RLL Container Report - 15 March 2017
From: John Keir, Ross Learmont Ltd. Email: john.keir@telia.com Date: 15 March 2017
Iran rolls out the Persian carpet (Part Two).
At the same time as Iran improves transport links with Central Asia and Siberia, Teheran has its eyes firmly fixed on a very large potential market of over 200 million customers on its doorstep comprising Western Russia, Belarus, Ukraine, the Baltic Republics and Poland. As with Central Asia, Iran has a large potential clientele for its agricultural products within a radius of less than 3,000 km from Astara. This translates to a journey time by refrigerated block trains of a few days from the border crossing between Iran and Azerbaijan to Moscow. All other major producers of winter fruit and vegetables will face far longer delivery times and much higher transport costs compared with competitor suppliers situated on the southern shore of the Caspian Sea.
With a young and rapidly growing population of 77 million, the government in Teheran has to find suitable employment for all those entering the labour market. The country will invest heavily in car production but car factories no longer employ vast numbers of workers. Instead, the labour-intensive agricultural sector will be relied upon to absorb much of the youthful workforce, which wishes to enjoy all the delights of a modern consumer society. The country is blessed with fertile, arable lands: some 28.3% of Iran’s territory is suitable for agricultural production. With a hot, dry climate, Iran has long, hot, dry summers and short, cool winters. The country is located between the subtropical aridity of the Arabian desert areas and the subtropical humidity of the eastern Mediterranean area.
All that will be required is a fleet of refrigerated containers plus a number of diesel generators to transport the fruit and vegetables from farms around the southern Caspian Sea to the border crossings in the North-East with Turkmenistan and in the North-West with Azerbaijan. Coincidentally, Iran’s leading shipping line, IRISL is currently taking delivery of larger container vessels with a capacity of 14,500 teu, including a modern fleet of refrigerated containers. The Iranian government could simply add a few hundred more reefer containers to the IRISL order with Chinese box manufacturers and the equipment could be coming off the production line within weeks.
The advent of the new IRISL vessels will allow Iranian horticulture exporters quickly to develop oversea markets via the port of Bandar Abbas, from where sailing times to prospective markets in the south, east and west will be relatively short. The opening up of rail lines to neighbouring countries means that Bandar Abbas becomes a natural intermodal hub serving clients well to the east, north and west of Iran’s borders. Volgograd, for example, lies 3,200 km from the major deep-water port in Rotterdam. However, it is the same distance down to Bandar Abbas, the difference being that export cargoes to the Indian Subcontinent, the Far East, the east coast of the African continent will reach the receiver far more quickly and probably more cheaply. The port of Bandar Abbas is resuming its ancient role as a major trading post of the Persian Gulf. Politics may change but geography is permanent.
John Keir, Ross Learmont Ltd.
15 March 2017
Copyright ©, 2017, John Keir