syrian conflict makes lebanon a key shipping hub
Last Updated : GMT 06:23:15
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Syrian conflict makes Lebanon a key shipping hub

Arab Today, arab today

Arab Today, arab today Syrian conflict makes Lebanon a key shipping hub

Beirut - Arabstoday

Before the conflict in Syria erupted in 2011, potatoes exported from the Bekaa Valley would travel by truck to Latakia’s port, where they would be loaded onto a container vessel and shipped by sea to different markets in the Middle East. Cars were transported directly from Latakia to Iraq, and Turkish exports from Syrian ports arrived in Europe in eight days flat. As the conflict has intensified over the past two years, most international shipping companies have dramatically redrawn traditional trade routes in order to divert cargo away from Latakia, and Beirut has assumed an increasingly pivotal role as the transshipment hub to the Eastern Mediterranean. According to the most recent shipping statistics from the Port of Latakia, the volume of cargo they handle fell to 194,064 tons in 2012 from 356,083 in 2009. Freight volumes at Latakia in the last quarter of 2012 were 39 percent lower than in the same period in 2010. By contrast, activity at the Port of Beirut has risen continuously for the past two years. The Port of Beirut received a total of 1,041,000 tons of freight in 2012 – 45 percent of which was transshipment cargo destined for different countries – compared to 1,031,000 tons in 2011, according to Elie Zakhour, head of the Beirut International Chamber of Navigation, an organization which represents 45 shipping agencies at the port. Before the Port of Beirut was expanded in 2005, it received an average of about 300,000 new containers a year, he said. A total of 80 percent of the cargo that travels through the Port of Beirut is controlled by three of the world’s largest multinational shipping firms, Hamburg Sud, MSC and CMA CGM. The last two both use Beirut as a transshipment hub for cargo destined for the Turkish Mediterranean. Cargo from Alexandria, Egypt, that CMA might have transshipped through Latakia en route to Eastern European markets a couple of years ago is increasingly being redirected through Beirut. “It is the main transshipment hub of [the] Eastern Mediterranean now,” Zakhour said. “The cargo that used to be destined for Syria is discharged in Lebanon instead. This means that the shipping industry in Lebanon is doing very well. The competing port is Damietta in Egypt.” Hamburg Sud saw the volume of cargo shipped through the Port of Beirut increase nearly 10 percent between 2011 and 2012, according to Samir Moukawem, president and chairman of Sealine Group and Hamburg Sud’s official representative in Lebanon. Though Damietta and Port Said in Egypt remain the most important transshipment hubs in the Eastern Mediterranean, the sector has remained stable in Lebanon so far and is poised to benefit in 2013, he said. “This sector is working well, moving well,” Moukawem said. “Due to the fact that the Port of Latakia is closed and there are a lot of Syrian refugees here, Beirut is being used as a hub for local and transit cargo to Syria.” CMA transported 280,000 tons of cargo to the Port of Beirut, 180,000 tons of which was unloaded in Beirut and transshipped – transferred to another vessel – to various destinations in Western Africa, according to CMA’s Lebanese representative, Bernard Gerdy. The remainder was imports to Lebanon from the Far East. Though the company still has an office in Latakia with a staff of 100 people and 550 employees at the port, transshipping from Beirut to Latakia has become increasingly problematic, Gerdy said, and CMA is increasingly discharging vessels in Beirut and shipping freight overland to Syria. The volume of cargo imported to Lebanon and other destinations through Latakia has dropped 50 percent in the past year. The decline in trade through Latakia has led to some new export opportunities for Lebanon’s agricultural sector, Gerdy said. CMA is currently working on a program with Lebanon’s Agriculture Ministry to help farmers in the Bekaa Valley export their produce to Eastern European markets that have been the biggest importers of fruits and vegetables from North African countries. “Morocco, Algeria, Tunisia have always exported a lot of produce to Russia [via Latakia] and it’s so difficult to send cargo through Syria to the countries that usually buy Lebanese fruits,” Gerdy said. “So we saw an opening in the market, and Mr. [Jacques] Saade [the Lebanese-born CEO of CMA] wants to help local farmers.” Based on the 2012 figures released by the Lebanese Customs Authority, it seems the conflict in Syria boosted exports across the board. After remaining stagnant in 2011, total export volumes rose 5.1 percent last year to $4.5 billion. Exports to Syria rose a whopping 37 percent last year, after declining 3 percent in 2011. By the last quarter of 2012 the country was the single largest market for Lebanese goods by volume, displacing the UAE and Saudi Arabia who have traditionally been the nation’s top two partners. The value of exports to Syria more than doubled last year, rising to more than $45 million in December from about $20 million in January 2012. If this January’s figures are any indication of what’s to come, export volumes are sure to increase in 2013. Last month 83,295 tons of cargo, valued at $58 million, were exported from Lebanon to Syria. Though the lion’s share was still shipped by land, exports from the Port of Beirut rose to 9 percent in 2012 from 1 percent in 2011, while goods passing through the largest customs station used for overland transport, Masnaa, declined to 44 percent from 66 percent over the same period. Tom Mather of Henry Heald Shipping and Insurance Co. , which deals mainly in noncontainerized cargo like cars, wines, yachts and construction equipment, said the number of cars Henry Heald transships to Iraq through Beirut has increased dramatically since the conflict began. “A lot of Lebanese businessmen that used to transport break-bulk cargo overland through Syria are shipping to Beirut, transferring the cargo to another vessel, transshipping it to Mersin, Turkey, and driving it overland to Iraq.” U.S. sanctions against Syria have had little impact on shipping through Latakia, said Fouad Bawarshi, deputy CEO of Gezairi Transport, since most of the country’s trading partners are Arab countries. His company is one of the few still operating out of the Syrian port. “What has affected us most is the difficulty transporting cargo through Syria. The cost of shipping and transit time has doubled” since the conflict began, he said. Turkish cargo that used to take eight days to transport directly to European markets through Latakia now takes about 16 days as it travels through Mersin and Port Said. Meanwhile, insurance rates have tripled or quadrupled for freight going to Syria, Bawarshi said. Despite the higher costs and risk of shipping through Latakia, both Mather and Bawarshi say there is still demand for shipping services there. Gezairi’s imports to Syria have dropped 60 percent, but exports have only dipped by 5 percent. “I have my own explanation for this,” Bawarshi said. “People want to get rid of merchandise as soon as possible.” Albawaba Business

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