There is broad consensus on one point in the fierce argument over the construction of new ports: Israel must urgently increase its ports' capacity, especially for the new large container ships of 15,000 TEU and greater capacity. 400 of these ships are due to come into service in the coming years, but Ashdod Port Company Ltd. and Haifa Port Company Ltd. cannot handle anything larger than a 9,000 TEU container ship.
Shipping and Ports Authority director general Captain Yigal Maor describes the situation as a "maritime blockade". He says that, within a few years, Israel will be cut off from major shipping routes, and imports and exports will have to be handled via feeder lines or via transit through large eastern Mediterranean ports such as Piraeus in Greece and Port Said in Egypt. The extended transport times will raise the cost of goods.
The need to use feeder lines will raise the cost to importers and exporters by average of $300 per standard container (TEU), compared with direct shipping. Feeder lines already handle 700,000 TEU a year for Israel, raising the price of goods by NIS 1 billion.
A study that Maor presented at a conference of the Marine Transport Users Association in Israel states that the situation will be much worse than previously thought. Data cross-referenced by three leading maritime research companies are worrying: container traffic in the east Mediterranean is projected to rise to 10 million TEU by 2020, while ports' capacity will only reach 8 million TEU. By 2017, the region's ports will be operating at a nominal capacity of 136%, creating monumental congestion, forcing ships to unload at more remote locations in the central and western Mediterranean.
Shipping from Malta to Israel takes two weeks, double the time from Port Said. The extra feeder cost could rise from $300 to $800 per TEU, and there is no assurance that the remoter ports will agree to give priority to feeder lines to Israel.
However, these forecasts are actually over-optimistic. The researchers assume that new ports at Ashdod and Haifa, each of which are supposed to increase handling capacity by 1.1 million TEU, will begin operating in 2018 and 2020. In practice, one port will be operational in 2019 in the best case.
The situation is exacerbated by the situation in Egypt, where plans to expand Port Said's port capacity by 5.5 million TEU are frozen because of the uncertainty caused by the Arab Spring. "The masses who thronged Tahrir Square screwed our imports and exports," said Maor.
Published by Globes [online], Israel business news - www.globes-online.com - on January 14, 2014
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