Iran’s Shipping Line:
Rising to Heyday
The Director of Islamic Republic of Iran Shipping Line (IRISL) pronounced that the paralyzed maritime transportation of Iran is back on its feet again, and is breathing some fresh air these days.
All along the sanctions era, IRISL fleet, as one of the main axes of Iranian economic with 155 ships, was specifically and unfairly targeted. Up until one and a half years ago, Iranian ships were able to dock at only 2 lines; yet these days, ships from 16 transcontinental lines commute to Iranian waters; and all out connections with Europe, East Asia and Latin America have been revived and reestablished. Moreover, by March 2018, new-generation cutting-edge Hyundai ultra-large ships will have joined and renewed IRISL fleet.
In an interview with MANA correspondent, IRISL director and head of the board, Dr. Mohammad Saeedi, narrated the account of Iranian maritime story at the sanctions era and its revival and rejuvenation after the execution of JCPOA.
Could you please illustrate the picture of IRISL under sanctions?
In the course of the sanctions era, sanction-enforcing countries were committed to paralyze Iran’s economy by targeting maritime transportation. They worked restlessly to restrict our maritime transportation up to the point that our entire export and import route be disrupted. At that era, shipping lines from other countries refused to travel to Iranian ports, and IRISL was the sole transporter of imports to and exports from Iran. In other words, the burden of supplying foreign needs of Iranian people was only born by IRISL, as Iran’s national fleet.
Our hard-working and sophisticated crew in IRISL worked tirelessly and pertinaciously to reduce the impacts of sanction up the maximum possible point. We were confined to merely two service lines: The line from East Asia (Shanghai Zone) to Jebel Ali and Bandar Abbas, which aimed at trading with Persian Gulf ports; and the line from Persian Gulf ports to the eastern ports of African countries. Practically, we did our entire business through these two lines only and other routes were either blocked or extremely restricted for us.
The other challenge we were dealing with at the sanctions era was that international insurance corporations broke off their relationships with IRISL, which caused the major limitations for traveling to international ports. The third challenge was break-off of the ties between international classification societies and Iran. In order for Iranian ships to be able to travel in international waters, they were required to achieve valid and authentic certificates from classification societies, and unless their technical well-being was certified by these institutes, they were not licensed to go through these lines. It was unfortunate that we were deprived of receiving such certificates. Hence, I can conclude that limitations in the commuting of our fleet, not receiving insurance services and classification institutes’ not issuing certificates for our fleet were the three daunting challenges IRISL was confronting under the dense shadow of sanctions.
How did this trend change after the nuclear agreement and the execution of JCPOA?
In view of the prospects created by the nuclear agreement, we commenced taking measures to remove our limitations and return to international lines two months before the execution of JCPOA. As the first step, we endeavored to retrieve the services that we had lost under sanctions. In the course of the past year, the first line that we reestablished was from Persian Gulf ports – specifically Bandar Abbas – to European ports, including Hamburg in Germany, Antwerp in Belgium and Genoa in Italy. Only 20 days after JCPOA execution, IRISL was the first company who benefited from JCPOA effects and managed to launch its lines to Europe immediately. The second line we established was to Latin America, which we had already lost under sanctions. Currently, IRISL fleet make routine trips to Brazil, Uruguay and Argentina with no limitations. As the third step, we defined African ports as our routine services. Moreover, we used to have limited travel destinations in South East Asia; yet now we do cover all ports in this region including Japan and South Korea. We have also defined and established a new routine service line to India – Mumbai ports – as well as to Iraqi Umm Qasr Port. At the moment, IRISL fleet travel to every corner of the world with no practical restrictions, except for two countries.
As far as insurance companies and classification institutes are concerned, we have signed contracts and agreements with the most prominent international organizations and have settled down all our issues successfully. Besides, in February 2017, IRISL director was admitted as a board member in Steamship Mutual P&I Club. This matter is yet another benefit of lifting the sanctions and IRISL’s return to international arena.
How did the challenged and the problems that you just counted affect the costs of exports and imports? How different is the current costs?
The challenges definitely affected the costs. At the sanctions era, the majority of the exported products, including petroleum products, were shipped to Turkey first, and then, it was transferred to Europe by Turkish vessels; and this trend imposed massive costs to Iran’s exports. But now, thanks to the organized and systematic services of producer exporter companies, both at steel sector and at petro-chemistry, exports could be thoroughly done by IRISL, from source to destination. As a result, middle agents have been removed from the process by mineral and petrochemical corporations and the whole profit would be seized by the main producer rather than being shared by the middle agents.
Generally speaking, to what extent does Iranian trade depend on shipping?
In the post-JCPOA era, when 16 international lines commute to Iran’s ports, a total of 55 % of all exports to and imports from Iran depend on IRISL. Owing to this, we have set the development and renewal of our fleet as our top concern and priority. We are receiving complete and effective cooperation from the administration and respect-worthy secretaries in this area so that we could revive our fleet at a rapid pace. This restless endeavor has promoted our international rank as much as 4 steps, and we have leapt forward from our 23rd rank last year to our current 19th rank in the classification of best shipping lines worldwide. It is absolutely essential for us to put all our domestic and foreign capacities into use and renew IRISL fleet within the next 5 years.
