At present, ships prefer to unload and load Iranian cargo at Emirati ports.
The movement of each container between Bandar Abbas and Dubai incurs an additional cost of $500 for Iran; 1 million containers belonging to Iran are being unloaded and loaded in Dubai every year, generating $500 million for the UAE. Iran loses this large sum not to sanctions, but due to the inefficiency of its ports, Masoud Daneshmand, a member of the board of directors of the Association of Transport Companies, says.
“Iran’s nuclear agreement will be reached sooner or later, but the repercussions of sanctions on the country’s trade and the delay they have caused in establishing infrastructures are significant. Over the years, Iranian ports should have prepared their infrastructures to receive vessels, especially container ships, according to international standards,” he was quoted as saying by the Persian economic daily Jahan-e Sanat.
According to the official, ports such as Shanghai, Hong Kong and Singapore handle 50 containers per hour and the Persian Gulf ports like Jebel Ali handle 25 containers per hour, while Bandar Abbas, which is Iran’s top container port, handles 12 containers per hour.
Unreal Port Tariffs
Let’s assume that the sanctions are lifted today, yet shipping lines will face an array of problems while entering Bandar Abbas or other Iranian ports, the first of which would be port delays,” he said.
Noting that port delays drive up costs for shipping lines, Daneshmand said, “Another problem with Iranian ports is the high port duties and charges they apply. At present, Iran’s port charges and tariffs for container ships are more expensive than those of other regional ports. Ports should modify their tariffs instead of offering temporary discounts.”
According to the official, Iranian ports’ tariffs are twofold higher than those of Jebel Ali Port, while operations of Iranian ports are carried out at a much slower pace than those of regional countries, which inflict higher shipment costs on ships.
“Lack of a detailed schedule for the movement of containers from Iranian ports to other destinations is another key issue. The time of departure from Iranian ports remain unknown to vessels, whereas it is vital for ships to know the exact date of their departure and arrival to the next port. The whole thing disrupts shipping lines’ operations and imposes additional costs. Therefore, ships opt for Emirati ports, which has nothing to do with sanctions,” he said.
“Absence of integrated management in Iran’s ports has led to high port costs. The structure of Iran’s ports administration should change; we need to avail ourselves of port management models of other countries. For example, we need to delegate the management of ports’ container department to companies. Those companies will then set the ceiling on tariffs and the level of services in a fully competitive environment.”
On the revival of the Joint Comprehensive Plan of Action and the prospects of foreign vessels entering Iranian ports, Daneshmand said, “You cannot blame the loading and unloading of Iranian cargo at UAE ports on sanctions. Measures to skirt the sanctions are usually taken at the port of origin; reloading and unloading of Iranian goods in the UAE reduce the likelihood of upending sanctions. Companies in the UAE comply with rules on sanctions. By going to Emirati ports, we actually add one more control and supervisory stage. The fact is that the loading and unloading of Iranian goods in UAE ports, thanks to the lack of discipline and Iranian ports’ unrealistic tariff rates and delays.”
‘Blame Sanctions, Not Ports’
Masoud Polmeh, chairman of the Shipping Association of Iran, rejected the comments made by Daneshmand, claiming that Iranian ports and Bandar Abbas in particular, have the capacity to handle containers of up to 14,000 TEUs.
“Iranian ports do have inefficiencies but their infrastructures and equipment allow them to receive liners and compete with a port like Jebel Ali. The concept of a liner refers to regular services provided at certain dates. It can include a ship with a capacity of 100 TEUs or one with a capacity of 14,000 TEUs. International shipping lines, large or small, refused to enter Iranian ports fearing sanctions,” he said.
According to Polmeh, Jebel Ali Port has been the container hub of the region for a long time; naturally container ships that used to receive services from Iranian ports shifted their destination to that port after the imposition of sanctions.
“Even before the sanctions, some international shipping lines did not sail to Iran; a significant amount of their activities were carried out in Jebel Ali, so they didn’t see the need to enter Iranian waters. They had the option to extend commercial services to Iranian ports through feeders and transship services,” he said.
Acknowledging that sanctions against Iran generates $500 million for the UAE ports because most of the goods that are imported to Iran through the UAE are initially considered Emirati imports, he said freights sent to Iran undergo changes in their documents and containers.
“Sanctions did not allow us to attract new investments. Foreign investors were not willing to invest in Iranian ports. Manufacturers of port equipment, who are mostly international companies, did not sell any of the equipment we needed directly. Sanctions held back Iranian ports’ activities and so they were unable to prepare themselves for the berthing of heavy ships,” he added.
Polmeh noted that the implementation of Shahid Rajaee port development plan (Phase III) coincided with the second round of sanctions.
“Iran managed to overcome sanctions in many areas, including logistics. But part of the problems comes from the fact that Iran’s project partners prefer their interests over ours,” he concluded.
