IRIR Signs $70m Logistics Deal for Transportation of Essential Goods

EghtesadOnline: As per a deal signed between the Islamic Republic of Iran Railways and Tidewater Middle-East Company, the latter will be investing 16 trillion rials ($70 million).

News ID: ۷۵۰۴۳۹

15 July 2020

The deal involves the procurement of rolling stock and construction of grain terminals for the transportation of essential goods from Imam Khomeini Port in Khuzestan Province and Shahid Rajaee Port in Hormozgan Province to Aprin Logistic Center in southern Tehran.

Deputy Minister of Roads and Urban Development and Head of IRIR Saeed Rasouli and CEO of Tidewater Middle-East Company Hossein Zarei signed the agreement on Monday, Fars News Agency reported.

Tidewater will be providing 600 freight and container wagons for IRIR.

The two sides have also agreed to cooperate in the construction and operation of branch lines that extend from Iran’s national railroad network to the country’s southern ports of Imam Khomeini and Shahid Rajaee where grains and other essential goods will be directly unloaded from ships onto wagons and transported to local destinations across the country.

The agreement also aims to increase the share of railroad in goods transportation, environment protection, reduce fuel consumption and encourage private sector investment in rail projects.

Tidewater Middle East Co. is a major port operator in Iran founded in 1967.

Essential Goods in the Limelight

Amid sanctions and the mayhem created by the spread of the new coronavirus, the Iranian government has focused its attention on ensuring the sufficiency of essential goods.

Also known as necessity goods, essential goods are products consumers will buy, regardless of changes in income levels.

A total of 25.09 million tons of essential goods worth close to $15.5 billion were imported into Iran during the last fiscal year (March 2019-20) to register a 20.77% and 17.13% increase in weight and value respectively compared with the year before.

According to Spokesman of the Islamic Republic of Iran Customs administration, Rouhollah Latifi, this amount of essential goods’ imports accounted for 71% and 35% of the volume and value of last year’s total imports respectively.

“The imported essential commodities included wheat, sugar, corn, rubber, barley, processed tea, rice, different kinds of seeds, red meat, soybeans, pulses, paper, fertilizers and industrial machinery,” he was quoted as saying by ISNA.

“More than 6.6 million tons of essential goods have been unloaded at Iranian ports of entry since March 20 (the beginning of the current Iranian year), of which Imam Khomeini Port in the southern Khuzestan Province accounts for 4.1 million tons,” Ravanbakhsh Behzadian, a senior official with the Ports and Maritime Organization of Iran, said earlier this month, IRIB News reported.

Year to date, corn and wheat have been the country’s main imported essential goods: 2.6 million tons of corn and 2.1 million tons of wheat were unloaded at ports during the period under review, he added.

Behzadian noted that there are 3.6 million tons of essential goods in Iranian ports, the lion’s share of which is 1.9 million tons of corn.

Main Hub of Essential Goods’ Imports

Imam Khomeini Port is the main hub for the import of essential goods in Iran.

Located in the southern Khuzestan Province, Imam Khomeini port has 40 wharfs, 140 kilometers of railroads within its premises and is equipped with the latest loading and unloading facilities, according to Adel Deris, director general of Khuzestan Ports and Maritime Organization.

Last year (March 2019-20), some 3 million tons of goods were transported from this port using 53,000 wagons.

Close to 90% of Iran's demand for livestock feed raw material and 79% of grains are imported through this southern port.

A total of 922,000 tons of commodities were transported via railroad from Imam Khomeini Port to different destinations across the country during the first three months of the current Iranian year (March 20-June 20), which shows a 29% increase in the volume of transported goods compared with the similar period of last year, according to the director general of the South Railroad General Bureau.

“More than 260,000 tons of this amount pertained to grains, indicating a 126% hike YOY,” Abdolkarim Darvishzadeh was also quoted as saying by the news portal of the Ministry of Roads and Urban Development.

The main goods transported via railroad over the three-month period were essential goods, including corn, wheat, oilcake, charcoal and aluminum sheets.

The port was the second busiest port of Iran in the last fiscal year that ended March 19, 2020, after Shahid Rajaee Port, as it handled more than 44.15 million tons of commodities. The figure registered a 13.26% year-on-year increase.

Non-oil goods accounted for more than 29.45 million tons and oil products for over 14.7 million tons of the total throughput in Imam Khomeini Port, registering an 18.88% and 3.46% growth respectively year-on-year.

Iran's Biggest Container Port

A total of 1 million tons of essential goods were unloaded in Shahid Rajaee Port located in the southern Hormozgan Province since the beginning of the current Iranian year up until July 5 to register a 20% increase compared with the similar period of last year.

According to Director General of Hormozgan Ports and Maritime Organization Allahmorad Afifipour, the unloaded goods included vegetable oils, wheat, sugar, fertilizers and paper pulp.

He noted that a total of 20 vessels carried these essential goods to Shahid Rajaee Port over the period under review.

Located 23 kilometers west of the port city of Bandar Abbas, the capital of Hormozgan Province, Shahid Rajaee is Iran’s biggest container port.

Over half of Iran’s commercial trading is carried out at Shahid Rajaee that also accounts for over 85% of all container throughput in the country.

According to Mohammad Reza Rezaei-Kouchi, the head of Majlis Development Commission, Shahid Rajaee Port has a 6% share in the region’s total container throughput per annum.