Volume.7 / Autumn 2017 Payam Darya

A Khazar Sea Shipping Lines Leader in Non-petroleum Exports

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No.523, Asseman Tower, Shahid Lavasani (Farmanieh) Junction, Pasdaran Ave. Tehran - Iran. P.o.Box: 19395/1311 Tel: (+98 21) 23844561 Fax: (+98 21) 26100371

Shipping Magazine CONTENTS

002 Opening Remarks: An Invisible Hand! Published quarterly by IRISL 005 IRISL: Iran Ready to Absorb Foreign Investment Volume 7, Autumn 2017 ISSN: 1027-1058 006 Iran is the Best Country for Foreign Investment in the Region 008 IRISL Reveals Major Plan to Expand Shipping Fleet 012 The Arrival of Korean Ships to Increases National Fleet Capacity 014 Future of Bulk Market Is Promising Legal Representative: 022 New Lines from Europe to Indea.... Ali Akbar Ghonji 026 Developing the Activities in Chabahar, Shahid Rajaee ..... 030 Transfer of 150,000 Passengers during H1, 2017 Editor-in-chief: Amir Fallah 034 Integrated Transportation Performance Increased 30% during H1, 2017 [email protected] 035 Launching the Comprehensive Trading System Journalists: 042 25 %Increase in Fleet Nominal Capacity during Each 4-year Behrooz Ghahremani, Seyed Majid Motahari Period Leyla Beyranvand, Fatemeh Moonesan, 045 Marine: Smile of 2017! Sarah Zeinalzadeh, Narges Ehsandar, Elham Ghorbani, Fatemeh Bayat, Fereshteh Azizkhani, Vahid Basereh , 046 Will Seas’ Economy Peak Again? Sahar Eyvaziadli 052 Narrative of Global Container Shipping 060 Putting on Sunglasses, Lolling on the Shore without Designer: Sunshine! Fatemeh Abedini, Hossein Torkashvand 065 Energy: Petrochemical Contributes to Globalization of Iran’s Economy Financial-Administrative Department: 066 The Brand of Petro-chemistry Unit: A Path to Globalization Golnoosh Afrooshe 070 Convergence Is the Key to A Sustainable Presence in Global Photographer: Markets Ali Sobhan Hosseini 074 Commercial; the Lost Loop of Iran’s Petrochemicals 077 History: Half A Century of Glorious Presence 079 When Development Raisd Sailclothe 086 Half A Century of Pride and A Bright Outlook ADDRESS: 090 IRISL Role in National Economy No.523, Asseman Tower, Shahid Lavasani Exclusive Role of IRISL in Iran’s Economy; Guarantor of (Farmanieh) Junction, Pasdaran Ave. 098 National Economy Tehran - Iran. P.o.Box: 19395/1311 101 Close Up: Steel; Step by Step Progress Tel: (+98 21) 26100368 102 Comprehensive Plan for Steel, Template for Iranian Fax: (+98 21) 26100371 Minerals’ Strategy 106 Make A Proper Margin of Profit with Balance on Domestic and Foreign Sales 109 Iran:How to Invest in Iran? 110 A Review on Iran’s Foreign Investment Promotion and Protection Act

General Manager of 114 Investment Attraction in Iran Capital Market Advertising Department: 118 A Look at Participating Security in Iran Alireza M.Sadeghi 122 Industry of Investment Funds in Iran To advertise in Payam-e-Darya, please contact 127 Glance: Port; A Chance for Making Progress Alireza M.Sadeghi at Tel: +989121001769 128 Intellectual Capital Management in Ports Email: [email protected] 144 A Key Player in Iran- Germany Relationship [email protected] 148 We Gurantee! 153 Bulletin: The International North-South Corridor Key to Iran’s trade 163 Image: 50 Years of IRISL Narrated by Image

Opening Remarks

place in the first decade of the caused the shipping companies to consciously. current century and caused the face the crisis of equity one after The result of economic growth unlimited difficulties of 2008. the other and because shipping in 2014 finally has been shown AnAn InvisibleInvisible Hand!Hand! Evacuation of mortgages’ industry innately is a costly when reports of international bubbles in America and the end activity it has been affected more organizations announced a By: Amir Fallah of speculation in this significant by the global circumstances. growth of 3.7% for the world and Editor in Chief By: Amir Fallah global economy were sufficient Meanwhile, successive prosperous indexes in trade i.e. to face the world which gathered manpower adjustment and a shipping companies have been When Editor the in 21Chiefst century began Despite the last century that governments only is defined as a together through the economy move toward mergers were appeared. as the new era, the countries contradictions existed in war policymaker. and the so-called Persian poem an unsuitable action and this An increase in BDI Index of the world stepped toward front and cold war based on One of the advantages of this more than ever. This encour eved its recordable growth by mies especially in China, South Ko by Sa’adi “No ease for other continued up to the point where accompanying with increase accompaniment based on an different ways of thinking and cooperation between the nations age in a digest utterance was focusing on free market and rea and Japan as well as the regul members then remains” the economic structures and in china’s steel production are unwritten law and they became made the countries to muse was creating trade platforms economy and the nationalitie the views of its leaders, people ations’ consistency in Europe foc happened. reproduction trade have to be defined as reproduction based united to resolve the ominous between the conflict of socialism because the prepared products of s of the world noticed what des noticed the thi using on a single economic regu If the idea of the 21st century rebuilt. When finally this crisis on globalization. Meanwhile, shadow of War in the past and liberalism, the current human with this idea has no loner troyed the previous century ng that could set the relation lation (The United Nation) led t had been provided the required reached china as a main motor of increase in Howe Robinson century which was spread century has a joint view toward belonged to the manufacturing were a contrast in interests and s to gather them around a table o the trade growth and bes thing of people’s interest, the global trade, shipping companied Container Index during the first over the countries. economy and that was free country and they have to be used negative competition. Theref to have sufficient and justly t performance of shipping lines catastrophes would be the same understood that they fell and quarter of the current year has This event which was market economy. Meanwhile, in West and vice versa. ore, having a point of view towa share is called “An Invisible Ha and consequently encourages every and then the effect of America’s talked about the collapse of the completed the positive news in interpreted as globalization establishing organizations such Accordingly, the more valid rd economy and profit for nd” which was referred to by Adam non-specialized individual to b economy collapse would industry. this field. encountered a new crisis as World Trade ensured the thing of this idea relates to all the people led the worl Smith over the past centuries uy ships in order to enjoy the ef move the world to one of the However, the Yellow Dragon Trade growth in the East and i.e. terrorism during the first view that the base of wealth and infrastructures particularly the d to move toward peace. Althoug in “An Inquiry into the Nature an ficiency of prosperous shippi unprecedented records of human finally revived in 2014 and increasing productions in years of the started century profit’s distribution is rooted in ones in transportation and when it h contradictory views haven d Causes of the Wealth o ng up to the point that al history at least after the gold moved toward a more optimal countries such as Germany and the campaign of the United competition and noninterference comes to trade and transportation, ’t brought peace perfectly and co f Nations” book. Althou l the shipping yards faced w crisis. economy by focusing on an and widening of Panama States to the Middle East once of governments. Because the shipping lines will stand in the mprehensively, the 17 years past fr gh this phrase were defined ba ith the cumulative orders. If we believe that growth and efficient program. Meanwhile, Canal compensate the bitter again led the minds toward experience of the 20th century special position with their high om the century demonstrates that sed on a mystical-religious liter trade move the same direction the West could find a way for its of bankruptcies of Hanjin the 20th century. However, the showed the governments’ shares in the industry. a definite regulation which ature, the accuracy of that is clea What has been proven according t toward transportation and at cumulative debts and the slept shipping company and create a mentioned unwritten law which interference permanently led Growing increase in economies is economy could gather the pe r because a hope in the results is o the mathematical rule and of the meantime consider the giant of the market could once conservative hope for the future. was considered as a refuge for the contradictions in interests especially in China, South ople around a table and possible when governments allow e course the human experience demo transportation in global trade again show the growing indexes But this time behaviors were the people and protect them and when China as one of the Korea and Japan as well as divide the interests in dolla conomy and market to repair their nstrate that when a cancerous g as shippers, the first loss was and the invisible hand has done assigned different from the by its shadowst encouraged pillars of the East achieved its the regulations’ consistency rsWhen instead the of war21 front. centuryDespite beg rs insteadrelations of warand front. improveDespite t rowth relations occurs andand the improvefountain rist experienced by them because by whatever it had to be done. previous ideas and if shippers anthe asknowledgeable the new era, groupsthe count to recordablethe last centurygrowth bythat focusing contra hein difficultiesEurope focusing by their on aowna the fall in trade and production After passing 2 years from 2014, were competing negatively in the riescooperate of the more world than stepped ever. tow dictionson free marketexisted andin war the frontviews and of ndsingle the economicrole of governmentsregulation worldwide, shipping and marine the global economy was assured previous centuries, now move ardThis accompanimentencourage in baseda digest on itscold leaders, war based people on noticeddifferent thew only(The isUnited defined Nation) as led a policyto transportation companies that it exited from crisis. When toward cooperation and creating anutterance unwritten was law economyand they becaand aysthing of thatthinking could and set made the relations the cou maker.the trade One growthof the advantages and best o encountered the decline trend we refer to a classic economy, alliances by having a dice of metheunited nationalities to resolve ofthe ominousthe world sh ntriesto gather to muse them betweenaround athe table confl to fperformance this cooperation of shipping between lines t of cargos. Considering the rapid the mentioned topic is enough to global economy and exploit the adownoticed of whatWar in destroyedthe past centthe icthave of socialism sufficient and and liberalism, justly th share heand nationsconsequently was encouragescreating t economic growth in the world, assure that if for two consecutive excellent result of the mergers. uryprevious which wascentury spread were over thea contrast countri eis currentcalled century“An Invisible has a joint Hand” vie radeevery platforms becausenon-specialized the prepa the capacities increased and the years the economy enjoy growth, Today, the significant increase es.in Thisinterests event whichand wasnegative wwhich toward was economy referred and to that by was Adam fre redindividual products toof humanbuy shipswith thisin two factors led the indexes to it is definitely has been exited and reasonable trend in interpretedcompetition. as globalizationTherefore, having encou eSmith market over economy. the past Meanwhile, centuries in e orderidea has to no enjoy loner the belonged efficiency to t show the difficulty of this crisis form the recession. shipbuilding orders as well as the ntereda point a of new view crisis toward i.e. terrorismeconomy stablishing“An Inquiry organizationsinto the Nature such and heof manufacturingprosperous countryshipping and theyup more than ever. Although the world experienced growth of the global economy and during profit the firstfor all years the of people the st led Causesas World of Tradethe Wealth ensured of Nations”the view tohave the to be usedpoint in Westthat and all vice the ve Decrease in demand and increase the risk in 2016 again with the and the productivity of shipping artedthe world to movecentury toward peace.a thatbook. the base of wealth and prof rsa.shippingAccordingly, yards facedthe more with valid the th in supply led to a phenomena for Britain exit from the United companies demonstrate that ndAlthough the campaign contradictory of the Unitedviews it’s Although distribution this is phraserooted inwere co ingcumulative of this idea orders. relates to infras shippers of the world than has Nation and the presidency of these enterprises although have haven’tStates tobrought the Middle peace East perfectly once mpetitiondefined based on a mystical- tructures particularly the ones in been never recorded in the history Tramp which were both the little fear of recession, could againand comprehensively,led the minds towardthe 17 t andreligious noninterference literature, the ofaccuracy gove Whattransportation has been provenand when according it c Volume.7 / Autumn 2017 Volume.7 / Autumn 2017 Volume.7 / Autumn 2017 and then it was possible to be product of populism and reminded revive the industry once again heyears 20 thpast century. from However,the century th rnments.of that is Becauseclear because the experie a hope- omto the mathematical rule and of witness of a tragic image in ports the terrible war of the previous by seeding hope in the life of edemonstrates mentioned unwritten that a law definite whi ncein the of theresults 20th century is possible showed when the escourse to tradethe andhuman transportation, experience where ships were abandoned century, the global resilient could that and remaking the conditions chregulation was considered which isas economya refug governments’governments interferenceallow economy perman and demonstrateshipping lines thatwill standwhen in tha without owners and shipbuilding once again continue the way assure that the invisible hand in ecould for thegather people the andpeople protect around th entlymarket led to therepair contradictions their relations in ecancerous special growthposition occurs with and thei the yards faced a terrible recession. with a little doubt and monitor the market is doing its best. ema table by its shadowand divide encouraged the interests the know in interestsand improve and when the China difficulties as on rfountain high risesshares to a inheight the a indfall Decline in freight rates and cargos these two ominous phenomenons ledgeabledollars instead groups of war to front.cooperate eby of their the pillarsown andof the the East role achi of ustry.will beGrowing happen soonincrease and inthis econo took Payam Darya Payam Darya Payam Darya

2 3 Opening Remarks

yplace the fall in in the trade first and productiondecade of w the ,caused thethe shipping global companies toe consciously. orldwide,current century shipping and and caused marine thetra conomyface the crisiswas assuredof equity that one it after exi The result of economic growth nsportationunlimited companiesdifficulties encountered of 2008. th tedthe fromother crisis.and because When weshipping refer in 2014 finally has been shown An Invisible Hand! e declineEvacuation trend ofof cargos.mortgages’ Cons toindustry a classic innately economy, is thea costlyment when reports of international ideringbubbles thein Americarapid economic and the endgro ionedactivity topic it has beenis enough affected tomore a organizations announced a By: Amir Fallah wthof speculation in the world, in the this capacities significant in ssureby the that global if for circumstances. two consecutive growth of 3.7% for the world and Editor in Chief creasedglobal economyand the weretwo sufficientfactors l years theMeanwhile, economy enjoysuccessive growth, prosperous indexes in trade i.e. edto facethe the indexes world which to gatheredshow t itmanpower is definitely adjustment has andbeen a exi shipping companies have been When the 21st century began Despite the last century that governments only is defined as a hetogether difficulty through theof economy this cris tedmove towardform mergers wereth appeared. as the new era, the countries contradictions existed in war policymaker. isand more the than so-called ever. Decrea Persian poem ean recession. unsuitableAlthough action the and this An increase in BDI Index of the world stepped toward front and cold war based on One of the advantages of this seby inSa’adi demand “No and ease increase for other in s continuedworld experiencedup to the point the where risk accompanying with increase accompaniment based on an different ways of thinking and cooperation between the nations upplymembers led to a phenomenathen remains” for shi thein 2016economic again withstructures the Britain and in china’s steel production are unwritten law and they became made the countries to muse was creating trade platforms ppershappened. of the world than has exitreproduction from the tradeUnited have Nation to anbe defined as reproduction based united to resolve the ominous between the conflict of socialism because the prepared products of beenIf the never idea recordedof the 21 inst centurythe his drebuilt. the presidency When finally of Tramp this whi crisis on globalization. Meanwhile, shadow of War in the past and liberalism, the current human with this idea has no loner toryhad andbeen then provided it was possiblethe required to b chreached were china both as athe main product motor ofo increase in Howe Robinson century which was spread century has a joint view toward belonged to the manufacturing ething witness of ofpeople’s a tragic interest,image in thepo fglobal populism trade, and shipping reminded companied the terri Container Index during the first over the countries. economy and that was free country and they have to be used rtscatastrophes where ships would were abandoned be the same wi bleunderstood war of thethat previous they fellcentury, and quarter of the current year has This event which was market economy. Meanwhile, in West and vice versa. thoutand then owners the effect and ofshipbuilding America’s talkedthe global about resilientthe collapse could of oncthe completed the positive news in interpreted as globalization establishing organizations such Accordingly, the more valid yardseconomy faced a collapseterrible recession.would eindustry. again cont this field. encountered a new crisis as World Trade ensured the thing of this idea relates to rowthmoveDecline occursthe in world and theto fountainone of theris inue Decline However, the inway the with Yellow a little Dragon do Trade growth in the East and i.e. terrorism during the first view that the base of wealth and infrastructures particularly the esunprecedented to a height records a offall human w freightubtfinally and rates revivedmonitor and cargos thesein 2014causetwo and increasing productions in years of the started century profit’s distribution is rooted in ones in transportation and when it illhistory be happenat least soon after and the thisgold t dominousmoved the shippingtoward phenomenons a companiesmore optimalconsci to countries such as Germany and the campaign of the United competition and noninterference comes to trade and transportation, ookcrisis. place in the first decade o faceeconomy the crisisby focusing of equity on onan and widening of Panama States to the Middle East once of governments. Because the shipping lines will stand in the fIf the we current believe century that growthand caused and eefficient after the program. other and Meanwhile, beca Canal compensate the bitter again led the minds toward experience of the 20th century special position with their high trade move thethe same directionunlim usethe Westshipping could industryfind a wayinnately for its of bankruptcies of Hanjin the 20th century. However, the showed the governments’ shares in the industry. itedtoward difficulties transportation of 2008. Evand at cumulativeis a costly debtsactivity and it hasthe beenslept shipping company and create a mentioned unwritten law which interference permanently led Growing increase in economies acuationthe meantime of mortgages’ consider bubbles the affectedgiant of morethe market by the could global once cir conservative hope for the future. was considered as a refuge for the contradictions in interests especially in China, South transportationin America and in theglobal end oftrade sp cumstances.again show the Meanwhile, growing indexes succes But this time behaviors were the people and protect them and when China as one of the Korea and Japan as well as eculationas shippers, in the thisfirst significloss was siveand themanpower invisible adjustment hand has anddone a assigned different from the by its shadow encouraged pillars of the East achieved its the regulations’ consistency antexperienced global economy by them were because suffici by movewhatever toward it had mergers to be were done. an unsu previous ideas and if shippers the knowledgeable groups to recordable growth by focusing in Europe focusing on a entthe tofall face in thetrade world and whichproduction gath itableAfter passingaction 2 yearsand fromthis 2014,conti were competing negatively in the cooperate more than ever. on free market and the views of single economic regulation eredworldwide, together shipping through and the marineecono nuedthe global up to economythe point wherewas assured the ec previous centuries, now move This encourage in a digest its leaders, people noticed the (The United Nation) led to mytransportation and the so-called Persiancompanies poem onomicthat it exited structures from and crisis. reproduct When toward cooperation and creating utterance was economy and thing that could set the relations the trade growth and best encounteredby Sa’adi “ Nothe ease decline for other trend m ionwe traderefer haveto a toclassic be rebuilt. economy, Whe alliances by having a dice of the nationalities of the world to gather them around a table to performance of shipping lines embersof cargos. then Considering remains” the rapidhapp nthe finally mentioned this topic crisis is enough reached toc global economy and exploit the noticed what destroyed the have sufficient and justly share and consequently encourages ened. If the idea of the 21st hina as a main motor of global tr economic growth in the world, assure that if for two consecutive excellent result of the mergers. previous century were a contrast is called “An Invisible Hand” every non-specialized century had been provided the re ade, shipping companied understood the capacities increased and the years the economy enjoy growth, Today, the significant increase in interests and negative which was referred to by Adam individual to buy ships in quired thing of people’s inter that they fell and talked about two factors led the indexes to it is definitely has been exited and reasonable trend in competition. Therefore, having Smith over the past centuries in order to enjoy the efficiency est, the catastrophes would be th the collapse of the industry. show the difficulty of this crisis form the recession. shipbuilding orders as well as the a point of view toward economy “An Inquiry into the Nature and of prosperous shipping up e same and then the effect of A However, the Yello more than ever. Although the world experienced growth of the global economy and profit for all the people led Causes of the Wealth of Nations” to the point that all the merica’seconomy collapse would mov w Dragon finally revived in 201 Decrease in demand and increase the risk in 2016 again with the and the productivity of shipping the world to move toward peace. book. shipping yards faced with the e the world to o 4 and moved toward a more optima in supply led to a phenomena for Britain exit from the United companies demonstrate that Although contradictory views Although this phrase were cumulative orders. ne of the unprecedented records l economy by focusing on an e shippers of the world than has Nation and the presidency of these enterprises although have haven’t brought peace perfectly defined based on a mystical- of human history at least after t fficient program. Meanwhile, been never recorded in the history Tramp which were both the little fear of recession, could and comprehensively, the 17 religious literature, the accuracy What has been proven according he gold crisis. If we believe the West could find a way Volume.7 / Autumn 2017 Volume.7 / Autumn 2017 Volume.7 / Autumn 2017 and then it was possible to be product of populism and reminded revive the industry once again years past from the century of that is clear because a hope to the mathematical rule and of that growth and trade move the sam for its cumulative debts and the witness of a tragic image in ports the terrible war of the previous by seeding hope in the life of demonstrates that a definite in the results is possible when course the human experience e direction toward transportati slept giant of the market could o where ships were abandoned century, the global resilient could that and remaking the conditions regulation which is economy governments allow economy and demonstrate that when a on and at the meantime consider the nce again show the growing indexes a without owners and shipbuilding once again continue the way assure that the invisible hand in could gather the people around market to repair their relations cancerous growth occurs and the transportation in global t nd the invisible hand has do yards faced a terrible recession. with a little doubt and monitor the market is doing its best. a table and divide the interests in and improve the difficulties fountain rises to a height a fall rade as shippers, the first loss ne whatever it had to be done. A Decline in freight rates and cargos these two ominous phenomenons dollars instead of war front. by their own and the role of will be happen soon and this took was experienced by them because b fter passing 2 years from 2014 Payam Darya Payam Darya Payam Darya

2 3

IRISL

IRISL CEO: Iran Ready to Absorb Foreign Investment Volume.7 / Autumn 2017 Payam Darya

5 Report

Dr. Mohammad Saeedi Says in Iran-Italy Economic Summit: Iran is the Best Country for Foreign Investment in the Region

Dr. Mohammad Saeedi, CEO and head of the board at Islamic Republic of Iran Shipping Lines (IRISL) stated that today, Iran is the best country for absorbing investment of foreign corporations in various fields in the region.

In Iran-Italy Economic Summit plans, the statistics has it that the between these two countries in which was held with the presence direct investment of European various aspects and fields. of members of Iran chamber of countries in Iran experienced Dr. Saeedi further stated: a Commerce, Industries, Mines an upward trend, which has key issue is that we are facing & Agriculture, Ambassadors also brought about tangible and some obstacles in banking of Iran and Italy, members constructive results. systems relationships between of parliament and economic Referring to the significance Iran and Europe. Some believe Volume.7 / Autumn 2017 activist of both countries, Dr. of Iran –Italy relationships, he that the problem exists in Mohammad Saeedi remarked: reminded that Italy has always Iranian banking system, but following the implementation been the best strategic partner the fact is that currently and of JCPOA, a positive ground of Iran, moreover, there is a in the light of new measures, has been created for foreign huge potential for increasing Iranian banking system has

Payam Darya investment in Iran’s strategic the capacities of cooperation considerably improved and 6 CEO and head of the board at IRISL emphasized that Iran as a countries of Silk Road, holds a very significant and strategic role in connecting Commonwealth of Independent States (CIS) and European countries through maritime, road and railways routes. Dr. Saeedi asserted: IRISL as Iran’s national shipping lines invites investors to investment in Iran ‘s maritime transportation industry. Pointing out that Iran has the second largest economy in the Middle East, Saeedi stated that in the last year, the gross domestic product (GDP) of Iran was reached 412 Billion Dollars. Additionally, Iran enjoys rich and diverse sources of gas, oil, mines, minerals and other industries. With regards to trade in the oil and gas sectors, Dr. Mohammad Saeedi remarked that Iran oil and gas reserves occupy the fourth and first rank in the world, respectively. He added: Iran is now exporting 2.9 million barrels per day to global markets, which is one of the most significant impacts of JCPOA execution. In the end, Dr. Mohammad measured up to the international Saeedi referred to the positive standards, it is also hoped, he performance of Iran in continued, we will witness a key issue is exporting non-petroleum further facilitation of banking that we are products, and remarked that this relationships between Iranian facing some country also enjoys rich sources and top European banks in the of zine, copper, Chromium and near future. obstacles

Iron Ore. It is worth noting Volume.7 / Autumn 2017 This official figure also in banking that Iran is considered as one proposed that Islamic Republic systems of the significant supplier of of Iran Shipping Lines plays a relationships petrochemical products and critical and key role in maritime between Iran Iron Ore in the world. transportation between Iran and and Europe. Europe. Payam Darya 7 Interview

Deputy Director for technical and commercial affairs at IRISL; IRISL Reveals Major Plan to Expand Shipping Fleet Volume.7 / Autumn 2017 Payam Darya

8 Considering IRISL performance an important specialty of the in 2016, he added that a company. Meanwhile, IRISL comparison among other hadn’t have any charter ships In order to expansion activists of this field makes us and this paved the way for and Rejuvenation of declare that IRISL recorded a the company not to encounter fleet, Deputy Director for significant achievement in its with the difficulties that other technical and commercial performance. shipping companies could face affairs at Islamic Republic Following the loss in most in the same situation. In addition, of Iran Shipping Line container shipping companies extension of international IRISL announced that 49 last year, He further added cooperation and establishing ships will be replaced by that IRISL could record an regional companies in different 2022. acceptable profit during the locations could assist IRISL to Referring to intricate same period particularly in bulk achieve desirable conditions. situation of maritime and general cargo transportation Referring to the entrance of 17 transportation, Capt. section. Meanwhile, it should international lines in Iran’s water Amir Saman Torabizadeh be noted that a comparison and ports and requisition of between IRISL and international more than half of the container in an interview with circumstances reveals that market after the implementation MANA International IRISL prevented loss and at the of JCPOA, he added that before Group said: during the same time it gained a worthy JCPOA, IRISL transported first half of the current profit. approximately 85% of the year, signs of recovery Referring to no intervene in countries cargos. Meanwhile, in the most important appointing rates in international there are many competitors today poles of global economy markets by IRISL and in the market and to fill this gap have been appeared competitive circumstances, IRISL has to increase ton mile due to an acceptable Deputy Director for technical particularly in bulk division and growth in GDP and trade and commercial affairs said: international market. development. Meanwhile, to achieve profit and prevent Capt. Torabizadeh announced maritime transportation loss, we have had an optimum that IRISL is the same as other has experienced a better management in costs. In this competitors in the country’s condition and the reflection regard and with the purpose of ports and added that the company of these signs has been decreasing costs more than ever does not have any special clearly seen in indexes. and optimum management of facilities, such as subsidized fuel transportation, we are installing or discounted ports, and in this innovative smart technologies regard it should be acknowledge onboard. that IRISL in its territorial Iran’s crisis exist of maritime waters like other companies are transportation was another competing, but with all these positive points in IRISL’s work conditions, a satisfactory growth process. In this line, Capt. has been seen in the bulk and Torabizadeh further added said: general cargo sectors in 2016. thanks to the achievements He pointed out the arrival of of JCPOA, IRISL entered new ships in IRISL’s fleet in international markets and the first quarter of 2018 and

could travel to locations which said: Considering the new Volume.7 / Autumn 2017 were inhibited during the technologies used in these ships, sanctions era. This fact was very especially in the fuel sector, impressive in gaining profit. there will be good conditions During the sanctions era IRISL regarding the capacity of these made use of its owned ships as ships. Payam Darya

9 Interview

He continued: At the present time continued: in the near future fleet development exploiting and with the current conditions, Asia-Europe and Europe-Asia the capacity of domestic and we are rapidly recapturing our Container Line will be launched. foreign shipbuilders by 2022. At international market, and by The Deputy Director for the same time and with getting Volume.7 / Autumn 2017 creating various lines, we were technical and commercial permission from the board of able to close ourselves to the affairs at IRISL pointed to a directors as well as the approval conditions governed before the five-year plan of developing the of the General Meeting of sanctions. fleet including the mobilizing Shareholders, credit lines have Considering the development- of the fleet and said: 49 ships been opened in countries such oriented projects of IRISL, he will be replaced in response to as China and South Korea which Payam Darya

10 be approved by General Meeting of Shareholders. Capt. Torabizadeh referred to to achieve the construction of 200 wagons and said that the arrival of profit and these wagons in the multimodal prevent loss, transportation sector will also we have had create a significant development. an optimum Pointing out to the necessity management for synergy and organizational agility, Torabizadeh put special in costs. emphasis on the significance of digitalization and data review process. Referring to holding of the ceremony of 50th anniversary of IRISL establishment on the 10th of December and the presence of top and high- ranking maritime industry activists, he hoped that in the light of half of a century of glorious experience, IRISL could present brilliant performance and make noticeable progress. In the course of the 8 years of sacred defense, the relentless endeavors of IRISL staff and seafarers, with national determination and drive, guaranteed the fluent export and import of goods, which brought about the title “Second Defense Line” for this line. IRISL truly deserved this epithet since it did not allow even the smallest hesitations in the country’s trade. In spite of all these economic sanctions and confinements, IRISL managed to pursue its operations and its goals, he would assist us to utilize the added. created capacities. At the end, the Deputy Director According to him, a part of for technical and commercial activities’ expansion in the affairs at IRISL referred to an development plan of the optimistic future in maritime Volume.7 / Autumn 2017 company focused on the transportation and said: “In the development of the offshore logistics services sector, we section. For the implementation will have 100% increases in of these programs, we need to activities.” increase the capital, which must Payam Darya

11 Interview

The IRISL’s Deputy Chief Financial Officer Announced: The Arrival of Korean Ships to

Volume.7 / Autumn 2017 Increases National Fleet Capacity Payam Darya

12 The IRISL’s Deputy Chief Financial Officer said: “following the arrival of 10 ships built in the Korean shipyards, the capacity of national fleet will increase by 50 percent.” Referring to IRISL’s situation in three time periods before, during the sanctions and post-sanctions era, Ahmad Shahbaz Beigi- IRISL’s Deputy Chief Financial Officer- in an interview with MANA International Group said: Islamic Republic of Iran Shipping Lines is one of the unique Iranian companies because it is one of the numerable economic enterprises which its financial and commercial deals are international; and is directly affected by the global economy’s condition.

Considering IRISL’s normal situation growth in its achievement which accompanied by international demonstrates a sign of gaining profit competition before the sanctions, he in the current fiscal year. added that: IRISL as a national fleet IRISL had a He called the post-sanctions era an have experienced good financial appropriate opportunity for IRISL to state during the sanctions and in a desirable implement developmental programs situation that foreign companies performance and continued: during the sanctions were banned from entrance to the in 2015 and 2016 era and due to the limitations, the country’s ports due to the cruel while a heavy national fleet couldn’t be renovated imposed sanctions. shadow of parallel to the international According to him, IRISL could competitive companies. But now, IRISL focuses recapture its position in the on it to become reality. international era by sanctions’ condition Shahbaz Beigi referred to the 10 removal and enter the competitive and slump in ships ordered to be build by Hyundai atmosphere with other shipping transportation and added that arrival of these ships lines. market ruled will increase the capacity of the fleet Referring to an appropriate the industry. by 50 percent. profit margin during the crisis in He emphasized: IRISL’s stock price maritime transportation as one of flow in the stock market and during the positive effective factors of the the two past years shows that it national fleet, he further continued: doesn’t follow the fluctuations in the if we have a comparative look at capital market with the purpose of international companies, we would recording a stable flow and we hope reach the conclusion that IRISL has applying developmental programs encountered the difficulties in an to provide the profits of stockholders excellent manner while other big more than before and IRISL’s stock shipping companies faced challenges to remain a valuable and attractive and recorded heavy losses. choice in securities exchange. He further pointed out that IRISL Given the financial supports of had a desirable performance in 2015 Korean and Chinese banks in and 2016 while a heavy shadow of applying developmental programs, competitive condition and slump IRISL’s Deputy Chief Financial in transportation market ruled the Officer continued: considering the industry. In line with this, he said that credit line worth Eight billion Euros Volume.7 / Autumn 2017 during the first half of the current year created by Central Bank of the and by considering the information Islamic Republic of Iran in South which hasn’t been audited due to the Korea and another one in China, it performance of Group’s companies, announced its readiness to support IRISL enjoyed a 30 to 45 percent the developmental programs. Payam Darya

13 Interview Volume.7 / Autumn 2017 Payam Darya

14 How do you evaluate the situation of shipping industry market particularly bulk sector? Reports and analysis from reliable international institutions declared that shipping industry particularly bulk sector has not been still survived from the financial- The Managing Director of Bulk Carrier Division of IRISL: economic crisis of 2007/8. Bulk sector suffered from the situation in a way that although a relative recovery had been seen in Future of container shipping market, bulk sector passed 2016 as the worst year and BDI reached lower than 300 points which was unheard. Bulk Market While, the minimum level for dry bulk index in BDI to be normal is 1300 points. At the beginning of 2017, the index increased then fell Is Promising again and finally after reaching almost 700 points during summer showed ascending trend and now it’s approximately around 1400 Players of shipping industry are aware that rates’ return to the points. It should be noted that a peak period is somewhat out of reach and shipping industry inevi- vast majority of the mentioned tably has to survive by executing new norms. Given various coun- growth in BDI index was rooted tries and indexes of bulk cargo in origins and destinations, china in large bulk carriers rather small is the best and the most important player in shipping industry. ones. The general situation of bulk Meanwhile, indicative indexes of revenue in the industry shows a companies during second quarter low level and there is not any satisfactory perspective but the only of the current year demonstrates approach which remains is costs reduction. Costs reduction actu- that these companies could only ally is the most important strategy of leading shipping companies decrease the amount of loss and in recent years which have been seen in broad sense in different they rarely could overcome the sections and by various manners which could present a promising future for the bulk market. In line with this, PD has conducted an resulted costs. However, players interview with managing director of IRISL Bulk Carrier Division of shipping industry know that to elaborate the dominant situation in the market. The transcrip- rates’ return to the peak period in tion of this interview is given in the following section. a decade ago is impossible and shipping industry inevitably has to survive by implementing new norms.

