SearchIran's container trade forecast to grow 25 percent annually | JOC.com

Iran's container trade forecast to grow 25 percent annually | JOC.com...
joc.com 02/11/2015 Import-Export

Keywords:#2015, #Abadan, #Afghanistan, #Anzali, #Astara, #Bandar_Abbas, #Bushehr, #CEO, #CMA, #CMA_CGM, #Chabahar, #China, #Dubai, #EU, #France, #Gas_Exporting_Countries_Forum, #Germany, #Government, #Hanjin, #Imam, #Imam_Khomeini, #India, #International_Atomic_Energy_Agency, #Iran, #Iran_Shipping_Lines, #Iranian, #Iraq, #Islamic, #Islamic_Republic, #Islamic_Republic_of_Iran, #Islamic_Republic_of_Iran_Shipping_Lines, #Italy, #Joc.com, #Joint_Comprehensive_Plan_of_Action, #Khomeini, #Khorramshahr, #Korea, #Maersk, #Mediterranean, #Negin_Island, #OPEC, #Organization_of_Petroleum_Exporting_Countries, #Persian, #Persian_Gulf, #Russia, #Shahid_Rajaee, #South_Korea, #Sultan, #Tehran, #Total, #U.N, #WTO, #World_Trade_Organization

By Turloch Mooney, Senior Editor, Global Ports | Nov 02, 2015 9:59AM EST
Container throughput at Iran’s ports should grow by up to 25 percent annually over the next half decade as a confluence of benefits are realized from the expected relaxation of sanctions, a senior Iran-based industry researcher and commentator told JOC.com.
“Within the coming five years, Iran can expect to expand its throughput to around 8 million 20-foot-equivalent units per annum, equating to 25 percent growth on an annual basis,” said Mehdi Rastegary, head of research and development with Sina Ports & Marine Services, Iran’s largest terminal operator, based in Bandar Abbas.
Iran has been subject to varying levels of U.N., EU and U.S. sanctions due to its nuclear program, but a significant portion of those sanctions are set to be relaxed following the agreement reached in July between Iran, the EU and the ‘P5+1’ countries (U.K., France, Germany, U.S., China and Russia).
The agreement was formalized in the Joint Comprehensive Plan of Action under which sanctions are to be withdrawn in a phased manner beginning in the first half of 2016 and conditional on certain actions by the Iranian government and verification by the International Atomic Energy Agency.
Iran was an important driver of growth in global container trades in the period from 2006 to 2010, but a tightening of sanctions at that time quickly eroded its growth and impact on global volumes. Throughput at its main port, Shahid Rajaee on the Persian Gulf, which is responsible for more than 80 percent of the country’s total container trade, fell from a peak of 2.8 million TEUs in 2011 to 1.82 million TEUs in 2014. The port fell more than 40 places in the ranking of top global container ports, from 44 to 87, from 2010 to 2014.
Total container throughput in fiscal 2014-15 expanded 10.6 percent year-over-year to 2.45 million TEUs. However, throughput in the first half of the current fiscal year is down by around 10 percent, said Rastegary.
Current demand is mainly around gateway business but the termination of sanctions is expected to spur growth in transshipment volumes to westbound ports in the Persian Gulf, he added.
The re-establishment and development of trade ties with the EU, China, Russia, India and the U.S. will clearly be the key driver of growth together with demand from a large and growing market of over 80 million people. Iran sees itself as a potential shipping gateway for several underdeveloped neighboring countries, including Afghanistan, Iraq and several Commonwealth of Independent States countries.
“Iran is moving towards becoming a global trade power. It is already an influential member of several important supranational economic organizations, including the GECF (Gas Exporting Countries Forum), the ECO (Economic Cooperation Organization) and OPEC (Organization of Petroleum Exporting Countries). The expectation is it will eventually join others, including the WTO (World Trade Organization),” said Rastegary.
Government policies and moves to attract more foreign direct investment are expected to grease the wheels for growth in container shipping. These plans include developing a value-added export sector to diversify the economy away from its reliance on oil and gas production, and creating special economic zones and free trade zones at port areas.
SEZs are being developed at Shahid Rajaee, Imam Khomeini Port, Bushehr, Mashahr and Astara, while FTZs are being developed at Chabahar, Anzali, Khorramshahr and Abadan.
“Development of the Iranian fleet in the post-sanction years will be a main driver of throughput at Iranian Ports,” said Rastegary. According to the chairman and managing director of the Islamic Republic of Iran Shipping Lines, Mohammad Saeidi, Iran will add 570,000 TEUs of containership capacity, 2 million deadweight tonnage of dry bulk vessels and 1.6 million deadweight tonnage of tankers by the year 2020.
A series of newbuild contracts is to be signed with yards in China and possibly South Korea as the country invests funds built up in overseas banks through trading during the sanctions era.
On a tonnage basis, containerized cargoes currently account for around 16 percent of the total throughput of Iranian ports and 25 percent of non-oil throughput.
Iranian ports currently have the capacity needed to handle 5.34 million TEUs per year, double current throughput levels. There are a number of capacity expansion projects in the pipeline, including second and third phase projects at Shahid Rajaee and construction of new terminals at Chabahar and at Negin Island in Bushehr.
Overseas interest in the post-sanction potential of the country’s shipping sector is rising. CMA CGM, Hanjin Shipping and Yang Ming have resumed calls at Bandar Abbas after most carriers dropped Iran from their networks in 2013-2014 when sanctions were tightened.
Contship Italia, Italy's largest container terminal operator, in August signed a strategic memorandum of understanding with Sina Port and Marine, Iran's biggest port company.
Diego Aponte, the CEO of Mediterranean Shipping Co., and Sultan bin Sulayem, chairman of DP World, the Dubai-based global container terminal operator, have also visited Iran recently, while Maersk Group has had people on the ground investigating investment opportunities in the country for some time.
A delegation from the Port of Antwerp visited in late October to look for opportunities to exploit relaxed sanctions.
Led by port alderman and port authority chairman Marc Van Peel, the group of petrochemical and shipping experts met with various ministries in Tehran, petrochemical organizations, and private companies. The exploratory mission was aimed at making contact with official bodies, the Belgian port said in a statement.
---Container throughput at Iran’s ports should grow by up to 25 percent annually over the next half decade as a confluence of benefits are realized from the expected relaxation of sanctions, a senior Iran-based industry researcher and commentator told JOC.com.---
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