Domestic Economy

Shipping Industry Hoists Sails

Shipping Industry Hoists SailsShipping Industry Hoists Sails

Shipping lines are preparing to resume services to and from Iran en masse ahead of the expected lifting of sanctions against the country.

Several major shipping lines have already resumed services. France’s CMA CGM, the world’s third largest container shipping group, became on Thursday the latest to call on Shahid Rajaee, Iran’s biggest container port at the mouth of the Strait of Hormuz.

It arrived a day after Taiwan’s Evergreen, the world’s fifth container line, resumed services by sending Ever Legion to the Iranian port near Bandar Abbas. The Singapore-flagged container ship reportedly headed to the Saudi port of Dammam after loading and discharge operations, APA reported.

Italy’s largest container terminal operator, Contship Italia, also signed a memorandum of understanding with Iran’s biggest port company Sina Port and Marine to resume trade.

Korean carrier HMM (Hyundai Merchant Marine), resumed services to and from Shahid Rajaee Port in Bandar Abbas even before the conclusion of nuclear talks with a total of seven vessels of 6,300-6,800 TEU (20-foot equivalent units).

The two Taiwanese carriers, Hanjin Shipping and Yan Ming, will this month add Bandar Abbas to their respective route networks between the Far East and the Middle East, according to a report by ShippingWatch.

> Ship-Owners See Opportunity

The expected lifting of economic sanctions against Iran over its nuclear energy program has sent a ripple of activity and planning through the shipping industry.

DP World's chairman Sultan Ahmed Bin Sulayem headed a delegation to Tehran, as has Diego Aponte, CEO of the world's second-largest container carrier MSC, a close partner of Maersk Line in the 2M Alliance.

Maersk recently said in a statement that the carrier sees great potential in Iran, but has indicated that it is unlikely to take definitive action until the sanctions are officially lifted.

Earlier this week, head of Iran’s Ports and Maritime Organization (PMO) Mohammad Saeidnejad said 11 container shipping groups have opened offices in Shahid Rajaee Port.

Iran relies on container and bulk carriers to transport much of its basic needs, including food, medicine and other consumer goods. A majority of international container carriers had to abandon the Iranian market in 2012-2013 after the sanctions were tightened even further.

US and Europe’s blacklisting of Iran’s leading ports operator, the Tidewater Middle East Maritime Company, impaired commercial maritime traffic, curbing the otherwise legal trade.

Last month, the official news agency IRNA said the Islamic Republic of Iran Shipping Lines and Tidewater had been removed from the US list of companies designated for sanctions and assets freeze.

The nuclear accord reached on July 14 in Vienna between Iran and six world powers – namely the US, France, Russia, China, the UK and Germany – is expected to lift the economic sanctions imposed by the US, EU and the UN Security Council against Iran in exchange for Iran limiting its nuclear program.

> Bandar Abbas Container Throughput

The Business Monitor Research Group forecast that container throughput at Bandar Abbas will expand by 6.5% year-on-year in 2015 to reach 1.7 million TEU.

"The port has a long way to go to reclaim its previous milestone of 2.8 million TEU, which it recorded in 2011, but we believe that recovery is underway," Reuters quoted Michelle Berman, head of operational risk at BMI Research.

In its 5-year forecasts to 2019 of Iran’s shipping sector, Business Monitor International projects that annual container throughput at Bandar Abbas will average growth of 7.0% per annum. This would take 2019's handling figure to 2.22 million TEUs.

The forecast average growth rate is considerably less than the 13.0% average between 2007 and 2011, and is indicative of the continuing structural challenges to economic recovery, the report adds.