Major Trade With Iran Beginning To Open Up
The 1st international container ships began arriving in Iran this week after the nuclear accord between Tehran and 5P+1 UN world powers, though many shippers are still wary of resuming business until all of the Western sanctions are removed.
Iran depended on foreign shippers for much of its imports, but has relied more on land routes and its own commercial fleet, particularly since Y 2012, as layers of sanctions led to the exit of Western shipping firms, causing supply disruptions.
In one of the 1st signs of change, the world’s 3rd largest container shipping group, France’s CMA CGM, said it is restarting services to Iran in August.
The UK-flagged CMA CGM Andromeda container ship arrived in Iran’s Bandar Abbas port Thursday, ship tracking data showed.
CMA CGM declined further comment.
Taiwanese container line Evergreen, the world’s 5th biggest shipper, said it had also resumed calls to Bandar Abbas and its 1st vessel arrived at the port Wednesday.
Evergreen, one of the last lines to suspend direct calls in Y 2013, said its Iran service would “accommodate increased customer demand that we are experiencing”.
While Iran’s market represents a potential boon, EU and US officials say it is likely to be months before trade sanctions are removed and subject to Iran meeting its obligations under the nuclear accord reached last month.
“Once Iran fulfills its commitments, it will receive sanctions relief,” Samantha Evans, deputy head of the sanctions section at Britain’s Foreign Office, told an Iran business forum in London.
The trade sanctions have an explicit exemption for food, medicine and other humanitarian goods, but foreign shipping firms pulled out to avoid falling under any of the provisions.
The Y 2011 blacklisting of Iranian port operator Tidewater Middle East Co, which operates terminals including Bandar Abbas and major Grain terminal Bandar Imam Khomeini, has also discouraged foreign shipping firms. That designation is still in place, making trade complicated due to difficulties with making payments with designated entities.
Ship insurer Standard Club said this week: “Members should exercise caution if they are considering trading to Iran and carry out due diligence including seeking legal advice to ensure that they will not be in breach of sanctions.”
The world’s top container group Maersk Line said it was prepared to resume commercial container business in Iran “as and when international sanctions are repealed”.
Diego Aponte, President and CEO of the world’s # 2 line MSC, visited Tehran in July for informal meetings with logistics businesses and government officials. The company said it was “optimistic about future trading” in Iran.
BMI Research forecast container throughput at Bandar Abbas would expand by 6.7% Y-Y in Y 2015 to reach 1.7-M TEU (20-foot equivalent units).
“The port has a long way to go to reclaim its previous trade milestone of 2.8-M TEU, which it recorded in Y 2011, but we believe that recovery is underway,” said Michelle Berman, head of operational risk at BMI Research.
Stay tuned…
HeffX-LTN
Paul Ebeling
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