If possible, please explain the Volume.7 / Autumn 2017 nature of bulk shipping and clarify the differences with other types of carrying commodities in the industry. Basically, shipping industry is Payam Darya

15 Interview

a so-called economy of scale to return with no commodity at are limited in a way that having and bulk sector is the most the end of sailing to a desired access to them has its particular economical one among various region while a relative balance is difficulties and sometimes they marine commodity carryings. It observed in container shipping. have to move through brokers. is crystal clear that fundamental Moreover considering the Last but not the least relates differences exist when it comes container shipping, freight rates to the role of intermediates. to container shipping. One of are determined and periodic They generally have little the sensible properties of bulk while they aren’t clear in bulk responsibilities regarding the shipping is the sailing schedules shipping and are established carrying contracts unless a strong in a way that ships’ activities are by the commodity’s properties and direct relation exists between defined by tramp and routes are and market outlook adjacent to them and the goods owners. The not determined beforehand. So, the destination. As a result, a recent trend is that charterers all the costs are unique in every challenging accounting process have direct communications with sailing. In other words, each and discussion is seen in every carrying companies. In other sailing is similar to launching sailing. In contrast to container words, giving the responsibilities a new line and in order to be shipping in which competitors to others outside the industry profitable, it is usually necessary are known and activities are clear is impossible due to unclear to provide multi sailings while in in different routes, all the bulk rates and the industry needs the container shipping sailing routes companies in a global scale are intermediated to be given up. As are definite from the beginning. competing with one another and opposed to container shipping, the Volume.7 / Autumn 2017 Lack of balance in sailing on it is impossible to predict the rates are determined beforehand the backhaul and headhual is competitors’ reactions. The third in different routes and sale of another characteristic of this type distinction between these two the services is possible through of shipping. It is rarely seen that types of shipping is customers. extensive networks. the port of export import the same Customers of bulk sector are the goods. Therefore, ships have owners of massive goods and they Payam Darya

16 By implementation of JCPOA 75 million ton and when it is and the entrance of foreign compared to 72 million ton of companies to domestic ports, marine trade during the same In contrast how do you evaluate the activity period last year it shows a 4.2 to container of bulk sector in IRISL? per cent growth. However, the amount of commodities’ growth shipping During the sanctions era which in H1 is differ from other sectors in which the entrance of foreign ships comparing to the corresponding competitors were forbidden to domestic ports, period in 2015 and container demands by domestic companies shipping enjoyed a high growth are known to carry goods were more than and activities of 33.3 percent while dry bulk ever and bulk sector of IRISL commodities recorded only a are clear gained more shares by carrying growth of 3.2 percent. In addition, in different inner commodities. But then, general cargo’s growth showed routes, all transit of national ships had been a stable trend and oil product the bulk banned in international waters growth decreased by 82 percent. and great traders faced lots of companies Meanwhile, liquid bulk cargos challenges particularly in carrying showed a 66.7 percent growth. in a global foodstuffs and using national scale are fleet’s ships. By implementation competing of JCPOA which was a great Considering the entrance of with one event in marine transportation chemical tanker carries, how do industry of Iran, foreign you evaluate the outlook of bulk another companies could have access sector? and it is to domestic market thoroughly Bulk division is now active in impossible to and domestic companies could three major sectors of dry bulk get in contact with international predict the including industrial bulk, food markets. Meanwhile, foreign competitors’ bulk and chemical bulk and liquid famous charterers which has a reactions. bulk and general cargo. The fleet long history of cooperation with consists of supramax and panamax IRISL’s bulk sector and had to ships which are responsive to give up the ties unintentionally, the most needs of the market resumed their partnership with and their performance has been a more interest and desire. As a satisfactory. In this regard, we whole and during post-JCPOA, need to upgrade the current fleet facility of customer relationship, and improve its capacity to get the having a better technical and most share of the market. General commercial operation as well cargo sector has been recovered as providing time and financial by using heavy lift vessels and savings have been achieved. it is expected to be witness of launching new lines with the How do you assess trend of purpose of carrying projected changes in trade of the country’s cargoes by a recovery in domestic

different sections? market and an increase in Volume.7 / Autumn 2017 demands to achieve profitability. Considering the statistics released In contrast, the fleet of liquid bulk by PMO, marine trade of Iran is not accompanied by the needs during the first half of the year of domestic market and this gap has had an ascending trend with could be easily sensed during the Payam Darya

17 Interview

sanctions. Therefore considering china is the initiative step of the exported from this country. It is the appropriate perspective of country in the infrastructure expected that the cancellation or the market for MR tankers, it is project called OROB which is revision of NAFTA would lead to expected that the entrance of these expected to affect the investing new demands due to alternative ships would transform the tankers trends in different countries trades particularly in the field of in liquid bulk sector and improve and various regions. Another grain imports by Mexico. the capabilities and diversities of significant issue regarding the national fleet to make this part the fact is the cancellation of Providing a short elaboration one of the most significant the international contracts by the side on the fleet operation in bulk important arms of the company. of American presidency such as Paris Agreement and NAFTA. carrier and general cargo, Mr. In line with this, cancellation Ghonji please take a look on the How do you describe the of Paris Agreement is now performance of bulk division of fundamental factors in profitable for the bulk carrier IRISL and explain what the main international bulk market? market and it has been facilitated change is during the first half of the coal production of America the current year in comparison Although bulk cargos include and different cargoes have been with the same period last year? diverse commodities, coal and iron ore are the most important ones. Considering different countries and indexes of origin and destination of bulk cargo, china is the best and the most important player in shipping industry particularly bulk carrier industry in a way that predictions regarding the economic growth of the country directly affect the international indexes of bulk sector. Given the growth in demand for bulk cargos in the current year from the perspective of cargo types and import countries which was extensive, china is still the major importer. It should be noted that the country is changing and understanding it by relying on dry bulk market is difficult. But different indexes of major economy of china demonstrate that these changes would result in a decrease in investment especially in machinery, infrastructures and Volume.7 / Autumn 2017 building projects which are the main incentive of dry bulk imports. Statistics and data present the successive decrease of investment in both state and private sectors. However, the positive point about Payam Darya

18 Bulk carrier and general cargo of different sectors consisting events have been recorded division handled the operation of of dry bulk, liquid bulk and and many carrying capacities an average of 53 ships including general cargo has been recovered have been lost in short routes, 15 Panamaxes, 17 Supramaxes, although a decrease in active implementation of JCPOA led the 7 general cargo ships, 8 heavy- capacity had been recorded. In dry bulk carriers to be applied in lift ships, 2 Suexmax tankers, this regard, the number of sailings long distances. In addition, new one bitumen carrying ship, one decreased by 10 percent and fall and large charterers have been MR tanker and two Handysize of 18 percent in carrying cargo added to the customers. Origin tankers with a total capacity led to an increase of 34 percent imported markets and exported of 2.5 million DWT. In the of ton mile which demonstrate destinations in the field of corresponding period last year the a performative increase of more carrying chemical and industrial company recorded the capacity of than 50 percent. If we would products as well as freed 2.83 million DWT in a way that evaluate the activity of bulk tonnages in international markets a decrease of 12.4 percent could sector in different sub sectors we are exploited. Development in be seen in the active capacity of could understand that in dry bulk carrying exported coal and sulfur the fleet. During the H1, 2017 sector positive events have been to China, carrying exported the commercial performance occurred. While some regional wheat from Iran to Oman, and Volume.7 / Autumn 2017 Payam Darya

19 Interview

improvement in carrying imported broad sense in different sections grain from South America are all and by various manners. Certainly, a significant act done in dry bulk costs topic in shipping industry is carrying. Considering the severe of high importance from another foreign fall in liquid bulk operation during point of view and that’s cost companies the end of the last year and the centers in shipping industry in beginning of the current year, this a way that source of revenue could have market fortunately has been able is approximately the same and access to to revive the previous markets that’s the received freight from domestic market and improve the level of activities customers. Customers gained thoroughly in international market. In line more power in discounting due to and domestic with this, it is expected that with the excess of supply over demand companies more thoughts and a recovery in recent years and many of whom in the situation of the existed established the basis of their could get in ships the market will enjoy more business on costs reduction even contact with growth. General cargo section during the long era of recession international hadn’t have a regular line in the in the industry. Ship-owners and markets. first half of 2016 but now it has marine transportation companies Meanwhile, launched two regular lines to Asia concentrate on meeting their and Europe and the dominant previous commitments in the foreign famous approach in this sector has been peak time even with low revenues charterers changed from carrying low level and overcome the current costs. which has a bulk cargo to more specialized As referred earlier, the current long history general cargos with a more costs include different sections of cooperation value added. Therefore, these in which technical management with IRISL s facts would justify the outlook costs, fuel and consumables, ’ of utilizing the fruits of JCPOA repair and maintenance, supplies, bulk sector and the launch of new projects insurance and other related office and had to in the country which has led the and administrative expenses give up the ties increase in projected cargoes and are the most important ones. the presence of a stable line. The latest reports demonstrates a drop in shipping costs for the fifth consecutive year, adding As you know, shipping to the importance of a cost- companies have changed their saving strategy to maintain main strategy from revenue to competitiveness. Another cost- costs. What is the reason behind related issue that is usually not the strategy of costs reduction? taken into consideration is the As indicative indexes of revenue costs imposed by the structure in the industry shows a low level and organization of businesses and there is not any satisfactory in the shipping industry. As has perspective and a jump in recovery already been said, cost centers of the revenues in the shipping are numerous in the shipping industry, and this increases

Volume.7 / Autumn 2017 industry, the only approach remain is costs reduction. Costs costs. Perhaps this has caused reduction actually is the most the leading company in shipping important strategy of leading industry- Maersk- to face the shipping companies in recent following of other companies. years which have been seen in In this regard and after Payam Darya

20 implementing the costs reduction be implemented on a larger strategy for a consecutive period, and more practical scale. Smart Maersk had to give an end to its shipping is a concept that players During the operations in the energy sector in the shipping industry have H1, 2017 the from its business portfolio and long been looking for in order to receive a part of the stock from reduce costs; it’s also a fact that commercial one of the top energy companies, the shipping industry has always performance Total. Then, acknowledgment of taken technological advances of different the much higher professionalism over time with some time lag, and sectors and superior capabilities of Total, this is a matter of smart shipping. consisting Mersak could outline a better While various industries have prospect in the energy sector long enjoyed the full potential of dry bulk, and maintain the interests of the of technological advancements, liquid bulk Group. Moreover, reorganization the shipping industry has not yet and general and integration of transport and moved parallel as it should be. cargo logistics sectors led to the more The response to technological has been reduction in costs by removing advances in the shipping industry recovered cash costs and other related ones is debatable from two aspects which are dominant among of hardware, namely, ships different departments of business and equipment, and software, formed transport and logistics structure and organization. In sectors. hardware aspect, ships of the fleet should be upgraded to meet the required need and the These days, there are no seminars orders of new-building should be and conferences related to accompanied by considering the shipping in international arena, last technological advances. In in which the terms “smart the software dimension, training shipping” and “autonomous of human resources is one of the ships” and “digitization in most important issues for the staff shipping” to be exploited to have access to the most up-to- repeatedly. In your opinion, are date training methods. It should be these issues just word processing, noted that, due to the multiplicity or a compiled and executable of customers and the need for roadmap? What would be your accountability in the predicament company’s reaction? situation, the digitization of Perhaps, just a few years ago, if processes especially in the anyone talked about autonomous container transport section plays shipping, nobody would consider a key role in customer satisfaction the discussion serious; while as well as marketing. Of course, we are even witnessing the big charterers such as BHP autonomous ships’ testing in a Billiton have recently unveiled an smaller scale and in this regard online rental platform for direct communication with shipowners, the International Maritime Volume.7 / Autumn 2017 Organization is seeking to draft or one of the big active charterers relevant laws and regulations. in the bulk carrier has ordered the All of these indicate that these construction of unmanned ships, issues, which are considered as which is very interesting. a part of smart shipping, will Payam Darya

21 InterviewInterview

When does the history of Fortunately, after the finalization ManagingManaging DirectorDirector ofof IRISLIRISL ContainerContainer TransportationTransportation Co.:Co.: the ships. This demonstrates the Container Shipping Co. come of JCPOA the process changed better attraction of cargos and back to and what services does and despite the concerns that the most usability of ships. it provide now? resuming activities of the During the first seven month Providing container services foreign lines would decrease the of 2017, Container Shipping NewNew LinesLines fromfrom started since 1991 in Islamic share market of IRISL Container Co. enjoyed a growth of 144% Republic of Iran Shipping Shipping Co. and severe and 234% in its international Lines and prior to that, IRISL competitions, the company performance and its revenues, carried the main cargos of the could gain acceptable growth in respectively. This leads to EuropeEurope toto India,India, country. By the end of War the post-JCPOA era. exploit more routes and most of and the emergency situation our available capacities. of the country, the grounds of Please explain the performance By good fortune and during the IRISL’s entrance and providing of IRISL Container Shipping post-JCPOA era, the cooperation NorthNorth AfricaAfrica andand container services had been Co. during the first seven with leading shipping lines supplied to create a new vision months of current year. has been resumed in a way to the market, private sector When it is compared with the that carrying goods has been and the market’s needs. In fact, corresponding period last year conducted directly from Asia SouthSouth AmericaAmerica toto container shipping was the most Container Shipping Co. during to Europe. Meanwhile, a close fundamental step which should the first seven months of 2017 relation between some lines and be taken by IRISL. Although experience an increase of 28 routes to establish joint services IRISL started its activity in this and 53 in its performance and has been formed. BeBe LaunchedLaunched field with small multipurpose revenues, respectively. In ships carrying 700 and 1000 addition, the company recorded How do you evaluate the reasons behind increase in حق توقف containers, it grew with an a 48% increase in ?Whereas the complied profit .کانتینری IRISLIRISL ContainerContainer ShippingShipping acceptable speed in a way Co.Co. aimsaims atat beingbeing preparedprepared that now container shipping budget of the company was the One of the characteristics of forfor aa growthgrowth ofof 60%60% inin is one of the basic pillars of ambitious one. In fact, revenue’s container shipping is that the capacitycapacity withwith thethe entranceentrance IRISL. Moreover in special and doubled growth to performance ships should transit cargos in the ofof newnew vessels.vessels. ManagingManaging critical situations, the company was projected to rise during defined lines and in the case of DirectorDirector ofof ContainerContainer carried more than of 80% of the 2016/17. This led to more than not having cargos they would ShippingShipping Co.,Co., Cap.Cap. country’s cargos so that there double profit for the company. lose their customers. Therefore, HamzehHamzeh Keshavarz,Keshavarz, inin anan wasn’t any disruption during the This increase recorded while container ships try to have interviewinterview withwith PDPD referredreferred sanctions era for the entrance of fuel price enhanced last year and a regular sailing schedule to toto anan increaseincrease ofof 28%28% inin market’s cargos, raw materials the average fuel price during the attract customers trust. performanceperformance andand 53%53% inin of the factories and county’s first six months of 2017 reached Ships have fix costs such as fuel, revenuerevenue duringduring thethe sevenseven exports and petrochemicals. $308 per ton from $230 in the port, personnel and technical monthmonth ofof thethe currentcurrent yearyear andand During this period, people corresponding period in 2016. expanses. So, as ships carry explainedexplained thethe activitiesactivities ofof thethe didn’t notice the disconnection In line with this, 34% of higher more cargos fixed costs would company.company. of foreign container lines fuel prices were posted globally. be divided and the income carrying container cargos and So, growth has come about in a would be increased. However, this issue was one of the tools situation where we have faced some costs vary for instance that provided the possibility increasing fuel prices that were carrying cost of a container and for the government to start beyond our control. 1000 containers depending on the negotiations in a better In addition, the bulk carrier Volume.7 / Autumn 2017 Volume.7 / Autumn 2017 Volume.7 / Autumn 2017 the workload differ from one circumstances. At the same time shipments increased from 939 another. as the centrifuges were moving thousand miles to one million Considering fixed costs, in depth of the ground, the and 138 thousand miles which efficiency of the ships lead propellers of our ships continued show a growth of 21%. This to more profit. In this regard, to spin against the eyes of the indicates the attraction of new routes of Asia-Europe and Payam Darya Payam Darya Payam Darya hostile nations. supplies and better operation of 2218 19 Interview

thatWhen there does wasn’t the any disruptionhistory duof ThisFortunately, increase after recorded the finalization while fuel se of not having cargos they wou Managing Director of IRISL Container Transportation Co.: the ships. This demonstrates the ringContainer the sanctions Shipping era Co. for come th ofprice JCPOA enhanced the process last year changed and th ldbetter lose attractiontheir customers. of cargos Theref and eback entrance to and of what market’s services cargos, does eand average despite fuel the price concerns during thatthe ore,the mostcontainer usability ships of tryships. to have itraw provide materials now? of the facto resuming first six activities months of of 2017 the rea Duringa regular the sailing first sevenschedule montht riesProviding and county’s container exports servicesand pet chedforeign $308 lines per would ton decreasefrom $230 the oof attract 2017, customers Container trust. Shipping Shi New Lines from rochemicals.started since During 1991 this in Islamicperiod, inshare the market corresponding of IRISL Containerperiod i psCo. have enjoyed fix a costsgrowth such of 144% as fuel, Republicpeople ofdidn’t Iran notice Shipping th nShipping 2016. In line Co. with and this, severe 34% andport, 234%personnel in andits technicalinternational exp eLines disconnection and prior to of that, foreign IRISL competitions,of higher fuel pricesthe companywere po anses.performance So, as ships and carry its revenues,more car carriedcontainer the lines main carrying cargos contaiof the stedcould globally. gain acceptable So, growth growth hain gosrespectively. fixed costs This would leadsbe divide to Europe to India, nercountry. cargos By theand end thisof Wari sthe come post-JCPOA about in a era. situation wher dexploit and the more income routes would and be most increas of sand the emergency situation e we have faced increasing ed.our However, available capacities.some costs vary fo sueof thewas country, one of thethe toolsgrounds that ofp Pleasefuel prices explain that the were performance beyond o rBy instance good fortune carrying and costduring of the a rovidedIRISL’s entrancethe possibility and providing for urof control.IRISL InContainer addition, Shippingthe bul containerpost-JCPOA and era, 1000 the containers cooperation d North Africa and thecontainer government services to hadstart beenthe kCo. carrier during shipments the first increase seven ependingwith leading on the shipping workload linesdiff suppliednegotiations to create in a newa visionbette dmonths from of939 current thousand year. miles erhas from been one resumedanother. Considerinin a way rto circumstances. the market, privateAt the sectorsame toWhen one itmillion is compared and 138 with thousa the gthat fixed carrying costs, goods efficiency has been oft timeand theas themarket’s centrifuges needs. were In fact, mo ndcorresponding miles which period show alast growth year heconducted ships lead directly to more from profit. Asia In South America to vingcontainer in depth shipping of the was ground, the most t ofContainer 21%. This Shipping indicates Co. theduring att tothis Europe. regard, Meanwhile, new routes aof close Asi hefundamental propellers stepof our which ships should cont ractionthe first of suppliesseven andmonths better of o 2017 a-Europerelation between and transit some lines lines to andIra inuedbe taken to spin by IRISL.against Althoughthe eye perationexperience of the an ships. increase This demonst of 28 perationroutes to of establish the ships. joint This demonstservices sWhenIRISL of the does startedhostile the history itsnations. activity of ContainerFort in this sand of the53 hostilein its nations.performanceFort and rateshas been formed.the better Be Launched Shippingfield with Co. come small back multipurpose to and unately,revenues, after respectively. the finaliza In a whatships servicescarrying does700 andit provid 1000 tionaddition, of JCPOA the company the process recorded chang ttractionHow do youof evaluatecargos andthe thereasons most behindusability increase of ships in حق توقفecontainers, now? Providing it grew container with s an eda 48%and despiteincrease thein concerns ervices started since 1991 resuming. Whereas activities the complied of th .profit? Duri کانتینریIRISL Container Shipping acceptable speed in a way that in Islamic Republic of Iran Co. aims at being prepared that now container shipping ebudget foreign of linesthe company would decrease was the ngOne the of first the characteristicsseven month ofof 20 Shipping Lines and prior to th for a growth of 60% in is one of the basic pillars of theambitious share market one. In of fact, IRISL revenue’s Contai 17,container Container shipping Shipping is Co.that enjothe at, IRISL carried the main carg capacity with the entrance IRISL. Moreover in special and nerdoubled Shipping growth Co. to performanceand severe yedships a growth should of transit 144% andcargos 234% in inthe it os of the country. By the end of of new vessels. Managing critical situations, the company competitions,was projected the to company rise during cou sdefined international lines performanceand in the case and iof War and the emergency situation Director of Container carried more than of 80% of the ld2016/17. gain acceptable This led growthto more in than the tsnot revenues, having cargos respectively. they would Th Shipping Co., Cap. ofcountry’s the country, cargos the so grounds that there of post-JCPOAdouble profit era. forPlease theexplain company. islose leads their to customers.exploit more Therefore, routes a Hamzeh Keshavarz, in an IRISL’swasn’t any entrance disruption and providing during the co theThis performance increase recorded of IRISL Contaiwhile ndcontainer most of ships our available try to havecap interview with PD referred ntainersanctions services era for had the been entrance supplied of nerfuel Shipping price enhanced Co. during last year the and fir acities.a regularBy goodsailing fortune schedule and d to to an increase of 28% in market’sto create cargos,a new rawvision materials to the stthe seven average months fuel ofprice current during year. the uringattract customersthe post-JCPOA trust. era, performance and 53% in market,of the factoriesprivate sector and county’sand the firstWhen six it ismonths compared of 2017 with reached the c theShips cooperation have fix withcosts leading such shippias fuel, revenue during the seven exportsmarket’s andneeds. petrochemicals. In fact, co orresponding$308 per ton periodfrom $230last year in the C ngport, lines personnel has been andresumed technical in a month of the current year and ntainerDuring shippingthis period, was thepeople mo ontainercorresponding Shipping period Co. during in 2016. the expanses.way that So,carrying as shipsgoods carry has explained the activities of the stdidn’t fundamental notice thestep disconnectionwhich should firstIn line seven with months this, 34%of 2017 of experien higher beenmore conducted cargos fixed directly costs from Awould company. ofbe takenforeign by containerIRISL. Althoug lines cefuel an prices increase were of posted 28 and globally. 53 in siabe dividedto Europe. and theMeanwhile, income hcarrying IRISL containerstarted its cargos activity and i itsSo, performancegrowth has come and aboutrevenues, in a awould close berelation increased. between However, some nthis this issue field was with one small of the multipur tools respectively.situation where In weaddition, have facedthe somelines costsand routes vary forto instanceestablis posethat ships provided carrying the 700 possibility and 10 companyincreasing recorded fuel prices a 48% that increase were i hcarrying joint services cost of has a containerbeen formed. and 00for containers, the government it grew to with start nbeyond container our control. detention charge. 1000How containersdo you evaluate depending the rea on anthe acceptablenegotiations speed in ina a betterway WhereasIn addition, the complied the bulk budget carrier of Volume.7 / Autumn 2017 Volume.7 / Autumn 2017 Volume.7 / Autumn 2017 sonsthe workload behind increasediffer from in profi one thatcircumstances. now container At theshipping same timeis o shipmentsthe company increased was the from ambitiou 939 t?another.One of neas theof thecentrifuges basic pillars were ofmoving IRIS sthousand one. In milesfact, revenue’sto one million doub theConsidering characteristics fixed of costs,co L.in Moreoverdepth of inthe special ground, and the c ledand growth138 thousand to performance miles which was ntainerefficiency shipping of theis that ships the lead riticalpropellers situations, of our theships company continued ca showprojected a growth to riseof 21%.during This 2 shipsto more should profit. transit In cargos this in regard, t rriedto spin more against than ofthe 80% eyes of theof theco 016/17.indicates This the led attractionto more thaof henew defined routes of lines Asia-Europe and in and the ca Payam Darya Payam Darya Payam Darya untry’shostile nations.cargos so nsupplies double andprofit better for theoperation company. of 18 2319 InterviewInterview

has been programmed for them? transite. This lines view to Iraqrelates have to been the Shipping Co. imported about TEU equipped container withships. Inthe otherne the ongoing issues. permanently a strong one for us. With the entrance of new ships establishedeast transit according corridor to whichin w 14,000 containers of rice words,w systems, the providingcapacity is new doubled remot We are trying to attract more However, if political instabilities , the capacity of the fleet wou wehich expect the government, to be witness PMO of and this ma through Chabahr port last year bute theservices fuel consumptionand digital costs a cargos by providing the decline, we will activate our line ld increase by 60%. The first on positivejor marine continuing policies trend. of the cou which were unloaded in Shahid whichnd online include selling. 35% of At the theships’ sa customers’ satisfaction and in this market again. Activation e will be delivered by the en Onntry the aiming other at sideimproving of the marine coin, Kalantari Port and Chabahr Free costme remaintime, sellthe sameof internation and the the required circumstances. Container of South America’s market is d of March, 2018 and then with an PMOtransp reduced discounts and this Zone. renovatingal cargos has of thebeen fleet started is onli being In fact, container division of Shipping Co. under investigation as well. interval o actortation imposed are costs taken on the nationalinto a Inidians also considered provided.ne in some foreign sites and IRISL has the capability of f a month the others will be during the fleetccount. because Considering almost theall preeminof these Chabahar Port a central region In good line measures with havethis, beenContainer taken i being the first symbol of every Considering the 50th added to the fleet. Follow first seven discountsent role haveof IRISLbeen eliminated in issue to export their cargos to Shippingn providing Co. preparesproper servithe shipping company by the anniversary of IRISL and its ing the sanctions against IRISL months of 2017 thiss such year. as At beingthe same present time, duringPMO Afghanistan. India is supposed groundsces to theto increasecustomers. the Most cargos of side of customers. Therefore, entrance to 51st of activity, , purchasing of these calculatedthe Imposed all Wartheir and unloading launchin to transfer one million ton volumethe customers by have60% accessthrough to a more concentration is paid on experience an what’s your message to the ships was a positive ste andg of loading Khoramshahr, costs inBushehr, dollars. I of wheat to Afghanistan and enhancing virtual profile marketing. according to whicAt digitalization as one of the most increase of 28 employees? p because developing the flee Duemam to Khomeini the imbalance and Asaluyeh exists inpo through the port freely. To theh they meantime, can monitor it hasall thestarted finan important goals of the company. and 53 in its I would like to congratulate the t was suspended during th therts, theimport company and isexport now fallowing of the t carry the first part of this cargo cooperationc with leading 50th anniversary of IRISL to e mentioned period. Adding n performance country;he ways mostto pave of thethe waycontainers for the which is approximately 130,000 internationalial procedures lines ofand theirthe Considering the current stakeholders, senior managers ew ships will give a new life to and revenues, are success carried ofempty the and national without fle ton, the Container Shipping programscurrent and to previouscharter the cargos. ships In in a situation of container shipping, and all the employees. I the fleet. It should be noted goodset in the which near lead future. to severRecently costs Co. could provide the way in a theddition, determined notices time are havereceived been o how do you evaluate the future respectively. sincerely appreciate the efforts that the fuel consum for, PMO IRISL in andan attemptconsequently to develop our very competitive circumstance takennline into account.or through S of this industry? of our loved ones, and especially ption cost of these ships despite costa-Europe Shahid of transshipment Beshti and transit in Chahbahr increased.lines to Port Ira to conduct the contract. Up to ToMS. supply While the the required customers container coul Container shipping moves to our colleagues in the Container having the capacity of 14,500 q has invested extensively. The now, three ships have carried ford pay the online, new ships, they can Holding be a memb has monopoly globally. In fact, the Transportation Division and TEUContainer equals Shipping to 6500 TEU Co. containerimported Recently, Containerhave Shippingbeenthe Co.establishedcompany imported part of the product to Chabahar postederTEU of equals telegramexcellent to 6500 channelprocedures TEU container to beand a numbers of container shipping hope them all their success. about 14,000 containers of carried according cargos to which from weIndia expect to and then to Afghanistan. It inware ships. the meantimeof In theother ongoing thewords, Container issues.the ca companies are decreasing in Considering my entrance to rice through Chabahr port la Afghanistan to be witness through of Chabahrthis posit is expected that with PMO’s Shippingpacity is co.doubled helps butIRISL the to fuel buy c different ports of the world IRISL since 1980 co-occurred st year which were unloaded in S port.ive continuing Could trend. you please support in developing the port, themonsumption in an appropriate costs which cost. include and this is a warning that the with the Cultural Revolution, I elaborateOn the thisother issue? side of t thehahid national Kalantari fleet Port would and Chabahr manage UNCTAD has noted. Currently, believe from the point of view Thehe coin,government PMO reduced considers disc appropriately Free Zone. Inidians to activate also cons the What35% ofmeasures the ships’ have costbeen r despite the relative increase in of not a member of staff that idered Chabahrounts and as thisa actstrategic imposed port c port. takenemain bythe thesame company and the tor cargos, the number of companies has become more stable when the company is the economic

andosts the on country’s the national only fleet oceanic beca provideenovating the of thenecessities fleet isof b has declined, and the ports of the compared to prior times and supporter of the country because Chabahar Port a central r portuse almostand in allline of with these this discounts it has Considering the entrance havingeing provided. access In lineto online world are regularly covered by there will be better management it supplies the main cargos egion to export their cargos conductedhave been weeklyeliminated investment this ye of new ships to the national systems?with this, the lower number of container in the container shipping process and then it is a special one. In to Afghanistan. India is su there.ar. At theThis same view time, relates PMO to calcul the fleet, what plans has been The Container purpose Shipping of the company Co. prepar is lines year by year. worldwide. the same way, the importance eastated transitall their corridor unloading in whichand lo programmedpposed to fortransfer them? one beinges the equipped grounds withto increasethe new t Of course, more than 80 percent of IRISL has been taken into million ton of wheat to Afghani theading government, costs inPMO dollars. and With the entrance of new ships, systems,he cargos providing volume by new 60% remote throug of the world’s cargos are handled Do you intend to launch a new account even in the constitution stan and through the port freely majorDue tomarine the imbalance policies existsof the i the capacity of the fleet would servicesh enhancing and marketing. digital and At onlinethe me by a few families owned by line? of the country. So I think having . To carry the first part of th countryn the importaiming and at exportimproving of t increase by 60%. The first one selling.antime, Atit hasthe startedsame time,cooperati sell private companies. This issue Many routes are being honest cooperation with the is cargo which is approximately marinehe country; transportation most of the are containe taken will be delivered by the end of ofon international with leading cargos international has been lin has negative and positive points, investigated and Africa route company is a national duty. 130,000 ton, the Container Sh intors are account. carried Consideringempty and witho the March, 2018 and then with an startedes and onlinethe programs in some to foreigncharter and it is especially interesting is being improved. At the same It is crystal clear that the country ipping Co. could provide the wa preeminentut goods whichrole oflead IRISL to sever in interval of a month the others sitesthe shipsand goodin the measures determined have t for our country, but the number time, east of Africa has a more should have a stable supporter y in a very competitive circ issues costs suchfor IRISL as being and consequepresent will be added to the fleet. beenime havetaken been in providingtaken into accounproper of lines has decreased, with most stable situation and we intend to in all sections particularly in umstance to conduct the duringntly ourthe costImposed of transshipmWar and Following the sanctions servicest. To supply to the the customers. required contai Most of the remaining one working develop this route to south and transportation. Fortunately, contract. Up to now, three sh launchingent increased. of Recently,Khoramshahr, against IRISL, purchasing of ofner the for customersthe new ships,have Holdinaccess together as a consortium. west of the country. In this regard over the past years, IRISL has ips have carried part of the pro Bushehr,the company Imam carriedKhomeini cargos and these ships was a positive step tog hasa virtual posted profile excellent according procedures to Therefore, the national fleet and in an attempt to reduce had an excellent performance. duct to Chabahar and then to Afgh Asaluyehfrom India ports, toAfghanistan the company throu is because developing the fleet was whichand in theythe meantime can monitor the Containall the should maintain and develop costs, international cooperation Considering the crisis periods gh Chabahr port. Could you ple anistan. It is expected that wi er Shipping co. helps IRISL to Volume.7 / Autumn 2017 now fallowing the ways to pave suspended during the mentioned financial procedures of their its condition by carefully and the imposed War, IRISL had Volume.7 / Autumn 2017

Volume.7 / Autumn 2017 should be conducted. With the th PMO’s support in developing thease way elaborate for the this success issue? ofThe the g period. Adding new ships will current buy them and in previous an appropriate cargos. cost In examining the difficult situation entrance of new ships, Europe been called the second defense the port, the national fleet wou nationalovernment fleet considers in the Chabahrnear future. as a st give a new life to the fleet. It addition,. What measuresnotices arehave received been tak and economic competitiveness line will be connected to India line of the country and it played ld manage appropriately to act Recently,rategic portPMO and in thean attemptcountry should be noted that the fuel onlineen by theor throughcompany SMS. to provide While at the international level. soon and the focus on attraction its crucial role as the first defense ivate the port. Considering the to’s developonly oceanic Shahid port Beshti and inin consumption cost of these ships thethe customers necessities could of having pay online, access It is expected that the container of international cargos will be line during the sanctions era. entrance of new ships to the n Chahbahrline with Portthis ithas has invested condu despite having the capacity of they to online can systems?be a member The of freight rate to be increased from increased. Therefore, serving in this Group

