Iran Port Throughput Rises on Eased Sanctions

EghtesadOnline: Iran’s ports are clearly benefitting from the relaxation of sanctions on a tonnage basis year-on-year, though those gains have yet to materialize for the container trade.

News ID: ۷۳۶۸۰۴

10 September 2016

Year-to-date container volumes are disappointing, falling 0.4% year-on-year to 1.67 million 20-foot-equivalent units, however data show container traffic surged in recent months, rising nearly 16% in August, 19.5% in July and 14% in June, according to Iran’s Ports and Maritime Organization.

That growth is expected to continue into the future, as a confluence of benefits is realized from the relaxation of sanctions.

“Within the coming five years, Iran can expect to expand its throughput to around 8 million TEUs per annum, equating to 25% growth on an annual basis,” Mehdi Rastegary, the head of research and development with Sina Ports and Marine Services of Bandar Abbas, told JOC Group Inc., a US-based provider of global intelligence for trade, transportation and logistics professionals.

The reestablishment and development of trade ties with the European Union, China, Russia, India and the United States will clearly be the key driver of growth, together with demand from a huge and growing market of more than 80 million people.

Iran also sees itself as a shipping gateway for several underdeveloped neighboring countries, including Afghanistan, Iraq and several Commonwealth of Independent States members.

Iran was an important driver of growth in the global container trade from 2006 to 2010, but a tightening of sanctions at that time quickly eroded its growth.

Sanctions imposed against the Islamic Republic were lifted mid-January as part of a landmark deal the country signed with world powers last year, according to which it agreed to limit the scope of its nuclear program.

Throughput at Iran’s main port, Shahid Rajaei on the Persian Gulf, which is responsible for more than 80% of the total container trade, fell from a peak of 2.8 million TEUs in 2011 to 1.82 million TEUs in 2014, reports Financial Tribune.

During 2010-14, the port fell more than 40 places in the ranking of the world’s top container ports from 44 to 87.

Iran’s ports currently have the capacity to handle 5.34 million TEUs annually and there are a number of capacity expansion projects in the pipeline, including second and third phase projects at Shahid Rajaei and construction of new terminals at Negin Island in Bushehr and Chabahar.

Throughput at the country’s 28 ports stood at 211.5 tons through the end of August, a rise of 26.9 million tons, which show a 16.3% rise compared to volumes handled in the first eight months of 2015.

Oil volumes, accounting for nearly two-thirds of total throughput, are up by more than 31% year-on-year to 122.38 million tons on a year-to-date basis.

Total cargo volumes handled at the ports in August rose by 24.5% to 26.34 million tons, with oil accounting for 17.3 million tons, up 35.2% year-on-year and non-oil products up 8.1% year-on-year.

Indian Prime Minister Narendra Modi said in May India would invest $500 million to develop the strategically important Chabahar Port close to Iran’s border with Pakistan.

The development will open a transit route to Afghanistan and Central Asia for Indian goods and products, avoiding the land route through Pakistan.

“The bilateral agreement to develop the Chabahar Port and related infrastructure, and availability of about $500 million from India for this purpose is an important milestone. This major effort would boost economic growth in the region,” Modi said at the time of the announcement.