Iran earns $200 from each ton of transit goods, according to the newly-appointed secretary of the High Council of Free Trade and Special Economic Zones.
“Every year, more than 1 billion tons of commodities are transited through the Suez Canal. By attracting 5% of this volume through our borders, the revenues can be considerable,” Hamidreza Momeni was quoted as saying by Mehr News Agency during the first specialized meeting for logistics in free trade zones on Monday.
The official noted that the High Council of Free Trade and Special Economic Zones plans to develop a logistical market worth $10 billion in Iran’s FTZs.
The council’s specialized logistics meetings are scheduled to be held weekly in one of the country’s free trade zones.
Border Transit Back to Pre-Covid Levels
Transit via Iranian border crossings as well as the country’s foreign truck commutes have increased to reach the pre-Covid-19 pandemic level, director general of the Transit and International Transport Bureau of the Road Maintenance and Transportation Organization said recently.
“After the coronavirus spread across the region more than a year ago, our surrounding countries closed their borders to Iranian transit trucks. Later, regulations were loosened, yet commutes remained restricted and controlled. This resulted in a drastic fall in the country’s transit activities,” Javad Hedayati was also quoted as saying by the news portal of the Ministry of Roads and Urban Development.
At present, the official added, truck commutes from Iran’s 24 border crossings are back to pre-Covid days with the exception of its border with Turkmenistan, which still has a ban in place.
“We have made a request to the National Coronavirus Headquarters and the Health Ministry to prioritize the vaccination of transit drivers so things could speed up in our international transportation sector. This is what many countries have done and we need to do the same for close to 150,000 drivers that facilitate our foreign trade and transit,” Hedayati said.
Fiscal 2020-21 Transit Volume
A total of 7.53 million tons of commodities were transited through Iran during the last Iranian year (March 2020-21), showing a 0.89% decline compared with the year before, according to the spokesperson of the Islamic Republic of Iran Customs Administration.
“The transit volume came despite the outbreak of Covid-19, which closed down many of our common border crossings for a few months,” Rouhollah Latifi was quoted as saying by Fars News Agency.
The official noted that the country’s top 10 busiest transit borders were Shahid Rajaee Special Economic Zone in the southern Hormozgan Province with more than 3,3 million tons, Bazargan in West Azarbaijan Province with 703,000 tons, Bashmaq in Kurdestan Province with 687,000 tons, Sarakhs in Khorasan Razavi Province with 457,000 tons, Imam Khomeini Port checkpoint in Khuzestan Province with 447,000 tons, Bileh Savar in Ardabil Province with 337,000 tons, Jolfa in East Azarbaijan Province 312,000 tons, Razi in East Azarbaijan Province with 188,000 tons, Astara in Gilan Province with 156,000 tons and Bandar Lengeh in Hormozgan Province with 139,000 tons.
“These 10 border crossings accounted for 89% of Iran’s overall transit during the period under review,” Latifi said.
Shahid Rajaee: Iran’s Busiest Transit Border
With 12 wharfs, Shahid Rajaee is Iran’s biggest container port, accounting for 90% of the country’s total container throughput.
Over half of Iran’s commercial trading is carried out at Shahid Rajaee, which is located 23 kilometers west of the port city of Bandar Abbas, the capital of Hormozgan Province.
Hormozgan Ports and Maritime Organization finalized investment contracts with five local and one foreign company on Dec. 24. Agreements, which were signed in the presence of Minister of Roads and Urban Development Mohammad Eslami, are worth 250 trillion rials ($1 billion) and aim to develop 2,400 hectares of hinterlands newly added to Shahid Rajaee Port and improve southern ports to ports of third generation.
The United Nations Conference on Trade and Development developed a taxonomy that classifies ports into first, second and third generations. First-generation ports only perform traditional port activities, i.e., they are simply interfaces between the land and the sea. Second-generation ports are characterized as support service centers for transport, industry and trade that provide certain value-added cargo services, such as labeling volumes, consolidation, deconsolidation and completion of production processes. Third-generation ports are dynamic links in international trade networks and active agents that design and implement strategies for the complete development of a port’s area of influence.
The agreements include investment by Bama Company for establishment of zinc, lead and manganese factories, Entekhab Industrial Group for the construction of home appliance plants, Kayhan Port and Maritime Services Company for creating a verity of industries and Nahavand Arman Company for investment in a refinery.
A Chinese company will also invest in establishing a container manufacturing plant.
The Ports and Maritime Organization also finalized a memorandum of understanding with Bank Melli Iran Brokerage Company that will provide financial guarantees for these projects, the ministry’s news portal News.mrud.ir reported.
Eslami said investment projects in Shahid Rajaee Port will create 20,000 jobs and their duration must not exceed three years.
“Increasing the capacity of Iranian ports to 280 million tons was the main approach pursued by the ministry and PMO over the past 40 years. As per development plans, their capacity must reach 500 million tons in five years,” he said.
“The Ports and Maritime Organization has finalized 336 contracts worth 1,300 trillion rials [$5.2 billion] with the private sector to date,” Mohammad Rastad, PMO’s managing director, said.
