APM Terminals buys into Jeddah container hub

APM Terminals has agreed to acquire a 37.5 per cent stake in the South Container Terminal at Jeddah Islamic Port, marking a strategic partnership with DP World in one of the Red Sea’s most significant trade gateways.

The deal, confirmed by both companies on Wednesday, will see the subsidiary of Denmark-based shipping group A. P. Moller-Maersk join DP World in the ownership of the terminal, while the Dubai-headquartered ports operator retains a 62.5 per cent majority stake and operational control. Financial terms were not disclosed.

South Container Terminal, located at Saudi Arabia’s largest port on the Red Sea, has undergone a substantial transformation over the past few years. DP World secured a 30-year concession for the facility in 2019, taking full operational control and committing to expand and modernise the site. That programme culminated in a SAR 3 billion upgrade, equivalent to about $800 million, which more than doubled the terminal’s annual handling capacity and introduced new automation and equipment designed to improve turnaround times.

The entry of APM Terminals into the project reflects a broader shift in the global port industry, where major shipping lines and terminal operators are tightening integration between maritime transport and landside logistics. APM Terminals is part of A. P. Moller-Maersk, one of the world’s largest container shipping groups, and operates a global portfolio of terminals spanning Europe, Asia, Africa and the Americas. DP World, meanwhile, manages a network of ports and logistics assets across six continents, positioning itself as an end-to-end supply chain player rather than a pure port operator.

Jeddah Islamic Port plays a pivotal role in Saudi Arabia’s trade flows, handling a significant share of the kingdom’s containerised cargo and serving as a gateway for goods moving to and from the western and central regions. Its location along key east–west shipping routes linking Asia, Europe and Africa has long made it a strategic stop for global carriers transiting the Suez Canal.

Under Saudi Arabia’s Vision 2030 economic diversification agenda, authorities have placed heavy emphasis on upgrading logistics infrastructure and increasing private sector participation in ports. The Saudi Ports Authority has overseen a series of concession agreements with international operators aimed at boosting capacity, efficiency and competitiveness. The expansion of South Container Terminal aligns with those objectives, as the kingdom seeks to position itself as a regional logistics hub connecting three continents.

Executives from both companies described the transaction as a long-term partnership rather than a change in operational direction. DP World will continue to manage the terminal’s day-to-day activities, while APM Terminals is expected to contribute operational expertise and global customer relationships. The structure allows Maersk’s terminal arm to gain exposure to a growing Red Sea gateway without assuming full control, while DP World secures a strategic partner that is also one of the world’s largest container carriers.

Industry analysts view such collaborations as increasingly common in a sector marked by volatile freight rates, geopolitical disruption and pressure to decarbonise. Container shipping lines have faced sharp swings in profitability over the past four years, from record earnings during the pandemic-driven supply chain crunch to more subdued conditions as capacity normalised. Terminal operators, for their part, are investing heavily in automation, digital systems and greener equipment to meet regulatory and customer demands.

The modernisation at South Container Terminal included the installation of new quay cranes, yard equipment and digital systems aimed at improving vessel productivity and reducing congestion. Automation and data-driven processes are becoming central to port competitiveness, particularly in high-volume hubs where minutes saved on each vessel call can translate into significant cost efficiencies for carriers.

For Maersk, deepening its footprint in key transhipment and gateway ports forms part of a strategy to offer integrated logistics solutions beyond ocean freight. The group has articulated ambitions to transform from a traditional shipping line into a global logistics integrator, providing warehousing, inland transport and supply chain services. Access to strategically located terminals can strengthen that value proposition, particularly in regions experiencing trade growth.

DP World, chaired by Sultan Ahmed bin Sulayem, has similarly expanded into logistics, economic zones and inland services, aiming to capture more value across the supply chain. Retaining a majority stake in the Jeddah terminal ensures continuity in management while sharing capital commitments and operational risk with a global partner.

The Red Sea corridor has drawn heightened attention over the past year due to security concerns affecting shipping routes. Disruptions in the Bab el-Mandeb strait and surrounding waters have led some carriers to reroute vessels around the Cape of Good Hope, increasing transit times and costs. Despite those challenges, ports along the Red Sea remain strategically important for regional trade and long-term infrastructure planning.

Saudi Arabia has continued to press ahead with investments in ports, rail and logistics zones, signalling confidence in sustained trade flows. The expanded capacity at South Container Terminal is designed to accommodate larger vessels and higher volumes, supporting both import demand and the kingdom’s export ambitions as it develops industrial and manufacturing sectors.