By Tony Akleh
Beirut port was the regional trade hub before 1975, similar what Jebel Ali Port is today
The damage caused by the explosion at Beirut’s port on the evening of August 4 was immediate – and immediately apparent.
From the twisted, charred remains of the warehouses at the water’s edge to the capsized ferries, rivers of broken glass and shattered apartment buildings, the detonation of 2,700 tonnes of ammonium nitrate left a trail of destruction reminiscent of the munitions that have fallen on this city in decades past.
Then there’s the loss of life, which will inevitably rise from the 100 being reported on Thursday morning.
What will take longer to appreciate, though, is the economic toll the loss of the Lebanon’s biggest port will have on a country already reeling from the financial crisis that was already gripping the country.
Beirut port is one of the most important logistics hubs in the eastern Mediterranean, providing a strategic link between the markets of Asia, Europe and Africa.
Beirut Port in figures
For Lebanon, it is also an economic lifeline: according to the Beirut Port Company, it is the largest free shipping and clearance point in the country and deals with 82 percent of the country's imports and exports – and it absorbs 98 percent of all containers in Lebanon.
In terms of revenues, its four 24-metre-deep basins and 16 piers was able to generate $250 million in fees each year, while collecting almost 80 percent of customs duties and VAT.
First opened in 1894, Beirut Port was first used to import essential materials from the world and export it through Lebanese interior to the rest of the Middle East. Before the explosion, it had direct links to 56 ports on three continents and exported goods in cooperation with 300 ports around the world. Its silos had a capacity to store 120,000 tons of agricultural produce.
Now, though, Lebanon’s authorities are rapidly assessing both the physical damage and how best to redirect cargo vessels to other ports. It’s clear that few aspects of Beirut’s commercial shipping hub remain unaffected – whether the physical docks, the supporting offices, warehouses and terminals, or the facility’s computer system.
The city’s governor, Marwan Aboud, has already estimated damage across the city to be between $3bn and $5bn. Looking at not just the cost of repair but also the loss to the economy – fees, customs, support services and their employees – the port will likely account for the lion’s share of that figure.
“We need at least two to three weeks to start reorganising work, in particular to rehabilitate the infrastructure at least partially,” a port employee told Arabian Business. “In addition to the damage to the grain silos, many hangars have been destroyed and the status of the goods stored there must be assessed, too. The container clearance area has been completely destroyed. We can’t yet offer a precise timetable for a full recommissioning.
“The only good news is that the giant cranes, capable of servicing the majority of container ships in the port, have suffered only seemingly minor damage,” he added. “But they must now be inspected and therefore cannot be put back into service immediately."
The Lebanese Cabinet took a decision on Wednesday, August 5 to use ports in Tripoli in the north and the smaller ports of Sidon and Tyre to the south. Tripoli, as the second-largest logistics hub in the country, is expected to pick up the majority of the redirected shipping.
Located near the Syrian border, Tripoli’s port has the logistical and maritime capacity to receive the largest container ships in the world. It received a $300 million upgrade 18 years ago and can absorb approximately 5 million tons of cargo in 300,000 containers per year. At present, though, it is only receiving around 2 million tons in 70,000 containers, meaning it is well placed to absorb much of the excess.
“The port of Tripoli can meet the existing deficit,” said Dr Ahmed Tamer, director of Tripoli Port. “We have an integrated plan between the relevant agencies – customs, the port administration, the army, the ministries of economy, agriculture and health – to raise the absorptive capacity to 7 million tons and approximately 400,000 containers. This is roughly the size of the Lebanese import of containers.
“We can receive all the required stocks of wheat and grain so I can assure everyone that we will not fall into a food or grain crisis.”
CMA CGM, one of the world leaders in maritime transport and logistics, announced on August 5 that an operational organisation has been put in place to establish a logistics hub in Tripoli. All ships are diverted to Tripoli or other terminals in the region until further notice. In order to maintain business continuity, the group has organised three recovery sites, of which two are in Beirut and one in Tripoli.