As we head into 2025, the complex systems that underpin global trade are set to continue to be tested. With a key strategic dependence on supply chains, Bahrain is taking steps in four priority areas, to future-proof logistics and boost trade resilience.
Like its regional neighbours, Bahrain is reliant on imports, particularly for the provision of commodities and other goods. This has led to unique supply-chain vulnerabilities for the national economy, especially amid ongoing global geopolitical tensions.
To protect consumers and businesses from supply-chain shocks, Bahrain has identified three key approaches to address these potential disruptions. Among the most important priorities are the adoption of innovative technology to grow infrastructure and mitigate supply risks, the formation of strategic partnerships to boost resilience, and revisions in national regulations in order to facilitate trade.
Harnessing technology for trade
Bahrain has positioned itself as a regional trailblazer by embracing emerging technologies. In the context of supply-chain resilience, new technologies can offer improved efficiency, adaptability and autonomy.
For example, tech innovation is addressing the nation’s dependence on food imports. Although ‘locally grown’ is not a label shoppers are used to seeing in Bahrain’s food stores, technologies such as vertical farming and aqua farming are advancing the nation’s progress toward food self-sufficiency.
On a radically different scale, digital technology is revolutionising the flow of trade via the famous King Fahd Causeway between Bahrain and Saudi Arabia which has seen multiple updates, equipping it with the latest smart technology. Harnessing digital tech including blockchain, AI and IoT, customs processes have been streamlined – from contracts and fee payments to tracking and pre-clearance approvals. One pilot scheme applied smart technology to screen and process trucks using the causeway, enabling trucks to transit across the bridge 12 times faster than before, cutting processing and waiting times from as much as four hours to just twenty minutes.
Cutting-edge innovations are also helping to set new records for efficiency at the Global Sea-to-Air Hub, a multimodal logistics hub connecting Bahrain International Airport and Khalifa Bin Salman Port (KBSP). The port was recently named ‘Most Efficient Small Port in the Region’ by the World Bank.
By investing in technology, the hub has streamlined clearance processes, allowing it to offer a two-hour end-to-end bonded lead time for all containers transiting between the two facilities. This means products can reach customers in half the time and at 40% of the previous cost.
Supercharging infrastructure
Bahrain is constantly working to design and build cutting-edge infrastructure to strengthen its ties with the wider region and the global trading system, including significant modernisation and expansion of Bahrain International Airport (BAH). With a pipeline of over $30 million in investment, focused on logistics and tourism, the plans are to rapidly grow the number of annual travellers, from 8.7 million in 2023, to 14 million in 2026. BAH is also a key component in Bahrain’s highly efficient Global Sea-to-Air Hub, swiftly moving cargo from port to airport.
The King Hamad Causeway is another clear example of infrastructure investment: the planned second bridge connecting Bahrain with Saudi Arabia, this four-lane causeway is designed to span 25 kilometres and improve traffic flow for the 11.5 million vehicles crossing between the two countries each year.
The causeway is expected to enhance the flow of people and goods by road, while also progressing wider ambitions to coordinate ultra-modern transport infrastructure across the Gulf Cooperation Council (GCC) region. It will be integrated within the GCC’s innovative Gulf Railway project, which is expected to transport over 8 million people and 95 million tonnes of cargo throughout the GCC’s six member states by 2045.
The power of strategic partnerships
Relying on imports for vital goods and supplies means relying on smooth partnerships. To support its key supply chains, Bahrain has been forming strategic partnerships with fellow GCC nations, private-sector stakeholders, and beyond. These partnerships have been instrumental in developing Bahrain’s reputation among the world’s leading logistics hubs, as well as strengthening its ability to seamlessly import supplies.
Bahrain is building regional partnerships to maximise demand for its products. Two bilateral agreements, signed with the UAE and Saudi Arabia (the Takamul initiative) treat products from either country as local in both markets. These arrangements open new opportunities and markets for products manufactured in Bahrain, whilst strengthening ties with neighbouring countries.
Bahrain’s progress in modernising its transport infrastructure has been recognised by major private firms, leading to significant partnerships that are helping to cement the nation’s position as a major regional hub. 2024 saw the completion of phase 1 of the Express Cargo Village at the expanded airport, which aims to push Bahrain’s logistics sector into the top 20 in the world. This project saw the airport operator invest in cargo facilities for the first time, after securing global logistics giant FedEx as an anchor tenant. It offers state-of-the-art infrastructure for express cargo and e-commerce companies, enabling reduced shipping times, increased cargo capacity and operating efficiencies.
Eliminating obstacles through smart regulation
Reducing administrative hurdles is another vital component in Bahrain’s efforts to smooth supply chains and this is reflected in a number of key initiatives. Across all the nation’s points of entry – airports and seaports – preclearance is mandatory, easing the complexity for companies bringing in vital supplies.
The country’s customs authorities also offer Authorised Economic Operator (AEO) certification, which allows affiliated companies to benefit from simplified customs procedures, swift access, fast-track queues and access to end users. In 2020, this initiative went a step further: Bahrain signed an agreement with Saudi Arabia to mutually recognise AEO agreements. This has given a further boost to international trade and supply chain security in the region.
Regulatory measures have also played a key role in strengthening Bahrain’s economic relationship with the United States, through the launch of a new trade zone (USTZ). This initiative builds on the two countries’ existing ties, including the groundbreaking 2004 Free Trade Agreement, – the first such deal signed by the USA with a GCC country.
Primarily focused on manufacturing and logistics, the new USTZ will encourage US companies to establish their regional presence in Bahrain. They will benefit from lower transport costs thanks to the zone’s strategic location, as well as exemption from customs duties for imported raw materials, manufacturing, spare parts and construction machines.
In parallel to the benefits of free trade agreements, logistics companies setting up in Bahrain have the advantage of duty-free access covering 25 countries – representing 33% of the world’s GDP.
The roadmap for resilience
Despite global geopolitical and macroeconomic uncertainty, Bahrain has implemented a broad range of measures to help strengthen and future-proof its supply chains. These ambitious initiatives – from the most innovative technology and infrastructure to smoother processes for trading partners – are helping to ensure resilience even during turbulent times.