Payam Darya ational fleet, what plans

cted weekly investment ther purpose of the company is being Payam Darya Payam Darya extensively. The Container 14,500 TEU equals to 6500 telegram channel to be aware of 2019. However, the market North Africa’s market has been is an honor for everyone. 2024 21 Interview transit lines to Iraq have been Shipping Co. imported about TEU container ships. In other theourse, ongoing more issues. than 80 percent permanently a strong one for us. established according to which 14,000 containers of rice words, the capacity is doubled Weof theare world’strying tocargos attract are more ha However, if political instabilities we expect to be witness of this through Chabahr port last year but the fuel consumption costs cargosndled by aby few familiesproviding owned the by decline, we will activate our line positive continuing trend. which were unloaded in Shahid which include 35% of the ships’ customers’ private companies. satisfaction This issue and has in this market again. Activation On the other side of the coin, Kalantari Port and Chabahr Free cost remain the same and the the requirednegative circumstances. a Container of South America’s market is PMO reduced discounts and this Zone. renovating of the fleet is being Inn fact, container division of Shipping Co. under investigation as well. act imposed costs on the national Inidians also considered provided. IRISLd positive has points,the capability and it is ofe during the specia th fleet because almost all of these Chabahar Port a central region In line with this, Container being the first symbol of every first seven Considering the 50 to export their cargos to lly interesting for ou discounts have been eliminated Shipping Co. prepares the shipping company by the months of 2017 anniversary of IRISL and its this year. At the same time, PMO Afghanistan. India is supposed grounds to increase the cargos sider country, of customers. but the number Therefore, of l entrance to 51st of activity, calculated all their unloading to transfer one million ton volume by 60% through moreines has concentration decreased, withis paid most on o experience an what’s your message to the and loading costs in dollars. of wheat to Afghanistan and enhancing marketing. At digitalizationf the remaining as one one working of the most toge increase of 28 employees? Due to the imbalance exists in through the port freely. To the meantime, it has started importantther as a consortium. goals of the Therefore, company. t and 53 in its I would like to congratulate the he national fleet should maintai the import and export of the carry the first part of this cargo cooperation with leading performance 50th anniversary of IRISL to n and develop its condition by caref country; most of the containers which is approximately 130,000 international lines and the Considering the current and revenues, stakeholders, senior managers are carried empty and without ton, the Container Shipping programs to charter the ships in situationully examining of container the shipping, difficult and all the employees. I goods which lead to sever costs Co. could provide the way in a the determined time have been how situation do you and evaluate economic the competiti future respectively. sincerely appreciate the efforts for IRISL and consequently our very competitive circumstance taken into account. ofveness this industry?at the international le of our loved ones, and especially cost of transshipment increased. to conduct the contract. Up to To supply the required container Containervel. It is expected shipping that moves the c to our colleagues in the Container now, three ships have carried for the new ships, Holding has monopolyontainer freight globally. rate In to fact, be incrthe Transportation Division and Recently, the company part of the product to Chabahar posted excellent procedures and numberseased from of 2019. container However, shipping the mar hope them all their success. carried cargos from India to and then to Afghanistan. It in the meantime the Container companiesketware has ofbecome theare more ongoingdecreasing stable issues. when in Considering my entrance to Afghanistan through Chabahr is expected that with PMO’s Shipping co. helps IRISL to buy differentWe are trying ports to ofattract the mor world IRISL since 1980 co-occurred port. Could you please support in developing the port, them in an appropriate cost. ande cargos this byis aproviding warning thethat custo the with the Cultural Revolution, I elaborate this issue? the national fleet would manage UNCTADmers’ satisfaction has noted. and Currently, the re believe from the point of view The government considers appropriately to activate the What measures have been despitequired circumstances.the relative increase In fact, coin of not a member of staff that Chabahr as a strategic port port. taken by the company to cargos,ntainer thedivision number of ofIRISL companies has th hasetter become management more in stablethe container when the company is the economic and the country’s only oceanic provide the necessities of hase capability declined, of and being the the ports first of thesym shippingcompared process to worldwide. prior timesDo andyou supporter of the country because port and in line with this it has Considering the entrance having access to online worldbol of everyare regularly shipping covered company by b thereintend willto launch be bettera new managementline? Many it supplies the main cargos conducted weekly investment of new ships to the national systems? they the lower side numberof customers. of container There inroutes the container are being shipping investigated process and and then it is a special one. In there. This view relates to the fleet, what plans has been The purpose of the company is linesfore, year bymore year. concentra worldwide. Africa route is being improv the same way, the importance east transit corridor in which programmed for them? being equipped with the new Oftion course, is paid more on thandigitalization 80 percent a ed. At the same time, east of Afr of IRISL has been taken into the government, PMO and With the entrance of new ships, systems, providing new remote ofs one the ofworld’s the most cargos important are handled goals Doi you intend to launch a new account even in the constitution major marine policies of the the capacity of the fleet would services and digital and online byof thea company.few familiesConsiderin owned by line?ca has a more stable of the country. So I think having country aiming at improving increase by 60%. The first one selling. At the same time, sell privateg the current companies. situation This ofissue con Manysituation routesand we intendare beingto de honest cooperation with the marine transportation are taken will be delivered by the end of of international cargos has been hastainer negative shipping, and how positive do you points, evalua investigatedvelop this routeand toAfrica south route and company is a national duty. into account. Considering the March, 2018 and then with an started online in some foreign andte the it futureis especially of this industry?interestingC iswest being of improved.the country. At the In same thi It is crystal clear that the country preeminent role of IRISL in interval of a month the others sites and good measures have forontainer our country, shipping but moves the to number monop time,s east ofregard Africa has a morean should have a stable supporter issues such as being present will be added to the fleet. been taken in providing proper ofoly lines globally. has decreased, In fact, the with numbers most stabled in an situation attempt and to reducewe intend costs, to in all sections particularly in during the Imposed War and Following the sanctions services to the customers. Most of of the container remaining shipping one workingcompan developinternational this routecooperation to south andsho transportation. Fortunately, launching of Khoramshahr, against IRISL, purchasing of of the customers have access togetheries are asdecreasing a consortium. in diff westuld be of theconducted. country. InWith this the regard ent over the past years, IRISL has Bushehr, Imam Khomeini and these ships was a positive step to a virtual profile according to Therefore,erent ports of the the national world and fleet t andrance in ofan newattempt ships, to reduceEurop had an excellent performance. Asaluyeh ports, the company is because developing the fleet was which they can monitor all the shouldhis is amaintain warning andthat developthe UN costs,e line willinternational be connected cooperation to India Considering the crisis periods CTAD has noted. Currently, now fallowing the ways to pave suspended during the mentioned financial procedures of their its condition by carefully soon and the focus on attraction and the imposed War, IRISL had Volume.7 / Autumn 2017 Volume.7 / Autumn 2017

Volume.7 / Autumn 2017 should be conducted. With the the way for the success of the period. Adding new ships will current and previous cargos. In examiningdespite the therelative difficult increase situation in c entranceof international of new cargosships, willEurope be been called the second defense national fleet in the near future. give a new life to the fleet. It addition, notices are received andargos, economic the number competitiveness of companie lineincreased. will be North connected Africa’s to mIndia line of the country and it played Recently, PMO in an attempt should be noted that the fuel online or through SMS. While ats thehas international declined, and level. the port soonarket andhas the been focus permanently on attraction a its crucial role as the first defense to develop Shahid Beshti in consumption cost of these ships the customers could pay online, Its ofis theexpected world arethat regularly the container cover ofket internationalhas become more cargos stable will when be line during the sanctions era. Chahbahr Port has invested despite having the capacity of they can be a member of freighted by the rate lower to numberbe increased of containe from increased.compared to Therefore, serving in this Group Payam Darya

r lines year by year. Of c Payam Darya Payam Darya extensively. The Container 14,500 TEU equals to 6500 telegram channel to be aware of 2019. However, the market Northprior timesAfrica’s and market there willhas beenbe b is an honor for everyone. 20 2521 InterviewInterview

CEOCEO ofof SouthSouth ShippingShipping Lines-IranLines-Iran LineLine Announced; Announced; DeDevelopingveloping thethe ActivitiesActivities inin Chabahar,Chabahar, ShahidShahid RajaeeRajaee andand ImamImam AirportAirport LogisticsLogistics CityCity

What are the main activities of logistics company, as one of the In which ports and by how the South Shipping Lines-Iran big and standard companies; many employees does the Line Company? it is approved by the Ports and company currently operate? SouthSouth ShippingShipping Lines-IranLines-Iran LineLine Company,Company, whichwhich currentlycurrently isis operatoroperator ofof The history of SSLIL dates back Maritime Organization. The company has been active as KhorramshahrKhorramshahr andand ImamImam KhomeiniKhomeini ports,ports, intendsintends toto increaseincrease itsits activitiesactivities to 1967. In fact, the company It is carrying out all of the operator in the two ports of Imam atat ShahidShahid RajaeeRajaee andand ChabaharChabahar portsports andand ImamImam AirportAirport LogisticsLogistics City.City. TheThe started its operations as the first operations including loading Khomeini and Khorramshahr for companycompany withwith 700700 lineline employeesemployees andand 2424 staffstaff employeesemployees isis oneone ofof thethe successfulsuccessful shipping company in Iran. and unloading vessels, loading more than 14 years, and in these companiescompanies ofof thethe IRISLIRISL group.group. Initially, it worked as port and unloading containers ports it carries out all activities InIn anan interviewinterview withwith PayamPayam Darya,Darya, CEOCEO ofof SSLIL,SSLIL, CaptainCaptain FarshadFarshad ShahbazShahbaz operator, agency, and did for importers and exporters, related to entering commodity, Volume.7 / Autumn 2017 Volume.7 / Autumn 2017 Volume.7 / Autumn 2017 hashas explainedexplained thethe activitiesactivities ofof thisthis company.company. multimodal transportation. All performing clearance, including unloading and loading goods, port services were provided assessment, issuance of bills filling and emptying the by contractors until 2003, but and provision of facilities to the container. after that, the company did owners of goods. In this regard, In fact, the port of Imam this business cycle. Currently, the reputation is one of the main Khomeini has become a port Payam Darya

Payam Darya SSLIL has become a leading Payam Darya characteristics of the SSLIL. for exporting of goods, and the

2622 23 Interview

CEO of South Shipping Lines-Iran Line Announced; Developing the Activities in Chabahar, Shahid Rajaee and Imam Airport Logistics City

WhatWhat areare thethe mainmain activitiesactivities ofof logisticslogistics company,company, asas oneone ofof thethe InIn whichwhich portsports andand by how thethe SouthSouth ShippingShipping Lines-IranLines-Iran bigbig andand standardstandard companies;companies; manymany employees does the LineLine Company?Company? itit isis approvedapproved byby thethe PortsPorts andand companycompany currently operate? South Shipping Lines-Iran Line Company, which currently is operator of TheThe historyhistory ofof SSLILSSLIL datesdates backback MaritimeMaritime Organization.Organization. TheThe company has been active as Khorramshahr and Imam Khomeini ports, intends to increase its activities toto 1967.1967. InIn fact,fact, thethe companycompany ItIt isis carryingcarrying outout allall ofof thethe operatoroperator in the two ports of Imam at Shahid Rajaee and Chabahar ports and Imam Airport Logistics City. The startedstarted itsits operationsoperations asas thethe firstfirst operationsoperations includingincluding loadingloading KhomeiniKhomeini and Khorramshahr for company with 700 line employees and 24 staff employees is one of the successful shippingshipping companycompany inin Iran.Iran. andand unloadingunloading vessels,vessels, loadingloading moremore than 14 years, and in these companies of the IRISL group. Initially,Initially, itit workedworked asas portport andand unloadingunloading containerscontainers portsports it carries out all activities In an interview with Payam Darya, CEO of SSLIL, Captain Farshad Shahbaz operator,operator, agency,agency, andand diddid forfor importersimporters andand exporters,exporters, relatedrelated toto enteringentering commodity,commodity, Volume.7 / Autumn 2017 Volume.7 / Autumn 2017 Volume.7 / Autumn 2017 has explained the activities of this company. multimodalmultimodal transportation.transportation. AllAll performingperforming clearance,clearance, includingincluding unloadingunloading and loading goods, portport servicesservices werewere providedprovided assessment,assessment, issuanceissuance ofof billsbills fillingfilling and emptying the byby contractorscontractors untiluntil 2003,2003, butbut andand provisionprovision ofof facilitiesfacilities toto thethe container.container. afterafter that,that, thethe companycompany diddid ownersowners ofof goods.goods. InIn thisthis regard,regard, InIn fact,fact, thethe portport ofof ImamImam thisthis businessbusiness cycle.cycle. Currently,Currently, thethe reputationreputation isis oneone ofof thethe mainmain KhomeiniKhomeini has become a port Payam Darya Payam Darya Payam Darya SSLILSSLIL hashas becomebecome aa leadingleading characteristicscharacteristics ofof thethe SSLIL.SSLIL. forfor exportingexporting ofof goods,goods, andand thethe

22 2723 InterviewInterview

ownersowners ofof thethe goodsgoods receivereceive future,been used a BOT for contractthe repairing, will bee deliver its exporting goods to One of the most important plans servicesservices relatedrelated toto thethe unloadingunloading quippingauctioned. and In maintainingthis contract, of the e this company. Unfortunately, of the SSLIL is to take over the andand loadingloading ofof theirtheir goodsgoods inin mptyoperator containers must havein the a past.foreign Al it is not easy to attract such operatory of Chabahar port. As thisthis portport fromfrom SSLIL.SSLIL. TheThe mainmain SSLILSSLIL hashas so,partner there who hasare the27 abilityhectar to commodities right now. there are 27 you know, the partner of the Aria activityactivity ofof thisthis companycompany inin become a esattract of customers.logistics facilitiesFortunately, in The company also has an eight Banader Iranian has borrowed Khorramshahr port is to provide become a Shahid Rejaee port for the hectares of Khorramshahr port is to provide leading SSLIL has regional knowledge hectare washing and repair $403 million to develop and servicesservices forfor importersimporters ofof goods.goods. leading purposeand equipment of carrying as outwell expor as site with a class of Iranian logistics equip Chabahar, and its Indian logisticslogistics tcooperation and import services, with whicha French was s Classification Institute. Washing facilities in partner has brought $85 million. WhatWhat activitiesactivities doesdoes thethe company,company, asas tartedpartner, by “Bollore the Minister Logistics”. of Tra and repairing of all IRISL’s Shahid Rejaee SSLIL has announced its companycompany dodo inin thethe portport ofof oneone ofof thethe bigbig nsport and CEO of IRISL in the last containers are carried out at this port for the preparation and started some Khorramshahr?Khorramshahr? and standard Whenyear. Of will course, the companyone of the chastart location. In the future, we are negotiation for getting the For many years, SSLIL has and standard llenges is marketing. Due to th purpose of For many years, SSLIL has companies; it operating in Shahid Rajaee planning to do repair services operatory of this port. been the container operator of companies; it e fact that SSLIL has provided exce carrying been the container operator of is approved port? of the containers of foreign lines In recent years, IRISL has thethe KhorramshahrKhorramshahr port.port. UnderUnder is approved llentActivities facilities in Shahid inRajaee this port entering Iranian ports. out export signed a contract to Assaluyeh aa BOTBOT contract,contract, forfor 1515 years,years, aa byby thethe PortsPorts have been done since 1993. At and import Port for loading and unloading landland withwith anan areaarea ofof 1515 hectareshectares andand MaritimeMaritime area,first, it thehas 33company, thousand as ansqu agent What happen to the issue of services of petrochemical commodity. hashas beenbeen delivereddelivered toto SSLILSSLIL Organization.Organization. areof IRISLmeters on ofthe northwestenclosed sidecell operatory in Shahid Rajaee But at the sanction period, toto equipequip itit forfor twotwo yearsyears andand ar.of the port, was dumping emptyOu port? this contract had some operateoperate itit overover 1313 years.years. rcontainers. request fromBut nowthe itpetroche has 10 For 12 years, we have been problems, so eventually it ThisThis contract contract is is in in the the field field micalhectares companies of land ofin Socialthis port S the leading company in the was terminated. While some ofof warehousingwarehousing andand TerminalTerminal ecurityganization.where fullInvestment containersIn the Companynear are kept.future, is maritime industry and we are equipment belonging to SSLIL HandlingHandling ChargesCharges (THC),(THC), andand itit aSSLIL toBOT deliver expectscontract its thewillexporting Ports be aucti andgo seeking to enter the Shahid has remained in that area, cancan bebe consideredconsidered asas oneone ofof thethe oned.Maritime In thisOrganization contract, tot Rajaee Port as operator. SSLIL unfortunately, this issue has not successessuccesses ofof SSLIL.SSLIL. hehave operator the same must view have about a foreig this is an independent company been resolved so far, and we HaveHave thethe operationsoperations ofof thethe ncompany partner aswho other has thecontainer abili which serves to all lines, and hope that we could solve this projectproject beenbeen started?started? tyoperators to attract operating customers. in Fortunatethis area. thankfully all lines are satisfied problem with negotiation. TheThe projectproject isis underunder schedule.schedule. ly,In SSLILthis case, has regional some negotiations knowledge of our services. WeWe hopehope thatthat eveneven beforebefore thethe withand equipmentthe Ports asand well Maritime as co Another important issue is the It seems that SSLIL wants two-yeartwo-year deadlinedeadline thisthis nationalnational operationOrganization with have a begun. French p construction of third phase of to invest in Imam Khomeini projectproject willwill bebe equipped.equipped. AsAs artner,In addition, “Bollore SSLIL Logistics”. has an emptyWh Shahid Rajaee port. According in two ports of Khorramshahr airport city, do not it? indicatedindicated inin thisthis contract,contract, enterminal will the in company the area, start which operat has to experts of Ports and Maritime and Imam Khomeini. Container The airport city of Imam Ac somesome equipmentequipment whichwhich worthworth ingbeen in Shahidused for Rajaee the port?repairing, Organization, the project will discharged in these ports Khomeini Airport has an area of tivities in Shahid Rajaee por sevenseven millionmillion euroseuros shouldshould bebe equipping and maintaining of cost over $300 million. SSLIL increased by 26%, transshipping 14,000 hectares. Participation in t have been done since 1993 purchasedpurchased forfor thisthis project.project. empty containers in the past.. A has announced its intention in by 12%, unloading of empty the project of Logistics City of tAlso, first, there the are company, 27 hectares as an of age buying equipment and operatory containers by 46%, loading of Imam Khomeini Airport is one WhatWhat areare thethe activitiesactivities ofof ntlogistics of IRISL facilities on the northwestin Shahid si in this phase. full export containers by 23%, of the future plans of SSLIL. In SSLILSSLIL inin ImamImam KhomeiniKhomeini deRejaee of the port port, for was the dumping purpose emp of With taking the operatory of and loading empty container by this case, the initial agreement port?port? tycarrying containers. out exportBut now and it importhas 1 Shahid Rajaee Port, the company 60%. was signed with the relevant InIn thisthis port,port, thethe serviceservice isis 0services, hectares which of land was in started this port by will earn THC revenue. One In addition, delivery of full authorities. providedprovided toto allall domesticdomestic andand thewhere Minister full containers of Transport are kepand of the strong advantages of the container to the owner of The government seeks to foreignforeign lines.lines. Unfortunately,Unfortunately, t.CEOSSLIL of IRISLexpects in the the Ports last year. and company is having 442 devices the goods increased by 38%, establish a law so that all goods inin thethe past,past, thethe PortsPorts andand MaritimeOf course, Organization one of the challenges to have the for loading and unloading such filling the container by 66%, destined for Tehran cannot get MaritimeMaritime OrganizationOrganization diddid issame marketing. view about Due this to companythe fact as traps, RTG, etc., which is a and emptying the container by clearance in Bandar Abbas; not have a positive view of the as other container opera Volume.7 / Autumn 2017 not have a positive view of the that SSLIL has provided special privilege. 23%. In addition, we observed instead, this will be done in Volume.7 / Autumn 2017 Volume.7 / Autumn 2017 activities of IRISL as well as tors operating in this area. In thi activities of IRISL as well as excellent facilities in this area, the growth of 40% in container the Logistics City of Imam the activities of SSLIL in Imam s case, some negotiations the activities of SSLIL in Imam it has 33 thousand square What was the performance repairs and 104% in container Khomeini Airport. As the Khomeini port; but fortunately, with the Ports and Maritime Org Khomeini port; but fortunately, meters of enclosed cellar. Our of company in the first half of washing. current accumulation of loads in this point of view has changed anization have begun. In additi this point of view has changed request from the petrochemical this year? the ports of the country is non- with the new management of on, SSLIL has an empty termin with the new management of companies of Social Security In the first half of this year, SSLIL Do you have any plan for strategic, SSLIL is willing to

Payam Darya this organization. In the near al in the area, which has Payam Darya Payam Darya this organization. In the near Investment Company is to has had a positive performance activity in other countries? invest in this logistic city. 28 24 25 Interview owners of the goods receive future, a BOT contract will be ahidasdeliver had Rajaee a itspositive exporting port. performance According goods intot One of the most important plans services related to the unloading auctioned. In this contract, the othis experts company. of Ports Unfortunately, and Mariti of the SSLIL is to take over the and loading of their goods in operator must have a foreign meit is Organization,not easy to attractthe projesuch operatory of Chabahar port. As this port from SSLIL. The main SSLIL has partner who has the ability to ctcommodities will cost over right $300now. million. there are 27 you know, the partner of the Aria activity of this company in attract customers. Fortunately, SSLILThe company has announced also has anits eight int hectares of Banader Iranian has borrowed become a ention in buying equipment and hectares of Khorramshahr port is to provide SSLIL has regional knowledge hectare washing and repair logistics $403 million to develop and services for importers of goods. leading and equipment as well as siteoperatory with ina thisclass phase of. WithIranian logistics equip Chabahar, and its Indian logistics cooperation with a French takingClassification the operatory Institute. of ShahidWashing facilities in partner has brought $85 million. What activities does the company, as partner, “Bollore Logistics”. Rajaeand repairing of all IRISL’s Shahid Rejaee SSLIL has announced its company do in the port of one of the big econtainers Port, the are company carried outwill at earn this port for the preparation and started some Khorramshahr? When will the company start THClocation. revenue. In the Onefuture, of wethe arest purpose of negotiation for getting the and standard rong advantages of the compa purpose of For many years, SSLIL has operating in Shahid Rajaee planning to do repair services carrying operatory of this port. companies; it ny is having 442 devices for l carrying been the container operator of port? of the containers of foreign lines out export In recent years, IRISL has the Khorramshahr port. Under is approved Activities in Shahid Rajaee port oadingentering and Iranian unloading ports. such as t out export signed a contract to Assaluyeh a BOT contract, for 15 years, a by the Ports have been done since 1993. At raps, RTG, etc., which is a sp and import Port for loading and unloading land with an area of 15 hectares and Maritime first, the company, as an agent ecialWhat privilege. happen Whatto the was issue the of services of petrochemical commodity. has been delivered to SSLIL Organization. of IRISL on the northwest side performanceoperatory in of Shahid company Rajaee in the But at the sanction period, to equip it for two years and of the port, was dumping empty firstport? hal this contract had some operate it over 13 years. containers. But now it has 10 fFor 12 years, we have been problems, so eventually it This contract is in the field hectares of land in this port theof thisleading year? companyIn the fir in the was terminated. While some of warehousing and Terminal where full containers are kept. stmaritime half of industrythis year, and SSLIL we are h equipment belonging to SSLIL Handling Charges (THC), and it SSLIL expects the Ports and seekingto deliver to enterits exporting the Shahid go has remained in that area, can be considered as one of the Maritime Organization to odsRajaee to this Port company. as operator. Unfortunat SSLIL unfortunately, this issue has not successes of SSLIL. have the same view about this ely,is anit independentis not easy company to att been resolved so far, and we Have the operations of the company as other container ractwhich such serves commodities to all lines, right nowand hope that we could solve this project been started? operators operating in this area. .thankfullyThecompany all also lineshas arean eight satisfiedhec problem with negotiation. The project is under schedule. In this case, some negotiations tareof our services.washing and We hope that even before the with the Ports and Maritime repairAnother site important with a classissue ofis theIra It seems that SSLIL wants two-year deadline this national Organization have begun. nianconstruction Classification of third phase Institute. of to invest in Imam Khomeini project will be equipped. As In addition, SSLIL has an empty WashingShahid Rajaee and repairing port. According of all I in two ports of Khorramshahr airport city, do not it? indicated in this contract, terminal in the area, which has RISL’sto experts containers of Ports are and carried Maritime out and Imam Khomeini. Container The airport city of Imam some equipment which worth been used for the repairing, Organization,at this location. the Inproject the futurwill discharged in these ports Khomeini Airport has an area of seven million euros should be equipping and maintaining of e,cost we over are $300planning million to do. SSLIL repai increased by 26%, transshipping 14,000 hectares. Participation in purchased for this project. empty containers in the past. rhas services announced of the its containers intention ofin by 12%, unloading of empty the project of Logistics City of Also, there are 27 hectares of buyingforeign equipment lines entering and operatory Iranian containers by 46%, loading of Imam Khomeini Airport is one What are the activities of logistics facilities in Shahid inports. this phaseWhat. h full export containers by 23%, of the future plans of SSLIL. In SSLIL in Imam Khomeini Rejaee port for the purpose of appenWith takingto the theissue operatory of operato of and loading empty container by this case, the initial agreement port? carrying out export and import ryShahid in Shahid Rajaee Rajaee Port, the port? companyFor 12 60%. was signed with the relevant In this port, the service is services, which was started by willyears, earn we THC have revenue. been the One le In addition, delivery of full authorities. provided to all domestic and the Minister of Transport and adingof the company strong advantages in the maritime of the in container to the owner of The government seeks to foreign lines. Unfortunately, CEO of IRISL in the last year. dustrycompany and is wehaving are seeking442 devices to e the goods increased by 38%, establish a law so that all goods in the past, the Ports and Of course, one of the challenges nterfor loadingthe Shahid and unloadingRajaee Port such as filling the container by 66%, destined for Tehran cannot get Maritime Organization did is marketing. Due to the fact operator.as traps, SSLILRTG, isetc., an independenwhich is a and emptying the container by clearance in Bandar Abbas; t company which ser not have a positive view of the that SSLIL has provided special privilege. 23%. In addition, we observed instead, this will be done in Volume.7 / Autumn 2017 Volume.7 / Autumn 2017 Volume.7 / Autumn 2017 v activities of IRISL as well as excellent facilities in this area, the growth of 40% in container the Logistics City of Imam es to all lines, and than the activities of SSLIL in Imam it has 33 thousand square What was the performance repairs and 104% in container Khomeini Airport. As the kfully all lines are satisfied o Khomeini port; but fortunately, meters of enclosed cellar. Our of company in the first half of washing. current accumulation of loads in f our servi this point of view has changed request from the petrochemical this year? the ports of the country is non- ces. Anotherimportant issue is the co with the new management of companies of Social Security In the first half of this year, SSLIL Do you have any plan for strategic, SSLIL is willing to nstruction of third phase of Sh Payam Darya Payam Darya Payam Darya this organization. In the near Investment Company is to has had a positive performance activity in other countries? invest in this logistic city. 29 24 25 Interview

Managing Director of Valfajr Shipping Co. Announced: Transfer of 150,000 Volume.7 / Autumn 2017 Passengers during

Payam Darya H1, 2017 30 In line with this and in the recent months, the company participated in tenders of National Iranian Oil Company and its subsidiaries and succeeded in conducting three contracts,

Given the performance of in Persian Gulf and Oman Sea the company in the current which has affected the amount Valfajr Shipping Co. is one year, please give a brief of incomes due to political of the main subsidiaries description of the company’s circumstances and international of Islamic Republic of achievements. limitations, has put developing Iran Shipping Lines Considering the environmental of its offshore fleet top of the (IRISL) which established changes in shipping industry agenda based on planned and in 1986. Considering the and market such as competition rational program and will presence of specialized in providing electronic services, increase the ships from 2 in and expert manpower cyber attacks, sudden change in 2013 to 9 in the current year. and an equipped fleet, the freight rates, market demands At the same time, all the tenders company has provided and political evolutions in by the side of downstream and incredible role in the international and regional level upstream companies in oil and country’s marine industry which go rapidly, a special gas industry are monitored particularly in transfer of attention should be paid to exactly to enhance the activities passenger and offshore foreign effective factors and of offshore section according services by its presence in optimal exploit of the future to which readiness of the the Persian Gulf. Referring opportunities and defiance companies are announced by to the most important against threats by focusing considering the capacity and activities of the company of domestic effective factors throughput of them. In line with during H1, 2017, Capt. through improving strengths this and in the recent months, Majid Sojdeh, Managing and weaknesses. Therefore, a the company participated in Director of the company necessity of having a complied tenders of National Iranian Oil conducted an interview planning in an attempt to Company and its subsidiaries with PD according to achieving the goals of IRISL is and succeeded in conducting which the transcriptions high on the agenda. three contracts for one offshore is given ion the following Valfajr Shipping Co. aiming supply vessel and two tows and section. at extending its activities in then the proper growth in income Volume.7 / Autumn 2017 offshore section and creating of this sector is predicated. new income markets as Valfajr Shipping Co. as a well as resisting against the specialized company with more approximate recession of the than three decades of activity in cargo and passenger carrying the field of passenger transfer Payam Darya

31 Interview

carrying cargos in the Persian Shipping Co. has the ability Gulf and Oman Sea provides in providing supply vessels regular and international aiming at developing oil and gas sailings. Considering the industry of the country which main purpose of the company, already had been done by foreign forming an appropriate platform companies. The implications of to facilitate passenger transfer Valfajr Shipping Co. in offshore is of high importance. This section include the growth and company could record a glorious development of the country’s performance of its own during offshore industry, sustainable the sanctions era and overcame employment, foreign exchange, the difficulties and limitations. the presence of specialized During the first six months of manpower instead of foreign the current year, more than workforce, safety and security 150, 000 passengers have enhancement in the country’s been transferred in different oil industry. domestic and foreign routes. Fortunately by relying on The performance of this sector the company’s operation and in comparison to the same activities in the recent years in period last year experienced an offshore section, the satisfaction acceptable growth in operational of utilized companies has been income and the number of gained and this company has passengers. been known as one of the Considering the schemes and powerful ones among others in cooperation of all the personals, oil and gas fields. We hope to be a good record of servicing witness of spread improvement 160,000 tourists was reported and development of activities in Norouz 96 for the first time. of the company in this utmost Definitely, consistent increase important and strategic field in quality of services would with the help of employees in lead to a better and significant different section. Meanwhile, growth in the region’s economy. we will achieve the variant services in marine division passengers a year. Valfajar What are the achievements and sustainable growth in the Shipping Co. used Catamaran to of the company’s entrance to coming years. enhance the speed in passenger offshore section? transfer since 2004. Based on the views of the Considering the cancellation We are honor of providing Supreme Leader on “resilience, of Bushehr-kharg shipping passenger services during the production and employment,” line, do you intend to launch last 30 years in an attempt the company implemented these other lines to the islands? to consider the interests of strategic policies by identifying The Bushehr-Kharq route the nation and move forward and focusing on beneficial has become operational since without taking into account the economic activities, financial 1986 as one of Valfajr’s oldest economic interests. In order to increase the services set by the

Volume.7 / Autumn 2017 resources management and shipping services. In general, employment in offshore section the volume of operations on this Co. all the organizations should has been top of the agenda. route in recent years has been cooperate with one another. Considering the capacities more than 350 round trips per and potentials of the company year, with an average transfer How many ships are owned by in offshore section, Valfajr of more than 120 thousand the Co. and to which domestic Payam Darya

32 the orders and guidelines of the CEO and in accordance to the country’s interests during the sanctions era, entering the market to provide offshore vessels has created a new season of marine services in the Persian Gulf for IRISL which is to be taken by Valfajr Shipping Co. Considering the main policy of IRISL, it is necessary to establish an appropriate approach in the field of investment and supplying financial resources. Therefore, the approaches shoulb be followed in the cost reduction direction. In line with this, the fuel cost which is the main cost in a ship’s sailing providing the subsidy for passenger trips could be effective.

Has been Passenger Agency of Valfjar launched? Following the emphasizes of IRISL’s CEO to focus on increase in efficiency, activities’ development and job creation, Valfajr Shipping Co. has taken the measures to establish passenger Agency Services and foreign ports do they passengers are Bandar Abbars, and gained the required travel? Sharjah, Lengeh seaport, licenses to increase variability At the moment, the Co. owns 20 Dubia, Khoramshahr, Kuwait in the income basket and the ships including four catamarans, and domestic ones are Lengeh entrance to a new market. The two Ro-RosT five container seaport, Abu Musa and Lengeh Agency is called “Rahpooyan ships and nine offshore ones to seaport/ Kish (during Norouz). Rah Shiri” and its services operate in carrying cargos and Container ships of the company include passenger, tourism and passenger transfer from south are now at the charter of pilgrimage services. ports of Iran to islands and the container shipping Co. of It is worth noting that the most Persian Gulf countries to pave IRISL. important target market in the the way for the excellence goals first phase is proving services of marine industry of Iran. What are your planned to families of IRISL with the Volume.7 / Autumn 2017 The company also operates programs for the second half capacity of about 35,000. In the in supports of oil and gas rigs of 2017? next phases organizations, state- established in the region. In recent years and in order owned institutions and private The main active foreign to achieve the strategic plans sectors will enjoy the services. lines in carrying cargo and and policies of IRISL due to Payam Darya

33 Interview

Managing Director of IRISL Integrated Transportation Company: Integrated Transportation Performance Increased 30% during H1, 2017 Volume.7 / Autumn 2017 Payam Darya

34 IRISL Integrated Transportation Co. will commence new activities by the end of this year in three areas of rail transportation and the establishment of a center in the Special Economic Zone of Sarakhs, wagon repair and activation of the Robat Karim Depot of Tehran. In line with this, Capt. Ali Hossein Farrokhi, Managing Director of IRISL Integrated Transportation Co. in an interview with PD stated the main goal of the company to establish a logistics company in the region.

