The challenges of the shipping industry in Iran

Category: Blog Published: Tuesday, 29 January 2019 Print Email
The challenges of the shipping industry in Iran

1 - International economic sanctions
All sanctions currently applied by the United States against Iran and Iranian market, Europe and their allies are unprecedented in terms of the type and severity of the history of the maritime shipping industry.

The sanctions did not allow Iranian ships to raise the flag of the Islamic republic in ports of other countries, so the shipping company of the Islamic Republic of Iran had to rename the flag of the flotilla and register its ships in other countries such as Malta. The main reason for this action is to escape of taxes and additional charges imposed on the ship out of Iranian market, as well as some rigorous regulations regarding the occupation of flag-ship crew members that are imposed in some countries, including Iran, and the countries in question do not have such rules. Because most flotilla owners would like to register their ships in those countries, such countries as Malta and Panama and Cyprus will also flip their country's flag in all international bonds because of easy taxes rules.
2 - Exchange rate and its preparation from the free market
The problems of currency transfers, which have become a major dilemma for imports, have also reached the shipping industry in Iranian market, so that shipping companies have to sell their bills in bonds to the banks, and also to supply currencies. Go to the free market and provide the currency they need.
3. Depression in global markets
Given the global nature of the business environment, the maritime industry in Iranian market is more affected by global market conditions than other sectors. In the current situation, shipping companies are having trouble attracting funds and obtaining financial credits from banks.
4. Capacity surplus in the fleet of maritime transport
This surplus of capacity has affected the container trade and is currently witnessing a drop in rates on major routes, especially in Asia, Europe, which has reduced operational incomes and loss credit of shipping companies.
5 - Fuel price increase
Fuel costs include 30 percent of the cost of trading a ship in Iranian market. With a sharp decline in shipping rates and lower incomes, and on the other hand, rising fuel prices have been negatively affected by margin squeeze by shipping companies.
6 - Unwillingness of credit and financial institutions
For lending and facilities in the maritime sector over Iranian market, due to the vague outlook of this section not only for marketing in Iran and also for global marketing and practicing this important industry, the consequences of these problems are the reduction of the BDI Indicator Index (BDI) index.
7 - High port costs compared to other Persian Gulf ports
For shipwrecks in Iranian market ports, there is also a large upstream cost to shipping companies and ship owners out of Iranian market, as a result of the inability of the ports and maritime organizations in Iranian market to increase port capacity and implement port projects from the organization's own revenues; which has made the organization supremacy as a commercial tool.
Implementation of the integrated maritime transport management plan and promotion of departmental policy management, providing equal facilities for public and non-state warships in the field of fuel not only out of global marketing but also for marketing in Iran too. In Iranian market, port fees and duties, research and development of marine information portals, and the evolution of technology and application had faced many difficulties. Information technology is another challenge facing the industry in Iranian market.
8-Bank sanctions
Banking sanctions also allowed the transfer of funds from shipping companies. Given the urgent need of this group of companies to exchange currency, banking sanctions played a more paranoid role than direct shipments.
9. Ban on container delivery to Iranian market ports
The boycott of the ban on shipping of container lines to Iranian market ports has caused many companies to face bankruptcy and the Islamic Republic's shipping company is the only carrier of container transport due to marketing in Iran. Although Iran has filed lawsuits in various international tribunals and has gained some successes, the chain-linking of sanctions did not help to improve the industry. Companies active in this field averaged 40% of their profits from foreign shipping. In other words, 40% of their profits were foreign exchange earnings.
Effects of lifting sanctions
With the lifting of sanctions, there is a dramatic change in maritime transport and international trade, as one of the main lines of our foreign trade was the European line that has been deactivated. Mohammad Hussein Dajarm stated that the direction and type of Iran's trade has changed due to the boycott, said: "Our transport situation is affected by foreign trade, and our European line, as one of the most important transportation lines, is about 48 years old. It has been inactive since its inception, and alongside that line of America, it was important from other lines that were deactivated almost from the early days of the revolution.
He said that with the abolition of sanctions, the foreign trade of Iranian market would return to normal, and its volume would increase dramatically. Dajmar said that once Germany was one of the first countries to interact with the trade, East India, such as China and India, has already been the first party of Iran, saying that with the abolition of sanctions, foreign trade has increased, and with active The European route in the context of maritime shipping will reach a large volume of foreign trade.

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