By Tony Akleh
Shipping sources say losses limited due to small amount of goods being stored after August 4 explosion
The total damages and losses from the fire that broke out at Beirut Port last week have been limited to between $10-15 million only, Arabian Business has been told.
Sources at shipping companies revealed to Arabian Business that the damage was constrained because the amount of goods remaining after the huge explosion on August 4 was small, due to the significant decline in the import movement.
A large fire erupted at Beirut port on Thursday, engulfing parts of the Lebanese capital in a pall of smoke, just weeks after a massive blast devastated the port and ruined a swathe of the city.
The fire was caused by repair welding work. Sparks fell on warehouses storing flammable items, including food items held there by aid agencies.
Lebanese trade activity has further deteriorated by the current economic and financial crisis and ongoing capital controls restricting Lebanon's ability to import goods.
Fabrizio Carboni, regional director for the Near and Middle East for the International Committee of the Red Cross, said that the warehouse which caught fire was used by the NGOs to stock thousands of food parcels and 0.5 million litres of oil.
Beirut’s port is used by aid agencies to supply refugees in Lebanon and people in need in neighbouring Syria.
The August 4 explosion, triggered when some 2,700 tons of ammonium nitrates caught fire, claimed more than 200 lives, injured 6,500 and left hundreds of thousands homeless.
As to whether the damaged goods due to the fire are insured, shipping company officials told Arabian Business that “the importers usually insure the hangars, and hangars companies insure the stored goods. So, the insurance companies have to compensate for this fire even if it is contrived, and the insurance companies usually cover fires 100 percent".
Insurance penetration rates in Lebanon generally are low and property insurance represents only a small fraction of the Lebanese insurance industry, which is dominated by three segments - life, medical and motor. Based on the latest available data, together these segments accounted for almost 85 percent of Lebanon’s gross written premium in 2018.
The free zone, where the fire broke out, is divided into two parts - a section consisting of buildings constructed by the port and leased warehouses to merchants.
Another section, consisting of logistical warehouses leased from transport intermediaries, is not built by the port authorities, but only leased land.
Those who build these buildings are forced to put on fire extinguishers, water hoses and a warning bell, and the port administration ensures that these procedures are implemented.
As a result of the August 4 explosion, Port of Beirut officials asked the Civil Defence Service to maintain fire engines in the port, since all fire engines were destroyed in the port, as well as water tanks. They told all merchants to report all imported materials and the necessity to store goods in a safe and proper manner, and to hold them legally and criminally accountable in case of any accident detrimental to public safety.