At first, explain the transit during a year and a half company had been focused on performance of the company past. In this regard, the required directing road transportation during the first half of the trust has been formed among the of domestic transit toward rail current year. customers in a way that those transportation which has been IRISL Integrated Transportation who imported their cargoes conducted successively by Co. moved 24,000 containers by through foreign shipping lines receiving a request from one road transportation during the now exploit IRISL Integrated of our customers to carry 600 first half the year which shows Transportation Co. to transit the containers by rail monthly. a 30% increase in comparison imported commodities. Unfortunately, customer with the corresponding period During the past years, the satisfaction was difficult due last year. In addition, carrying wagons of the company had to the lack of sufficient wagon low-sided wagon experienced been idled about three months to carry containers which has a growth of 20% during the but fortunately the company been solved by transferring new mentioned period. Meanwhile, reached the point where it wagons. Pursuant to this and good collaboration has been permanently has cargoes to carry by considering the conducted made with Qeshm Marine and sometimes it faces with the plans, 200 wagons for carrying Services and Engineering lack of wagons. For instance, container would be added soon Company in the field of carrying the number of wagons has to the company. mazut and the carrying capacity been increased by 20% to carry Wagon repair workhouse of reached 15,000 tons of mazut container goods and general IRISL Integrated Transportation during H1, 2017. cargos in comparison with 2016. Co. has been launched in Haji Volume.7 / Autumn 2017 IRISL Integrated Transportation Abad, Bandar Abbas which Co. has created revolution in type What purposes are included in repaired 12/13 wagons last and manner of the activity while IRISL Integrated Transportation year and now it can handle the it increased the performance in Co.’s future plans? repair of 22 wagons in a month. road transportation and domestic One of the purposes of the Considering the plans and Payam Darya

35 Interview

investments in this field, in the services on Tehran and Bandar next two monthe the mentioned Abbas should be disregarded. number would increase to 40 Recently, container depot has wagons. This company has a the required been launched in Isfahan and warehouse in Robat Karim, trust has a complete service package Tehran which demonstrates been formed presented to the customers. an increase of 60% in the Meanwhile, a memorandum of number of entry and exit of among the understanding (MoU) signed containers. Recently, an attempt customers in a with Special Economic Zone of has been made to complete way that those Sarakhs. In addition, negotiations providing service packaging who imported with different forwarders of CIS to the exported customers. their cargoes countries which import cargos to Considering the importance of through Iran have been conducted. So, a flexi tank as one of the needs of joint activity will be soon started exporting companies, importing foreign in Sarakhs Region with the of this product has been shipping lines cooperation of the mentioned started. Therefore, customers now exploit forwarders. can receive a thorough service IRISL Integrated With the purpose of directing package in Robat Karim. This Transportation 70% of domestic transit toward led to the attraction of customers Co. to transit wagons, a more value-added will who preferred foreign shipping enter to the Islamic Republic of the imported lines to export basic oils. Iran Shipping Lines and to pave commodities. the way wagon purchasing has Has it been planned to develop been top of the agenda. the activities of the company? Facilities, services and A five-year plan with the appropriate price all can presence of counselors has been encourage customers to make codified according to which use of rail services of IRISL being a logistics company in Integrated Transportation Co. the region is one of the most In agreement with this, the price significant goals of the IRISL of rail carrying have to be lower Integrated Transportation co. than rail transportation because Given the conducted plans and the customer is not satisfied for supports of other sections, the his cargos to be carried in a long company will reach its defined time and with a high price. To goal. reach the goal, it is necessary for the country’s railways to What measures should be provide us with better services taken into account to being a so that we could determine and logistics company? support more desired services to Transportation is not the main our customers. issue stated in logistics and a Considering the interaction series of services that have to with Islamic Republic of Iran Volume.7 / Autumn 2017 been provided for customers Railways, an increase in the is of utmost importance. In monthly travels from Bandar this regard, different centers Abbas to Bam has been recorded have to be formed in various due to the abdicated facilities locations and the focus of by the country’s railways. Payam Darya

36 Fortunately it should be noted the needed investments. that the interaction between Iran’s Railways and IRISL has Is the country’s logistics entered a new phase. With the infrastructure appropriate? When it comes to logistics, purpose of Logistics infrastructure is not facilities need to be provided by directing 70 defiantly appropriate. When other organizations definitely. By % it comes to North and South good fortune and in the presence of domestic Corridor the main weakness is of the current government of transit the lack of a railway between Iran, a positive approach is toward Rasht and Astara but it is existed regarding integrated wagons, a possible to use alternative transportation and logistics. more value- routes. Conducted studies in During the first years of added will this regard demonstrate that the establishment of IRISL Integrated final price of carrying cargos Transportation Co. the most enter to from Bandar Abbas to Aktau activities were rooted in bulk the Islamic in Kazakhstan by sea and and general cargo transportation Republic of road in comparison with other but gradually it moved toward Iran Shipping routes were more appropriate. container transportation. At the Lines However, investment and proper meantime, companies are stepping advertising should be taken toward being logistic companies into consideration to assure and shipping companies provide the customers to exploit the service to them. Therefore, IRISL mentioned routes. Group has to have access to a strong integrated transportation When does the history of IRISL company to remain in the Integrated Transportation Co. competitive market and change to come back to? a logistic company in an attempt IRISL Integrated Transportation for transportation companies to Co. established in 2004 with provide services for it. IRISL the investment of IRISL (51%) could move toward the mentioned and Islamic Republic of Iran direction unconsciously but in Railways (49%) in an attempt the case of support and powerful to complete the supply chain thinking it will approach the and multimodal transportation’s destination earlier than the time development without owning scheduled. Certainly in the wagons. Then gradually Islamic near future IRISL Integrated Republic of Iran Railways bided Transportation Co. would be a its wagons and IRISL Integrated main company of IRISL Group. Transportaion Co. purchased However, achieving this goal about 1200 wagons. Considering require the support of group the government’s circular companies and organizations regarding privatization, Islamic such as Islamic Republic of Republic of Iran Railways had Volume.7 / Autumn 2017 Iran Customs Administration, to abdicate its share to private Iran Road Maintenance & sector and Tosse’e Tarabar Transportation Organization, Iranian Investment Group and special economic zones and Social Security Investment Co. general warehouses and finally bought its share. Payam Darya

37 Interview

Managing Director of Hoopad Darya Shipping Agency Company Announced: Launching the Comprehensive Trading System

The Agency Company was established on April 11, 2009 with the name of South Rout Shipping. It was renamed to Hoopad Darya Shipping Company on April 9, 2011 and continued to its activities. By using professional methods, the company has activated in various areas to meet customer needs, and this initially has made the customers and owners of the goods satisfied and ultimately has resulted the positive returns for IRISL group. Captain Norouz Tayebi Sadr Abadi has explained about this title in further detail in following paragraphs. Volume.7 / Autumn 2017 Payam Darya

38 Hoopad Darya Shipping Agency Company has been currently providing services to foreign companies case by case and we are looking to provide agency services for companies that travel to the southern ports of the country.

Please tell us about the their goods by Hafez Darya Arya Please describe the activities of the HDS Co. since Shipping Line and provide the performance of the company its establishment? services during the time of their in the last year (from March The scope of its activity is very arrival to the ports of Iran in such 21, 2016 to March 20, 2017) wide and includes all southern a way that the customer with full and the first half of this year ports of the country and is satisfaction and confidence will (from March 21, 2017 to associated with all the companies deliver his goods to the national September 22, 2017)? of the group, on the other word, fleet for shipping. Achieving to The performance of the company somehow it is a harbinger of customer satisfaction is the most can be summarized as: providing the national fleet of Iran. The important goal of HDS in post agency services to HDASCO company actually completes the sanction era. shipping company, Safiran services that other companies In the post sanction era and in Payam Darya shipping company, in the group provide. The need the new conditions of IRISL Valfajr shipping company and for precision and experience in group, by considering the global other companies of IRISL group, operational tasks is the necessity and specific perspective of the monitoring of cargo loading of the activities of this company. senior manager of group as well and unloading operations at Hoopad Darya Shipping Agency as the launch of new lines, we ports, clearance and checkout Company has eight branches in should increase the agility and of goods at ports, coordinating Tehran, Bandar Abbas, Bandar operational capabilities of the with customs and the Ports Imam Khomeini, Bushehr, company. and Maritime Organization, Khorramshahr, Asaluyeh, HDS currently provides services container export operations Chabahar and Kharg; the largest to foreign companies case by case and other operations which are branch is located in Bandar and we are looking to provide indicated in the table below. Abbas. In 2014, HDS’s office agency for the companies which was established in Mashhad for come to southern ports of the What is the condition of the satisfaction of customers. country. In the first half of this company in post-sanctions Currently, all customers in year (from March 21, 2017 period? Khorasan province come to to September 22, 2017) the By lifting the sanctions and Mashhad office and all activities growth of attracting ships from the implementation of JCPOA, are carried out in the same office. outside the group has increased IRISL was able to promote its Volume.7 / Autumn 2017 Due to the current conditions that significantly in comparison the global rank in the short time by foreign lines are entering Iran’s same period of 2016. We should expanding its activities. This ports, the goal of the company is develop our activities in the ports success occurred when many to provide the services properly of Iran to meet new customers in large companies in the world

for the customers who carry the future. were bankrupt or losing due to Payam Darya

39 Interview

unfavorable conditions in global informing about the return of shipping industry. How much progress has the the empty container, calculating The use of domestic, regional project of digitalization in of allowed lay time cost, and and international capacities HDS had? enough explanation. By this is a necessity, and now with Web-based electronic service way, in addition to increase the activation of the north-east system for customers is created. satisfaction of customers, it has corridor, the CIS market for It has the capability of Internet reduced the customers’ need to the transit of goods can be an payment and all THS costs, loss call. opportunity for us. insurance as well as required In sum, according to the Another important event was information for customers circumstances of the day, the the revival of reinsurance cover with the aim of increasing general policy of the company for ships, and IRISL was able to the satisfaction of the owners is the optimum and maximum provide insurance coverage for of goods and enhancing the use of IT capacity and software its fleets. As a result, our ships ability of the shipping group to applications. are going to all the ports of the provide customer service, and world without any problem. it is in operation and available What plans and projects are At the time of sanctions, our for customers. Meanwhile, in you studying or implementing? only active shipping line was the system, all related costs are The main activity of HDS is to the eastern Asian line, but in payable online and financial provide customers with services the post sanctions era almost clearance operations are carried that require up-to-date software all of the agencies have been out on system basis. In order to and systems to enable us to reactivated and new agencies customers’ access to new system, provide customer satisfaction. have been stablished in various for whom has had a history in Therefore, attracting customers international ports. the company’s database (about and maintaining their loyalty is IRISL has developed joint 2,000 customers) has created so important for the company. ventures for international a username and password and So the launch of this system for services in the ports of Italy, they have been notified in the customers was carried out Hamburg in Germany, Singapore diverse ways. Also, to ensure in order to provide services to and China. IRISL’s restrictions that customers are successful them more easily. The plan of in the European ports have in executing online payment CRM has been implementing been completely eliminated operations, the tracking code is since some month ago to after lifting the sanctions. Due created systemically and at the improve customer satisfaction, to these changes, the shipping end of the work by this code the and the process of completing lines should be restored, so new client can be notified of their information and appropriate shipping line to the European latest payment status. Until communication with customers ports has been fully renovated. recently, payments of up to 500 are under study. Furthermore, According to these explanations, million rials could not be made, the company’s expansion plan the workload and the operational with the help of the IT team, this for marketing and recruiting sensitivity of the HDS are also problem was also solved. customers from outside of the increased. At Tehran office, we have group has been doing seriously In this era, an important point stablished a trial electronic and has had relatively good in the maritime industry is the payment kiosk (using barcode results. presence of many competitors reader). After its trial period, The plan of an integrated system and high capacity of global fleet.

Volume.7 / Autumn 2017 it will be launched in other or “comprehensive trading The company should continue agencies of the company. system” in collaboration with to survive with minimal costs, Through the web site of Marine Information Technology as there is low freight rate. So company, we provide a variety Development Company (MITD only by good and professional of services and notifications, Co.) is in the initial research and management and reducing costs such as announcing the design stages, and it will help

Payam Darya we can survive in this industry. approximate arrival of ships, to resolve many of the current 40 system restrictions. the main foreign trade lines this line. The construction of the second was the Europe Line, which The role of IRISL in the phase of the uncompleted was reactivated after lifting of economy of the country is very administrative, residential and sanctions. important and vital. We all commercial project in our office Before the sanctions, there was a know that the importance of the based on Asaluyeh, is also under huge amount of shipping traffic existence and authority of the construction in the 1000 meter through the Europe line. In the IRISL was determined during long land in Chabahar free zone. past IRISL had interacted with the severe period of the imposed the Germany, but in the sanctions war and during the sanctions By considering that you have period, Eastern countries, such when foreign companies were been worked in the national as China and India, were the not willing to travel to Iranian fleet for many years, how do most important parties to deal ports. Perhaps if the fleet of you assess the role of the IRISL with Iran. IRISL had not been existed, the in the country’s economy? By lifting the sanctions, the country’s economy and security By lifting of the sanctions, amount of foreign trade has would have faced with serious a significant development increased, and by the activation danger. occurred in the shipping of European line in the field of In my opinion, the strength and industry and the International maritime shipping, we hope we huge capacity of IRISL should trade of IRISL because one of can maximize the benefits on be preserved more than ever.

The performance of Hoopad Darya Shipping Agency Company

In the first half of last year (from March 21, 2016 to September 22, 2016) and the first half of this year (from March 21, 2017 to September 22, 2017)

Comparison to the the first half of first Last year Subject No this year half of last year The number of ships traveled to the 20% 487 916 1 southern ports for unloading The number of ships traveled to the 14% 489 957 2 southern ports for loading 24% 5,756,814 tons 9,148,063 tons The volume of bulk and container export 3 95% 7,494,462 tons 9,272,378 tons The volume of bulk and container import 4

31% 230,020 TEU 380,389 TEU Full imported Container 5

-0.3% 62,588 TEU 138,095 TEU Full exported Container 6 1% 49,233 TEU 92,590 TEU Internal transit rate 7 The number of issued clearance in the 5% 35,026 TEU 69,604 TEU 8 agencies The number of attracted ships from More 25 numbers 28 12 9 outside of the group

The number of passengers transferred in Volume.7 / Autumn 2017 -27% 27367 56897 Bushehr, Khoramshahr and Bandar Abbas 10 ports -22% 2600 7893 The number of seafarers added to the ships 11 The number of seafarers excluded from -14% 2737 7942 12

the ships Payam Darya

41 Interview

CEO of Khazar Sea Shipping Lines Co. said: 25 %Increase in Fleet Nominal Capacity during Each 4-year period

The Caspian Sea is considered as the largest enclosed lake in the world with numerous opportunities in the field of transportation across the region and the world, so its neighbor

Volume.7 / Autumn 2017 countries always try to take a larger share of its maritime business. A competition that given the economic condition of these days, has its own hardship. Khazar Sea Shipping Lines Co. is one of the privately owned companies active in this zone which has managed to maintain its profitability in this difficult situation. Although sometimes the company could not have done as well as possible because of the heavy competition in the region, and it suffered a loss of profit, but according to the managers, the company was able to move more powerful and balance its

Payam Darya financial statements. 42 What was the reason for the that the market would move that were all against us, but we were drop in maritime trade in the way. able to profit marginally over Caspian Sea? The other challenge we faced the next three months, and for Except for the Russians, another was the issue of iron entry the second quarter, this would serious competitor for us is fees. The government raised certainly be solvable. So far, Azeri, and they are trying to entry fees to support domestic we have been able to focus on make a bigger contribution to production. At first, it was 4% shipping operations and carry the region’s trade. From the and then 11%, and finally the out more than 90% of repairs beginning of the year to mid- tariff was 20%. In addition, in Iran and reduce foreign June, the region’s trade fell to the domestic production exchange dependency in parts its lowest level due to political dropped and the variety of iron supply to below 10%. developments. Currency production companies increased fluctuations and Western in Iran. This led to the reduction The main shipping vessels sanctions against Russia had a of one of the major commodities of the Caspian Sea are bulk direct impact on the maritime in the Caspian Sea. cargo. Do you have any plans trade. In two steps, the currency to enter the energy and tanker of Kazakhstan declined to What have you done to deal transportation sections? and less than 15% of the value of with the problem of reduction what plans do you have for this country’s currency, which in demand in this region? fleet development? increased the risk of investment In the first two months of the We own 33 multipurpose ships and the cost of investing in CIS year, we attempted to make carrying dry cargos and at the region, especially Kazakhstan regional rivals not be able to take meantime, we have plans to and Russia declined and our share of the past year and, in renovate the fleet. investors’ willingness to invest addition, we could increase our Considering the regional in the region was in recession. share. According to the total circumstances of the Caspian The next issue was the number of operations, we were Sea, marine trade is of utmost presidential election in Iran. able to increase our share of importance. We as one of At that time, Iranian merchants Caspian Sea transportation by the economical arms of Iran were cautious. On the other 4%, and after establishing this are trying to increase marine hand, there were breaks and joint venture as a company that trade. At the same time, we are tariff reductions that the Russian was the main player to provide negotiating with domestic and and Kazakh governments the freight rate, we started the foreign yards and following began to take on vessels. This second phase. Fortunately, in inexpensive resources to record has led to a dramatic drop in the second quarter, the growing new orders. freight rates, and the balance of trend in both income and Most of the countries adjacent supply and demand goes away. tonnage shows that our chosen to the Caspian Sea are producers In this situation, we faced with policies are correct and that of Energy but their resources excess capacity in the region. we are finally reaching out and are limited. For instance, The Russians used persuasive achieving our goals. Kazakhstan intends to export offers to reduce this pressure. In September, we were able to energy but it could not be One of their offers was bunker carry 210,000 tons of cargo, successful and prefer tanker cost. In Iran, the cost of fuel is which is unprecedented in transportation. between $420 and $500 in the recession, as well as we could We gained initial design of the Persian Gulf, and this figure increase prices by 40%, which considered ship to carry fuel Volume.7 / Autumn 2017 for the Russians is at least $100 helped us cover the first two and now we are negotiating less, helping the Russian fleet months of the year, and get close with different shipbuilders. to compete more. These were to the predicted budget. This is in Regarding the financiers, the the challenges that took place in a situation where tariffs, salaries process is completed and we the first two months of this year. and wages grew and inflation would enter to energy swab. In

Since last March, We predicted was declining, and these factors the first phase, we start Payam Darya 43 Interview

with a tanker and then we will in the ports of two sides as concentrate on energy swab in a well as revival and reinforce different section. of multimodal transportation The program to purchase new we were able between the ports of the CIS, ships is high on the agenda and China and the northern and to carry as we finalize the orders, it will southern ports of Iran, and also take one year for the vessels to 210,000 tons of investment and improvement join the fleet. We paid attention cargo, which is of equipment and services to resale market as well. This unprecedented in Iran and Kazakhstan, can market is specialized for the in recession facilitate the import, transit and ships that demand or their owner export by decreasing the costs refuses the carrying of cargos. of transportation in the Caspian Meanwhile, we are negotiating Sea and other demanded routs with domestic and foreign yards year the initial agreement was to transfer the technology to Iran made at the trip of president of What plans do you have for to build ships. Iran to Kazakhstan. fleet renovation? Our negotiating parties are The main goals of this joint At the present, by having domestic and subsidiary venture can be: facilitating trade 23 ships with the flag of the companies from Russia and with the CIS countries, providing Islamic Republic of Iran and the China. We should see which of access to these countries through capacity of 95,000 tons, Khazar these models are the best and free ports through Iranian ports, Sea Shipping Lines Co. has the join the fleet in the shortest developing transit through largest fleet in the north of the possible time. the territory of Iran and the country, and the development of Caspian Sea, and finally the its fleet as one of the companies Khazar Sea Shipping Lines development and enlargement of IRISL group is one of the Co. has a major role in the of the dimensions and volume of strategic goals of the company recent agreement signed the Caspian Sea market. in order to increase the share, between Kazakhstan and By constructing joint terminals develope the influence factor in Iran. Please explain the details in China, as well as the railway the Caspian Sea transportation and objectives of this contract connection between Kazakhstan sector and improve of the freight in the region. and China, KTZ EXPRESS rate in this region. Therefore, The signing ceremony of the can create a new gateway for fortunately, the feasibility final document of joint venture the exchange of goods through studies of the purchase and of the Kazakhstan Railways Kazakhstan between Iran and construction of several ships (KTZ EXPRESS) and IRISL China, also sending goods have been completed and we was held in Tehran on January for some parts of Iran from are financing the necessary 2017, with the presence of the Caspian Sea route can be funds for the implementation of the President of the State replaced the Incheh Borun the fleet development project. Transportation Company of railway, which will make a According to the planning based Kazakhstan, ambassador of competitive decline in time and on the company’s vision and this country in Tehran, and the prices. The operation of this joint mission, we have considered to CEO of IRISL. This important venture company will result in a increase the nominal capacity economic event was based on significant increase in the level of the fleet by 25% during each studies and reviews carried of market penetration as the 4-year period up to 100% of Volume.7 / Autumn 2017 out by the expert of IRISL market size and volume of the the current capacity and update group, strategic decisions of transportation market increase and reduce the age of the fleet the managing director and the in the Caspian Sea. to less than half its present age. former manager of Khazar Sea By entering the management By delivering the new buildings, Shipping Lines Co., and this and operation of the terminal this goal will be possible. Payam Darya

44 Marine

Has Maritime Transportation Come out of Recession? Smile of 2017 ! Report

Maritime Transportation Market Analysis in 2017: Will Seas’ Economy Peak Again?

By: Narges Ehsandar

The year 2017, when the majority of the world nations experienced political stability, witnessed significant events in the field of trade. A growth in the international maritime trade could be interpreted as a signal that the market is peaking again. The world was faced with some sort of instability in 2016 in the light of Brexit, triple elections in Europe and US presidential elections, which resulted in cautious behaviors and decision. Admittedly, shipping industry was not an exception to this. Nonetheless, a brisk glance at the global economic trends in 2017 highlights that a new equilibrium is coming to existence under the influence of latent demand detection technologies, a reduction in supply at the international fleet level, and consolidation of some shipping lines. In fact, these matters have retrieved the opportunity of becoming profitable again for an industry which is practically in its mature years age-wise.

While from 2005 to 2010, the experts assert that shipping lines managed to rebuild their market witnessed a 5.5-percent are moving forward in their economies. growth; this figure, however, supply trends at a slow pace. Even the European Union underwent a nose-dive fall to The 5-year recession in the injected an extra 5 billion Euros approximately 3.1 % between field has practically disrupted to the market for managing its 2010 and 2015. Between 2015 the fleet supply, causing the negative inflation, keeping this and 2018, the tide began to come lines to merge, and reduce their rate between 0 to 2 percent. On up, and the demand has been orders for purchasing vessels. the other hand, the impacts of

Volume.7 / Autumn 2017 proportionally rising compared In addition, the 2008 economic the US sanctions gradually faded to 2010-2015, but this cannot be recession reached a manageable away. Indeed, the condition of deemed a rise compared to 2005- point. European countries such consumption was mended in 2010. When being asked about as Greece, Portugal, Spain and comparison with 2008 to 2010, the reasons of an increase in Iceland, who had almost reached when the crisis broke out. demands between 2015 to 2017, the boundaries of bankruptcy However, the mending trend Payam Darya

46 Trump, from his early days in the oval office, terminated the financial regulations supervising financial derivatives. This termination makes it difficult to make long-term prognostication, but what could be foreseen for certain is that the market will have a slow rise up to the end of 2018. It is noteworthy that the type of possession as well as the registration of the ships are two critical issues. Japan and Greece hold the first and second positions in this regard, and China, Germany, the United States and South Korea stand in the next ranks. The access of these countries to well- equipped fleet and container ships could be translated as the actual demand and supply in their own economic capacities. Each of these countries are key players in the global economic games, production, and export and import of raw materials. The year 2017 is the year of economic stability for Japan, China, Germany, the United States and South Korea, who have all moved on from the economic problems of the has been delicate. There was various factors shadowed previous years. a recession between 2005 and the international maritime 2010; the ship owners had transportation and caused a drop Collaborations of Transportation ordered a large number of ships, in the indices. Yet, now, this Companies in 2017 and the prices hence had become economy is gradually peaking. The year 2017 witnessed an increasingly competitive. A Nevertheless, it is difficult to increase in technological stimuli. rise in the number of vessels speculate the conditions after These stimuli have a massive as well as new technologies 2018 because events that had impact on consumerism seeing had given rise to an increase in created the economic crisis could that they discover the blind Volume.7 / Autumn 2017 the investment. Given that the have been solved by financial spots of demands in markets. new vessels were not able to regulation. The ex-president of Here, technology does not mean venture to just any port, they the US, Barrack Obama, had building equipment; it rather needed to make turns and dock commenced taking measures represents the true understanding at alternative ports. Therefore, for such regulations, but Donald of consumer behavior relying Payam Darya

47 Report

on information technology. In signs are highlighting that substantially declined. other words, more accurate and the world has reached a point In the container transportation meticulous technologies analyze where countries prefer to have sector, large lines have staged consumers’ behavior, and detect further collaborations with each their interest lie in having the untouched demands or form other. These interactions are massive fleet. This strategy a coalition with their allies. more vividly observed in the which is called the Blue Ocean A senior expert in transportation, economic arenas. Our age is the was pioneered by Maersk Majid Tehrani, counts the type age of interactions and dialog Shipping line. In fact, the of deals, types of agreement among countries; the age of win- competitive elements of the and diversifications in trade win economic affairs. industry had all been similar, models as the affective factors Another transportation expert, and the dire need to a factor that in this regard, and asserted Mahmoud Rostam Afshar, is of triggers new rivalry was strongly that these coalitions have been the opinion that world shipping felt. Even though the vision of formed by companies who are lines are placing orders for the decision makers at the time concerned about their final price building larger ships, and small was to increase the capacity of and geographical classifications. lines are merging. the vessels, other parties decided They also use more advanced Referring to the excellent moves that they could benefit from this technologies. As a case in point, of IRISL in international scale, policy as well. In the light of DHL or Kuehne & Nagel, as Rostam Afshar added that global the easy access two low-interest logistic activists, enjoy extremely economy is growing out of the complicated technologies, and recession, yet the growth rate have managed to conduct the will bit be impressive. Hence, he necessary restorations. speculated that in 2018, shipping According to a member of the lines will witness a maximum board at Shipping and Subsidiary positive trend of 5 %. Services Association, Mehrshad Moeinm, the global demands An Increase in Container in the shipping market in the Trade past years drove many shipping Prior to 2017, the capacity of lines to place orders to purchase container trade was debatable. ship to be able to cater to the However, this figure increased demands they predicted would dramatically afterwards. emerge; nevertheless, the world- From 1980 to 2015, a large wide recession did not allow capacity entered the container the transportation of goods shipping market and the supply reach the predicted levels. Upon expanded. This trend reached this, the companies that had stability in 2016, which could miscalculated their predictions bear benefits for the restoration ran into problems. Meanwhile, of maritime transportation the more powerful companies industry, increasing profitability, merged with each other in and promoting growth rate. In order to reduce their losses to a 2017, the available fleet and minimum. the ordered fleet with different Volume.7 / Autumn 2017 Speculating that shipping capacities between 13 to 18 activities will be positive thousand TEU and between and promising in 2018 and 18 and 20 thousand containers 2019, Moein continued that enjoy a specific pattern. In political issues, production, fact, orders for the fleet of social issues and many other smaller than 10,000 tons have Payam Darya

48 financial resources in Europe, all mega hub port so that vessels can can indeed optimize their ship owners found a chance to dock at them. This way, in case relationship through a mediator. participate in this game, and the there is a sudden fall, they can Unless a mediator is in place, market was hence saturated. be transferred to the neighboring the ship operator passes on his ports and the destiny of the ports problem to the port operator, and Slow Growth of Forwarders change. the bottleneck will be transferred and Operators As far as the number of ship from one point to another. In the In the supply chain, each and operators and TEU capacity is goods forwarders sector, the every ring has to be optimized, concerned, APM Company is trend is increasing at a logical and the optimization of one the world’s leading company; and steady trend. The world’s ring without the proportional and MSC, CMA, COSCO, main players such as Kuehne development and modification Hapag-Lloyd, Evergreenqxz, & Nagel, DHL, SINOTRANS of other rings in ineffective. and OOCL stand in the next and DB SCHENKER have Hence, the role of the port in positions, respectively. All these managed themselves capacity- the maritime transportation operators have reached stability wise in 2016 and 2017, and have should not be neglected. That is through forming a coalition, in reached stability. why many countries direct their such way that the entire world In 2017, ship operators managed monetary resources to ports or can be classified into 3 coalitions to do their business through they themselves participate in in terms of vessel operators. leasing relationships. This the ports, and turn them into Ship and port operators highlights that the executives of ship operators staged stronger sensitivity to their balance sheets and liquidity. In fact, they endeavored to increase the return of liquidity since this process is a source of income for them and as well, it turns the industry to its natural state. APM, MSC, and CMA hold 50 % of the market share. The mere fact that these primary players leave the competitions and reach equilibrium has profound effects. It is noteworthy that strong bankers accompany these firms and have acted as stabilizer factors to the market.

Ports Events The years of 2016 and 2017 have witnessed significant events in the main ports of world. The five main ports of the world, Shanghai port with the container Volume.7 / Autumn 2017 throughout of 37.1 Million TEU, Singapore 30 Million TEU, Shenzhen 24 Million TEU, Payam Darya

49 Report

Ningbo 22 Million TEU and position, so that, PSA which Hong Kong port with the volume accounts 8 percent share of throughout of 19 Million TEU, market and HUTCHINSON have experienced some changes it is with 6.8 percent, APM with 5.5 in their movement. difficult to percent and PD WORLD with Hong Kong and Singapore ports 5.3 percent have managed to speculate the which were among the regional play a colorful role the market Mega-ports, had experienced a conditions with a more stable trend. downward trend in comparison after 2018 A case in point, during 2010 with the last year. On the because to 2012 years, the reduction of other hand other, ports such as events that revenue of shipping companies Shanghai, Ningbo and Shenzhen had created had resulted in a change in had experienced an upward their behavior, however, for the economic trend. the time being, these behavior When a company is responsible crisis could have been improved. When for both production and logistic have been the revenue of Maersk, the process, it naturally tries to solved by world’s largest container stage a stable behavior. This financial shipping company, declined is why that Hong Kong and regulation. from 49 Billion Dollar to 35 Singapore have seen a decline Billion Dollar, this company in their ranking, three top ports had to put pressure on the (Shanghai, Shenzhen, Ningbo) market , as a result, the market have recorded 83 million TEU had underwent some changes. container throughout. Nevertheless, currently, these The top global operators have companies have come out of managed to maintain their the crisis, the rates have been Volume.7 / Autumn 2017 Payam Darya

50 improved and a partial stability four decades of activities, it is being experienced in the could turn America from oil market. importer into oil exporter. This In the light issue has a massive impact on The Impacts of Energy on of the easy energy trade. Transportation Referring to the transferring access two When it comes to the general energy through pipeline, improvement of global trade low-interest he explains that in terms of flow, it means an increase in financial logistically, the energy sector is energy consumption and need to resources in subjected to security policy, on the raw material simultaneously. Europe, all the other hand, the attempts are Generally, underdeveloped ship owners being made that wherever that countries mainly export general there is a sustainable supply- found a cargo and import container. demand, the energy is transferred Therefore, when the global trade chance to by pipeline. Therefore, pipeline is experiencing an improvement participate in and oil and gas pipeline are trend, underdeveloped countries this game, and very significant matters when sell more raw materials, as a the market it comes to the management of result, these countries export was hence ships. The world of energy is getting more general cargo and import saturated. containers at the same time. more influenced by world A senior expert in transportation, policy than the trade cycle. Majid Tehrani, proposed: an Moreover, instability will increase in general cargo or exert a great influence on the container movement depends on world of energy. It is possible the development of countries. that when shocks either African, Asian and Middle East arise from the demand side countries export mainly general or the supply side, a very cargo. Moreover, their imports sustainable player in market rate has been higher than their like Aramco, Saudi Arabian Oil exports rate. Otherwise, these Company may leave the shadow countries will face balance of of market due to political trade deficit and other main instabilities. problems such as inflation. Without such political events, With regards to energy condition, the energy market will not he continued that given that experience ups and downs. main energy trade moves toward Countries will supply the needs sustainable environment, it is of energy through a wide variety predicted that in the next one or of methods. two decades, oil consumption will experience a partial stability Maritime Transportation in or a decline, because there is the Middle East tendency toward sustainable and There is not a shred of doubt clean energy. that political events in the region Volume.7 / Autumn 2017 Tehrani remarks that Shell such as defeating Daesh, Oil Company, which is one of America’s largest oil and natural gas producers, has been very effective company. Following Payam Darya

51 Articel

The economic crisis hit the shipping Narrative industry ► The demand growth got negative ► The gap between demand and supply was caused excess capacity ► There was a tough fight on freight rates of Global ► Changes in freight rates were gotten out of the control of shipping companies ► Companies thought about focusing on cutting costs, in order to be profitable ► Container Cost reduction by improving productivity was the approach taken by large shipping companies ► It was concluded that available capacity should be used optimally Shipping ► What was the solution: using larger ships, removing some ships, and slowing down the ships’ movements for reducing By : Elham Ghorbani fuel consumption, joining to alliances and agreements to share the capacity and take more global market share ► These days, In brief, all of the events which have been happened the container section is continuing its way about the shipping industry since mid-2008 can be towards consolidation more than before. summarized as follow: Volume.7 / Autumn 2017 Payam Darya

52 It was predicted and it seems to be true up to now that the lowest levels in recent years. In this condition, the balance of supply and demand in the shipping alliances, mergers and acquisitions in the container industry has been due to the massive demand for iron sector are positive events because larger players are ore and coal. In fact, experts are optimistic about more responsive than smaller ones. the maritime market for at least the next three years. Although there is no doubt that the container sector 2017 is a landmark in the container shipping will benefit from improvements in world trade as industry well as other sectors, to what extent this segment of After about a decade, Drewry predicts that the the trade can take benefit from global GDP growth container sector will reach to its most annual profit and reduce the gap between supply and demand is in 2017, a combined operating profit of about $6 bn. an issue that needs to be studied further. By considering that the forecasts of the entire shipping Data of global macroeconomics is so good that industry indicate a total operating profit of about for the container sector, it has been expected that $20 bn in 2018, it can be expected that next year will the growth for the container sector in 2017 at the be the most thriving year for container section since beginning of this year was between 2-4% and for 2010. In fact, this will happen if shipping companies the entire 2017 was 4-5%. Due to the delivery and can handle the massive entrance of new ships next entry into the service life cycle of new vessels, there year. As Drewry states, for the container carriers, the will be some problems in the next year, but in the collapse of Hanjin was a historical milestone that beginning of 2018, there will be no flow of new paved the way to the promised paradise )Sustainable ships that we saw at the beginning of each year. profitability). It cannot be concealed that orders have been issued Although increasing the size of ships is delayed due some years ago and delivery will take place next to infrastructure constraints (including the size of year, but the fact is that the orders have reached canals and ports) and the lack of proper financing, over the past two decades, average size of the vessels in the global fleet has grown by 69% and at the early of October 2017 has reached to 30,582 DWT. Certainly, in container ships, the heavy weight makes a huge difference in average size of ship, and leading to outstanding orders for very large container ships of 18,000 TEU and more recently 22,000 TEU. This led the average size of container ships to over 48,700 DWT, which showed 104% increase over the past two decades. But this tendency to boost ships is not only affected by one factor, and the trend of protagonists for larger vessels, resulting from several factors. One of the factors is the growth of seaborne trade as ship owners are always seeking the opportunities to increase their market shares with cost-effective operations, and in this way it is very important for them to pay lower costs per unit. Increasing the size of ships in the container segment Volume.7 / Autumn 2017 indicates the willingness to compete through lower costs of unit, although there are some other factors, such as removal of restrictions of the Panama Canal in 2016. Generally larger ships will result in lower unit costs. This is very effective for shipping as well

as for the global economy. Payam Darya 53 Articel

Power sharing of the worldwide container lines According to Alphaliner, the information of the top 30 container lines can be seen in table 1 and the comparison of their existing capacity is shown in Figure 1.

