Saudi Arabia’s Red Sea Gateway Terminal (RSGT) and France’s CMA CGM Group have signed definitive agreements to jointly develop and operate Terminal 4 at Jeddah Islamic Port, marking a major investment in the Kingdom’s maritime and logistics infrastructure. The project involves an initial investment of approximately $434 million, or SAR 1.6 billion, and is expected to add up to 2.6 million twenty-foot equivalent units (TEUs) of annual container-handling capacity. The development is being carried out in collaboration with the Saudi Ports Authority, known as Mawani, and will form part of RSGT’s existing concession at the port.
This agreement was made public on 25th August, 2026 after signing in Paris in connection with the French-Saudi Investment Roundtable. This ceremony brought together the Saudi Crown Prince and Prime Minister, Mohammed Bin Salman and the French President, Emmanuel Macron thus making the agreement more politically and economically relevant. Even though this is a business-oriented project, its importance goes much further than that of the shipping industry. It provides support for the Saudi Vision 2030 initiative, the National Transport and Logistics Strategy and the move by the Kingdom of Saudi Arabia to position itself as one of the leading global centres of trade and logistics. The Jeddah Islamic Port is well positioned at the Red Sea and helps connect the country to shipping routes from Europe, Asia and Africa.
What the $434 million project will deliver
The proposed terminal will add up to 2.6 million TEUs of annual capacity. A TEU is the standard industry measurement for container traffic and represents the capacity of one twenty-foot container. The project will include new deep-water berths designed to accommodate the world’s largest container ships. It will also feature 10 new ship-to-shore cranes, advanced terminal technologies and infrastructure aimed at improving productivity, efficiency and service reliability.
The development is expected to improve the handling of Saudi imports and exports while strengthening Jeddah’s ability to attract major international shipping services. Larger vessels generally require deeper berths, powerful cranes and terminal systems capable of processing high volumes of containers quickly.
By providing those facilities, Terminal 4 could help Jeddah Islamic Port compete more effectively with other major ports in the Gulf, the Red Sea and the wider Mediterranean region. Its value will depend not only on the physical construction of the terminal but also on whether shipping lines choose to route more services and transshipment cargo through Jeddah. The project partners say the new terminal will strengthen the efficiency and resilience of Saudi supply chains. That could be particularly important for a country seeking to expand manufacturing, trade, retail, food imports, industrial production and non-oil exports.
A partnership between local expertise and global reach
The partnership combines RSGT’s Saudi terminal operating experience and CMA CGM’s international shipping and logistics network. RSGT is currently operating the Jeddah Islamic Port Terminal and has built up experience in running container operations in the Kingdom. CMA CGM is a leading international shipping and logistics group with operations in maritime transport, logistics services on land and by air, and terminals. CMA CGM is interested in 64 port terminals across the globe. For CMA CGM, terminal operation has been a very important component of the business strategy of late. This can be explained by the fact that CMA CGM has come to regard ports more strategically than simply as cargo pickup/delivery locations for their ships. This can be seen from the statements of CMA CGM Chairman and CEO, Rodolphe Saadé.
According to him, “as the global trade environment changes and infrastructures must grow and become modernized, terminals are increasingly becoming strategic assets, key to securing our operations, strengthening major trade corridors, and offering our customers greater reliability.” Saadé went further to note that
“we are taking an absolutely major step forward in Jeddah with the creation of a state-of-the art facility able to handle the biggest container vessels in the world.”
Saadé said that the investment was an indication of the company’s commitment to the Saudi Arabian market and its vision of becoming a global trade and logistics hub. From the above analysis, it is clear that the partnership has two dimensions. Firstly, RSGT provides local know-how, established operations and access to the Saudi market. Secondly, CMA CGM brings international cargo networks, shipping experience, capital and terminal development and operations experience.
Why Jeddah matters to global trade
Jeddah Islamic Port is Saudi Arabia’s principal Red Sea gateway and one of the most important maritime facilities in the Kingdom. Its location allows it to serve Saudi population centres and industrial markets while also supporting regional transshipment. The port sits close to the maritime route connecting the Indian Ocean with the Suez Canal and the Mediterranean. This geographic position gives Jeddah potential importance in trade between Asian manufacturing centres, European markets and African economies.
