Port activities are on growth path after the double whammy of Covid-19 restrictions and unilateral US sanctions that adversely affected Iran’s economy.
The volume of freight loading and unloading in Iranian ports hit 44.9 million tons during the first three months of the current Iranian year (March 21-June 21), indicating a 7% rise compared with the similar period of last year, according to the deputy head of Ports and Maritime Organization of Iran, Farhad Montasar Kouhsari.
“This growth has come about under severe economic sanctions as well as restrictions caused by the Covid-19 pandemic for trade and marine transport,” the official was quoted as saying by ILNA.
Oil throughput, the official said, stood at 21 million tons, showing a YOY increase of 17%.
“Container throughput saw a meager 1% rise to 536 TEUs in Q1 against 534,000 TEUs in last year’s corresponding period.”
Kouhsari noted that PMO has taken measures to speed up clearance procedures in ports so that storage facilities can be put into more effective use.
$3.7b Worth of Essential Goods Cleared Since March 21
A total of 6.1 million tons of essential goods worth $3.7 billion have undergone clearance at Iranian customs terminals since the beginning of the current Iranian year on March 21, the head of the Islamic Republic of Iran Customs Administration said last week.
“At present, more than 8.3 million tons of different kinds of commodities are stored in ports of entry, 4.5 million tons of which are essential goods,” Mehdi Mirashrafi was also quoted as saying by ILNA.
The official noted that with the measures recently taken by the government, clearance procedures have been eased to reach 100,000 tons per day.
According to Mehrdad Jamal Orounaqi, the deputy head of the Islamic Republic of Iran Customs Administration, currently 4.6 million tons of essential goods are stored at customs terminals and ports of entry, in addition to 1.8 million tons on vessels near docks waiting to be unloaded.
From the total of 4.6 million tons, 3.4 million tons are stored at Imam Khomeini Port, 289,400 tons at Shahid Rajaei port, 173,100 tons at Chabahar Port, 4,700 tons in Astara Port, 97,300 tons in Fereydounkenar Port, 70 tons in Bandar Lengeh Port, 3 tons in Shahid Bahonar Port and 82 tons in Khorramshahr Port.
Corn has the highest volume among all the stored essential goods with 1.9 million tons followed by barley with 878,100 tons, soybeans with 745,200 tons, oilseeds with 473,700 tons, unprocessed vegetable oil with 375,000 tons, wheat with 69,300 tons, rice with 38,600 tons and sugar with 105,100 tons.
Imam Khomeini Port: Main Hub of Essential Imports
Boasting 40 wharfs, 140 kilometers of railroads within its premises and equipped with the latest loading and unloading facilities, Imam Khomeini Port located in southwest Iran is the hub of essential goods imports.
Close to 90% of Iran’s demand for livestock feed raw material as well as 80% of grains are imported through this port.
In the fiscal 2019-20, the port handled nearly 15.7 million tons of essential goods.
A total of 4.14 tons of essential goods have been unloaded in Khuzestan Province’s Imam Khomeini Port since the beginning of the current Iranian year on March 21, showing a 3% rise compared with the similar period of last year, the news portal of the Ministry of Roads and Urban Development reported recently.
These commodities, which included wheat, barley, oilseeds, sugar, soya, rice and vegetable oils, were delivered by 73 vessels.
During the same period, of the 3.62 million tons of such goods transported inland from the port, over 3.24 million tons were forwarded by trucks and 379,000 tons by railroad.
Imam Khomeini Port saw the inauguration and sod-turning ceremonies for 18 investment and development projects worth 15.79 trillion rials ($63 million) in late 2020.
The event was attended by Minister of Roads and Urban Development Mohammad Eslami and CEO of the Ports and Maritime Organization of Iran Mohammad Rastad, Fars News Agency reported.
Among the most important inaugurated projects were four multipurpose warehouses, oil product reservoirs and a mechanized grain terminal.
Two projects for the construction of edible oil refineries also started on the same day.
Other projects included the overhaul of some of the wharfs and railroads inside Imam Khomeini Port premises, dredging operations, fixing of breakwaters and providing proper lighting for the port’s launchers.