Table1. The Information of Top 30 Container Lines

Share of Capacity Market Share No. Name of the line Total existing TEU (%) (%) 1 Maersk 3,527,900 18.3 16.5 2 MSC 3,128,843 16.2 14.6 3 CMA CGM 2,494,881 12.9 11.7 4 COSCO Shipping 1,814,011 9.4 8.5 5 Hapag-Lloyd 1,497,490 7.8 7 6 Evergreen Line 1,069,844 5.6 5 7 OOCL 672,159 3.5 3.1 8 Yang Ming Marine 579,826 3.0 2.7 9 MOL 568,789 3.0 2.7 10 Hamburg Süd 563,769 2.9 2.6 11 NYK Line 537,763 2.8 2.5 12 Pacific International Line 382,647 2.0 1.8 13 Zim 357,221 1.9 1.7 14 HMM 351,813 1.8 1.6 15 K Line 341,746 1.8 1.6 16 Wan Hai Lines 226,001 1.2 1.1 17 X-Press Feeders 151,373 0.8 0.7 18 KMTC 122,983 0.6 0.6 19 Antong Holdings (QASC) 104,694 0.5 0.5 20 SITC 103,515 0.5 0.5 21 Zhonggu Logistics Corp. 99,081 0.5 0.5 22 IRISL Group 96,383 0.5 0.5 23 Arkas Line / EMES 74,758 0.4 0.3 24 TS Lines 69,219 0.4 0.3 25 Sinotrans 67,631 0.4 0.3 26 Simatech 65,129 0.3 Volume.7 / Autumn 2017 27 Salam Pacific 52,273 0.3 28 Heung-A Shipping 49,754 0.3 11.1 29 SM Line Corp 49,266 0.3 30 Regional Container Line 49,105 0.3 Payam Darya

54 Fig1. Top 30 container lines by total existing TEU

Table2. Alliances’ Capacity and Market Share

Market Share No Alliance Name Total existing TEU Share of Capacity (%) (%) 1 2M Alliance 7,572,325 39.3 35.5 2 Ocean Alliance 6,050,895 31.4 28.3 3 The Alliance 3,525,614 18.3 16.5

As far as you can expect and shown in figure 2, the market share of these companies is exactly that are relatively smaller and should try to coordinate to the amount of their available capacity. maintain the remaining market share (about Tables 1 and 2 show important information about 20%). the current state of the container shipping market, some of which can be summarized as follows: • By considering that only 13 of the top 30 container companies in the world • About 80% of the market share is related to have taken part in alliances, we can 3 major container carriers. As you can see,

conclude that so tight competition Volume.7 / Autumn 2017 from 30 top container companies in the world, between the 17 remain companies only 13 of them have taken part in an alliance. has happened to maintain the small According this, it’s clear that there is a tight remaining share of the market (about competition between the 17 other companies 20%). Payam Darya

55 Articel

Capacity management, effort to balance supply and demand

Fig2. Comparison between top 30 container lines’ market share

• Approximately 90% of the available capac- ity is controlled by the container alliances. In other words, other container companies by only 10% of total capacity have to fight for gaining 20% market share.

• As shown in Table 1 with 3 different col- ors, there are only 13 top-level companies in the al- liances. It means that powerful companies are trying to form superpowers, while small firms in such a competitive environment (which goes toward mo- nopoly) are struggling to survive with low incomes and little operating margins.

Certainly, more analysis of the data reveals more facts, but the choice of container carriers will make Fig3. The last condition of container alliances the future of the market in the future. The container shipping industry is definitely moving towards con- solidation, and the power to determine the future of While no orders have been issued recently, statis- this segment of the shipping industry is in the hands tics show that the total existing orders is 3.2 million Volume.7 / Autumn 2017 of the great ones, such as Maersk which has con- TEU, equal to 15.6% of the total fleet capacity avail- centrated its activities more than before in order to able in October 2017 (the total capacity is around 20 manage its whole group in the best way and conse- million TEU) quently make favor profit for itself. According to Drewry’s estimations, 128 very large Payam Darya

56 vessels with a capacity of more than 10,000 TEU the end of 2018 will be very different in the light will be delivered by 2020. It is expected that 83 of developments in 2017. Compared to 2016, at units of them will be delivered by the end of 2018, of first glance the list of top companies seems tobe which 24 will be super-large vessels with a capacity the same in terms of capacity, but Evergreen, which of more than 20,000 TEU. once had the first place, at present fell to sixth place, Hapag-Lloyd has promoted one step and Hamburg Following more than two decades of sustainable Süd has fallen to its previous position. In comparison growth, the capacity of container ships has been more to 2016, this year’s top 4 companies are also Maersk closely controlled in the last two years. Container Line, Mediterranean Shipping Co, CMA CGM and fleet growth was only 1.2% during 2016, due to drop Cosco Shipping in terms of capacity. in the delivery of shipyards and continue scrapping Undoubtedly, the integration of the three Japanese activities. Over the past 3 years, the proportion of container lines, MOL, NYK and K Line, can be container ships in the range of 3,000 TEU to 7,999 regarded as the largest merger of the shipping TEU has fallen sharply in comparison to the total industry. The merger of these three companies container fleet, which has risen to 33% from 41% resulted in the formation of Ocean Network Express at the beginning of October 2014. At the same time, (ONE) company, ranked sixth in terms of capacity, the proportion of larger vessels in the range of over while now these three companies are ranked 9th, 8,000 TEU during this period increased from 36% 11th and 15th respectively. The company will at the beginning of October 2014 to the current introduce its services from April 2018, and until that level of 48%. As a result, it is quite clear that due time the three companies will continue to operate to lower unit costs, the trend towards larger ships separately. has increased and this trend will continue, as 84% Another change is about the OOCL, which currently of the ships scheduled to be delivered in 2018, have holds the seventh rank of the world list and is being the capacity of more than 8,000 TEU. In addition, acquired by Cosco Shipping, so that Casco can between 2016 and mid-October 2017, 70% of the ranked as the third at least for a short time. After that, scrapped ships were in the range of 3,000 - 7,999 we have to wait to see how the delivery of new ships TEU. will change the list of top companies in the coming years. We should not forget that Cosco Shipping is As in the late 1970s, after the peak of shipbuilding the result of the merger of two Chinese companies activity in 2010, the economic downturn and its (Cosco and China Shipping). Another company that impact on shipping markets led to a drop in the will probably lose its independence officially by outputs of shipyards. Between 2010 and 2014, the the end of 2017 is Hamburg Süd, which is bought number of new ships dropped by 34%, while a total by Maersk. United Arab Shipping Co, which was of 178 shipyards announced they had delivered the tenth largest container shipping company in all their orders by 2012. Of course, trade growth, the world in 2016, now has merged with Hapag- the replacement of older ships, ships with lower Lloyd, and previously Hapag-Lloyd had acquired efficiency, and more strict environmental laws can the Chilean container company CSAV. In the list of help increase the orders and improve the conditions the top 20 container companies in 2017, compared of shipbuilding industry. But in general, it can with 2016, the position of Hanjin Shipping, which be seen that shipping companies try to use their announced bankruptcy in August 2016, is empty. available capacity optimally (sharing the capacity But there is a new entrant from South Korea, with other companies in the form of alliances or called SM Line, which has started its activity after agreements) and optimize their capacity (upgrade the bankruptcy of Hanjin to rank 29th among the the fleet, renovate their equipment and utilize the world’s container companies. Volume.7 / Autumn 2017 economy of scale). Consolidation, an unavoidable solution Every year, the list of top-level shipping companies has changed, and certainly the list that we see at Payam Darya

57 Articel

Fig4. The most important events in recent years

Other container companies that have upgraded have not been promoted due to their development strategy, but because of the merger of some companies or the fall of some others. This includes the promotion of Zim from grade 16 at the end of October 2016 to grade 13 at the same time point in 2017.

The difference between the 6 companies at the beginning of the list from the rest in the term of the number of fleets is obvious (figure 5). This distance will expand by more mergers and alliances of big companies.

Although 22 of the 30 largest container companies are Asian, the power in this industry is dominated by the first three European companies at the list.

The solution that Maersk has taken to stay at the first level of this industry is interesting. The company,

Volume.7 / Autumn 2017 which had a capacity of 3.2 million TEU in 2016, has increased it to 3.5 million TEU this year and will continue to make significant orders for the coming years. Payam Darya

58 Fig5. Top 30 container lines by ships

Intellection will bring the bright future

We have to wait and see if Asian companies will move towards the policy that Europeans are pursuing, to integrate and start significant cooperation, or just watch the developments in the world around them. When we see huge ships in the list of orders which will be delivered over the next two years, we suspect that super companies like Maersk want to reduce the number of container carriers in order to better manage the capacity and improve the fleet utilization to more than 90%. As a result, the best candidates for selling are small and medium-sized companies with a limited market share and a small fleet, by this way they avoid multiplicity as far as possible, and the whole industry will go to integrity.

However, given the sustained growth of the global economy, we can be optimistic about global freight

rates in 2018. Two months had remained until the Volume.7 / Autumn 2017 end of 2017, when Drewry announced that in 2017 the average freight rates in the east-west trade lane are projected to increase by 16.6% compared to 2016, and in 2018 this rate will be 8.8% compared to 2017. Payam Darya

59 Report

Shipping Industry Overview in 2017: Putting on Sunglasses, Lolling on the Shore without Sunshine!

By: Vahid Basereh

The shipping industry is still wounded. It seems that the industry has been affected by the economic crisis of the first decade of this century. Totally 4% drop in shipping operations in 2009 was a bitter memory of the industry whose impacts have continued until now. Although in the next seven years, with the growth and rather recovery of the global economy, the shipping industry somehow experienced the growth. However, the effects of the former slump once again impacted the industry in 2016, which its obvious manifestation was the bankruptcy of South Korean shipping company, Hanjin in that year. Although the reasons for the destruction of the seventh largest shipping line of the world were not limited to the economic crisis and consequently the crisis in the shipping industry, it cannot be ignored if the market was as flourishing as the past, the company did not feel the bitter taste of bankruptcy and the biggest fall in the world shipping industry in the last three decades was not happened. The successive mergers and acquisitions as the last solution for survival, which continued with more intensity from 2015 up to now, were another signs of the crisis. Although the advent of alliances such Volume.7 / Autumn 2017 as 2M, OCEAN and The Alliance, helped to survive the leaders and serve the integrity of the global shipping industry, It shows the fact that the world shipping industry is walking around the edge of the razor. Payam Darya

60 Now the situation is volatile. that time, it expressed a negative report that the condition of bulk There are some improvements, outlook for the shipping industry and container sections would not but each time a new drop does not in this year. Moody’s believed be worse than 2016. However, allow percentages to exceed 4. In that continuation of over supply it once again warns that in the its analysis of the first 3 quarters made this year not a good year for supply growth of the next months of 2017, the Clarksons predicted shipping industry. will impact container segment that by the end of 2017, the world The institute warned that if the negatively. This fact was indicated shipping industry will experience supply growth resumes more than in the subsequent reports of 3.9% growth which is higher than 2% of the demand growth and the other institute such as Clarksons the 2.8% and 2.1% in 2016 and decline in operating revenues is which has somehow shown in 2015, respectively. But it is still more than 5% annually, this year its weekly reports that the freight far from the ideal condition that will not have big difference from rates in the container sector can be called boom. 2016. Moody’s has announced are constantly fluctuated until But the Moody’s rating institute the only way out of the current October, although this fluctuation in late July 2017, in the 7-month situation in a sharp decline in eventually has kept its distance report of this year was not as supply. from Moody’s disappointments optimistic as this. In a report at But this institute also said in its in July. According to Clarksons, Volume.7 / Autumn 2017 Payam Darya

61 Report

the container market has for oil in the Middle East to the not convey great hopes, but it shown 9% growth in the first extent that regional huge ports seems that the era of crisis is three quarters this year. This look for special services for approaching to save in history. has been accomplished by loading more entry vessels. In In other words, if the supply and the transportation of 5.6m teu this period, the shipping industry operating costs optimization containers, which is a large part experienced a state of chaos as a continues in the shipping industry, of Hanjin’s share that has been result of a periodic and intense we can hope that the industry split between shipping companies boom, so non-professionals and will also find a solid situation for in the absence of it. profiteers also entered into the its future along with the global It seems that removal of Hanjin great market of shipping for more economy. has effectively optimized a large profit. By exploding of the boom In the bulk section, maybe this part of the supply, at least in the bubble, everything collapsed solid situation will be experienced container market. According suddenly, so the shipping industry sooner. The statistics in this to many industry players, the remained with a large amount section represent more valuable optimization of supply is one of of idle capacity. No one could expectations. China’s thermal the most important requirements forget the view of abandoned new coal imports will reach 178 of the shipping industry at ships in the shipyards. Now, after million tons this year. According the moment, but why it is not a decade, supply continues to to Clarksons, this figure is 8% optimal? The answer to this surpass demand, and as a result of higher than last year. At the same question can be found during the confusion in global economy, time, Australia has also increased the bubble boom period lasted the shipping industry is also in a its mineral exports. The presence until major economic crisis in state of confusion. of Donald Trump at the White

Volume.7 / Autumn 2017 2008. In the years ahead of it, the However, it cannot be ignored House, which ends or leaves much bubble boom in the market has that according to the International of the international conventions, led to a sharp rise in demand. As Monetary Fund, the global especially in the commercial and an example, the rise in oil prices economy will have about 3.5% environmental sectors, has also at a historic record of more than to 3.6% growth in 2017 same as helped boost the bulk market. $150 ppb increased the demand 2016. Perhaps this growth does Accordingly, now in the Baltic Payam Darya

62 region, the demand for dry bulk by considering the high supply of carriers is showing a positive different companies, this hope is trend. But the US government’s not strong enough. The scrapping actions are like a blade with two supply activities in this sector have not edges. In a report in July 2017, continues had clear trend in 2017, and in Braemar ACM, one of the largest some weeks there were virtually charter companies in the world, to surpass no tanker for scrapping. In the warned the possibility of limiting demand, and first half of 2017, 58 new tankers, imports of metals by USA and its as a result of including Aframax and Suezmax, impact on dry bulk sector. the confusion have entered to market, according In its report, it insists that stopping in global to the Lloydslist. However, imports of metals to USA will according to this Institute, the economy, eliminate large part of demands trend for coming of new tankers in dry bulk market. Furthermore, the shipping will be decreasing in the coming as the world’s largest exporter industry is year, but it seems that from 2019 of raw metals (with more than also in a state part of the other orders will enter 49% of the market share), China of confusion. to the market, which means a new has threatened USA to restrict wave of supplying tanker services. imports from this country, which If these events and actions did means a loss of another part of not affect the market negatively, the bulk market. Of course, up we can say that the future of the to now, after some months after tankers will be more obscure the publication of the Braemar because of them. Clarksons’ ACM’s report, there has been no weekly report on market review, special event, and bulk sector has for the first three quarters of 2017, been still in a slow fluctuated but confirmed that tanker carriers had hopeful condition. many problems to get a few more After all, in the tanker section, dollars. By this way, revenue of the situation is somewhat more giant tankers dropped by about complicated. While bulk and 45% over the first seven months container sectors are each of 2017 compare with the same recovering from the pressure period in 2016. The drop of of 2016, the tanker section has revenue in Aframax sector is experienced highly volatile reported to be up to 55% which conditions in 2017. Because of is an ignominious figure. It its high supply versus demand in seems that until the oil producing the tanker sector, Lloydslist had a countries or, more precisely, the negative outlook in late July and members of OPEC plus Russia early August 2017. According to adhere to the reduction in oil its report, at least in the spring production, it is unlikely that and summer of 2017 demand for the tanker market will boom oil has been in recession. At the in the medium term. However, same time, the supply of tankers according to the Lloydslist is increasing. This means slump report, The Chinese will soon Volume.7 / Autumn 2017 in this sector, which shows itself suspend some of their oil refining with increasing the speed of capacities due to repairs, so this freight reduction. Lloydslist hopes action can make the situation of the tanker market will boost with the market more complicated. the start of the winter season, but Although the French BRS group Payam Darya

63 Report

in recent weeks, given some of the USA government led by charterers’ actions, has reported Donald Tramp added to market the growth of the freight in this uncertainties over the next three sector, but this condition still as the world’s years, while China has gone seems to be fluctuating unless largest into its comfort zone, which is shipping companies find a unclear when it comes out exactly solution for the problem of excess exporter of what it is going to present to the supply. raw metals global economy. The oil market Anyway, it’s now announced that (with more is still not clear, and producers the number of orders in 2017 have than 49% of in the ambiguous horizon do reached to 573 vessels, which the market not know whether to wait for represents 135 number increase another sunrise, or everything share , compared to the same period of ) will end in a few rays of light. last year. Clarksons believes that China has Britain also has a low resolution in the overall review and taking threatened about its recent decision-Brexit, into account the statistics of USA to and it is not clear what the global recent years, this increase is not restrict economy will experience after a big growth. However, it cannot imports from its withdrawal from EU. These be ignored that due to the poor and many others are issues that growth of the industry along with this country, will affect the global economy the not so powerful growth of the which means and, consequently, has the direct global economy, the surplus of a loss of impact on maritime trade. In the shipping industry is still a big another part this totally vague condition, any problem. In other words, shipping of the bulk inattentive behavior can put the companies do not seem to believe entire industry in an irreparable market. that they are operating in a serious problem, such as the collapse area. Their behavior in recessions of Hanjin. The bankruptcy of and booms is extremely this large shipping line was emotional. In 2016, in response precisely because of the reckless to the recession, the speed of and incompetent behavior of scrapping was increased, which its managers. So, regardless the made the supply and demand recession in 2016 or the relative somewhat optimized in 2017, prosperity of the 2017, shipping In addition to this, successive industry in the world seems to mergers and the removal of need a major development in all Hanjin from the market helped areas. The first change is not in to balance supply and demand. the field of hardware, it should On the other hand, with the first be in the field of management, signs of improvement in 2017, market observation, and attitudes companies made orders, while change. A strategic look, which decreasing the scrapping rate. This is not suppressed by different is the point where you can call it conditions and could continuously emotional encounter. Now, given meet the needs of market with the ambiguous horizons ahead, the most flexibility, is the eternal Volume.7 / Autumn 2017 new vessels will start the activity need of the industry. Shipping from 2018 to 2020, while it is industry should be a strategic and unclear whether for this increased profitable industry which affects capacity there will be any demand the lives of billions of people in at that time or not. The behavior the world. Payam Darya

64 Energy

Petrochemical Contributes to Globalization of Iran’s Economy Report The Brand of Petro-chemistry Unit: A Path to Globalization By:Hoori Ghasemi

Today’s world is the world of economic benefits, and based on this principle, every country proceeds with its political goals through the path where its economy has the largest capabilities. Thus, political diplomacy, which used to be a marginal and side issue, has been put in the spotlight given once it has managed to prove its value in today’s world. Therefore , it could be argued that benefit is the main factor that causes rise and fall in commercial companies in today’s competitive world, and in a broader sense, leads the economy of countries. This matter promoted the status of economic diplomacy from a luxurious good to a necessity. It also drove countries to enhance their economic benefits and place specialized production as their top agenda. Meanwhile, Iran is not an exception to this principle, and

Volume.7 / Autumn 2017 given its economic situation and the resources it has at its disposal, the country is in the pursuit of playing a more colorful role in the global equations. Payam Darya

66 relying on its active diplomacy, Iran must endeavor to become the country that determines the prices in the petrochemical market.

Relying in its rich and abundant oil and gas resources, Iran could turn into a key player both in the Middle East and the world by completing the production and value chain in these two fields. To do so, Iran has paid considerable attention to the development of its upper and lower hand industries in the field of oil and gas. A good example for this is Iran’s doubling its oil production and rapid returning to international oil markets once JCPOA was put into action. Nevertheless, it must be noticed that in today’s world, the real added value and the main benefit of oil industry comes around with complementary industries, and manufacturing petrochemical material in particular. The statistics of Iran’s foreign trade has it that petrochemical materials are the leading non- petroleum Iranian export materials, shaping up 35 % of

Iran’s total non-petroleum export. Volume.7 / Autumn 2017 Based on the statistics released by Iranian customs, from mid- March to mid-September 2017, Iran’s export of petrochemical materials has increased 1.3 % Payam Darya

67 Report

compared to the same period in moderate prices in the market. 2016, and has reached over 7 This way, it reassured maximum billion dollars. The total amount profit for the producers. of non-petroleum Iranian export Iran intends Overall, even though Iran’s share materials in the same period has of petrochemical market has reached 20.54 billion dollars to expand its been smaller than its southern only, though. These figures do collaboration neighbor for several years, it emphasize the significance of with large has been speculated that once petrochemical materials in Iran’s corporations the petrochemical projects are foreign trade. It should also such as Royal completed and operationalized be added that petro-chemistry Dutch Shell and by the end of this year and continue the same pace into industry brought about a Total. noticeable amount of foreign 2018, Iran and Saudi Arabia’s revenue for Iran in the era when polymer and petrochemical Iran was under nuclear-related production rates will reach the sanctions. same amount. Iran’s 20-year Currently, Iran is producing vision plan emphasized that approximately 60 million tons the country must turn into the of petrochemical material, and region’s main and dominant this figure is going to reach over producer of petrochemical 100 million tons in the next material value-wise by 2025. upcoming years, once the 6th plan Of course, alongside the for the country’s development development of petrochemical is completed. Considering this industries in Iran and large volume of production, operationalization of new Iran is holding the top position projects, it is essential to bear in the production petrochemical in mind that the market will be materials, second only to Saudi saturated with petrochemical Arabian Sabic. products, and marketing Nevertheless, the Oil Secretary activities should commence Deputy and former managing from now. Moreover, relying on director of National Iranian its active diplomacy, Iran must Petrochemical Company endeavor to become the country (NIPC), Marzieh Shahdaei, that determines the prices in asserted that Iran’s rank had been the petrochemical market. The higher than Sabic before Iran’s major factor that determines Petrochemical Commercial Co. the role of countries in the sales (PCC) was privatized. Before market is the tonnage of products PCC was delegated to private that they deliver to the market. sector, it exported all Iranian Based on the rules governing the petrochemical products under market, the larger the volume of a single unified brand. In fact, the products a country delivers PCC had set excellent policies to the markets, the more colorful Volume.7 / Autumn 2017 for sales in the region, and it its role in bargaining over the chose the best time for selling market becomes. petrochemical products in order Now, provided that Iran wishes to both manage the demand- to play an influential role in the supply ratio and to maintain Payam Darya

68 global petrochemical market, it area of production and products at competitive prices. must focus on one unified brand, determining specific structure This is a critical matter for and deliver its products under for each group of products such Iran, seeing that its regional the name of Iran. This matter is as Methanols, Polyethylenes, competitor, Suadi Arabia, does significant in two aspects. First, Chemicals, and Polypropylenes. not have large gas reservoirs it prevents Iranian petrochemical The second approach, however, and its petrochemical industries producers from parallel work is establishing one particular are operating based on crude oil in the sales of their products. holding for exporting Iranian feed. Currently, every Iranian petrochemical products to Even so, Saudi Arabia is a large petrochemical manufacturer does international markets and and serious threat for Iran’s its own marketing and shipping guaranty maximum profit for all petrochemical industry, since independently, and hence, Iranian producers. Certainly, in this country is operating its individual benefits is sacrificed both cases, the to-be-established petrochemical industry in full for collective benefits. That is company will be a joint-stock throttle with each and every to say, Iranian petrochemical company and the beneficiary instrument it has, and aims producers offer lower prices petrochemical units will be the at occupying this market in to compete with other Iranian shareholders. the region. Now, seeing that peers. Second, exporting similar On the other hand, in the post- the preservation of national products increases the shipping JCPOA era, Iran is trying interests is Iran’s top priority, costs. These two factors lead to a to import the world’s latest the only means to cope with the reduction in the profit of Iranian technologies for its petrochemical threat posed by Saudi Arabia is petrochemical manufacturers. industries and as well, absorb the the unification of all domestic Therefore, by collecting all necessary funds to expand this petrochemical production Iranian petrochemical sales industry. To do so, Iran intends units in macro policies and under a united commercial to expand its collaboration with determining the sales price. unit, we could hope that Iranian large corporations such as Royal In a nutshell, it could be petrochemical manufacturers Dutch Shell and Total. Once concluded from all the above- stop competing with each other, the agreements with foreign proposed arguments that Iran is in and instead, focus on competing parties are executed and the dire need of establishing a unified with their foreign peers under a new products are launched into and single commercial unit for unified and solid sales unit. the market, the existence of a the sales of its petrochemical powerful commercial unit Iran products in the regional and Admittedly, the termination will be more significant than international markets. The of negative competition in the ever. Iran must go beyond India establishment of this unit is of domestic market will enhance and China, and expand its target great significance in the current Iran’s competition capacity in export markets to Africa and conditions; and disregarding international market and fortifies Europe. Not only this act will this necessity will enable Iran’s the country’s exports power. In bring more foreign-exchange competitors to capture the addition, a united commercial revenue to the country, but it will current and future petrochemical unit for Iranian petrochemical also expand Iran’s commercial markets by constant dumping, products increases Iran’s power give-and-takes and enhance its and eliminate Iran from the sales as a large rival in the market. diplomacy power. race.

Two approaches could be Iran can rely on the gas and the gas Volume.7 / Autumn 2017 adopted to establish this united condensates produced in South commercial unit. Pars fields, which are sustainable The first approach is feeding sources, and produce classification based on specific high-quality petrochemical Payam Darya

69 Interview

Convergence Is the Key to A Sustainable Presence in Global Markets

By : Foad Nabavi Volume.7 / Autumn 2017 Payam Darya

70 Ali Mohammad Bosagh Zadeh added that in its new Holdings and petrochemical development path, Iran’s companies need to work petrochemical industry needs together in a coherent manner, in order to make an a national determination to integrated and targeted export achieve its predicted goals, and for a sustainable presence on in this way, it should be more the international markets. empathy-intensive to attract The production control and lead new funds for the manager of the National development of petrochemicals, Petrochemical Company and in addition to trying to (NPC) by emphasizing increase production and exports, the need for convergence the powerful Iranian private and interaction between sector should play a greater role petrochemical companies in attracting investment. to participate in export He pointed out that the integrated markets, in an interview with activities of holdings and the Payam Darya magazine petrochemical companies for said: “Fortunately, the big exporting of petrochemical and holdings have a positive polymeric products, in addition competitive relationship and to lead to the coordination of we hope that we could have a manufacturers in determining solid international presence the minimum price for the export with the sympathy of the of petrochemicals, increase companies and holdings, but profitability, reduce shipping and the key to being involved in marketing costs, and develop the market is the cooperation export of Iranian petrochemical and association among the products in regional and global petrochemical complexes.” markets. Bosagh Zadeh added: “The large group of the Iranian petrochemical industry is determined to achieve the second jump of this industry and to achieve a resilient economy, in this way the alliance between the manufacturing complexes can make sustainable exports.” The production control manager of NPC emphasized that the attraction of new investments and the strong presence on the world markets with the Volume.7 / Autumn 2017 cooperation of petrochemical holdings will increase the capacity of producing various types of petrochemical products. He said Iran’s petrochemical Payam Darya

71 Interview

industry in the coming years will not only supply internal demand, but also fulfill the significant growth of exports. It should be said that the prospect “The large of petrochemicals is positive in group of all aspects. the Iranian He stated that the petrochemical petrochemical industry is now the pillar of the country’s economic industry is development and is linked to determined to all sectors of the industry, and achieve the added: “utilizing resources for second jump of production and avoiding waste this industry on national resources could and to achieve lead to a second jump in the petrochemical industry that has a resilient been mentioned by the minister economy, of petroleum.” in this way The member of the board of the alliance directors of the NPC said: between the “Balanced development and manufacturing completion of the value chain complexes could make our petrochemical industry one of the world’s top can make petrochemical powers in the sustainable future.” exports. Bosagh Zadeh added: “these days Iran’s petrochemical industry is accelerating its way to development by using of the modern knowledge and technologies of the world and relying on its expert professions, so by the end of the sixth development plan, Iran will become a major petrochemical power in the region and the world. The member of the board of directors of the NPC said if holdings such as Persian

Volume.7 / Autumn 2017 Gulf Petrochemical Industries Co, Tamin Petroleum & Petrochemical Investment Co, Parsian Oil & Gas Development Payam Darya

72 Group Co, and Pension funds as well as other holdings and huge investment companies; take part in the interaction and cooperation, they will be able to strengthen the position of Iran’s petrochemical industry in foreign markets. He added the export of petrochemical products is an important strategy in the country’s economy in the sixth development plan of the country. With the emphasis on the necessity of interaction and cooperation among all the components of Iran’s petrochemical industry, Bosagh Zadeh mentioned: “Fortunately, this advanced industry has been in the way to development and we can plan for the significant improvement in this industry by taking advantage of new plans and increase the production capacity.” Referring to the fact that the progress of the petrochemical industry is a sign of Iran’s and Iranian’s scientific and technical capabilities, and the petrochemical workers are proud of it, he said: “Now the condition for development in all dimensions is provided, and in addition to supplying Complete domestic needs, in the coming years the significant growth export of various polymer and chemical products will occur. Volume.7 / Autumn 2017 Payam Darya

73 Interview Commercial; the Lost Loop of Iran’s Petrochemicals

Iran’s petrochemical exports which had been limited to the neighboring countries such as Afghanistan and Iraq is now concentrates on the extension of its markets to Green and black continents due to the evolvement of international atmosphere. But Iran’s task is not easy to expand its export markets. Most of the target markets are owned by other companies and countries, and Iran should pursue active marketing in order to maintain the existed markets and demonstrates its role in new ones. Meanwhile, the production capacity of petrochemicals in Iran has been started a new trend of jumping which smooth exports’ opportunities. If the second lunge in petrochemical industry happens, it needs extended Volume.7 / Autumn 2017 marketing for the products to be sold. In line with this, the commercial of this industry has to act cohesively and intensively to be introduced

Payam Darya as a brand. 74 Emphasizing on reviving a stronger commercials aiming products we could manage a brand by the side of Iran at competing with leading foreign exchange reserves and with the purpose of exporting foreign companies because the divide the gained profit among petrochemical products, Mehdi interests of the country make us the Iranian companies instead of Sharifi Niknafs, Petrochemical to save the rights of shareholders paying $1.5 billion to foreigners. Commercial Co.’s CEO, in by creating such a coalition. To Given the in-built petrochemical an interview with PD said: all pave the way in this regard, a projects of the country, he the countries globally aiming specialized team which acts announced that: production at increasing export power dependently has to conduct the capacity of petrochemicals and the management share in related studies. So, excellent would reach above 100 million the world attempt to export patterns should be searched and ton in the coming years and various products, including the most appropriate one have to we have to find a way to be petrochemicals, in an integrated be selected. In line with this, the witness of profitable export of and unified manner. individual interests should be petrochemicals. He further added: during the forgotten and the concentration CEO of PCC said ensured the past years petrochemical exports should be given to the country’s increase in petrochemical in of Iran were carried out under interests to record the most the near future and added that: the NPC brand, but with the profitability. “At present, the production of privatization of the petrochemical Considering the current situation, petrochemical products has complexes and the subsequent Sharifi said that it is not possible increased by 10%, due to the use transfer of the Petrochemical to make the Petrochemical of new projects, and by the end Commercial Company, each Commercial Co. to return to of the year it will reach to 15%”. company exported the products the National Petrochemical Referring to the need for job independently. Given the current Company (N.P.C). In the creation in the country, Sharifi state of affairs, the national meantime, professional players said that on the other hand, interests of the country make us are active in global arena and we each ship could create 60 direct to start exporting petrochemicals have to learn the new regulations jobs, all of which would be in an integrated manner. of the world and design a proper specialized. Considering the fact CEO of the Petrochemical pattern for the commercials. that in the first step 150 ships Commercial Co. further stressed The CEO of the Petrochemical was planned for this company, that to solve all the issuers of Commercial Co. referred 9,000 people will be employed petrochemical exports all the to the establishment of a in the country. petrochemical complexes should shipping company to export The CEO of the PCC added: be united and being active under petrochemicals in the country “Moreover, there will be indirect the same brand in order to and said: “studies of a joint employment in the pier, loading, prevent broker’s interference. project with IRISL have been ports and more”. Given the intentionality to gather conducted to gather together the According to the preliminary together the petrochemicals of petrochemicals complexes to plan, Iran’s petrochemical the country, he added: Countries launch a logistics company to transportation companies will with a coastline on the Persian export petrochemicals”. In line create an independent company Gulf such as the UAE and Saudi with this, we paid $1.5 billion that will work both for Iran and Arabia, are now struggling to to foreign brokers form marine the region. boost their bargaining power transportation of petrochemicals. Sharifi Niknafs added that by forming coalition in the For the time being, exporting IRISL, NITC and petrochemical Volume.7 / Autumn 2017 petrochemical market. capacity of petrochemicals transportation companies To create a unified in Iran is recorded to be 365 announced their readiness to petrochemical, strong million ton. Therefore, by establish this new shipping commercials of petrochemicals launching a new shipping line company. should be combined to establish in an attempt to export the Payam Darya

