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Long delays at Israeli ports could harm supply chain for local factories

CM 04/04/2021

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Long delays at the ports in Haifa and Ashdod are making it hard for Israeli factories to import raw materials and export products, with factory managers fearing that they will need to halt production, according to Ynet.

About 50 ships are waiting to be unloaded in the two port cities, with ships waiting about 10 days in Ashdod and about four days in Haifa.
Some companies have decided to skip the Israeli ports due to the delays and have unloaded stock meant for Israel in Turkey and Egypt to be sent to Israel in smaller boats, meaning it takes more time and more money to get materials and products in and out of Israel, according to Ynet.
“A factory does not know how to produce without raw material that has no local substitute, and without me being able to know when we will receive the goods unloaded in Port Said and Turkey,” says Micha Schreier, CEO of Tambour, to Ynet. “Unloading at neighboring ports will cost us more fees and charges, but the additional transportation costs are secondary to the growing fear that we will be left without the ability to produce, and we will have to stop production lines and let workers go.”
“Container ships have to stay in the port for 24 hours, any delay beyond that harms the line and its obligations to customers. In the next two voyages, our ships will have to skip the Israeli ports, so as not to stop here for long days,” said Adani Simkin, director of the local representative office of the giant shipping company MSC. “At a time of record demand for containers, we have 29,000 empty containers in Israel that we are unable to transport to ports abroad, which will lead to an increase in transportation costs for Israeli exporters.”
“We are experiencing distress in maritime trade and ships of giant companies are announcing that their ships will not meet the traffic jam created at the ports of Haifa and Ashdod and are diverting them to other countries,” said president of the Manufacturers’ Association of Israel, Dr. Ron Tomer, to Ynet. “This is an event with severe consequences for the economy and industry and we may reach a shortage of products. We are in direct contact with port managers and port workers’ unions and are trying to provide solutions.”
The Transportation Ministry told Ynet that the delays were being caused by a number of factors, including upgrades to existing port infrastructure and unusual amounts of imports of products such as metal and cement due to expected price increases. The ministry added that two new ports are being built in Haifa and Ashdod to help address the increase in the volume of activity.

Last year, the government’s ministerial privatization committee approved plans on Tuesday to sell off the Port of Haifa, Israel’s largest shipping hub.

The vote will enable a private strategic investor to take full control of the northern port from the government-owned Haifa Port Company. The incoming owner will be required to invest approximately NIS 1 billion in the port, including the cost of upgrading infrastructure and financing the layoff of approximately 200 workers.
The sale is expected to be completed within two years, with the new owner expected to operate the port until 2054.The financial daily Globes reported in 2019 that the Ashdod Port would remain under government ownership until 2024.

Eytan Halon contributed to this report.
Source: Jerusalem Post

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