Aug. 28 (Bloomberg) — At the Port of Beirut, three trucks hauling yellow and orange containers wait for cranes to load their cargo onto a Liberian-flagged ship recently arrived from the Saudi port of Jeddah and headed for Greece.
About 2,200 such vehicles enter the port daily, twice the number at the start of the year, and the multicolored containers are stacked up five high rather than three. While Lebanon’s growth has suffered during the 2 1/2 year conflict next door in Syria, port traffic has risen as traders avoid risky overland transit. Domestic demand also is increasing as Lebanon absorbs 1.2 million Syrians fleeing their war-torn country.
“Compared to the many negatives of what’s happening in Syria and the impact on the Lebanese economy, the increase in port activity is one of the positive consequences,” said Jihad Azour, a former Lebanese finance minister who’s now vice president of advisory firm Booz & Co. in Beirut.
The port, which services carriers including AP Moeller- Maersk A/S, the world’s largest container line, Mediterranean Shipping Co SA and CMA CGM SA, saw a 24 percent jump in revenue during the first six months of this year from 2012, according to its website. International Port Management, the group overseeing the company running the terminal, will complete an expansion by November, lifting capacity by as much as 60 percent.
“The port is severely congested,” Chairman Ammar Kanaan said in an interview in Beirut. “It’s like placing 20 people in a car that fits five.”
The activity is reflected in Lebanon’s trade figures even as the economy in the country of 4.3 million people grows at a fraction of the pace before the start of the uprising against Syrian President Bashar al-Assad in March 2011.
Gross domestic product will rise 2 percent this year, up from a rate of 1.5 percent in each of the previous two years, though below 7 percent in 2010, according to a forecast in the International Monetary Fund’s April World Economic Outlook.
Exports rose 6.5 percent in January through June, and imports jumped 11.5 percent “under the influence of the Syrian situation,” Central Bank Governor Riad Salameh said in an Aug. 16 interview at his office in Beirut.
The U.S. and its allies this week condemned an alleged chemical attack by the Syrian government on a rebel-held area and are moving closer to a decision on military action. U.S. Defense Secretary Chuck Hagel said yesterday U.S. forces are “ready to go,” while Syrian Foreign Minister Walid al-Muallem said the government won’t surrender.
Lebanon’s importers of consumer goods have stepped up their orders of canned food; paint and other raw materials for small industries; cables, switches and other electrical items and plastics to cater to the rising population, according to Nassif Saleh, owner of Saleh Shipping, a company at the port.
“Local traffic has increased even though the economy has slowed,” said Saleh, whose business grew 17 percent in 2012 and 8.4 percent in the first half of 2013 from a year ago.
Cargo handled at the Beirut container terminal has swelled to about 1 million 20-foot equivalent units, or TEUs, a year, from 350,000 in 2005, the year it opened after a port revamp, Kanaan said. The planned extension will increase the capacity to at least 1.5 million to 1.6 million TEUs annually, he said.
Beirut still is dwarfed among Mediterranean container ports by Valencia and Algeciras in Spain to the west, both of which handle more than 4 million TEUs a year, and Port Said at the mouth of the Suez Canal in Egypt. The Lebanese capital is also smaller than Piraeus in Greece, shipping statistics show.
Copyright 2013 Bloomberg.