Terminal 4 is designed to take advantage of that location. Deep-water berths could allow larger vessels to call at Jeddah directly, while higher capacity could enable the port to receive, process and redistribute more containers.
The partners say the project will help attract and retain major shipping services, increase cargo flows and enhance the connectivity of Saudi businesses with international markets. It could also reduce logistical bottlenecks as the Kingdom’s economy expands. However, location alone does not guarantee commercial success. Shipping routes are influenced by freight rates, vessel availability, port productivity, congestion, security conditions, fuel costs, insurance premiums, customs procedures and the reliability of inland transport links.
The project will need to operate efficiently and offer competitive services if it is to convert its physical capacity into sustained cargo growth.
Vision 2030 and economic diversification
The Saudis are pouring billions into ports, airports, railways, roads and logistics zones in order to diversify their sources of income away from oil and gas revenue. Logistics is one of the growth sectors outlined by the Saudi Vision 2030 program. The Kingdom intends to leverage its strategic location between three continents to increase foreign trade, domestic manufacturing and new sources of income unrelated to hydrocarbons. The agreement on the construction of Terminal 4 falls right within the policy agenda. A modern container terminal can form an entire ecosystem involving warehouses, distribution centers, freight forwarding companies, customs agencies, truck operators, industrial zones and e-commerce networks. According to Mawani President Suliman bin Khalid Al-Mazrou, this deal demonstrates the attractiveness of the Saudi Arabia as a destination for maritime investments as well as growing interest in the Saudi Arabia’s port ecosystem from foreign investors.
He connected the project to the modernization of infrastructure, competitive enhancement and implementation of the National Transport and Logistics Strategy in accordance with the Vision 2030. This position of the government is significant since the project is not being offered as an isolated private investment, but as part of a national program to transform the transport infrastructure into an engine of economic transformation. Another objective of the Saudi government is increased private sector involvement in strategic infrastructure projects. RSGT-CMA CGM joint venture sets up a good example of such cooperation of a local operator, logistics company and government port authority in developing the capacity.
RSGT’s expected expansion
The Terminal 4 project is expected to increase RSGT’s total annual capacity at Jeddah Islamic Port to approximately 8.8 million TEUs once the broader expansion is completed. That would significantly strengthen RSGT’s position as a major terminal operator in the Red Sea region. It would also increase the importance of Jeddah within Saudi Arabia’s port network. The capacity increase is intended to provide room for future growth rather than respond only to existing demand. Saudi Arabia’s population, consumption, industrial development and trade requirements are expected to expand as the Kingdom pursues its diversification projects. The partners describe the terminal as “future capacity” for the Kingdom. This means the facility is being developed with an expectation that cargo volumes will grow over time and that shipping patterns will continue to evolve.
RSGT Executive Chairman Aamer Abdullah Alireza called the agreement a defining milestone for the company and Saudi Arabia’s maritime sector. He said,
“This partnership represents a defining milestone for both RSGT and Saudi Arabia’s maritime sector. It reflects the Kingdom’s ability to attract world-class international investors and demonstrates growing confidence in Saudi Arabia’s economic future, logistics ambitions and strategic position at the heart of global trade.”
Alireza added that the partners were investing in infrastructure that would create long-term value, strengthen national competitiveness and support Saudi Arabia’s transformation into a leading logistics hub. RSGT Group Chief Executive Officer Lars Vang Christensen said the signing marked a major stage in the development of both RSGT and Jeddah Islamic Port. He said,
“Through our upcoming partnership with CMA CGM, and with the continued support of the Ministry of Transport and Logistics Services and Mawani, we are delivering a project that will increase our container capacity significantly, enhance RSGT’s competitiveness and create long-term value for the Kingdom.”
CMA CGM’s wider investment strategy
The agreement comes as CMA CGM continues to expand beyond traditional ocean shipping.
