Jordan's only container port on the Red Sea has been capturing traffic to Syria, Israel and the West Bank as higher ocean freight costs give it an edge over closer but heavily congested Mediterranean ports, its CEO said on Tuesday.
Crises from COVID-19 lockdowns to Russia's invasion of Ukraine have fed into a global supply chain crunch, with one study this month showing one-fifth of the global container ship fleet was currently stuck at various major ports.
Given the current shipping backlog and ocean freight rates, Syrian and Palestinian importers are finding it less costly to get their cargos via Aqaba port than via Syria's Latakia and Israel's Haifa ports, Soren Jensen, the chief executive of Aqaba Container Terminal (ACT) told Reuters in an interview
"Some of our regional competitors... are seeing the consequences of high ocean freight demand and waiting time at the gate for customers," he said. "We don't experience that."
Total throughput at ACT, part of A.P. Moller-Maersk, was expected to rise between 5 and 8% this year above last year's 765,662 20-foot equivalent units (TEUs), which was down from a pre-pandemic 802,420 TEUs in 2019, Jensen said. The port has capacity to handle 1.3 million TEUs.
ACT has invested over $320 million over the last decade and has seen improved truck waiting lines and vessel port stays, with delivery of cargo decreased to a week, Jensen said.
Representatives of Latakia and Haifa ports did not immediately respond to a request for comment on cargo delivery times.
"We have been able to attract a lot more cargo going to Syria and the West Bank and Israel. That basically meant that our in-transit volumes have increased considerably," Jensen said, referring to goods shipped into Jordan for transfer elsewhere by road.
More Syrians are also using Aqaba to avoid strict scrutiny and delays encountered when they import on shipping lines directly to Syria, which is under Western sanctions, two senior businessmen and a leading shipper told Reuters.
The port is also hoping for a revival in business to Iraq, for which it was previously the main gateway, and which for decades received at least a third of the port's cargo.
Jordanian customs checks on Iraq-bound traffic have hampered the return of Aqaba port's transit business. Jordan reopened its main border crossing with Iraq in 2017 after years of closure following the takeover of the main highway to Baghdad by militants.
The Red Sea port's geographic location made importing goods via Aqaba to northwest Iraq more feasible than trucking goods from Iraq's Gulf port of Umm Qasr, he added.
"For northwest Iraq, if you discharge in Umm Qasr you have to truck it a longer haul than if you discharge in Aqaba. The major transformative move would be to reopen the gateway to Iraq," Jensen said.