ISRAEL AT WAR - DAY 142

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Israel logistics startup forges overland trade route to bypass Houthi Red Sea crisis

Trucknet seeks to facilitate the operation of an alternative land bridge for the transfer of goods from the ports of Dubai through Saudi Arabia and Jordan, to Israel’s Haifa port

Sharon Wrobel is a tech reporter for The Times of Israel.

Map of the land bridge that could see trucks traverse from the port of Dubai in the United Arab Emirates, across Saudi Arabia and Jordan, into Israel, and Egypt. (Trucknet)
Map of the land bridge that could see trucks traverse from the port of Dubai in the United Arab Emirates, across Saudi Arabia and Jordan, into Israel, and Egypt. (Trucknet)

Trucknet Enterprise, an Israeli smart transportation company has forged agreements this month to facilitate an overland trade route for the transfer of goods from the Persian Gulf through Saudi Arabia and Jordan to Israel bypassing the Red Sea waterway, which is currently a target of numerous attacks by Iranian-backed Houthi militants.

Earlier this month, Eilat-based Trucknet, which operates a digital marketplace to match importers with transportation companies, signed a cooperation agreement with Emirati-based counterpart Puretrans FZCO and the Dubai port-operating company DP World. The agreement is geared to facilitate the transport of cargo on trucks on a bi-directional land route connecting the ports of Dubai or Bahrain, passing through Saudi Arabia and Jordan, and getting to the port of Haifa, as well as Egypt, where cargo can continue to Europe.

On Sunday, Trucknet signed a similar memorandum of understanding with Alexandria-based logistics services company WWCS which operates as an agency for the management of container transportation from ports and serves the Egyptian market. The cooperation will allow the use of Israel’s border crossings for the transfer of goods on the land route, from the port of Dubai, through Saudi Arabia and Jordan to Israel, and from there, through the Mediterranean Sea or via land, to Egypt, Trucknet said.

“This week we completed the construction of a land bridge route that will connect the United Arab Emirates to Israel and Egypt,” said Trucknet founder Hanan Friedman.

A pilot to test the land transport line for trucks from the ports of Dubai to Israel has been ongoing in recent weeks.

Israeli smart transportation startup Trucknet. (Courtesy)

The agreements for cooperation for the establishment of an alternative land route comes as Yemen’s Houthis, an Iranian proxy, have launched a flurry of drone and missile attacks on commercial vessels with Israeli ownership or bound for one of the country’s ports since the start of its war on October 7 with the Hamas terror group.

Most have failed to reach their targets and many have been intercepted, but the ongoing threat prompted the world’s major shipping companies, including Denmark’s Maersk and German shipping company Hapag-Lloyd, as well as oil giant BP, to temporarily suspend sending their vessels through the Red Sea and the Suez Canal, threatening to shut down a key trade route connecting Asia, Israel and Europe.

Instead, container ships bound for Israel and linking to Europe from the Far East are diverting to a longer route around Africa and the Cape of Good Hope, increasing the shipping time of goods by two to four weeks and raising the costs per ship by up to $1 million. That is as ships sailing for Israel since the war erupted already have higher freight costs, as they need to pay an additional war risk premium levied by marine insurers.

Meanwhile, Maersk earlier this week announced that it was preparing to resume the route through the Red Sea after a US-led multinational naval coalition started to operate to try and protect shipping from attacks by Houthi militants.

“The purpose of the route is not to replace the use of the Suez Canal, but to create a complementary express route, which will be used as a bypass route for the Houthi threat in the Red Sea in times of emergency, and will shorten shipping times by 10 days,” said Friedman. “Transit time for cargo on container ships coming from Dubai or Abu Dhabi ports to the Haifa port is about two weeks while unloading and putting the cargo on trucks via the land route will take four days.”

Trucknet said that the land route, which received the necessary approvals from Israel’s Defense Ministry and Israeli authorities, is expected to save 80% of the time the sea route takes, at a lower cost also due to the current high insurance costs levied on shipping companies.

Founded in 2016 by CEO Friedman, Trucknet has developed a cloud-based platform to match cargo and available trucks, which it says enables transportation and logistics companies to lower transport costs and save resources by optimizing shipments across all modes of transportation. The AI-based technology uses business intelligence and machine learning for the automatic matching platform which also includes features such as real-time tracking of trucks, the status of shipments and emissions calculations for each shipment.

Trucknet founder and CEO Hanan Friedman. (Courtesy)

The startup, which listed on the Tel Aviv Stock Exchange in 2021, has more than 40 employees and operates offices in France, Romania and Israel.

The war began on October 7, when some 3,000 Hamas terrorists burst across the border into Israel from the Gaza Strip by land, air and sea, killing some 1,200 people and seizing over 240 hostages of all ages under the cover of a deluge of thousands of rockets fired at Israeli towns and cities. The vast majority of those killed as gunmen seized border communities amid horrific acts of brutality were civilians, including babies, children and the elderly.

The Houthis say the Red Sea strikes are in solidarity with the people of Gaza, where the Hamas-run health ministry says more than 20,900 people have been killed in the conflict. However, these figures cannot be independently verified, and are believed to include both Hamas terrorists and civilians, and people killed as a consequence of terror groups’ own rocket misfires.

Already before the outbreak of the Hamas war, the idea of establishing a trade land bridge connecting Jordan, Israel, Saudi Arabia and the UAE from the Persian Gulf to Israel’s seaports, was in the works, but the current situation has brought plans for the project fast forward, according to Friedman.

Saudi Arabia and Israel do not have diplomatic relations, though the White House has been pushing them toward normalizing relations in the months before the war. That’s after the signing of the Abraham Accords, the US-brokered agreement that normalized ties between Israel and the UAE and Bahrain in 2020. Morocco followed suit and normalized relations with Israel soon after.

“The cooperation and the high willingness we found among the transport and logistics companies in the Arab countries, proves that the ties that are being forged these days with Israel are in the common interest of all parties, which can and will lead to the transformation of Israel into a significant logistics traffic center on an international scale,” said Friedman.

Times of Israel staff contributed to this report.

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