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History

Half A Century of Glorious Presence Report Volume.7 / Autumn 2017 Payam Darya

78 When Development Raisd Sailclothe

The story of Islamic Republic utilize the new revenues for of Iran Shipping Lines (IRISL) construction and development. With silence, a bright barge as an enterprise is the story Iranian government commenced would split the ocean at night. of maturity. It is the story of a establishing various plants Here’s the Persian Gulf: an thought and a choice for growth. and companies to prepare the ancient memory of Iran’s It is a story whose ups and downs necessary infrastructures for maritime world, a Persian Sea hammered out development and development. that witnessed the commuting sacrifice. It is a story of serving It had almost been 5 years since of primary ships from Jamshid the homeland all along. the establishment of OPEC, during Pishdadian Dynasty to IRISL story symbolizes as a system that brought about the first marine fleet of the world the exponential economic regulated revenue to Iran, and during Achaemenes. Years of development and growth of a the country was already on its battles between Achaemenes’ country which lies in the middle crusade to development. To this ships passed. Waves came to of world; a country which end, large factories and major stones and the silence of the wanted and still wants to keep companies began to rise from Gulf accompanied by a strange up with the global development mid 1960s. fanfare to make the ancient trend. As a consumer country up until sea become familiar with new The story that you are going then, Iran was now in need of fables. to hear is the story of IRISL transportation infrastructures becoming IRISL. to carry the products it needed. With the establishment of Hence, the initial studies for Organization of Petroleum launching a shipping line Exporting Countries (OPEC), started in 1961, and, in 1967, Middle Eastern countries Iranian government finalized its witnessed the flow of new decision for the establishment of revenues to the extent that they a shipping line. had not even dreamed of. The line was officially Volume.7 / Autumn 2017 As the first Middle Eastern inaugurated in March 1967 country where oil had been under the title Arya National discovered, and as a country Shipping Line with two ships with larger population and called Aboureyhan (with the vaster area, Iran decided to capacity of 1,000 tons) and Ebn- Payam Darya

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E-Sinad (with the capacity of managed to lead Arya National 1,550 tons). Shipping Line to a new phase Arya National Shipping Line was during his tenure, resigned established with the contribution from his office in December initial of different shareholders such 1961, and was replaced by Reza studies for as Kar Bank and Pahlavi Shaygan, who used to serve as Foundation. The headquarters the director or Iran’s National launching a of the line was located on the 8th Standard Organization. shipping line floor of the Kar Bank, and it was Enjoying the support of the then started in managed by Director Fereydoun Iranian Prime Minister, Amir 1961, and, in Mahdavi. Abbas Hoveida, Shaygan was 1967, Iranian Fereydoun Mahdavi, who served able to land the management government as the commerce secretary, was position of Iran’s southern ports. extremely busy with the affairs Thanks to the support he received finalized and issues of this department; from the King and the prime its decision and thus, he resigned from the minister, Shaygan managed to for the managing directorship of the place orders to purchase vessels establishment line. Following this resignation, from different countries and of a shipping Hamid Mousavian was remarkably expand the fleet appointed as the line’s managing of the Arya National Shipping line. director, and held this position Line. up to December 1967. The more colorful role the With the tenure of Mousavian, shipping line played in Iran’s Arya National Shipping Line, economy, the more paramount which used to operate with its role became in the country’s foreign seafarers and with no macro political economy; and this office staff, commenced to trend coincided with the dispute recruit local forces; and hence, of Iranian and Iraqi government its headquarters was moved to over the right of shipping with Karim Khan Avenue. At the flags in Arvandroud. Therefore, same time, Mousavian decided under the direct order of Iran’s to increase the number of the king, Arya National Shipping vessels in the line. To this end, Line’s ships sailed through order for 8 cargo and passenger Arvandroud with Iranian flag vessels was placed to a Belgian while being escorted by Iranian company, and a number of navy. This event, which had not trainees were sent to Belgium been a trend up until then, paved for seafaring training. the grounds for the signing of In the November of the same Algeria Agreement between year, the first call for recruiting Iran’s and Iraqi governments, trainees was carried out in the which determined the Thalweg newspapers; and 35 applicants as the maritime border of the were shipped off to a navy base two countries. Ever since then, in Anzali Port for basic training. Iranian ships freely sailed Volume.7 / Autumn 2017 After one month, 10 trainees through to Khoramshahr Port, were sent to Belgium as the first which is the most significant generation of Iranian seafarers port of the country. to be trained in the field of deck Continuing to receive the seafaring. support of the then government,

Payam Darya Mousavian, who had practically Shaygan kept his tenure in the 80 Revolution and underwent a number of changes. Based upon the initial decisions made in the Islamic Revolution Council, Arya National Shipping Line was renamed National Shipping Line; and together with 18 other firms, it was placed under the management and leadership of the Department of Commerce. Meanwhile, Nezamoddin Movahed was appointed as the managing director of the National Shipping Line by Reza Sadr, the then Secretary of Commerce. In his 10-month tenure over the National Shipping Line, Movahed put in remarkable effort to stabilize and protect the line. At the time when the revolution-related events and acts had been causing disruptions in different sectors in Iran, Movahed managed to preserve the possession and properties of the line (which were in fact the national possessions of Iran). That is to say, he well managed to keep the National Shipping Line away from the crises and revolts. Once Movahed was promoted as the counsellor to the Secretary of Commerce, Abodolali Erfani took charge of the National Shipping Line. By the start of Arya National Shipping Line domestic needs, Arya offered his tenure, the Iran-Iraq war until middle 1978, and managed cargo carrying services to the had already started; and he was to send two other groups of Persian Gulf countries. tasked to organize the offices trainees abroad. Moreover, under Following Shaygan, Farokhreza of line worldwide, particularly his management, the number Moaser was in charge of Arya the line’s office in London, of the vessels in the line’s fleet National Shipping Line, whose which was responsible for reached 38, the majority of tenure was shorter than 7 a large portion of the line’s Volume.7 / Autumn 2017 which were built in Hungary and months – from middle 1978 to revenue. His other mission was Poland. At this point, as the only February 1979, when the Islamic to delineate a list of the line’s commercial shipping line in the Revolution took place. deficiencies and needs. Having region, Arya started to cater to Just as any other sector in composed and prepared report the needs of Iran’s neighbors as Iran, shipping industry was for the high-ranking government well. Alongside supplying the also influenced by the Islamic officials, Erfani asserted that Payam Darya 81 Report

Iran’s commercial line is ready heating up, Mohammad Souri IRISL led the cargo ships to for supplying the country’s was put in charge of the IRISL. the ports in the caravan style. needs. With two directives He has gained rich shipping line This way, the financial and issued by the cabinet and by the experience in the United States, human losses were reduced to Economic Council, the National and he was tasked to lead the minimum. Shipping Line was officially second Iranian defense line in On the other hand, since Iranian tasked to supply the needs of the the battle field. “Second Iranian ports were considered to fall battlefield warriors as well as to Defense Line” was an epithet within the war zone, foreign provide back up. Meanwhile, the given to IRISL by Ayatollah cargo carrier ships either line’s statute was revised, and it Hashemi Rafsanjani, because avoided ventures to Iran or did was renamed Islamic Republic IRISL and its ventures supplied so at far higher costs. Thus, of Iran’s Shipping Line (IRISL), the needs of the battlefield Iranian government executed by which it is called today. warriors. the FOB plan to support the Having been appointed as the Souri’s first measure as the national commercial fleet. line’s managing director and head IRISL director was laying out an Based on this plan, all the of the board by the Economic organized structure for human supplies that were shipped off Council, Erfani managed to resources in order to maximize to Iran for Iranian companies, bring order back to the IRISL in the efficiency of the IRISL staff particularly for government- his 16-month tenure, and having during those critical times. owned companies, had to be put the emotional revolutionary As the country that ignited and carried by IRISL. To accomplish Volume.7 / Autumn 2017 atmosphere behind him, he initiated the war and imposed this task, Souri commenced set up a logical structure in it to Iran, Iraq targeted Iranian purchasing second-hand ships the IRISL to provide excellent cargo ships with missiles in to expand IRISL fleet’s capacity. support for frontline warriors in order to cut off Iran’s supplies. Besides, in middle 1983, Iran-Iraq war. Accordingly, to prevent the following the agreement of

Payam Darya As the Iraqi-imposed war was damage and losses to its fleet, Economic Council and the then

82 prime minister, IRISL signed a structure. He established Valfajr Caspian Sea. contract with the South Korean Shipping Line to facilitate With the launch of Khazar Sea Daewoo Shipbuilding and the commuting of passengers Shipping Line in northern Iran, Marine Engineering Company between Bandar Abbas and the IRISL was already covering the for purchasing 20 bulk carrier UAE Port of Sharjah as well entire country. As a follow-up ships. as to facilitate the IRISL feeder to this coverage, following the This was a huge event. Even transportation. In addition, in Dissolution of the Soviet Union, though Iran was in the middle order to supply the necessities railways were constructed of a war, IRISL took measures and spare parts of IRISL ships, to the Caspian Sea so that a to renew and expand its fleet Dajmar established a firm called quick connection is established simultaneously, given that Tadarokat-E-Navgan (Fleet between Iran’s southern and its forward-looking visions Supply). northern ports, and contributions emphasized its development Considering the foreign are made to supplying for the to be able to support Iran. exchange conditions of Iran needs of the newly independent Relying on such a wide strategic and the uncooperative mood common wealth states. vision enabled IRISL to stage a of some western countries, With the start of President successful performance in later Dajmar decided to train Rafsanjani’s second term and stages as well. maritime workforce locally the changing of Commerce In 1985, in the final weeks of with the collaboration of Iran’s Secretary, Dajmar’s 8-year his tenure as the IRISL director, Department of High education. tenure as the IRISL managing Souri decided to keep up with the This plan, which had been director ended, and he global phase shift of maritime initiated under Souri’s tenure as was replaced by Mahmoud transportation to containers, and the IRISL director, was put in the Farhang Tarjoman and later purchased IRISL’s first container spotlight during Dajmar’s tenure on by Mostafa Al-E-Eshagh ship. This ship, which was and flourished and thrived. What upon the decision of the then made in Denmark, was named Dajmar was after was offering Commerce Secretary. Under Teifouri, to honor IRISL’s seafarer training in Iran upon the the management of these two courageous Martyred electrical international standards. directors, orders for purchasing engineer, Asghar Teifouri. With the ceasefire of Iran-Iraq 17 ships were place to Hyundai Just as Iran was advancing in the war and the changing of the Ship Yard, and 12 second-hand imposed war, IRISL was moving Iranian president, the country ships were bought. By the end its way up the ladder of success, entered a new phase. Iran was of President Rafsanjani’s second in such way that it possessed a struggling to rebuild the damage term, IRISL owned a fleet of young fleet of 84 ships by March from war and get out of an 112 ships as well as 17 ships 1985, and it had reached a proper era of crisis: The conditions that were under construction at degree of profitability. It was in that required construction Korean Ship Yards. this period when Mohammad and connections with the On 23 May 1997, Iran witnessed Hossein Dajmar was appointed international community. a paramount event. Seyyed as IRISL managing director and Akbar Hashemi Rafsanjani’s Mohammad Khatami took head of the board. administration inaugurated office as the new president with Taking office in the middle with the two main mottos: the motto of reforms, and the of Iran-Iraq war, Dajmar Construction and free economy. development of politics and concentrated on two specific The rise of the new Iranian international relations. With the areas during his 8-year tenure in government coincided with tenure of the President Khatami Volume.7 / Autumn 2017 IRISL. His first agenda was to another significant event in and a change in the government’s endeavor to supply fuel, spare Iran’s northern neighbor, the approach in economy and parts and other necessities for USSR. In the light of the new international ties, once again ships; while his other agenda was developments in USSR, IRISL Iran felt the need for resources to make organizational changes managed to establish proper and materials so that ground is in IRISL and create a holding grounds for moving goods in the paved for the new president to Payam Darya 83 Report

execute his plans: creating jobs, offices, in such way that the market. Hence, in 2008, IRISL developing Iran’s industry, and 5-year tenure of Afkhami left the shadow of government- bringing welfare for all Iranians. witnessed the possession of based management and entered With the directive of the new 152 ships in IRISL fleet. An the stock market. The majority Commerce Secretary, Ahad appropriate international status of IRISL’s share was purchased Mohammadi was appointed for IRISL and a noticeable by Social Security Investment as the new IRISL managing degree of profitability were also Company. However, the most director and was tasked to achieved. crucial challenges ahead of prepared desired conditions. Once Mahmoud Ahmadinejad Dajmar were the nuclear-based Operating on the new took office as the new president, sanctions. government’s motto and his Commerce Secretary selected So as to put pressure on Iran and approach, Mohammadi Mohammad Hossein Dajmar restrict the country’s nuclear concentrated on improving the as the IRISL managing director program, IRISL was placed in welfare state of IRISL human again. Dajmar’s second tenure the sanctions’ list in 2007 by a resources; and as the first step, as IRISL director, which took number of western countries. he gave loans to all the staff 10 years, witnessed diverse rises The sanctions barred foreign members to enable them to and falls. Based on the 44th article shipping lines from venturing purchase their own houses. in the constitution, Iran’s grand to Iranian ports, and once again, This matter lifted the spirits leader issued a directive which supplying the necessities of the and promoted organizational set a certain deadline for IRISL country turned into the main liveliness. At the end of to become a private company mission of IRISL, just like the President Khatami’s first term, and be retailed in the stock years of Iran-Iraq war. The main Mohammadi put a magnificent purpose of sanctions was to and idealistic plan on the table disrupt Iranian people’s lives; in the Economic Council, and hence, IRISL, as a support to everyone’s surprise, it was provider organization, fulfilled ratified. The plan encompassed its important duty of backing up the purchase of 40 ships, which Just as and protecting Iran’s economy, set a new record in IRISL history. with the hope of relieving the Following the ratification of this Iran was country from an economic plan, the new IRISL managing advancing in war. In this era, not only Iran’s director, Ali Ashraf Afkhami, the imposed economy was confined in all signed the contracts for the war, IRISL its sectors, but the shipping new orders with South Korean was moving yards also refused to deliver the ship yards. In this era, maritime its way up orders, despite having received transportation market was at its deposits. No vessels were heyday, and the FOB plan no the ladder of delivered to Iran. longer existed. Therefore, to success, in In the spring of 2013, once address this gap, Afkhami began such way that again, Iran witnessed the rise to establishing international it possessed of a government who had set routes in the light of Iran’s better a young fleet developing international ties and and expanded international ties. enhancing the quality of Iranian Up until then, IRISL used to of 84 ships life as its main mottos. Having carry cargos to different corners by March obtained the majority vote in Volume.7 / Autumn 2017 of the world; yet this trend 1985, and it the public presidential election, was never serious. In this era, had reached Hassan Ruhani took office as the th however, IRISL chose the motto a proper 11 President of Iran. One of the “IRISL, your Global Partner”, degree of first moves of President Rouhani and commenced establishing was discharging Iran’s Supreme profitability. Payam Darya various routes and regional National Security Council from 84 Dr. Rouhani’s Government of Prudence and Hope has pursued worthwhile endeavors to revive the attraction of foreign tourists to Iran again

the nuclear negotiations and was appointed as the managing restarted its negotiations for the putting the State Department director of IRISL on 19th August revival of its 2008 agreements in charge. This move implied 2015. with shipyards, which it to the world people that Iran’s The lifting of the sanctions managed to successfully settle nuclear case is a legal and on Iran coincided with an down with a structure change diplomatic matter rather than a unprecedented recession and turning them into financing. security matter. The fruit of all in maritime transportation: The revival of these contracts efforts of the State Department The recession which was was first post-JCPOA finances negotiation team was the signing a consequence of the 2008 drawn to the country. of Joint Comprehensive Plan of economic crises, having been Today, relying on its multiple Action (JCPOA) in Vienna on stretched to 2015 and 2016. offices in different corners 14 July 2015. With the lifting of the sanctions, of the world and its various Based on JCPOA, both parties international shipping lines transportation routes, IRISL has (Iran and P5+1) had a 6-month started their ventures to Iran managed to reach a remarkable deadline to create the necessary again. After 7 years of being in position both in the international grounds so that the agreement isolation from the international markets and the global maritime could be executed from January community, IRISL managed to industry. It has also managed to 2016. In doing so, IRISL, send its first ship to Europe, in play its national role. which was in the leading February 2016, only one month IRISL story is the story of a company in the main ring of after the execution of JCPOA. history: History of sacrifice, Volume.7 / Autumn 2017 the sanctions, second only to IRISL immediately faced and history of perseverance, history Iran’s National Oil Company, won all the challenges that lay of love, and of course, history of would have been lifted from ahead of it – namely the right of development. the sanctions’ list. At this point, flag, classification and insurance. As the prominent Columbian an internationally-recognized In addition, in order to restore author, Gabriel Garcia Marquez

figure, Dr. Mohammad Saeedi, and renew its fleet, IRISL put it, “Living to Tell the Tale”. Payam Darya 85 Report Half A Century of Pride and A Bright Outlook

By :Kamran Narjeh

The coverage of four fifth of the earth by water and the enclosure of 5 continents by oceans have resulted in 80% of the physical exchanges in the world to be realized by shipping lines. For centuries the human societies have understood the importance of sea domination and strength in shipping, and throughout history the sovereignty of different nations on others was directly related to the level of their skills in navigation and their progress in shipping. Volume.7 / Autumn 2017 Payam Darya

86 Today also it would be impossible the regional shipping industry to exchange goods among most motivated the government to countries without shipping and create a large shipping company, the global economy is becoming IRISL and so the first national more and more dependent on Multimodal commercial fleet was born in maritime transportation. Based Transportation August 1967 under the title on available witnesses, in the of “National Arya Shipping”. course of the last twenty years, Company have The proper performance of the even the landlocked countries in recent year young fleet in meeting the needs have thought of strengthening taken extensive of regional countries during the their role in shipping by leasing actions to first five years of its operation, the port facilities of coastal states boost their incited the management of to be able to meet their needs in performance Arya Shipping to increase the the cycle of global exchanges in number of owned vessels by a streamlined fashion. in cargo and tenfold, and with the increase of Statistics show that for each passenger transportation capacity to half a member country of the United transportation million, the mentioned shipping Nations, there are on average at different company became in practice the 277 large commercial ships and waterways largest maritime transportation tankers sailing in the oceans, company in the Middle East. and the global competition At this junction the national to expand the capacities of Iranian maritime fleet established maritime fleet has reached its regular lines for transportation of zenith. If thirty years ago the cargo between the Persian Gulf largest oceangoing vessel could and Europe, the Persian Gulf barely handle 15,000 tons of and South Asian and the Persian cargo, today the movement of Gulf and America, thereby ships with capacities exceeding succeeding in appropriating a the 25,000 TEU in capacity large share of the cargo transit in at different parts of the world the surrounding markets. has become an ordinary event After the revolution and and possession of such fleets changing its name to “Islamic has become an indicator for Republic of Iran Shipping economic development in world Lines”, by insisting on the need ranking. for maintaining independence The Middle East and in and national self-sufficiency, particular the strategic waterway the fleet has taken great strides of Persian Gulf was since the in training specialized seaman middle of twentieth century among the country’s youths and in the need for a large fleet for has founded one of the most ensuring the import and export advanced navigation training requirements of the region in centers in the country. Volume.7 / Autumn 2017 parallel to the industrial growth In subsequent years, in addition of the littoral states. At this time to meeting the needs of IRISL and the importance of efficient use its subsidiaries for specialized of the countries coasts and the manpower this positive move need for Iran’s participation in has ensured a major part of Payam Darya

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manpower supply for other proper cargo and passenger non-governmental shipping transportation services in the companies and has even paved frame of different shipping lines. the grounds for export of Iranian IRISL has found The Iran South Line Shipping navigation services to other a new momentum Company, the Valfajr Shipping countries and foreign currency company, the Caspian Shipping earnings. for powerful Company, the Iran – India In this software strategy through presence Shipping Company, the Iran – organization of comparative and in maritime Egypt shipping Company, the applied navigation trainings, the transportation Iranian West Ship Company, supplementary officers training, and has the Maritime and Shipping auxiliary course, training on port signed large Engineering Services Company, operations and logistics, and the Ira-Ital Company and contracts for training the land staff, the IRISL Machine Services Company Training Institute has played investment in and the IRISL Multimodal an effective role in improving construction Transportation Company the professional awareness of of private port have in recent year taken manpower employed by different facilities extensive actions to boost parts of the Iranian maritime their performance in cargo and transportation sector. passenger transportation at

Volume.7 / Autumn 2017 Another considerable action different waterways, the total of taken by IRISL in the years which has aided in improving the following the Islamic Revolution IRISL’s world ranking. However was the establishment of new the most praiseworthy services companies for provision of of the national fleet were Payam Darya

88 related to eight years of Sacred led to expansion of trade with the Defense, when it never allowed newly independent countries. the limitations of the war and On the other hand in the last the turmoil in the Persian Gulf decade and after privatization to impair the importation and and separation from government supply of essential goods of the dominion, IRISL has found country and the logistic cargo of a new momentum for the frontlines. powerful presence in maritime The proud performance of the transportation and has signed fleet during the years of Sacred large contracts for investment Defense under the harshest of in construction of private port conditions and the relentless facilities or the purchase of bombardments of port terminals advanced and powerful fleet prevented even the least from advanced countries. interruption in supplying the This action never interfered general and special requirements with the task of supporting the of the country. national production by IRISL, On the other hand, the regular because simultaneous with the plan for expansion of the purchase of state of the arts mentioned lines, which had ships from abroad, the order begun three decades before and for construction of a number of continued during the presidency oceangoing vessels to national of Ayatollah Hashemi Rafsanjani industries paved the way for with the aim of expanding new shipbuilding technologies commercial exchanges with all to Iran. countries and conveying Iran’s Today it would Now on the threshold of its message of peace and friendship sixth decade of fruitful existence to other nations, paved the be impossible the national fleet is seeking to grounds for exchange of goods to exchange strengthen its support of national between the most important goods among industries and by investing in the ports of the world and the Iranian most countries expansion of technical capacities coasts. The second generation without of shipbuilders, encourages the of containerships was added shipping and domestic producers to bid in the to the IRISL fleet at this stage large international tenders and to the global following the public investment. compete productively with the However, more importantly economy is large shipbuilding industries. was the powerful presence of becoming A fair look at the performance IRISL in the process of maritime more and more of this company over the past transportation in the Caspian dependent fifty years and the review of its Sea, the right of which was taken on maritime proud record in the international away though shameful political transportation. maritime transportation, is the treaties with Russia in the past two source of delight for any Iranian centuries. In addition to reviving and traces a bright future for the Volume.7 / Autumn 2017 the political rights of Iran in this presence of the national fleet in sea, the movement of national the international trade. fleet among the different coasts of the Caspian and northern ports Payam Darya

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IRISL Role in National Economy

By :Mehrdad Mahmoodi, Marine Science Researcher Volume.7 / Autumn 2017 Payam Darya

90 Maritime approach, the scientific and cultural power has a essence of sustainable and deep, extensive and dynamic role balanced development in the sustainable development of The human achievement in countries. In the presence world, IRISL Role in maritime capacities in oceans is political reclusion and economic considered as a milestone in the self-sufficiency are considered history of civilization. as obsolete concepts. By opting Navigation facilitates the for the sustainable development National Economy movement of mankind in a approaches based on maritime fluid and level medium and economy, the possibility has been cause a country anywhere in the created for the humans to benefit world to become potentially the from the relative advantages of neighbor of another far away. each other with a synergic impact The fluid and borderless nature to improve living conditions of the sea makes the movement without damaging the vital and connection in most parts of capacity of the environment. the earth easier and without any Taking into consideration the obstacle. Such a medium can fact that: easily put both good and human 70% of the earth is covered by science at anyone’s disposal. sea; The maritime approach 90% of the global trade is underlines the vision and through the sea; determination of a nation in Most centers of global defining and clarifying its geo- economic powers are located on economic priorities for a strong coastal areas; presence at sea to tap on its The international maritime resources and the benefits of rights, freedom of shipping and marine trade. In recent centuries, trade at sea for any country has the geographers, historians been ensured without violating and economists have generally the national sovereignty of addressed and analyzed the sustainable development and another state; economic advances of different The twenty economic powers countries on the basis of the of the G20 have a maritime role and impact of maritime approach and power; approach, believing that such The effect of maritime approach an approach and participation in appears in the growth of the global economy through the economy and subsequently the sea has become an unescapable sustainable economy and the trend. progress of human societies. The maritime approach Therefore, the role and impact influenced by such factors and of maritime approach in the the natural marine resource, economic development of the climatic conditions, geographical countries and the sea-centered Volume.7 / Autumn 2017 parameters, the coastal economy intervenes in the population, anthropological progress of human society. creativity and spirit, the type of All nations are free to use the sea sovereignty and its willpower for and any country having a greater presence at sea and economic, determination and capacity to Payam Darya

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access the sea will be able to from economic centers. On the other hand the coastal draw the benefits of better and The impact of transportation countries have generally a freer greater world trade and achieve cost index on economic growth economy than the landlocked the sustainable and balanced is measured by the ratio of ones. In this context, the development for its present and importation costs including the landlocked countries are defined future generations. cost of good plus the costs of as either the ones with no access insurance and freight (CIF) to to sea, or those with no sea-based Maritime trade and economy the cost of importation without economy. This issue clearly The high costs of transportation the cost of insurance and underlines the direct impact and distance from economic freight (FOB). According to the of geography on opting for an centers have a negative International Monetary Fund, appropriate economic policy. impact on economic growth this indicator is 1.036 for USA, By opening up their economy since they increase the costs 1.049 for Europe, 1.098 for East the coastal countries have been of strategic commodities Asia, 1.106 for Latin America, absorbed in the globalization exported from developed to while for Africa it is more than process and have benefitted from developing countries. The costs 1.195. This figure is a function of the advantages of sea trade based of transportation in maritime the costs of shipping, volume of economy. Therefore in today’s based countries are much lower maritime trade and the distance world, the geographic factors than the land economies. On from major world markets. The affecting maritime economy have the other hand, transportation lower the figure the less the cost gain priority over agriculture costs in countries close to major of transportation, the higher the based economy. The protective Volume.7 / Autumn 2017 economic centers (producers volume of maritime shipping, policies in closed and non- of commodities) are lower than the higher the productivity, the competitive economies boost the distant countries. Therefore denser the coastal population, the prices of imported commodities the growth of economy has closer the world trade centers and (by increasing the costs of an inverse relation with finally the higher the economic transportation, insurance, taxes transportation costs and distance growth will be. and custom duties) and reduce Payam Darya

92 exports and as a result decrease world. indicators brings about poverty the economic growth. The long coastline and the ideal reduction, improved welfare Modern industries depend natural port sites in the Persian and increase in the human on intermediary products, Gulf and the Oman Sea are development indicators. commodities and the process exclusive advantages for global The “Millennium Development of multi-stage production. The trade. For this reason the high Goals” program approved in the products and goods required by profile presence of commercial year 2005 by the United Nations these industries are imported from fleet and the increase in the underlines peace, security and advanced countries, assembled density of coastal population a world free of poverty and by low cost and extensive labor in this region are among vital seeks rational, practical and and offered to the world market. requirements of the geo- measurable solutions to attain In practice a developing country economic development of our sustainable development at sells its workforce through the country. global scale. export of the final products of the The geo-economic importance This program sets out a complete modern industries. Any increase of the southern seas, as the roadmap and quantifiable in the cost of transportation common ground between Iran solutions allowing a coordinated due to: the inane inefficiency and the rest of the world goes global effort to eradicate of the transportation network, beyond the regional frame to poverty, starvation, problem of lack of appropriate shipping gain global dimension. From this habitation, diseases, mortality, infrastructure, the strategic perspective maritime economy discrimination, depletion of industries’ distance from the and trade is an unavoidable the environment, illiteracy and sea, increase in taxes, insurance option for sustainable and insecurity and to finally close and tariffs caused by economic balance development of the the great divide between the policies as well as distance from country. underdeveloped and developed the centers of economic power countries and global inequity, and consumption market cause The Islamic Republic of Iran allowing all the human the drop in the competitive Shipping Lines societies to attain sustainable edge of modern industries and The Islamic Republic of Iran development. reduce the economic growth of Shipping Lines (IRISL) is the Taking into account the theories the host country. Consequently, most pivotal national industry for of development the mission of establishing modern industries economic growth, development the national shipping fleet in in countries lacking relative of global trade and attraction the field of maritime trade and geographic advantage (low in the process of sustainable economy strengthens the national transportation cost and closeness development and globalization. capacities for sustainable and to major economic centers) is The national shipping industry as balanced development and unjustifiable. For this reason the focal point for sea-oriented lays the grounds for a dynamic the new industries, which have and global trade is the main axis economy in the frame of maritime a global demand, are created in for achieving the “Millennium trade and transportation. coastal regions. Consequently Development Goals”, since in Developing and maintaining the dynamic coasts are host to addition to being considered as the status of shipping, maritime migrants from inland. the intermediary ad the agent and major routes for the ports for global trade, it plays a along with the daily increase The sea and the development determining role in increasing of economic advantages and of Iran the capabilities of the national profits, reduction of vulnerability Volume.7 / Autumn 2017 The Persian Gulf and the Oman economy and the level of and improvement and flexibility Sea are our country’ gateways global participation. Maritime of maritime trade are among to other parts of the earth and trade increases production, important national priorities in the common chapters with employment and revenue the process of globalization. other countries for economic generation and the combination The Iranian shipping activities interaction with the people of the of these important economic in the endless oceans of the Payam Darya 93 Report

earth and as the link between shipbuilding, ship repair and Iranians and other nations and maintenance, training manpower the transportation of strategic and maritime communication goods to the country, while The long have also had a great share in job playing its role in the sustainable coastline creation, revenue generation and and balanced development of increasing the gross domestic the country, has created the and the ideal product. proper grounds for meeting natural Moreover, by considering newly appeared challenges and port sites in the need for accord in full the accelerated evolution in the the Persian compliance with international process of globalization based Gulf and the laws and treaties, the issue on maritime trade.. of result – oriented training Oman Sea are On the other hand, through its system, training competent extensive and determining share exclusive manpower, accurate execution in the sustainable and balanced advantages of international convention, development of the country, for global improving the level of education IRISL has demonstrated the need trade. and evaluation of vocational for integrating the economic competence, the shipping policies, focus on spatial plans in industry has a considerable role the coastal regions, taking on the in preventing accidents, reducing maritime approach and venturing the costs of transportation and in the globalization process for mitigating the environmental the high ranking officials and impacts. strategists of the country. From the beginning of fifty By taking into account the years of IRISL activities to date, global changes, the appearance maritime trade has increased of new concepts of sustainable with the development of development, the acceleration containerization and its impact of globalization process and the on macro-economy has become growth of maritime economy, the deeper and more extensive, maritime trade and the process of including: integration in the global market 1- Improved logistical continuity: through shipping industry have The strategy of commercial revealed the most important shipping has changed from answers and solutions to the the concept of “port to port” to new challenges in the fields of “door to door”. The container economy, culture, politics and carriage of goods has linked to environment of our country’s different modes of transportation future. (road, rail, sea) together allowing The IRISL mission in the the cargo to reach quickly and global trade has resulted in easily from the producer to the the distribution of wealth, consumer. reduction in the costs of 2- Concentration in trade production, logistical continuity, Volume.7 / Autumn 2017 concentration in business deals exchange: the different kinds of and industrial globalization. On goods, from raw materials up the other hand the outcomes of to semi-finished and finished this industry’s function, such as products, which once needed employment in the commercial specialized handling in specific

Payam Darya fleet, port operation and services, ports or docks possessing the 94 relevant facilities, are now IRISL has demonstrated great extend to 100 km. transported easier and more performance in eight topics 7- Taking into consideration effectively due to container including improving the culture concepts such as borderless and transportation, concentration of of safety at sea, energy efficiency, fluidity of the sea, “freedom of facilities and equipment and the new maritime innovations navigation” and the “innocent integration of ports and shipping and technologies, training passage” of shipping on one management. navigation, security of shipping, hand, and the major problems of 3- Industrial globalization: The management of shipping international road transportation, processing of raw materials, traffic, developing the maritime including the existence of production of semi-finished industry’s infrastructures and international borders, insecurity, goods and installation of global navigation standards. customs’ charges, geographical components of assembling 5- By reducing the cost of costs obstacles on the other, it is the final product make up the of transportation and increasing obvious that from the point of production process. With the the volume of maritime trade, view of efficiency, productivity, growth of maritime trade and IRISL has reduced the ratio speed and low costs the shipping transportation, it has become of CIF to FOB. Consequently industry is at a much higher possible to manufacture the the strategic, investment and level. components of any product in a intermediary commodities are 8- By investing in maritime number of countries, depending made available to the domestic industries, expansion of on the relative advantage of the modern industries at lower costs commercial fleet, application different regions of the world and this in turn leads to reduced of new maritime and and to ship it by container to costs of production, increased communication technologies, the country for final assembly competitiveness of domestic development of ports, by producers. In addition to products and economic growth. prevention of parallel functions, industrial globalization and 6- Environmental impacts, costs, development of infrastructures transfer of technology, such productivity and efficiency: for cargo transit through the a process will lead to the compared to land transportation, NOSTRAC Corridor, merger distribution of wealth and the environmental impacts, the of maritime training centers, cheaper products. volume of fuel consumption and encouraging the private sector for 3- Customer satisfaction: the economic returns of shipping investment and entrepreneurship through containerization, IRISL are quite substantial. One may in maritime sector, financial has improved the speed and consider a modern containership and tax facilities, reducing the ease of maritime trade. For this of 8,000 TEU in capacity with a costs of imports, reducing the reason the strategy of producers crew of 25. Such a vessel would costs of domestic production, has shifted from logistical consume 238,000 l. of fuel over boosting the growth of economy, operations and marketing to a distance of 1000 km at a speed improving the commercial improved quality of the product, of 23 knots. 8000 heavy trailers competitiveness, increasing customer satisfaction about with a total or 16,000 drivers and the speed of port operations, quicker delivery of goods and assistants would be required to integration of logistic operations, greater inclination for domestic carry this number of containers decentralization, standardization, products. by road. On a straight and even freedom of navigation, job 4- Alignment with the course, these trailers would creation, development of Volume.7 / Autumn 2017 “Sustainable Development: require a total of 3,200,000 coastal region, integration of the Cooperation of World l. of fuel, i.e. more than 13 national transportation fleet and Maritime Organization in the times the fuel consumption of the development of sea trade Context of Rio + 20” goals of a containership. The length of and industry IRISL has left a World Maritime Organization: these road trailers would also brilliant impact on the living and Payam Darya