After 9 years of not having access to international funding, thanks to the execution of the JCPOA, we have now managed to supply our first foreign funding via this contract with Hyundai Corporation. We settled on an agreement with Hyundai, which led them at accept our previous payment as the deposit, and enabled us to obtain the remaining 80 % as finances from Korean banks. Up until then, no other international contract had been funded after the JCPOA execution.
In an interview with MANA correspondent, IRISL director and head of the board, Dr. Mohammad Saeedi, narrated the account of Iranian maritime story at the sanctions era and its revival and rejuvenation after the execution of JCPOA.
Could you please illustrate the picture of IRISL under sanctions?
In the course of the sanctions era, sanction-enforcing countries were committed to paralyze Iran’s economy by targeting maritime transportation. They worked restlessly to restrict our maritime transportation up to the point that our entire export and import route be disrupted. At that era, shipping lines from other countries refused to travel to Iranian ports, and IRISL was the sole transporter of imports to and exports from Iran. In other words, the burden of supplying foreign needs of Iranian people was only born by IRISL, as Iran’s national fleet.
Our hard-working and sophisticated crew in IRISL worked tirelessly and pertinaciously to reduce the impacts of sanction up the maximum possible point. We were confined to merely two service lines: The line from East Asia (Shanghai Zone) to Jebel Ali and Bandar Abbas, which aimed at trading with Persian Gulf ports; and the line from Persian Gulf ports to the eastern ports of African countries. Practically, we did our entire business through these two lines only and other routes were either blocked or extremely restricted for us.
The other challenge we were dealing with at the sanctions era was that international insurance corporations broke off their relationships with IRISL, which caused the major limitations for traveling to international ports. The third challenge was break-off of the ties between international classification societies and Iran. In order for Iranian ships to be able to travel in international waters, they were required to achieve valid and authentic certificates from classification societies, and unless their technical well-being was certified by these institutes, they were not licensed to go through these lines. It was unfortunate that we were deprived of receiving such certificates. Hence, I can conclude that limitations in the commuting of our fleet, not receiving insurance services and classification institutes’ not issuing certificates for our fleet were the three daunting challenges IRISL was confronting under the dense shadow of sanctions.
How did this trend change after the nuclear agreement and the execution of JCPOA?
In view of the prospects created by the nuclear agreement, we commenced taking measures to remove our limitations and return to international lines two months before the execution of JCPOA. As the first step, we endeavored to retrieve the services that we had lost under sanctions. In the course of the past year, the first line that we reestablished was from Persian Gulf ports – specifically Bandar Abbas – to European ports, including Hamburg in Germany, Antwerp in Belgium and Genoa in Italy. Only 20 days after JCPOA execution, IRISL was the first company who benefited from JCPOA effects and managed to launch its lines to Europe immediately. The second line we established was to Latin America, which we had already lost under sanctions. Currently, IRISL fleet make routine trips to Brazil, Uruguay and Argentina with no limitations. As the third step, we defined African ports as our routine services. Moreover, we used to have limited travel destinations in South East Asia; yet now we do cover all ports in this region including Japan and South Korea. We have also defined and established a new routine service line to India – Mumbai ports – as well as to Iraqi Umm Qasr Port. At the moment, IRISL fleet travel to every corner of the world with no practical restrictions, except for two countries.
As far as insurance companies and classification institutes are concerned, we have signed contracts and agreements with the most prominent international organizations and have settled down all our issues successfully. Besides, in February 2017, IRISL director was admitted as a board member in Steamship Mutual P&I Club. This matter is yet another benefit of lifting the sanctions and IRISL’s return to international arena.
How did the challenged and the problems that you just counted affect the costs of exports and imports? How different is the current costs?
The challenges definitely affected the costs. At the sanctions era, the majority of the exported products, including petroleum products, were shipped to Turkey first, and then, it was transferred to Europe by Turkish vessels; and this trend imposed massive costs to Iran’s exports. But now, thanks to the organized and systematic services of producer exporter companies, both at steel sector and at petro-chemistry, exports could be thoroughly done by IRISL, from source to destination. As a result, middle agents have been removed from the process by mineral and petrochemical corporations and the whole profit would be seized by the main producer rather than being shared by the middle agents.
Generally speaking, to what extent does Iranian trade depend on shipping?
In the post-JCPOA era, when 16 international lines commute to Iran’s ports, a total of 55 % of all exports to and imports from Iran depend on IRISL. Owing to this, we have set the development and renewal of our fleet as our top concern and priority. We are receiving complete and effective cooperation from the administration and respect-worthy secretaries in this area so that we could revive our fleet at a rapid pace. This restless endeavor has promoted our international rank as much as 4 steps, and we have leapt forward from our 23rd rank last year to our current 19th rank in the classification of best shipping lines worldwide. It is absolutely essential for us to put all our domestic and foreign capacities into use and renew IRISL fleet within the next 5 years.
After 9 years of not having access to international funding, thanks to the execution of the JCPOA, we have now managed to supply our first foreign funding via this contract with Hyundai Corporation. We settled on an agreement with Hyundai, which led them at accept our previous payment as the deposit, and enabled us to obtain the remaining 80 % as finances from Korean banks. Up until then, no other international contract had been funded after the JCPOA execution.