14 March 2007

BEIRUT: Business at the Port of Beirut is beginning to flourish, just as the local economy is grinding to a halt. This seeming contradiction is explained by transshipment - more and more goods bound for other countries are changing vessels in Beirut.

The amount of cargo handled by the port in February nearly doubled from February 2006, rising from about 39,701 containers last year to some 72,000 containers this February. In January, the port welcomed 82,680 containers, up from 51,098 containers in January 2006.

"We are handling more cargo than we thought we'd be achieving any time soon," Port Authority of Beirut president Hassan Kraytem told The Daily Star on Tuesday. "These are great numbers. They show that the Port of Beirut and Lebanon can be a center for the region."

Despite the two-month Israeli blockade of the port during last summer's war, the world's largest shipping firms stepped up their transshipment traffic here. France's CMA CGM, the world's third-largest shipping company, inked a three-year deal in November 2006 to make the Port of Beirut its regional hub. Mediterranean Shipping Company (MSC), number two in the world, has used Beirut as a transshipment hub for years.

"We increased our volume quite nicely - MSC is growing everywhere," said Mohammad Fakhreddine, a partner in MSC's Lebanon operations.

Each week, three mother vessels - the largest class of freighter - unload their wares in Beirut for transfer. One MSC vessel visits weekly from the Far East, while one MSC and one CMA CGM vessel arrive from Northern Europe.

Shipping giants are growing fond of docking here due to the fortuitous geographic location and the quality facilities and low costs, said Elie Zakhour, president of the International Chamber of Navigation in Beirut.

Transshipment volume remains unaffected by the ongoing political squabbles here, although they are stifling imports of goods and, as a result, the total cargo volume at the port.

"We are at the minimum" of imports for the domestic market, said Fakhreddine. "We are now at the bottom of our input."

Due to transshipment, the port is projecting a record year of over 1 million containers, which would shatter the previous annual record of 594,000, set last year despite the two-month summer hiatus.

Traffic at the port is expanding so much that shipping companies need more space and are pressing the state to expand the container terminal.

"Other companies would like to use Beirut as a hub, but unfortunately [there's] no space," Zakhour said.

The Port Authority just hired a consulting firm to prepare a study on enlarging the terminal, but the study will take seven months and Kraytem termed the expansion a three-year project, saying: "We're using every possible square meter that we have."