Khorfakkan Port, located on the UAE's east coast outside the Strait of Hormuz, has undergone a dramatic transformation from a modest transshipment terminal into one of the region's most critical logistics gateways. Weekly road container traffic has surged from approximately 8,000 TEU at the start of 2026 to roughly 65,000 TEU, an eight-fold increase driven by the effective closure of the Strait of Hormuz and the subsequent rerouting of major container services away from Jebel Ali and other Gulf-facing ports .
The shift accelerated after Maersk and Hapag-Lloyd, operating under the Gemini Cooperation, replaced their Jebel Ali call with Khorfakkan on the relaunched AGX/FM1 service connecting Qingdao, Ningbo, Tanjung Pelepas, Khorfakkan, and Singapore . The port, which was originally built for ship-to-ship transshipment, lacked a truck gate entirely before the crisis. Gulftainer, the terminal operator, constructed landside gate infrastructure from scratch, scaling from roughly 100 truck movements per day to approximately 8,500 .
The rapid volume increase has placed severe strain on Khorfakkan's infrastructure. Maersk issued an operational warning in late October noting vessel congestion, limited berth availability, high yard utilization, road congestion, and extended truck waiting times delaying cargo clearance . Kuehne+Nagel identified Khorfakkan and Fujairah as the "main pressure points in the region," with transit times varying significantly by destination and final-mile delivery constrained by limited corridor connectivity .
Gulftainer has responded with a comprehensive $2 billion expansion program. The company is increasing terminal capacity from the current 3.5 million TEU annually to 5 million TEU in the near term, with a long-term target exceeding 10 million TEU . The expansion includes additional quay cranes, new berths, expanded yard capacity, and automated equipment to accommodate vessels of up to 24,000 TEU. The first phase to 5 million TEU was expected to be complete by the end of October, enabling weekly throughput of approximately 100,000 TEU .
Beyond the port itself, Gulftainer is building inland logistics capacity to address the landside bottleneck. The Sajaa Dry Port, 90 kilometers from Khorfakkan, serves as a bonded facility where cargo is sealed at the port and cleared at the customer's doorstep. A second hub, the Al Dhaid Multi-Modal Logistics Hub and Freezone, is being developed on 150 hectares approximately 60 kilometers from the port, designed to handle 1.5 million TEU annually and connect Khorfakkan to the Etihad Rail network . Together, Sajaa and Al Dhaid are planned to provide 2.3 million TEU of inland capacity .
The trucking bottleneck has become a critical constraint on the bypass model. Forwarders report that trucking capacity since the war began has been "hoovered up" by forwarders with the largest budgets rather than shipments with the greatest need, driving up costs and limiting access for smaller shippers . Spot rates to Khorfakkan have surged 479% since late February to $10,626 per 40-foot container, surpassing previous records set during the Covid disruption . Maersk has relocated some containers to the Sajja inland depot and is preparing contingency plans for possible redirection of shipments to Jebel Ali if congestion persists .
The congestion at Khorfakkan reflects a broader structural shift in Gulf logistics. What began as an emergency bypass is increasingly being treated as a permanent alternative to Hormuz-dependent gateways. Gulftainer CEO Farid Belbouab has described the expansion as building an "insurance policy to serve the entire UAE market," arguing that shippers now prioritize certainty over pure cost optimization . The port's ability to absorb the Gemini service relaunch and sustain inland distribution flows will be a key test of whether the east coast corridor can function as a durable component of regional supply chains rather than a temporary wartime expedient.