Post-Sanction Shipping Growth in Iran

20 Jan 2016

Iran Shipping Companies

Import and export business opportunities in Iran have finally got under steam since the lifting of sanctions by the UN, the US and EU at the weekend.  Already, Iran has seen some of the biggest freight shipping companies dropping anchor or planning stop offs in Iran’s harbours for the first time in many years.  Bandar Abbas and several other key ports in Iran look set to play a key part in re-connecting Iran and Central Asian trade partners to international markets via surrounding oceans.

Recently, the second-largest freight shipping company by volume, the Swiss Mediterranean Shipping Co. SA, unloaded 300 containers of food and agricultural commodities at Bandar Abbas port.  CMA CGM SA, the third-largest line, is also now operating sea freight to Iran.

The Swiss freight forwarders were on a round trip between China and the Middle East, demonstrating the potential for increased access to overseas markets for Iranian companies wishing to expand their horizons and find new markets.

 

The Wall Street Journal reported Lars Jensen, chief executive of SeaIntelligence Consulting in Copenhagen as saying: “With sanctions gone, everyone expects there to be quite a surge for containerized goods. They see this as a national strategic area for them. There’s an overall sense of great optimism about container shipping in the region.”

Now that Iran has renewed access to global payment systems and major insurers, international project management is once more possible, given the reduced risk for importers and exporters.  Now, international banks will be able to re-establish ties with the Central Bank of Iran and Iranian companies.

If container shipping via Iran fell by nearly half, in the few years between 2011 and 2015, then with renewed business optimism within Iran and many foreign countries seeking new outlets, the forthcoming years could mean halcyon days for those companies moving swiftly to capitalise on new trade partnerships.  The recent 2.8 million 20-foot equivalent units, or TEUs—a common shipping measure— referred to by global shipping association Bimco could double or even treble in the next few years.

Whilst Mr. Jensen cautions that Iran’s container shipping growth could be slow to begin with, this may also under-estimate some of the background negotiations going on furiously in the back-ground in the lead up to the lifting of sanctions.

Oman and the United Arab Emirates may see a dip in their activity, losing out to Iranian ports once logistics companies appreciate some of the incentives offered by the likes of Bandar Abbas.  International freight forwarders operating in Iran will likely see a flood of enquiries as international trade partners seek to cut their costs and shipping times.

MSC, for instance, already plans to stop here in its New Falcon service, which operates a 21 day route from China, through Singapore, India, Sri Lanka, UAE and 11 other ports, including Iran.  Their spokeswoman, Fiona Jackson, commented that: “Iran is really only opening up, and as things progress, volumes should increase…”  

The eased sanctions happily coincide with Iran’s National Iranian Tanker Company’s (NITC) 60th anniversary.   Representatives from the international shipping world are already being invited to attend its celebrations in Tehran this month, which offers golden opportunities for the building of trading and logistics partnerships for companies such as the White Rose Group, which our teams are excited about.

Ali-Akbar Safaei, NITC’s Managing Director in the Tehran Times was quoted as saying that Iran will act as a “driving force” in the world's overseas shipping as a maritime and overland transport hub with nine ports and strong regional ties.

Ship Technology also commented this week that Iranian shipping companies now have increased business opportunities “beyond Asia”, with the remaining territorial limitation on entry of Iranian ships into US ports.

 

Sea freight could see an additional injection of fuel with announcements made from a Chinese bank about their willingness to invest in Iran’s shipping capacity.  They could offer  $5-billion credit to develop Iran’s shipping fleet, according to the Iranian Minister of Cooperatives, Labor and Social Welfare, Ali Rabiei.

 

Both the Islamic Republic of Iran Shipping Lines and the NITC stand to benefit.  Currently, the NITC’s fleet of 62 tankers can carry over 130 million tons of crude and oil by-products and 15.4 million tons of goods and products.  Estimates of potential increases of oil exports have been put at between 500,000-600,000 barrels per day in the next year to eighteen months.  Extra capacity investment offers even greater scope for exports and revenues which will benefit Iranian companies, creating more jobs for our people.

 

Rabiei said that projects in Iran’s oil industry sectors will require $180 billion in funds in the next six years, but given negotiations with the Chinese, Russians and European companies in recent months over transport and oil investments, Rouhani’s plans to achieve an economic growth of 8 percent could be realistic. Rabiei continued that “for each 1 percent of economic growth, we need $31.25 million worth of investment.”  We look forward to bringing you updates on progress here at the White Rose Group.

 

Should you have any questions in regard to expanding your overseas business interests, our expert shipping team would be glad to discuss your requirements.  Please leave us details of your enquiry on our contact form or telephone: +98 (21) 22925880-3; alternatively, Fax: +98 (21) 22925884



Skontaktuj sie z nami
For more information on any of our services, please fill in
our contact form.
The White Rose Group looks forward to hearing from you.