I don’t know,” he said. The drive is making a meaningful dent in a fertilizer shortage that is threatening the global food supply. With talks between the U.S. and Iran deadlocked, the conflict has devolved into an economic war of attrition. Every shipment that makes it across the desert blunts the pressure from a closed strait and gives Gulf governments room to wait out the negotiations and shift the balance of power.
The trucking routes are part of a broader redrawing of the regional logistics map, reorienting trade away from the vulnerable Persian Gulf and providing governments and companies with critical contingencies. Shipping companies including MSC and Maersk are trucking goods across the Arabian peninsula. The mobilization can’t replace the capacity of shipping or compete on cost, nor can it avert shortages of jet fuel and other energy products. Still, it has become a shock absorber in some key markets, sustaining trade and helping contain global inflation.
U.A.E. supermarket chain Spinneys sent trucks loaded with British foods—including potato chips, porridge oats and children’s snacks—on a 16-day journey from Kent in the U.K. through Western Europe and then Egypt and Saudi Arabia to Dubai. Etihad Rail Freight recently moved hundreds of Nissans from Fujairah, on the U.A.E.’s eastern coast, to Abu Dhabi, which is on the Persian Gulf, marking the country’s first vehicle transport by train.
The trucking convoys are the latest example of ways the global economy has shown surprising resilience in the face of war-related shocks. While the region’s most important exports—oil and natural gas—have fallen sharply, a substantial amount continues to ship to global markets through backup routes. Saudi Aramco has leaned heavily on its East-West pipeline to the Red Sea port of Yanbu, while the U.A.E. has pushed more crude through Fujairah. Both countries are exploring ways to expand the capacity of these oil links. Other proposals include building new rail lines and expanding port infrastructure around the region.
For decades, Gulf producers optimized for speed and scale through Hormuz. The war exposed the risk of efficiency built around a single chokepoint. The smaller port of Khor Fakkan has become an unexpected lifeline for the U.A.E. Truck traffic at the Gulf of Oman port has surged to 7,000 a day from 100 before the conflict. Long lines of heavy vehicles laden with shipping containers are now a regular sight on the highway. Operated by Gulftainer—which also runs a cargo terminal at Port Canaveral in Florida—Khor Fakkan had long functioned primarily as a transshipment hub. It handled cargo that stayed inside the port system: Containers came off one ship and were loaded onto another.
Now it has become a gateway port, with incoming containers leaving the port by truck, passing through gates and customs and reaching warehouses, factories or shops. Weekly container traffic at the port exploded from 2,000 to 50,000 since the start of the conflict. The company hired 900 people in two weeks and reassigned customer-service employees to work as gate officers or yard managers. It opened a new truck marshaling yard for sorting and dispatching cargo. “It’s like having to bring together an orchestra overnight to play a Mozart symphony,” said Farid Belbouab, Gulftainer’s chief executive. For Maaden’s Wilt, the crisis has been a test of whether the company can deliver on a global stage.
Saudi Arabia has directed Maaden to expand production of phosphates, gold and aluminum, with plans to invest $110 billion over the next decade. It is working with U.S. company MP Materials and the Defense Department on rare-earth-metal refining efforts, making Saudi Arabia an important cog in efforts to reduce the West’s dependency on China. It also plays a large role in making Saudi Arabia the world’s third-largest exporter of phosphate, which is mined, processed into granules and shipped—in normal times—through the strait.
Getting the material across the open expanse of desert was in some ways the easier part. Saudi Arabia has a network of cross-country highways. But the ports on the Red Sea weren’t built for phosphate trade. Maaden erected prefabricated warehouses for the fertilizer and rigged piping systems to move corrosive sulfuric acid, a key ingredient in phosphate production, into stainless-steel tanker trucks. “We’ve demonstrated our capabilities,” Wilt said. “Let’s harden this and always have a route to the Red Sea.”
After the war started, analysts at commodities research firm CRU questioned whether any Saudi product would get to market. But in recent weeks, cargoes of phosphate from the Red Sea port of Yanbu have arrived in: Argentina, Djibouti, and Thailand, according to vessel-tracking firm Kpler.
Michael H. Drucker