95 Report

economic environments of the Laureate Economist, because in manner. country. macro-economy all the economic On the other hand by applying 8- The Iranian commercial sectors of a country interact on the mathematical analyses of fleet has increased the level of an interwoven and complicated “input – output model” and continuity and integrity of the network. From this perspective, comparing the results, the level country in the fields of economy, the output of Iranian maritime of effectiveness, productivity, the commerce and technology with transportation is injected as an apparent and hidden costs and the the world and as a consequence input to other strategic and vital profit / loss of different economic the globalization index, which sector of national economy to sectors can be measured and is an important indicator for the turn its wheel, since by nature evaluated. Of course, apparently maritime trade constitutes the link after the Islamic Revolution and level of adhesion of any country between the national economy due to the complication, lack of to globalization process, has and industry and the outside organizational interest and the improved. world and plays and endogenous need for experts to analyze the role in the economy. With the statistics related to the different Shipping industry and other speed of globalization and the economic sectors of the country, economic sectors of the country complication of the national no input – output table has been The study and analysis of the

Volume.7 / Autumn 2017 economy’s structure, the level drawn for the entire economy of link between the different of integration and dependence the country. economic sectors of a country of different economic sectors However, given the witnesses, and presenting a complete of the country on maritime one becomes aware of the image of their structure is based transportation is increasing in an brilliant role of IRISL compared on the “input – output model” organic, dynamic and chain-like of Wassily Leontief the Nobel Payam Darya

96 with other sectors of economy. competitive world. Conclusion The geo-economic sky of the Like other developed and country is expanding with the developing countries, shipping With the speed strong and effective presence of industry in Iran plays a of globalization the national fleet in the global considerable role in linking the economy, and the road has been human society with balanced and the paved for the sustainable and and sustainable development complication comprehensive development based on maritime trade, and is of the national through the sea. By pursuing the considered as the most central economy’s model of IRISL activities, the agent for economic growth, structure, move in reducing dependence to expansion of global trade and oil revenues, setting new policies the level of adhesion in the globalization for sea-oriented economy, process. integration the dynamic changes in the In addition to being the and dependence distribution of population, the intermediary and agent of of different increase in the coastal population global trade, the shipping economic density and the coastal spatial industry has made a deep mark sectors of plan have picked up pace. in strengthening the national Ranked 22nd in the world, IRISL economy and increasing the the country has played a unique role in the global participation index. on maritime national economy and after 50 The global trade with other transportation years of pride and dynamism, is countries increases the per capita is increasing the harbinger of a brilliant future gross domestic production, for the national economy. employment and revenues and the combination of these References: important indicators has led to 1- Haralambides, Hercules E. “The alleviation of poverty, improved Economic Impact of Shipping on the National Economy”. Conference: welfares and improved human International Association of Maritime development indicators. Economists (IAME).Vancouver.1996 With the expansion of 2- International Maritime Organization.” globalization phenomenon, the Sustainable Development : IMO’s trend of attraction and integration Contribution Beyond Rio+20 “. January of different countries in the 2013 global market has accelerated. 3- Jones, Eric. “The European Miracle: Environments, Economies and The geo-economic status of sea Geopolitics in the History of Europe course, the major development and Asia”. Cambridge University of ports and the daily increase of Press.2003 super containership in maritime 4- Levinson, M. “How the Shipping trade, have underlined the Container Made the World Smaller and importance of IRISL as the drive the World Economy Bigger”, Princeton: for the balanced and sustainable Princeton University Press. 2006 5- Review of Maritime Transport, development. United Nations conference on Trade and Through its performance, IRISL Development, Geneva,2007 Volume.7 / Autumn 2017 has opened up new horizons in 6- Rodrigue, J-P, C. Comtois and B. the outlook of national economy, Slack “ The Geography of Transport its link with the world trade and Systems”, London.2006 economy and the expansion 7- Sekimizu , Koji .”Sustainable Maritime Development Key to of its outreach and dynamism Economic Growth “. The Guardian . in today’s changing and January 2013 Payam Darya 97 Memo

Exclusive Role of IRISL in Iran’s Economy; Guarantor of

Volume.7 / Autumn 2017 National Economy Payam Darya

98 In an attempt to develop sea-based Support of IRISL from economy, IRISL’s fleet plays a key shipbuilding industry and ship role. The ships have transferred repair as well as training human various commodities for 50 years resources are all in line with in international waters. Although resilience economy. However, the the fleet with half a century of domestic shipbuilding industry experience encountered many failed to fulfill its obligations difficulties, it has never given up on time. But in repair section, and resumed its activity strongly. IRISL could provide opportunities IRISL supported people during for recruitment by establishing difficult eras by transferring their Persia Hormoz Ship Repair Yard required cargos in such a way and repair many ships of the that effort of trusted employees national fleet and other domestic made the silages not to be vacant and foreign lines. Meanwhile, by wheat during the Imposed it managed to prevent foreign War. During eight years of Iraqi- exchange. imposed war, many shipping JCPOA is the turning point of the companied denied entrance to activity and recreational boom of Iranian waters. Meanwhile, the the IRISL. With the lifting of the national fleet didn’t allow the sanctions, the sailing of national export and import of goods to fleet ships resumed all over the be disconnected by the nonstop world and now 90% of them with efforts of seafarers and active the flag of the Iran are again in personals in headquarters. international waters, which is a At that time, IRISL owned 35 ships positive development. of which 16 were hit by rockets at Development of the national least and many seafarers lost their fleet was another achievement of lives and became martyr. After the IRISL during the post-sanctions end of the War, IRISL could buy era in a way that it could revived Marine transportation is one new ships and enter new eras of the orders of new-building which transportation including container were suspended. So, 10 ships are of the most important pillars transportation with the valuable going to be added to the national of the country’s development and global brand of IRISL. fleet in the near future. At the time, because 90% of Iran’s With the start of the sanctions IRISL stands at nineteen steps in foreign trade is conducted against Iran, IRISL has been word ranking which is soon to be by the sea and then the affected severely because the decreased to top levels. significance of seaborne trade imposers were aware thoroughly IRISL with half a century of is not hidden in developing of the situation and potentials of experience in the field of marine other sectors of the county. the company and then increased transportation is a clear evidence Experts and involved one are the pressure more than ever. They of resilient economy because the aware of the importance of believed that by imposing severe fleet played an irreplaceable role marine transportation and sanctions IRSILT the economy of during the War, global economy consequently emphasize on IRAN was doomed to failure. But crisis, and fall of freight rates. the development of sea-based they couldn’t reach the desired Definitely, without the presence economy which pave the way intention due to the intelligence of a national fleet in the two most for an improvement in other of employees and managers. In sensitive areas of the war and Volume.7 / Autumn 2017 economical section. fact, IRISL stood the first line of sanctions, there would be severe defense during the sanctions era crisis. With these interpretations, and although it encountered many one can not overlook the effective difficulties, it didn’t allow the role of IRISL in Iran’s economy. sanctions to intervene the services. Payam Darya

99 Are you looking for a leading shipping agency that renders various types of shipping services in all Iranian southern ports? You are in the right path:

Hoopad Darya Shipping Agency Company (IRISL Group Agent)

(ISO 9001, ISO 14001, OHSAS 18001)

• Providing full agency, husbandry and protective agency services in all Iranian southern ports. HOOPAD DARYA SHIPPING AGENCY Company, take’s care of your interests, wherever in the Iranian southern ports • Providing commercial operation services In Tehran, Mashhad & Iranian Southern ports. • Providing Container operation services in Tehran and all Iranian southern ports. • Replenishment of Bunkers & Fresh Water to the ships in all Iranian southern ports. • Providing all types of crewing services including sign on/off, repatriation, medical services/ assistance.

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Steel; Step Volume.7 / Autumn 2017 by Step Progress Payam Darya

101 Memo

Comprehensive Plan for Steel, Template for Iranian Volume.7 / Autumn 2017 Minerals’ Strategy

By:Haniye Eftekhari Payam Darya

102 In those days, the Islamic revolution was in its infancy stage, and the impact of intemperate socialists was obvious on the economy of Iran. So, if you had trend to produce for export, you would be called as the servant of the enemy. On the other hand, if you did produce in any way with any cost and any quality, they would name you as loyal soldier of the homeland. At that time, few people paid attention to this reality that Iran’s market was a limited one, so they could not produce anything with any cost, and it is better to not only supply internal demand, but also take a glance on external markets. In the past, generally there was no advocate of exporting. Slogans had the trend of extreme self-sufficiency, and managers did not support exportation. This viewpoint was more terrible in mine section. By this way, it was hard to convince opponents that the country was not able to process some mineral materials, so they should be better to export. It should take 30 years for senior managers to conclude that I remember that some economic management is not years ago one of the widely magisterial, and by governmental circulated Iranian newspapers tools we could not control all had written in protest against sections. It should take 30 years export of watermelon: “Is it for managers to believe that the fair that Arabic counties in government does not have high Persian Gulf region consume ability in conducting economic watermelon, but Iranian enterprises, and it is better to citizens were deprived of this provide the condition for the gift in the heat of 40⁰C of entrance of capable private summer?” sector and to approve a revision Volume.7 / Autumn 2017 of article 44 of the constitution of Islamic Republic of Iran. It was just the beginning, when article 44 was ratified. The private sector could somehow Payam Darya

103 Memo

breathe in, but oxygen was was drafted, and it was supposed According to these, it is assured not enough. Those oppositions to double the amount of Iranian that the steel industry in Iran went on with less intensity. steel production until 1404. has the potential for increasing Industrialists have to produce In recent years, the depression exports and can achieve the for domestic consumption, self- of international and domestic goal of the Steel Master Plan sufficiency and withdrawal markets has influenced the steel by accessing to world markets from dependency. Apparently industry, and some internal in the case of adjusting of the the slogans were worthwhile, and external factors have infrastructures. In addition, the but in practice they prevented been effective in reducing the construction budget is still not the Iranian economy from production of steel products. stimulating the steel market, international trades. By this way, However, according to 10-year and two factors of industry when sanctions became more steel program (ISMP), it is growth and building growth will pronounced in the early 2010s, expected that in the year 1404, continue to affect the depression the isolation became more the country’s steel production of the market in this year. intense, and Iranians got away will increased to 55 million However, what could be the role from the technology of the world tons, and this figure had been of the world’s great steel industry for many years. calculated from the past. One activists on this route? The In the mining sector, despite of the items which had been presence of technology owners the rich reserves, we could not considered in this anticipation and cooperation with powerful complete the value chain. We was economic growth. Although companies in the field of steel continued to work with the same domestic steel consumption is production and its exportation technologies and did not let likely to decline at 1404 horizon, can affiliate Iranian industry with the mineral activity stop. With exports are forecasted to increase, global prospective and updated taking a glance on and Iran may achieve its goal production standards. If we take a glance at the steel – production of 55 million tons According to new reports and

Volume.7 / Autumn 2017 industry as one of the mining – before the deadline (next 10 ISMP, the infrastructure has been industries, we find that there years). However, in this Master partly prepared for producing is a close relationship between Plan a total of 42 million tons 55 million tons of steel and increasing steel production and of domestic consumption and taking part in mine sector’s economic growth. Accordingly, 14 million tons of exports are value-added. But if Ministry of Iran Steel Master Plan (ISMP) planned to be implemented. Roads & Urban Development Payam Darya

104 way, in addition to the outlook does not collaborate, production markets. document, this document is a of 55 million tons of steel will By establishing of a resisting supplementary object which occur, yet transportation of it economic headquarter with helps the Iranian economy to will be hard. Although in Sixth presence of Dr. Ishaq Jahangiri as interact and communicate with Development Plan it has been head of it, the country is now on the world economy. anticipated that some percentage track, and the private sector hopes We should not forget that resilient of importation of steel would to provide the infrastructure economy document is the most be allocated to this ministry. needed for competitive advanced document in our As ISMP was presented in production by improving the country. If only one of its clauses National Iranian Steel Company, business environment. which named “Endogenous and it was finally revealed that this Iran’s economy is thirsty for could be interpreted comprehensive plan is very competition, and if we do not ”برون نگر properly, so many problems in complete and feasible, and it can pay attention to this, it could Iranian business sector will be be defined for other minerals in not be hoped that it has been solved. Resilient economy in the country based on the same strengthened. We need to attract practice has the same meaning strategic plan. According to the foreign investment and joint with competitive economy, as we ISMP, in the development of the to the world’s industrial and could produce some commodity rails foreign and private sector mining leaders. In this case, with Iranian thought and capital investments are prioritized. other countries will have share and present them with acceptable On the other hand, mineral interests with Iran, and our quality to global markets. projects are currently seeking country will be able to resist Resistance economy stops to develop their own rail and sanctions and other restrictions monopoly. By this way, the provide of water supply, and it in present and future or in other producer thinks about beyond is better to produce concentrate words, it could reduce sanctions the borders of the country instead and pellets next to the mine impact on different parts. of thinking about the current and carry the final product Iran’s mining sector needs to take population (80 million people in to the sea. Although we have advantage of the competitive Iran’s market), and produces a some lag in ISMP, with the economy and, as far as possible, product that could be presented implementation of the cadastre add value to minerals to export in various markets from war- and the identification of new them. Of course, sometimes torn markets to the developed zones in the 11th government of economic conditions make us economics in the West. Iran, we managed to create value to convey minerals to global Anyway, for implement added in mines. But its overall markets with less value added, the resistance economy, the implementation requires long- and there is no problem in government needs tools in order term programs. such cases. It is better that all to handle it well. Perhaps in the Years of confronting with economic activists rethink first step, it is better to improve sanctions have had the great about their literature and talk the business environment. When lesson for us, Resilient somewhat more wisely about we talk about the business Economy. Top managers of the the economic conditions of the environment, only producers and country understood well that country and their demands. By market activists know what you the Iranian economy needs to this way, we could hope that mean and what obstacles they be strengthening to protect from the enterprises of the country face. From the rules of labor and external harms, and it is better with the lowest subsidy and the social security to the banking to find a solution to achieve this highest return do production, Volume.7 / Autumn 2017 system of the country, all need to goal. So the country’s economic policymakers engage in strategic be revised in order to open a door superiors in a clever attempt decision making and lawmakers to all business activists and they drafted a resilient economy make new rules and eliminate could have a better and more document, and it was ratified disturbing rules to improve the significant presence in global by the parliament. By this business process. Payam Darya

105 Interview

CEO of Gol Gohar Sirjan said: Make A Proper Margin of Profit with Balance on Domestic and Foreign Sales

These days, studies show that in our country about 25% of the cost of steel production is related to the cost of supply- ing iron ore, and so far about 4.6 to 5.1 billion tons of geo- logical reserves of iron ore have been estimated. By considering the fact that in China and the European continent 39 and 31 percent of steel prices consists cost of iron ore, Iranian by using do- mestic iron ore enjoy an im- portant economic advantage in this part. Considering the importance

Volume.7 / Autumn 2017 of this issue, we interviewed with Naser Taghizadeh, CEO of Gol Gohar. This interview is presented in following paragraphs. Payam Darya

106 Considering the fact that Gol the strength of the common cur- Gohar Sirjan Co. is one of the rencies, such as the dollar and largest suppliers of minerals in the euro, is also effectual. By the country, and according to The on time and smart balancing in the type of its activity, have we possibility of domestic and foreign sales, as paved the way to self-sufficien- well as giving priority to domes- cy in pelletizing in Iran? increasing or tic companies, Gol Gohar has Gol Gohar Mining and Indus- decreasing in largely secured itself from ad- trial Co., as the largest mineral production verse global effects. Obviously, company in Iran with competi- and it has placed export in the second tive advantages such as its loca- consumption priority with focus on providing tion on the country’s main trade liquidity to its widespread ex- in that road, close proximity to export pansion plans, thus it has played ports and having rich iron ore country a major role in keeping Iranian mines, has tried to complete the will lead to companies active. steel production chain, as well significant as fulfill the needs of this chain fluctuations Considering the country’s out- in the country. On the outlook in prices. look in 1404, do you think this of 1404, 55 million tons of steel is achievable? are planned to produce, so for Outlook of 1404 for production this production, we will need of 55 million tons of steel will 80 million tons of pellets. By require 170 million tons of iron having the production of more ore, 80 million tons of concen- than 10 million tons of pellets, trate and pellets and 55 million Gol Gohar has an effective role tons of sponge. This will not be in this process. By defining this out of reach if we could produce outlook, if we increase another more 16 million tons of concen- 5 million tones to our produc- trate and 5 million tons of pellets. tion, this self-sufficiency will be Of course, increasing the pro- realized. Plans have been made ductivity of the current capacity in the Gulf area for the role of is one of the things that should self-sufficiency. Plans have been be considered. Gol Gohar has made in the scope of Gol Gohar systematically tried to develop for its role in self-sufficiency. mines as well as increase pro- duction to reduce this deficiency. How much of the country’s de- mand for production and, of By considering the implemen- course, pricing is influenced by tation of Joint Comprehensive international conditions, and Plan of Action and signing up what role does it play in the some good contracts, what steps company’s manufacturing pro- have been taken by Gol Gohar cess? Company after lifting of sanc- The pricing of all middle materi- tions? als is influenced by the amount Gol Gohar has used this oppor- Volume.7 / Autumn 2017 of supply and demand. There- tunity to develop cooperation for fore, all the raw, middle and final providing of machines as well materials of the steel cycle are as exchanging of knowledge to not excluded from this fact. In empower domestic suppliers. At addition to supply and demand, present, it is developing its co- Payam Darya

107 Interview

operation with foreign parties. and equipping of private firms with purchase and assign up-to- Has the issue of increasing steel date transportation equipment to production in China caused the By having the them. By deploying of this pol- company to grow on the inter- production icy and efficient managing the national market as well? transportation of products, Gol As stated above, the global price of more than Gohar has succeeded in trans- of steel and middle products 10 million ferring all products for export or of the steel cycle is affected by tons of domestic consumers. Obviously, supply and demand, so obvi- pellets, Gol reaching to the 1404 outlook ously China plays a major role Gohar has needs more development and at- in this case as a major consumer tention to transportation, which an effective and producer. The possibility of is part of the development pro- increasing or decreasing in pro- role in this gram of Gol Gohar. duction and consumption in that process. country will lead to significant What has been the status of the fluctuations in prices. company in 2017, given that the overall trend in the internation- One of the most important is- al market was thriving? sues in mineral production In 2017, we were faced with (from the first step to the final fluctuations in global trade and product) is transportation, not prices, but by balancing do- only in domestic section but mestic and foreign sales, Gol also in international dimen- Gohar could have managed sion. What actions have been these changes well. In addition taken to overcome this issue? to managing investment in de- The transportation, costs and in- velopment projects, it has been frastructure required for it have able to efficiently control the

Volume.7 / Autumn 2017 an effective role in final price as final price and costs. Improving well as in competitive advan- the production chain from mine tage. Gol Gohar has adopted two to sponge is also a valuable plan approaches in this case: first, de- which will add to the company’s veloping of rail infrastructure, competitive advantage. and second, the empowering Payam Darya

108 Iran Volume.7 / Autumn 2017 How to Invest in Iran? Payam Darya 109 Report A Review on Iran’s Foreign Investment Promotion and Protection Act

By: Sattar Moradi

Incentivizing and attracting foreign investors is one of the main aims of the ministry of Economic affair and Finance in the 12th government of Iran, Iran minister of Economic affair and Finance said, we should use the full capacity of free zone and the Iranian who live in other countries to develop it. Volume.7 / Autumn 2017 Payam Darya

110 In the first Foreign Investment Mordad, 1392 until Mordad, in a deal called JCPOA (joint Board meeting of Iran 12th 1396 and said it was more than comprehensive plan of action), government, Masoud Karbasian 18 billion dollars. which because of dealing mentioned the insertion of free He also mentioned the effort of with nuclear issue of Iran is zone to the ministry of economic investment organization to reach considered as the opening of affair and finance according to the goals of 6th development world economic gates on Iran the capacity of having foreign project and 8 percent economic and also vice versa. investors, and encouraged the growth. Providing a political, economic, for organization of investment 31 foreign investment projects social and cultural platform is the economic and technical including 17 new projects and 11 prerequisite of entering foreign assistance of Iran to attract subsidiary ones with total worth investments in any country. foreign investors in free zone. of 1,697,577,514 US dollar These needed platforms must Mohammad Khazaei, the head was approved in the previous be in the form of legal rules and of organization for investment meeting of foreign investment acts. There is no doubt that any economic and technical board on 10th of Mordad – the foreign investor pays attention assistance of Iran, reported the last days of 11th government of to incentive, promotive and performance and activities of Iran. protective acts before entering Foreign Investment Board in These efforts to incentivize Iranian markets; to this end, the 11th government of in Iran in foreign investments in 11th we review the “Iran’s foreign attracting foreign investors from and 12th governments resulted investment promotion and protection act (FIPPA)” to guide foreign investors according to Iran’s acts and markets; the act in 25 article and 11 clause was approved in the Islamic consultative assembly in 1380.

Terms and Definitions According to the Iran’s foreign investment promotion and protection act, foreign investment is all of assets including cash that enter the country from foreign resources and include: 1. Cash which can be transferred and entered into the country in the form of currency, in banking system or other ways of money transfer approved by the central bank of Islamic Republic of Iran. 2. Machine and equipment 3.

Tools and spare parts, Volume.7 / Autumn 2017 disrupted pieces and raw materials, additive and auxiliary parts 4. Invention right, technical knowledge, trademarks and Payam Darya

111 Report

professional services and productive affairs including 5. Transferable interest of the industrial, mineral, agricultural foreign investor’s share services and according to the 6. Other lawful activities with 31 foreign following terms: 1. the approval of government investment They must result in economic growth, board projects Foreign investment means using technology development, the foreign capital in a new or including quality development of existed business enterprise after 17 new goods, increase in job getting the investment license projects and opportunities and increase and getting the admission 11 subsidiary in exports. request after the approval of ones with 2. They must not be against foreign investment board and national security, public confirmation of the minister of total worth interest, environment, economic affair and finance. of 1,697,577,514 economy, and domestic US dollar was General Terms of Foreign productions based on approved in domestic investments. Volume.7 / Autumn 2017 Investment Admission Admission of foreign investment the previous 3. They must not need the must be according to the meeting of exclusive privilege of the current acts of Iran; they must foreign foreign investor government contribute to the improvement investment in Iran; foreign investors and development of the country does not have the admission

Payam Darya board

112 Iran’s foreign investment promotion and protection act (FIPPA)” to guide foreign investors according to Iran’s acts and markets

to work exclusively in Iran. and transferring which has capital to this organization. 4. Share value of goods and income from the very economic A board called the board of productive services of performance of the invested foreign investment were created foreign investment in each project and which is not for doing the decision-making section cannot be more dependent on the guaranty of process of foreign investment request under the supervision of than 25 and 35 percent in banks or state-owned entities. the deputy minister of Economic each field of local goods It should be noted that when affair and Finance as the CEO construction, exploitation and and services. The amount of the organization and deputy transferring is not done and the and field of investment minister of foreign affairs, interest is not applied, ownership must be in accordance with deputy minister of management right of the rest of the investment regulations approved by and planning organization, in economic enterprise is board of ministers. deputy chairman of central bank allowed by the investor. Foreign investments for of the Islamic Republic of Iran Investment of foreign producing goods and services and other deputies of related government(s) in the Islamic for exporting goods except ministries. Republic of Iran is subject to crude oil are exempted. It should The investment license is issued the approval of the Islamic be noted that no foreign entity after the approval of the board consultative assembly and can own an immovable property and confirmation of the minister investment of foreign state- under their name in Iran and it is of organization for investment owned entities is considered as against the law of Iran. economic and technical private investment. Foreign investments approved assistance as per the investor’s by Iran’s foreign investment admission request. Competent Authorities promotion and protection act are The organization for investment Organization for investment supported in accordance with economic and technical economic and technical the act. The admission of foreign assistance is obliged to release assistance of Iran is the only investments is done in two ways: the result of initial study and official entity that deals with 1. their comment up to 15 days Foreign direct incentivizing foreign investment

after getting the request in the Volume.7 / Autumn 2017 investment in contexts allowed in Iran and deals with all board of investment. The board for activities of private sector. the affairs regarding foreign must announce its final decision 2. Foreign investment in investment; all foreign investors about requests in writing in up to all contexts in the framework must submit their request 30 days after receiving it. of civil participation, buyback regarding admission, inflow, All related ministries and and construction, exploitation exploitation, and outflow of organizations including the Payam Darya 113 Report Investment Attraction in Iran Capital Market

By: Mahdi Rezaei Marketing Advisor of financial institutes

The president of 12th government of Iran mentioned some important terms including some critical points about foreign investment in his first speeches in Iran national media. What an important issue it is; what does Iranian’s authorities attention to foreign investment mean? Does the recent attitude of Iranian authorities lead to eliminating barriers of direct and indirect foreign investments in Iran? We try to reach the answer of such questions by analyzing the recent terms and future prospects in the present article. According to President Rouhani’s 30th, August speech, Iran’s market received 13 billion dollar foreign investment after joint comprehensive plan of action; he noted that he was going to organize Iran’s financial system to eliminate invalid competitions and monopoly in Iran’s economy and attract some foreign investments. Foreign investment is typically done in two approaches: Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) Volume.7 / Autumn 2017 Payam Darya

114 A) Foreign Direct debt securities, and new tools in of efficiency in the target Investment (FDI) money market are included in capital market FDI is an investment in which this approach. • Increase in depth of market the investor is an entrepreneur In this approach of investment, • Increase in precision and who has a permanent interest individuals try to choose an accuracy of stock pricing optimal portfolio to maximize from a company located in a and mechanism of portfolio foreign country and they get their interest. Unlike direct pricing effective enforcement in the investment which is generally • Increase in capital markets company in return. Generally, done by multinational huge in the approach professional companies, investment in activists technology and management financial portfolio is possible comes to the foreign country as for institutional investors like Investment Opportunities in well. retirement funds of small Capital Market of Iran companies and joint venture One of the great opportunities in post-sanction period of Iran’s B) Foreign Portfolio funds. The income of these economy is entering of foreign Investment (FPI) investors is obtained from investments. Many economic According to the development capital gain, dividends and debt groups came to Iran for visiting of international relations in instruments. Volume.7 / Autumn 2017 the market and negotiating after portfolio exchanges and the the joint comprehensive plan of need for risk diversifications, Most significant advantages of action (JCPOA); they started foreign investment becomes one FPI: investing in Iran after multiple of the important issues in capital • Increase in liquidity meetings. The presence and markets. Investment in stocks, • Increase and development investment of foreign investors Payam Darya

115 Report

in Iran significantly increased in companies for investing in liquidity and market value in March and February of 1394; the Iran. Iran became a member of the target country. According amount of their deals in the end of International Organization of to the significant reduction in December, 1394 was 42 billion Securities Commissions after country risk, development of dollar, but after implementing lifting the sanctions, which privatization which is one of

Volume.7 / Autumn 2017 the JCPOA the amount increased led to recognition of new real the most critical issues and 12 times to be 511 billion dollar. opportunities and great potential the attention of all political Simultaneously, the activity of of Iran’s capital market. authorities to have economic multinational companies and Eliminating investment relations with other countries, it their experts increased in Iran’s obstacles in developing countries is one of the prospect approaches capital market and multiple leads to the development of in Iran. In addition, it should be

Payam Darya meetings were held in western capital market, increase in noted that all supervisory and 116 that makes one of the various security exchanges in Middle East. Exchange index has been the grown about 107 percent from April, 1392 to April, 1396. activity of Average return of total exchange multinational index had 19 percent growth from companies April, 92 to March, 95. Value and their of capital market transactions (e.g. stocks, securities, etc.) experts in Tehran security exchange increased in market, Tehran OTC and energy Iran’s capital exchange changed from one market and thousand and 96 billion RLS in multiple 1391 to one thousand and 902 billion dollar in 1395, which meetings means 74 percent growth. were held Financial support of plans from in western the capital market changed from companies 143 thousand billion RLS in 1391 to one thousand and 220 for investing thousand billion RLS in 1395 in Iran. Iran which means a 750 percent growth. Value of capital market of Iran changed from 2 thousand and 420 thousand billion RLS In the first of 1392 to 5 thousand and 19 thousand billion RLS in the last of Farvardin, 1396, which means a 107 percent growth. Foreign investment in the capital market was about 878 billion RLS in 1392, but it changed to 976 thousand and 14 billion RLS in 1396, which means a one thousand and 606 percent growth. Nowadays, investors from the United States, England, Russia, regulatory authorities has taken to facilitate investment process Germany, Switzerland, Sweden, a step forward with trying to in recent years; according to Uzbakistan, China, Netherland, have optimal relations with the recent consistency, this is India, Turkey, Lebonan, South world economic mechanisms the time to implement these Africa, Japan, Cyprus, Italy, to facilitate communication regulations in action. Emirates, Norway, Greece, by using the global financial

Indonesia, Maldives, Hong Volume.7 / Autumn 2017 reporting language in banks Significant Statistics of Tehran Kong, Qatar, Iraq, Pakistan, and companies, giving license Security Exchange in the first Syria, Luxemburg, Kuwait, to credit rating agencies, and period of president Rouhani New Zealand, Malaysia and facilitating bank exchanging. Presidency Afghanistan are active in Iran’s Furthermore, multiple 40 industries and 500 companies capital market. regulations have been developed are active in Iran capital market Payam Darya

117 Memo A Look at the Participating Security in Iran

By:Amine Ousta Market Developer Expert Volume.7 / Autumn 2017 Payam Darya

118 Each Iranian or non-Iranian investor can buy the participating security online after getting the online trading code and registering in the trading system of Iran exchange market.

Islamic countries cannot use securities such as participating the typical financial instruments security. such as bonds due to the fact that According to article 2 of Interest or “Reba1” in western participating security rules manner is illegitimate in Islam. approved on 30th, Shahrivar, Therefore, companies and 1376 in Islamic consultative organizations in these countries assembly and regulations of have to come up with different article 1 of participating security rules according to Islam. Islamic transaction approved on 18th, financial instruments known Mordad, 1377 in delegation of as “Sokouk2” have developed ministers, participating security significantly in recent years. is introduced as follow: Sokouk can be defined as a “In order to increase public security in accordance with participation in implementation “Shariah3”, with financial of profitable government’s support, fixed or fluctuated development projects included income and with the possibility in government annual budget for deal in secondary market. laws, as well as profitable This kind of bond cannot be productive, construction used as a speculation or non- and services projects, added value for profitability. the government, public There are different kinds of corporations, municipalities, non-public institutions and 1 the obtained interest people get from entities, public corporations, and giving their money to someone else and their affiliates, joint-stock and Volume.7 / Autumn 2017 doing nothing public joint-stock companies 2 An Islamic financial instrument used and producers’ cooperatives are instead of western bond system allowed, in line with this law, 3 The religious law forming part of the to finance part of the financial Islamic tradition: the term refers to God’s

immutable divine law resources required for the Payam Darya 119 Memo

implementation of the projects In participating security as According to the issuing act including financial resources it is obvious from its name, of the Islamic consultative required for the procurement the bearer is participated in assembly, the securities of raw materials required by a project; therefore, papers are issued as registered or the productive units through are documents that shows the unregistered bonds of nominal issuance and public offerings of bearer ownership of a part of value in a specific period of participating securities.” the real asset which belongs time and are transferred to Participating security and to government, public or investors who are interested saving bond are the same in non-public or co-operative in participating security nature; the only difference is organizations; the owner of issuance project. The due that in participating security participating security is hold date of participating security the proceeds must be used in responsible for any fluctuation includes the initial amount; the specific projects, but in bond and change in it until due date. nominal value associated with the issuer can pay them in any project that they want; this is due to the fact that in bond, the proceeds belong to the issuer, but in participating security the paper bearer is their partner. Some people still consider bonds and participating security the same. Bonds must be guaranteed in due date Volume.7 / Autumn 2017 and are transacted before the due date. Because of this, the interest is not fixed and there is no incompatibility regarding Islamic rules. Payam Darya

120 Islamic countries cannot use the typical financial instruments such as bonds due to the fact that Interest or “Reba” in western manner is illegitimate in Islam

participating security is paid to the owner of securities. Because of the interest payment, bonds are not legitimate in Islam, but participating securities are legitimate because of the act of participating of investors in economic activities and payment of real interests.