The financial performance of the group for the second quarter of 2026 showed a revenue of $15.7 billion, marking a 19.2% increase compared to the same period in 2025. Moreover, its EBITDA was recorded at $3 billion, representing a growth of 31% year-on-year. The group reported maritime volumes of 6.3 million TEUs, showing an increase of 6%. At the same time, the shipping revenue came in at $10 billion, representing a growth of 22%. CMA CGM emphasized the role of geopolitical instabilities in the Middle East region in shaping its results, as well as the uncertainties regarding the trade policies and tariffs. It should be noted that the group continues to grow in terms of logistics and terminals. The numbers provided above give background information about the Jeddah project.
The company invests into infrastructure during the period of disruptions faced by shipping companies along major transport corridors and attempts to have more control over the whole supply chain. This involvement in terminals helps shipping groups to enhance the schedule reliability, ensure handling capacity and coordinate services with the inland logistics. It also helps to maintain better relationships with governments and large cargo markets. Saadé emphasized that the strategy of the group is concentrated on growth in strategic markets and investments in strategic assets.
Security and regional uncertainty
The investment is being announced against a difficult geopolitical backdrop. Tensions and conflict in the Middle East have disrupted maritime routes, increased insurance costs and forced shipping companies to alter networks and deploy alternative multimodal corridors. CMA CGM’s second-quarter report said geopolitical tensions had created additional costs, including higher insurance premiums, the immobilization of certain vessels and lower volumes on services calling in the region. The group said it had adjusted its network and operations to maintain supply-chain continuity. Reuters reported that the Jeddah investment came amid uncertainty over trade access in the Middle East linked to the U.S.-Iran war. Jeddah’s position on the Red Sea gives it strategic relevance, but regional instability could also affect shipping decisions, vessel calls and the cost of operating through nearby routes.
This creates both an opportunity and a risk for the project. Disruptions elsewhere may encourage companies to diversify routes and rely on well-equipped regional hubs. At the same time, security risks can reduce traffic, raise operating expenses and delay investment returns.
The terminal’s long-term performance will therefore depend partly on regional stability. A modern facility can improve efficiency, but it cannot eliminate risks arising from conflict, naval threats, route closures or sudden changes in shipping patterns.
Investment timeline and financial structure
The two companies first announced their intention to engage in a potential joint venture for the Terminal 4 in October 2025. The initial proposal had the investment of around SAR 1.7 billion, or $450 million, and a capacity of 2.6 million TEUs. In the current agreement, the first investment has been set at SAR 1.6 billion, or $434 million, while keeping the same target capacity. This difference can be attributed to the change in the initial project cost estimates into the definitive investment package. The agreement calls for development of the project within the existing concession by RSGT at Jeddah Islamic Port through collaboration with Mawani. J.P. Morgan served as the financial advisor to the agreement.
These definitive agreements mark a step further from the previous stage of the memorandum or term sheet. It sets a solid foundation for the implementation, even though the details on the construction timeline, start date, equity percentages, and employment numbers are not available in the public statement. These information are crucial to gauge the economic implications of the project. The initial investment amount is not necessarily equal to the total cost of the project throughout its life, which may have other costs in later stages of development.
The broader economic test
The agreement is a strong statement of confidence in Saudi Arabia’s logistics ambitions, but its ultimate success will be measured by performance rather than investment size alone.
The terminal must attract cargo, deliver high productivity and integrate effectively with inland transport. It must also maintain competitive pricing and dependable turnaround times for shipping lines and cargo owners.
The 2.6-million-TEU target is substantial. To use that capacity effectively, Saudi Arabia will need continued growth in imports and exports, greater industrial production, expanded re-export activity and stronger connections between ports and inland economic zones.
The project may also create indirect benefits by encouraging logistics companies, manufacturers and distributors to establish operations near Jeddah. If that happens, the terminal could become part of a wider trade corridor rather than functioning only as a standalone port facility. For Saudi Arabia, the strategic objective is clear: build infrastructure that transforms the Kingdom’s geographic location into economic influence. For CMA CGM, the objective is to secure a stronger position in an important maritime market and integrate terminal operations with its global shipping and logistics network.
