High Transport Costs Impede Iranian Exports

Transportation costs account for 12% of the final prices of goods in Iran while the global standard stands at 6%, a board member of Tehran Chamber of Commerce, Industries, Mines and Agriculture said. “High transportation costs have become a major obstacle for Iranian exporters,” Fatemeh Moqimi was also quoted as saying by Exim News, emphasizing that the government needs to come up with more efficient measures to address the challenges in the sector. “This is while fuel prices in Iran are the lowest in the region–$0.18 per liter,” she said. The country’s dilapidated road fleet also needs to be replaced with fuel-efficient, low-cost trucks. According to a report by the Roads Ministry, there are about 120,000-130,000 vehicles in Iran’s cargo truck fleet with an average age of over 25 years. The country needs 15,000 new trucks each year to renovate its fleet. The government has been offering considerable incentives for replacing old trucks, financing up to 80% of the vehicle’s price. However, Moqimi believes that easing imports of foreign trucks, revising regulations and empowering the private sector could prove more effective in boosting the transportation sector.