DP World predicts 2026 will be a 'year of growth' despite tariffs

Supply chains 'stable' despite Red Sea disruptions, Tiemen Meester tells Abu Dhabi summit

Dubai's Jebel Ali Port now has more than 11,000 companies operating in its free zone. Reuters

Global ports operator DP World expects to grow next year, despite the challenges arising from tariffs and trade wars that are raising the shipping industry's costs, chief operating officer Tiemen Meester said on Wednesday.

The Dubai-based company is a global operator and “the world doesn't ride on the business between China and the US alone; there are still many more trades and markets that you can still play for”, Mr Meester told the Reuters Next Abu Dhabi summit.

He predicted that “2026 is a year of growth. Despite the tariff wars, you can still see very good growth, and in some markets, double-digit growth. It is incredible.”

Mr Meester said trade routes, including East Asia into India and the Middle East, and East Asia into Latin America, were “doing very well”.

The flow of trade has changed due to the imposition of tariffs, with a decrease in import volumes to the US as companies were “front-loading” their orders late last year to mitigate uncertainty.

Import volumes, specifically from the Far East into the US, are down in the second half of this year compared to the same time last year, Mr Meester said.

Tariffs have also increased the costs of DP World's customers as these shipping line companies have had to readjust their networks and redeploy ships to adapt to the levies.

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“There is now reciprocal tariffs on vessels calling on the United States that are made in China, and similarly on US-owned vessels calling into China, so they're penalising each other both ways and there's cost happening that way,” he said.

Shipping lines caught in the middle of this tariffs crossfire have had to incur a lot of costs to ensure that trade keeps flowing, said Mr Meester. However, the Middle East can leverage its position as a trade route between East and West, he added.

“As trade flows into Europe, Africa and Latin America, we see an increased role for the Middle East to tap into it by providing superior infrastructure in ports, logistics, warehousing, the ease of doing business and making sure the supply chain can thrive here,” he said. “It has a great economic knock-on effect to this region.”

As a result, DP World is pouring more investments in emerging markets.

“Our investments into port infrastructure in Asia, India, Middle East, Sub-Saharan Africa and Latin America have seen an increase,” he said.

Asked if there's enough confidence in these markets, Mr Meester said that the UAE has entered into dozens of Comprehensive Economic Partnership Agreements with key trade partners around the world that have removed the barriers to trade.

One example of these pacts in action is that Dubai's Jebel Ali Port now has more than 11,000 companies operating in its free zone, with the roll of construction materials, machinery, vehicles and foodstuffs demonstrating that the port has grown to become a distribution hub for the region and globally, Mr Meester said.

The shipping executive also expects the container shipping business will grow more in the Global South compared to traditional markets. This will raise the need for more port capacity in South-East Asian countries such as the Philippines, Indonesia and Vietnam more quickly than in other regions.

Red Sea shipping 'reset'

The global shipping industry has suffered problems arising from economic uncertainty, supply chain bottlenecks, Houthi attacks on vessels in the Red Sea and shifts in global trade flows due to the on-again, off-again tariffs imposed by US President Donald Trump on the country's key trading partners.

However, Mr Meester said that supply chains are now stable as the Red Sea shipping disruptions were at their peak a year and a half ago.

Since then, shipping lines have readjusted their routes to take alternative lanes, such as around the Cape of Good Hope in South Africa.

“Now the supply chains, although longer, they are quite working and quite stable,” Mr Meester said. “The networks have adjusted, it is working, you can get into Europe and it's quite easy.”

The challenge has been to access ports inside the Red Sea, including Egypt and Saudi Arabia, which were “affected more dramatically” than Europe as ships circumvented the area, he said.

However, there has now been a “reset” as those trade lanes are re-establishing and there is an influx of new entrants, including Russian and Chinese companies that offer feeder services, he added.