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French Version

Port of Beirut: safe harbor in a stormy economy

Booming transshipment business has helped facility to grow by leaps and bounds

The ceaseless shuffling of brightly colored containers at the Port of Beirut should be awe-inspiring to the citizens of a country where a pile of burning tires can close the international airport for several days and a bombing campaign can wipe out 15 years of reconstruction in a handful of weeks.

By any measure, June was a record month at the port. The 83,268 containers worth of traffic made last month the busiest ever. At more than $205 million, June's total revenues (port fees, VAT, and customs) were a full 78 percent higher than June of 2007. VAT and customs receipts through the port alone rose 84 percent to $195 million. Almost 7,000 cars were unloaded last month, up 129 percent from last June.

The Port of Beirut displays a degree of resilience in the face of Lebanon's ruthless political pendulum that few - if any - other sectors of the Lebanese economy can claim. This consistently good business getting even better due, in no small part, to transshipment contracts signed in recent years with two of the world's largest shipping firms.

The Mediterranean Shipping Co. (MSC) signed a transshipment contract with the Port of Beirut in 2005 and CMA-CGM signed a similar but smaller pact in 2006. Transshipment is when goods from Europe or Asia stop in Beirut and off-load their goods to smaller ships for a more localized distribution to regional ports. These new transshipment contracts are behind much of the unprecedented growth. According to Ammar Kanaan of the Beirut Container Terminal Consortium (BCTC) more transshipment contracts are currently being discussed.

CMA-CGM and MSC combined move 350,000 twenty-foot equivalent units (TEUs) through the port each year. The tangible benefits of these contracts are immense. Transshipment activities account for around 45 percent of the port's activity for the year 2007.

Although transshipments are growing as a percentage of the port's business, local importers remain a central component as well. The port saw a 21 percent increase in the amount of cargo for local consumption in June 2008 from the same month in 2007.

According to a BCTC press-release from December of last year, the number of TEUs handled by the terminal in 2007 was 947,265, representing a 162 percent increase compared to 2006 and 273 percent increase compared to 2005.

The contracts came as a result of several factors.

With deep water, the Port of Beirut is ideal for the big container ships that are the hallmark of a major port. The basin is over 1 million square meters, with room to grow as far north as the Beirut River.

A new quay, No. 16, for large containers is one of the most impressive in the region, with 15.5 meters of depth, 600 meters of length and a basin that is about 200,000 square meters.

This is not not to mention the mild weather and generally calm sea conditions that Beirut enjoys throughout the year.

Despite these assets, the facility's position as the preeminent port in this part of the world is not safe from competition. "The shipping business consists of fierce competition," said Hassan Qoraitem, head of the Port of Beirut. "The way we look at it, Beirut is in competition with every port in the region. Spain, Italy, Greece, Malta, Turkey are all in competition with us."

Providing consistent and rapid loading, unloading, and storage is vital to winning large contracts like that with MSC.

According to Qoraitem, the disruptive effects of this May's clashes, which ran roughshod over much of the economy, was no match for the thousands of containers that pass through the port each year.

Qoraitem told The Daily Star, "May's violence didn't have an effect on the port's business. In fact, things are all going for the better."

"The Port of Beirut simply offers good service," said Elie Zakhour, the head of the International Chamber of Navigation in the capital. "There are very few congestion problems and there is a maximum 24-hour wait to load or unload goods."

Port officials said employees unfailingly showed up to work, even during May's violence, because BCTC and the unions remain on good terms.

Consistent performance and a commitment to expansion that seem to be totally separate from the effects of the political instability that are so pervasive in other sectors of the economy have kept the port competitive.

However, the port is doing so much business that its infrastructure is having trouble keeping up. Zakhour's office said in a statement that new transshipment contracts still being discussed were meaningless given the port's already full work-load. He called for renewed work on the Terminal Port Project that once sought to expand the facility's capacity.

As much as the port's breath-taking expansion and rising prestige seem insulated from the political situation, it may not be entirely untouchable.

"The port's activities are not affected by the political situation or even the violence, and the transshipment activities continue to move forward" said Zakhour. "The politics are really no problem, but there simply has to be a stable security situation for a business to continue being successful."

Beirut 14-07-2008
The Daily Star

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