$5.5b Allocated for Essential Goods Imports
The Central Bank of Iran has supplied $5,542 million in subsidized foreign currency at the rate of 42,000 rials per US dollar for the import of essential goods since the beginning of the current Iranian year (March 21).
Latest data released by CBI show it has procured $1,218 million for the import of corn, $883 million for oilseeds, $580 million for barley, $1,097 million for unprocessed vegetable oil, $483 million for soymeal, $225 million for wheat and $130 million for other essential goods.
Also known as necessity goods, essential goods are products consumers will buy, regardless of changes in income levels.
A total of $926 million were also provided for the Health Ministry to import pharmaceuticals and their raw materials over the period.
As per the decision by the Economic Headquarters of the government, a total of $6 billion at the rate of 42,000 rials per US dollar are to be allocated for the supply of essential goods during the first half of the current fiscal year (March 2021-22).
Of the total sum, $4.5 billion will be offered to import corn, oilseeds, unprocessed vegetable oil, soybean meals, barley and wheat, and $1.5 billion to import pharmaceuticals and medical equipment.
Pile-Up at Ports Worsens as Truckers Refuse to Drive to South
The volume of piled-up essential goods at Iran’s 11 commercial ports equals the capacity of 210,000 trucks. However, truck drivers are reluctant to head for southern ports and this has aggravated the critical conditions regarding the clearance of these commodities and increased the risk of their spoilage under the high summer temperatures.
According to the Ports and Maritime Organization of Iran, a total of 4.5 million tons of essential goods purchased by the government to regulate the market of strategic goods, including wheat, corn, barley, soybean, rice, sugar, raw vegetable oil and oilseeds, are now stuck at ports. In addition, 40 vessels are waiting at the ports to unload their cargo of essential goods.
The Persian daily Etemad has surveyed the causes hampering the inflow of goods from ports, despite the pressing need to address the shortage of essential goods.
Unlike many large countries, road transport is the dominant mode of transportation for both passengers and cargoes in Iran. Rail transport accounts for 42% of transportation in the US compared with the roads’ share of only 28%.
In Europe, the share of rail transport ranges from 15-30%. In Central Asian countries, China and Russia, railroads constitute 70% of the transportation share.
In Iran, as per the Sixth Five-Year Development Plan (2017-22), the share of rail transport is projected to increase to 30% by March 2022.
The disproportionate distribution of railroads without prioritizing the linking of freight sources and the persistence of flaws in productivity parameters due to a lack of signaling equipment throughout the rail network and consequently the slow speed of trains are among the main reasons behind the low productivity of railroads in Iran.
All these factors lead to the fact that rail transport is perceived as economically unviable and therefore owners of freight prefer road transport. On the other hand, Iranian ports and hinterlands have not been equipped with rail infrastructures.
Truck drivers have to grapple with a number of challenges. Due to the rising price of tires and other parts, they opt for routes that inflict less physical depreciation and damage on their trucks. They say they can’t afford the maintenance of vehicles because government-mandated transportation fees are not being calculated fairly.
Many trucks are stuck in garages due to their worn-out tires and the drivers’ financial inability to repair them.
Navid Kheirmand, who’s active in the field of road transport, says essential goods are chiefly distributed from Imam Khomeini Port and all routes leading to this port exert double pressure on trucks and increase transportation costs.
Unsafety of the roads and even the terminal itself, lack of accommodation facilities, long queues at warehouses and disorder stemming from the absence of police supervision discourage drivers so they prefer to avoid the port.
Noting that loading cargo from Bandar Abbas is more appealing to drivers, he added that government officials can transfer a part of essential goods to Bandar Abbas to accelerate their discharge.
Saeed Alam, another road transport worker, says fundamental problems have resulted in the pile-up of goods at Imam Khomeini Port, including lack of supervision over transportation fees, particularly clinker shipments which is the main freight of trucks from this port, rough and dangerous mountain roads of Khuzestan Province, discrimination between native and nonnative drivers in all stages, particularly at the time of loading, and road insecurity that is thankfully being resolved by the police.