Share of Participating Security in Iran Debt Security Market In 1395, the amount of debt security in Iran capital market was 138,151 billion Rls and the participating security share was How Much Is the Participating for investors is tax free, which 26 % of the total amount. The Security Efficiency in Iran makes it more acceptable and amount was 10,550 billion Rls Market? interesting. in the first of Mordad, 1396 and Nowadays, security interest The security may be transacted the share of the participating in Iran is 20 to 22 percent for in stock exchange or out security was 6000 billion a one-year period. The more of it. Each Iranian or non- Rls. There was a reduction in interest it has, the more people Iranian investor can buy the Volume.7 / Autumn 2017 monthly transaction value in find it acceptable to purchase. participating security online 1396 which was due to the The interest due date of these after getting the online trading acceptable rate of security in securities is one or three month. code and registering in the comparison with the reduced In addition, the obtained income trading system of Iran exchange bank interest. of these participating securities market. Payam Darya

121 Memo

Industry of Investment Funds Volume.7 / Autumn 2017 in Iran

By: Parastou Kan’ani Expert of market development Payam Darya

122 Investment funds are financial institutes that invest the obtained interest of investment certificate issuance on their field of activity and their owners are included in any interest and loss of the investment. Investment funds may invest the capital on fixed-income portfolio, stocks and preferred stocks, construction projects, gold, exchange, etc. according to its According activity and prospectus. Investment funds can be transferred to the recent in exchange market, issued or revoked. These kinds of funds statistics of started working from 1384 after the approval of security market act; there has been a significant increase in the number securities of the investment funds from 1388 and according to the report and exchange of financial information processing center of Iran and the organization, website of Iran OTC, the number of the investment funds was there are 96 209 in Shahrivar, 1396. investment funds in stocks Kinds of Active Capital Funds Chart 3: annual return of with the value in Iran investment funds from 95, 16, of 17,778 billion Generally, Iran’s capital funds 05 to 96, 16, 05 RLS in Mordad, are of three kinds: 1396. 1. Investment funds in Investment Funds in Securities securities are of 5 kinds: 2. Investment funds in 1. Investment funds in properties securities with fixed-income 3. Adventuresome investment These funds invest special funds capitals of selling investment units in different kinds of Investment Funds on securities (current kinds Securities are mutual securities issued The number of investment by governmental, non- funds in securities was 202 in governmental and public 1396 with the total worth of corporations). These funds 1,296,249 billion RLS; you can invest at least 5 percent of their find the frequency chart and the incomes on stocks and the rest total value of assets of the recent of income on fixed-income year in the following charts. In securities and deposit accounts; addition, the average return chart therefore, there is no value of investment funds in securities reduction risk because of the in the recent year can be found banking return. According to in the chart number 3. the recent statistics of securities and exchange organization, Volume.7 / Autumn 2017 Chart 1: frequency of there are 58 fixed-income investment funds in securities investment funds until the end Chart 2: the average return of Mordad, 1396 with the value according to the type of of 1,236,616 billion RLS in Iran. investment fund It should be noted that this kind Payam Darya

123 Memo

of investment fund is the most of investment fund is more with the value of 17,778 billion popular one in Iran. likely to be reduced or grown RLS in Mordad, 1396. 2. Investment fund in stocks because of stock-based asset Investment funds in stocks are mix. According to the recent 3. Mixed Investment Fund the funds that invest at least 70 statistics of securities and This kind of fund is the mix of percent of their mix asset on exchange organization, there are fixed-income funds and stock stocks. The value of this kind 96 investment funds in stocks funds; half of the capital in invested on fixed-income funds and the other of on stock funds. According to the recent statistics of securities and exchange organization, there are 15 mixed investment funds with the value of 6,298 billion RLS in Mordad, 1396.

4. Index Investment Fund Volume.7 / Autumn 2017 The aim of index investment fund is to follow an index which makes managers to make a portfolio of securities based on an index to have the same

Payam Darya performance based on the index

124 there are 58 fixed-income investment funds until the end of Mordad, 1396 with the value of 1,236,616 billion RLS in Iran

performance. Managers do not middle of 1392 that the first accordance with the regulations, have an active role in this kind transferrable fund established after the confirmation of security of investment fund; they just in OTC of Iran and it has been and exchange organization, monitor if the securities are increasing since then. There are and share the income with the based on the index. There are 11 transferrable fund until the investors. There are 4 property just 3 index investment fund in end of Mordad, 1396 in Iran investment funds in Iran until Iran. exchange market with the value the end of Mordad, 1396- they of 15, 878 billion Rial (assets are considered as the new 5. Transferable Fund in of index investment fund are instrument of security and Exchange Market included). exchange organization. Transferable fund is a kind of mutual investment fund and like Investment Fund in Properties Adventuresome Investment other investment funds share This kind of fund was founded Funds its assets among hundreds or under the supervision of Adventuresome investment is a thousands investors. Unlike securities and exchange kind of investment that aims at other investment funds that the organization; it collect capital establishing small companies person has to go to the company from people and use the money with great potentials; this is for buying and selling, units of to invest on construction projects a great approach to start a this kind of fund is transferrable and then sell the property and business which are small and in exchange market like an obtain an income. The property cannot enter the exchange exchange- It is also obvious invests fund use the collected market and banks; it has a high The value of from its name. money for construction projects. percent of risk, so investors have these funds is determined in The anticipated cost and duration a high expectation. There are the time of transferring through of the projects are mentioned in 3 adventuresome investment the mechanism of supply and the prospectus of the project, funds in Iran so far. They are demand. This kind of fund was so investors must take a look at considered as one of the new introduced in 1993 for the first it, examine it and gain enough instruments of Iran’s exchange Volume.7 / Autumn 2017 time and has grown significantly information about the process. market and will experience a in the last decade; nowadays, This kind of fund has a deadline. high growth in the future years. they have the most shares in the After the specified deadline, net assets in universal mutual the project manager sells the investment funds. It was in the property (even in advance) in Payam Darya

125

Glance IRISL CEO: IRISL CEO: RisingIRISL CEO: to Rising to RisingPort; A Chance to HeyDayfor Making Progress HeyDay Articel

Intellectual Capital

Volume.7 / Autumn 2017 Management

By : Mehdi Rastegary Head of Research and Development in Ports Sina Ports and Marine Services Co Payam Darya

128 Abstract In the context of modern global economy, the market-value of many firms exceed far beyond the book-value of their tangible assets; indeed in most cases, the real value of a firm is many times more than the sum of her physical assets. This has led the management science into a quest for identification of resources that generate and sustain this considerable amount of surplus in economic firms. The quest has been referred to as research for identification of ‘intangible assets’ or ‘intellectual capitals’. Identification of intellectual capitals, not only explicates the elements and mechanisms of value production in a firm to a great extent, but it also facilitates the bed for further improvement and enrichment of such assets, as well as providing the means for indicating the real value of the firm in the market and facilitating for more promotion in her favor. Ports are among valuable, strategic, national assets of each country and have a critical role in developments of nations. In tandem with evolution of new generations of ports and within the context of global knowledge economy, the share and functions of intellectual capital is steadily increasing in production of value in the port sector. In spite of the essential role of Intellectual Capitals in ports, Intellectual Capital Management has not been addressed independently and holistically in ports industry. This article focuses on indicating the role of intellectual capitals in the port sector, and proposing a hybrid model for categorization of ICs in the port context, and management of Intellectual Capital in ports. Intellectual Capital is to a great extent capable of clarifying the ongoing changes in the global port sector. It can be used to establish a new paradigm in port development that enables the port managers to analyze and/or forecast the trends in port industry, and improve the assessments for their essential resources, competencies, needs, and potentials in business development.

Introduction In the beginning of the third millennium, ports are considered as strategic assets which can essentially contribute to social and economic development of nations. The modern concept of a port is a juxtaposition of such fundamental roles as national revenue-makers, regional trade-enablers, and linkages to global economy. These roles are usually configured by a set of such vital functions as logistics, multimodal transport, facilitation for industrial clustering, raise in local employment level, etc. In this context, one essential question may be asked: ‘Why have ports become so important in global economy, and international trade?’ The answer is simple: Ports act as the focal point of several added-value generating functions. First, the port activities have direct influence on delivery of goods in market, and their finished cost for supply in the end-market. In the more modern concepts of the port, port activities may also change the function of goods in a desirable way (e.g. via some specific logistical processing).The enhancements in delivery, costs , and functions of goods will produce added value in the shipments of commodities and products handled in a port. Second, the port activities involve production of port services, transport services, and logistic services. In this sense, port can be seen as an industry Volume.7 / Autumn 2017 that generates national revenue, enhances employment, contributes to industrial clustering, attracts investments, and facilitates trade. Furthermore, good performance of ports can accelerate the flow of shipments in their supply chain, and provide a fast-turning variety of goods in the market and a multitude of choices for customers. This will in turn lead to enhancement of production, raise of competition, and variety of goods at lower costs for customers. In this sense, the ports can be seen as tools Payam Darya for improvement of standards of life, and engines of socio-economic development in 129 Articel

national (or regional) level. Along the past fifty years, port development has been subject to great transformations. In the port management literature, this transformational trend is usually acknowledged as the evolution of the first, second and third generation of ports (ref. table 1). In most of the references, this evolution trend is considered to be a result of such phenomena as globalization (that stemmed from the worldwide political, social , and technical evolutions of national and regional economic systems), and international trade, as well as such technological trends as containerization, ship building developments, Information and Communications Technologies developments, etc. Although these have an explicit role in evolution of ports, but they cannot fully explain the reasons of upheaving changes in the port industry. Understanding these rearrangements is critical, as they are determining in gaining a proper attitude in business, and following the correct direction in the path of port development. However, in order to gain a good perception of them, it is imperative to comprehend the underlying causes in the port industry and her environment. Volume.7 / Autumn 2017 Payam Darya

130 Table 1- Evolution of port function [1]

First generation Second generation Third generation

Start period Before 1960s After 1960s After 1980s Conventional cargo and Bulk and unit cargo Principal cargo Conventional cargo bulk cargo Containerization The port Conservative Industrial principle development Expansionism junction point of international trade position & transportation and production the sea and inland base chain connecting development centre transportation transportation system strategy (1)+ (2) + (3) Cargo information, (1) + cargo Activity (1) Cargo handling, (2) Cargo type change distribution, logistics scope storage, navigation (distribution processing), ship activity assistance-pier related industry - enlargement of – Formation of the port regions terminal and distribution centers - Formation of the port cooperation system - Relations between port and its - Trade and users become more close transportation chain - Everybody acts - Emergence of the slight concentration in the port Structure individually in the port correlation among port - Relations between Formation and - Port and its users activities port and specifics maintain informal - Negative cooperation self-governing relations. relations between port and self- community governing community become more closer - Extension of the port structure - The flow of the cargo and -Invention of the cargo - Invention of the cargo information distribution distribution - Distribution of the Character of the -Individual supply of - Cargo processing cargo and productivity simple services - Complex services information -Low value added - Increase of the value - Combination of the added diversified services and distribution - Value added Technology and know- Core factors Labour/capital Capital how

As we will discuss in this article, development and dominance of intellectual capitals in ports are the most important factors that has laid the foundations for ongoing Volume.7 / Autumn 2017 evolutions in the port sector. Later we will discuss that intellectual capital management is the key to success of ports in the intense competitive market.

Knowledge Economy and Intellectual Capitals

Payam Darya After 1980s, the world economy entered into a new era, in which man-made 131 Articel

brainpower industries came to dominate the world economy. By development of new breeds of sciences and technologies, and in consequence to thorough, world-wide shifts towards liberalization of trade, establishment of international capital markets, global availability of cheap labor, revolutions in transportation and logistics, and many other causes, the competitive advantage which once laid in availability of capital, labor and natural resources, was moved into knowledge assets, resources, and capitals. This critical shift revolutionized the nature of production and consumption in a short while. It almost affected everything in the economy: Knowledge sharing and transfer among industries which were facilitated through extensive use of such methods as benchmarking, best practices and reengineering, resulted in breakthrough leaps in the development of developing economies. The market structures were transformed due to changes in the nature of supplies, products , needs , demands, and resources; the changes in the definition of industry competencies, rules of competitions, disposition of competitors, and tendencies of consumers. Customer demands forged the general paradigm of production from ‘mass production’ into ‘quality production’, and later transformed it into ‘mass customization’. Mobility of production resources was utterly increased and volatility of consumers’ communities raised substantially; channels of distribution and their arrangements experienced substantial changes; several old industrial giants were annihilated and substituted either by mergers or new-comers. Development of E-Commerce resulted in standardization, expedition of processing and communication, and raise of precision in business transactions; changes in marketing and sales approaches gave rise to proliferation of customers and substantial growth of sales in a world-wide level ; an apparent shift was seen from manufacturing industries to service industries; the nature of products were changed by raise of services and intelligence, rather than use of physical material in their designed composition; Paradigms of management and organizations were altered to meet the newly emerging requirements and generating the novel competencies; and myriads of other changes that has been elaborately discussed in the literature[2,3,4]. These tremendous changes which in the beginning were seen as a complete chaos in economic systems, revealed the dawn of a new age in economic history which is regularly referred to as the ‘Knowledge Economy Era’ [4]. In this era, knowledge has become the main and most important element in business: not only it affects every stage of the supply chain of products (design, production, marketing, sales, transport, distribution, retail, consumption and recycling), but also it may functions as raw material, or a major component of many products. In fact knowledge has become an indispensible part of the resources, capitals, assets, products and modus operandi of economic firms. Since 1950s, many models and approaches have quested to conceptualize and interpret the role of knowledge in business, among which we can point to Research and Development Management (R&D), Human Resources Management (HRM), Total Quality Management (TQM), Just In Time (JIT), Knowledge Management (KM), and Balanced Scorecard (BSC) for Strategic management. However, it seems that recent models which concern the Intellectual Capital Management and Volume.7 / Autumn 2017 Reporting, encompass the most general attitudes towards developing, management of the knowledge assets, resources and capitals in business. Intellectual Capital has been defined as ‘the sum of all resources, capabilities, relations, and network, whether intellectual like knowledge, or emotional and interpersonal like attitude, culture, and values, that enable an organization to

Payam Darya create and maximize value’ [4]. Intellectual Capitals are of critical importance, and acknowledged as the main sources of value production in every business. A good 132 instance can be sought in the surveys done on Market Capitalization1 of publicly traded companies [4, 5, 6, and 7]. The surveys have shown that the market capitalization in publicly traded companies around the world, between 1920 and 1990, amounted only to 187 percent of the book value; However in early 1990s, market capitalization raised to over 500 percent of the book value [6]. This significant raise in market capitalization is an apparent sign of intellectual capitals’ role in economic firm. On this basis, it is estimated that in the knowledge economy era, the organizational resources of corporations is consisted by 80 percent of intellectual capital, and only 20 percent of tangible assets[4]. This is in sharp contrast to former corporate capital composition that was consisted of 80 percent of tangible assets, and a 20 percent account for intangible resources .Therefore understanding the concept of intellectual capitals and the context of value production and preservation by them is of essential significance to economic firms and their success. However unlike to tangible assets, the intellectual capitals are very difficult to measure (, and thus to manage): this is a result of their impalpable nature, idiosyncrasy in industry (or even corporate) level, conceptual novelty, inadequacy of regular accounting standards in their acknowledgement, and their requisite dynamic interaction and synergic add-up in value production [5]. This has raised many diverse approaches in definition, measurement, management, and reporting of intellectual capitals. Among these approaches, we can point to Knowledge Assets Mapping, Scandia Navigator, Danish Government’s approach for intellectual capital statement, Sveiby’s Intangible Assets, International Federation of Accountants (IFAC) approach, Ericsson’s Cockpit Communicator, Celemi’s Intangible Assets Monitor, Ramboll’s Holistic Company Model, Bates Gruppen’s Company IQ Measurement System, and many others[5]. Knowledge asset mapping is a very common approach in classification of intellectual capital; it classifies the intellectual capitals into three categories: Human capitals which include (but are not restricted to) knowledge, competency, and brainpower of human resources; Relational Capital that encompasses the relations of the corporation with her customers, suppliers, and distributors; and Structural Capital that includes the organizational systems, culture, practices, and processes. Based on this approach, International Federation of Accountants (IFAC) has proposed a more elaborate classification, which is more helpful in practice:

Table 2 - Classification of Intellectual Capitals, IFAC (1998)[5 , 7]

Human capital Relational (customer) capital know-how Brands education customers vocational qualification customer loyalty work-related knowledge company names

occupational assessments backlog orders Volume.7 / Autumn 2017 psychometric assessments distribution channels work-related competencies business collaborations Payam Darya 1) Market Capitalization is the difference between the market value and book value of the corporation. 133 Articel

entrepreneurial élan, licensing agreements favorable contracts innovativeness, proactive and reactive abilities, changeability franchising agreements

Organizational (structural) capital

Intellectual property Infrastructure assets patents management philosophy copyrights corporate culture design rights management processes trade secrets information systems trademarks networking systems service marks financial relations

IFAC proposes that value forms in the merging intersection of Human, Relational, and Structural Capitals, and as a matter of knowledge flow between them. This idea is recognized as ‘Value formation Platform’ in the firm.[7]

It seems that this classification best serves our aims in surveying the intellectual capitals and their critical role in the port sector. The author believes that this survey is essential in port management: In the knowledge economy era, intellectual development shall be seen as a general discipline in tandem and supplement to physical development of ports. I hope the initial ideas in this paper can lay the basis for foundation of a general discipline in port management.

Volume.7 / Autumn 2017 Figure 1- Value formation Platform [4 , 7]

Port Sector and intellectual capital

As cited before, port development is essential for economic growth and trade facilitation. The more the global economy is augmented around the world, the more Payam Darya developments in international logistics and transportation is demanded, which in turn 134 necessitates development of ports. For instance, according to one study by OECD/ ITF, the global container traffic will double in 2030, reaching an estimate of 1095 million TEU. In response to this increase in the global container traffic, the port capacity will be increase to 1745 million TEU in 2030 [8]. As said before, ports are national strategic assets that can provide lucrative businesses, as well as attracting trade. Therefore, port sector is usually attractive to the investors. Indeed, enormous investments are being made in this sector and hundreds of millions of Dollars are needed to develop a deep-sea port terminal and augment her businesses in the regional markets. In such a capital-intensive market, each port is questing to maximize her share from the prevailing and potential benefits as much as possible. On the other side, the shipping lines and vessel operators are very observant in selecting their ports of call. In this regard, ports generally perform in two modus operandi: gateway and transshipment [9, 10, and 11]. Gateway ports act as the connections between hinterland territories and maritime transport. They serve the supply chains of their hinterlands and facilitate the flow of export, import and transit goods in them. Ports with strong gateway character generally attract direct calls and justify point-to-point logistics. Among ports which have strong gateway characteristics, we can mention Hong Kong Port in Far East, Bandar Abbas in Persian Gulf, and Rotterdam in Europe. Ports in this mode rely on their efficiency, connectivity and shipping frequency, adequate infrastructure and range of port services, location, port charges, quick response to port user’s needs, and reputation for cargo damage [11]. On the other hand, some Mega-ports rely on their capacities and capabilities to serve the mega-ships which in spite of providing economies in sea, generate great diseconomies in ports. In this respect, in the trunk lines of maritime transport industry, they are few ports in each region that can serve ultra-large container ships with capacity of +13,000 TEU s. Therefore international shipping is increasingly moving cargoes in ‘Transshipment’ as the alternate modus operandi. Transshipment is based on a hub-annd-spokes logistics model in which the ports are ranked in a hierarchical order (called as ‘cascade effect’ in some references [12]): Mega-hubs (capable of handling 12000-18000 TEU ships), Regional Pivot Ports (3000-5000 TEU ships), Sub-regional Pivot Ports (1000-1500 TEU vessels), and minor ports (200-500 TEU vessels) [13, 14]. In this hierarchy, shipping lines consider many factors for selection of ports for their maritime services. Among such factors, the literature mentions cargo source of hinterland, efficiency of handling facilities, Savings in operating cost, Draft of harbor, frequency of trunk and feeder routes, efficiency of clearance, location of port, level of port charge, total number of berths, capability of branch/ agent, convenience of inland transportation, area of marshalling yard, investments in dedicated terminals, quality of customer service, coordination of shipping alliance, preference of mother port, political considerations, type of port authority [15]. Among ports which rely heavily on their transshipment characteristics we can point to Singapore and Westport in South Asia, Jebel Ali in Persian Gulf, and Giao Tauro and Valencia in Europe. Thus, it is obvious that every port in different regions of the world is making her best efforts to enhance her productivity and facilities to improve Volume.7 / Autumn 2017 her ranking level in this hierarchical order. This competition is very intense among mega-ports (those handling at least 1 MM TEU per annum) which account for nearly two thirds of global port capacity [15]. However, Port development is extremely capital-intensive: Constructing a container terminal with 600 m of quays will need between 50-100 MM USD[16];

Development of a mega-port (a regional pivot port) requires more than 300 MM Payam Darya Euros of investment [9]. The commissioning and operating costs of such a port will 135 Articel

also incur tens of millions of Euros. Nevertheless, the investments in a port are not capable of being mobilized or recovered and in real sense, they are non-reversibly sunk in the place of their investment. Global Logistics Institute has exemplified this issue in one of her case studies on transportation of goods from China to U.S.A. Among the 13 players involved in the supply chain (including the manufacturing plant, warehouses, ship operators, ports, intermodal rail, haulers, distributors, processing units, retail stores, etc.), each of the players can mobilize her resources to other desirable points; but ports are the only ones who are not capable of moving their facilities[17]. This is a unique and risky characteristic of the port sector: many ports have failed in the fierce competitive market due to lack of insight, or being incapable of developing or preserving the required competencies. The history of port sector substantiates the issue: experiences of Dutch port sector in developing the Port of Eemshaven (1960s), and Ceres Paragon Terminal in Amsterdam Port (2002) are two good instances [18]. Successful ports (especially market leaders like Shanghai, Hong Kong, Singapore , and Rotterdam) are being steadily pursued and challenged by their followers (like Shenzhen, Tanjung Pelepas, and Hamburg in respective order ) who are ready to make heavy investments, take risks and relinquish instant benefits to obtain competitive advantages [16]. In this broad, diverse, global, strategic market, the knowledge, relations, culture, competencies, structures, and organization are among the imperative capitals1 of any port. As we mentioned in the former section, these are collectively referred to as Intellectual Capitals. Indeed, the heavy investments in the modern port sector are only appraised as feasible when the needed intellectual capital is in place: This includes the profound knowledge needed in port development, Technology Management, Business Administration (i.e. the synergetic resultant of marketing, Operations Management, and Finance), economic insight, Legal and Legislative acts, and many other areas. Shortages in each of these critical areas may generate formidable insufficiencies (including recess in business areas, operational deficiency, dissatisfaction of customers, significant environmental impacts, failures in market development, damages and losses, intolerable opportunity costs, etc.) or emergent need and dependence on specialized outsiders (which may necessitate/aggravate some compromises in terms of profitability, security, or autonomy throughout the port sector). On the other hand, buildup of ports industry knowledge and expertise in knowledge-based firms (such as port authorities, terminal operators, port consultants, equipment manufacturers, contractors and service providers, etc.) not only provides a flourishing bed to sustain the essential businesses in a known port sector, but also provides the potentials and opportunities for entrance into the profitable, and strategic global port markets. In spite of the implicit and critical role of intellectual capitals in the port industry, the value of most of them are not clearly known and recognized in the port sector: Though ports industry and its components have been viewed and studied through several diverse management approaches, instruments and models (e.g. Port Community Systems, Information Management Systems , Electronic Commerce, Port Governance Models, Expert Systems, Port Marketing, Sustainable Volume.7 / Autumn 2017 Development, Port R&D, Port Trainings, HSE Management, Quality Management, Strategic Management, Port Finance, etc.), little work has been done on establishing a taxonomy that can map the position and inter-relations of these concepts in the industry. Furthermore the resulting surpluses and improvements that are yielded by use of any of these instruments, and the possible synergies and economies of scope

Payam Darya between them are not assessed. Also, aside from many latent/ emerging facts that

136 1 ) Capital refers to’ possessions calculated to bring in income’ ( Merriam-Webster Dictionary). affect the market capitalization of the ports, it is very hard to measure and improve the contribution of currently-known factors in this regard. Therefore it seems that introduction of Intellectual Capital Management into the port industry is getting extremely essential.

Practice of ICM in Ports Introduction of ‘Intellectual Capital Management’ into the port industry requires a model that can scaffold and structure the matrix of numerous related prevailing concepts and potential ideas in this regard. The author trusts that this modeling may best be performed by IFAC’s classification of Intellectual Capitals. This model can provide an elaborate categorized list of ICs, within the port organization. This list can be very helpful in development of a general understanding of intellectual capitals in the port industry. Other functions of this categorization may be sought in identifying the position of each of ICs in the context of port organization, and recognizing the inter-relations of ICs within the context of ‘Value Formation Platform’ in the port and her markets. Such a list can also facilitate ‘Knowledge Asset Mapping’ process for developing the IC in value map. The map can be used for recognition of the needed flow between each of IC elements, and founding, monitoring, streamlining, and controlling them in the context of port’s mission. There is another (more recent) approach towards ICM, which can be assimilated into this framework. The approach has been defined by Dr. N. Al-Ali, and pursues deriving knowledge assets from human knowledge through Comprehensive Intellectual Capital Management (CICM) Model.[4] The Model argues that in order to achieve maximum value in a firm, the firm should embark from effective Knowledge Management, enhance herself to Innovation Management level, and transcend to Intellectual Property Management. Volume.7 / Autumn 2017

Figure 2- CICM™ - N.Al-Ali [4]

The argument seems quiet fair and practical: In Knowledge Management Phase, the firm establishes the mechanisms to learn, and remember what it needs, and leverage the gained knowledge by transferring it within organizational members and/ Payam Darya 137 Articel

with exterior stakeholders. This renders all of organization into a big brain that is always thinking and learning to serve her corporate benefits. Knowledge Management has proved to be essential to the modern port sector. Indeed, great ports have been orienting themselves towards Knowledge Management for decades. European ports and Southern East Asia have tenaciously worked in national and international levels to leverage their knowledge in order to keep ahead of their competitors. Their endeavors include a vast field of activities including research and training collaborations with Maritime Academies, collaborations with port and maritime consultants, definition of benchmarking and best practice programs in the international level, sisterhood collaborations with upstream and downstream ports, port community development in order to enhance the port-level and extra-port level integration with national maritime cluster, collaborations in development of international training programs and their implementation in less developed ports, etc. Among the instances we can point to successful experiences of such ports as Rotterdam, Antwerp, Hamburg, Singapore, Hong Kong, Pusan, Kaohsiung, and Jebel Ali around the world. The professional developments of these ports not only have turned them into hub ports in their region; but have also promoted their operators as the outstanding leaders of port-related industries. For example in the Container Terminal industry, the terminal operators in some of such hub ports have been internationally recognized in global port markets due to their business competencies. These firms are always among the first options in the lucrative and strategic container terminal concessions and other logistics businesses throughout the world. In fact, world-class terminal operators are known as the ‘wealth-makers’ that serve their mother economy through their huge contributions to Gross National Production (GNP) Rate, and raising their participation in international trade. Table 3 gives the list of top 20 container terminal operators in the world. Global Revenue in Throughput in 2015 Rank Name Economy 2015 World (Millions x (millions USD) of TEU) Hutchinson China, 1 DC 81 11.8% 4323.7 Ports Hong Kong SAR APM 2 Netherlands IN 69.3 10.1% 4200 Terminals 3 PSA Singapore DC 63.8 9.3% 2655 4 Cosco China DC 62.8 9.14% 798

5 DPW United Arab Emirates DC 60.5 8.81% 3968 Total 337.4 49.15%

Table 3: Top 5 Global Terminal Operators, 2015[19]

In order to support and realize the ideas that are originated in terms of Knowledge Management, there is absolute need to originate Innovation Management throughout Volume.7 / Autumn 2017 the organization. Innovation Management enables the firm to obtain a growing number of ideas about her products from the Knowledge of members and customers. These ideas are processed an evaluated for selection of the best choices. The Best choices are conceptualized and their feasibility is studied, and then brought into commercial reality by defining Innovation Projects. In this way, Innovation

Payam Darya Management realizes the potentials of the firms ICs; extracts it in form of value; and present it in form of competitive advantages in the market. Innovation Management 138 is seriously addressed in the global port sector in the context of Port R&D, Port Consultancy, and Port Communities. According to the literature, pioneers of port sectors are financing tens of Millions Euros in innovation systems annually. For example, ECMAR reports indicate that EU Financial participation in 7th Framework Program has contributed towards a 400 MM € budget in Waterborne Transport R&D [20] . Port R&D encompasses a broad range of industries. For instance, figure 4 gives a model presented at ECMAR [21].

Figure 3- Port R&D in EU Policies [21]

However, the competitive advantages obtained from the Innovation Management systems need to be supported and protected to sustain the benefits of her originator. Otherwise, the rivals in the market will copy or deploy it in a short while. Herein, the firm shall seek Intellectual Property Management solutions in order to turn her innovated products into assets. IPM practice can result in protection, personification, illustration, clarity, and exclusiveness of the competitive advantage gained by licensing it in form of an Intellectual Property. Table 4 illustrates the uses of different IP instruments for different Licensing purposes. Volume.7 / Autumn 2017 Payam Darya

Table 4- IP forms used for different licensing purposes [4] 139 Articel

The port sector has practiced IPM in terms of maximizing the value of her technological achievements. The instances can be seen in many instances, includuing:  patents,

 trademarks (e.g. in port systems and equipment),

 trade secrets in form of knowledge concerning port services and facilities, market, R&D results, technology, business models, etc.;

 Franchising instances in added-value logistics businesses;

 Copyrights to media, websites, publications, etc.;

 service marks in tourism-related services, Banking, etc.

However, it seems that interests in surveys, audits and certifications are increasing to demonstrate and exemplify the capabilities of each port and advantages of each her services in comparison to her regional competitors. This is an increasing trend to present the advantages and competencies to her stakeholders (including customers). Among the most popular certification orders in the port industry, we can point to :  ISO 9001:2008 for Quality Management System,

 ISO 14001:2004 for Environmental Management System,

 OHSAS 18001:2007 for Occupational Health & Safety Management System,

 ISO 27001:2005 for Information Security Management System,

 ISO 28000:2007 Supply Chain Security Management System,

 ISO 10002:2004 for international standard for Customer Complaint Handling by International Standardization Organization ;

 Container Terminal Quality System (CTQS), and Port Community Quality System(PCQS) by Global Institute of Logistics[22];

 Port Environmental Review System (PERS), and Ecologic Management Audit System (EMAS II) by ECOPORTS[23] , etc.

Such certifications indicate some richness in structural capital of the firm, and her capabilities to respond to customer (or other stakeholder’s) voice; the certificate can be reckoned as an intellectual property in the industry level. Indeed such popular certificates are IPs that lay in the heart of the firm’s value creation platform.

Volume.7 / Autumn 2017 Definition and development of port ICs in accordance to CICM™ model can encompass the multitude of different ICs within a port in a systematic and methodological way: It provides a holistic framework that does not exclude or overstate any of ICs in the ICM context. It also has the capability to lead into a holistic IC Management practice: not only it gives a general view of current and desirable state of ICs in the firm, it can indicate the requirements in each field of Payam Darya ICs and their subcategories for planning purposes, and estimate the required trade- 140 offs and resource allocation measures. Eventually it enables several businesses in the port sector to focus on the specific stage of ICM that best serves the business needs and goals. According to the trends in global port markets, it seems that success of ports depends on Intellectual Capital Management. The author trusts that the implementation of the models proposed in this article can be useful in this regard.

Conclusion In modern economy, the value creation models have changed dramatically. Market Value of most economic firms are significantly different with the sum of the book value of their assets. The magnitude of market capitalization in economic firms is generally explained by such concepts as ‘Intellectual Capitals’ and ‘Intangible Assets’. The literature shows that in developed economies, intellectual capitals account for 80 percent of the market value of the firms. Therefore, it is an obvious assumption that Intellectual Capital Management is an essential part of any economic activity within modern firms. As discussed in this article, we indicated that port industry is an essential part of global economy and international trade. Ports are national strategic assets that serve national and international socio-economic development. The history of port industry evolution shows that in past 50 years, ports have evolved from labor-intensive 1st generation level into knowledge-based 3rd generation level port. It was argued that port industry developments are subject to extreme challenges of global markets, and the fierce competitions will outcast any port that can not satisfy the wide range of her stakeholders. Survival and sustenance of ports,heavily relies on their intellectual capitals. Despite this primary fact and the implicit trends of IC development in the sector, IC Management has not been addressed consciously, independently and holistically in port management. Therefore, it seems that there is an urgent need to theorize and practice ICM in ports. Though essential, this task seems to be very Volume.7 / Autumn 2017 challenging. According to the literature, many models have been developed to explain the nature of Intellectual Capitals, their taxonomy, inter-relations, and their value assessment. For the purposes of this article, we specifically noted Knowledge Asset Mapping Model, IFAC’s Intellectual Capitals Classifications, and Comprehensive Intellectual Payam Darya

141 Articel

Capitals Management (CICM™). It is proposed that in the first step taxonomy of ICs in a port is developed according to IFAC’s IC Classification model. This will provide a categorized list that can facilitate the positioning of each IC element in the port, and studying its role in the port’s value map. In order to provide more objective- orientation and put more dynamism into ICM practice, it is recommended that IC in the port level is established and directed based on CICM™. CICM™ provides an an integrated approach to implement ICM in three levels: a)Knowledge Management for obtaining the needed knowledge in the firm and leveraging it to the benefit of the port b) Innovation Management for development and/or deployment of the firm’s ICs and transforming them into advantageous resources or capabilities and extractionof more and more value from them. c) Intellectual Property Management for maximizing the value extraction from ICs by barring competitor’s access to the competences or advantages generated in the innovation management process.. In this regard some instances of KM, IM, and IP practice in the port industry were mentioned. The author believes that combination of Knowledge Asset Mapping Model, IFAC’s Intellectual Capitals Classifications, and CICM™ provides a holistic, elaborate, and objective-oriented framework in a port as a complex organization. . According to the trends in global port markets, it seems that success of ports basically depends on Intellectual Capital Management. The author trusts that the implementation of the models proposed in this article can be useful in this regard.

Reference 1. UNCTAD, Port Marketing and the Challenge of the Third Generation Port, 1992. 2. Lester Thurow, ‘The Future of Capitalism: How today’s economic forces will shape tomorrow’s world’, William Morrow and Company Inc., 1996. 3. Alvin Toffler, ‘The Third Wave’, William Morrow & Company Inc., 1980. 4. Nermien Al-Ali, ‘Comprehensive Intellectual Capital Management’, ISBN: 0-471- 27506-9, John Wiley & Sons, Inc., 2003.i 5. The Chartered Institute of Management Accountants (CIMA) & Cranfield School of Management, ‘Understanding corporate value’. Volume.7 / Autumn 2017 Payam Darya

142 6. K. E. Sveiby, ‘Measuring Intangibles and Intellectual Capital,(article in Knowledge Management: Classic and Contemporary works,edited by Morey, Maybury, and Rhuraisingham; Cambridge:MIT Press, 2000) 7. IFAC, ‘The Measurement and Management of Intellectual Capital: An Introduction’ , 1998. 8. Kauppila,J.,et al.,Capacity to grow: Transport Infrastructure needs for future trade growth. OECD/ITF.2016 9. G. Lorthiois,Impacts of Mega-ships on Ports in Europe and the Mediteraian Sea, MAREFORUM, Sept 2008 . 10. Xavier Fageda , Load Centres in the Mediterranean Port Range-Ports Hub and Ports Gateway, 40th Congress of the EUROPEAN Regional Science Association, Barcelona, 2000 11. J.L.Tongzon, , Tae Hoon Oom, Role of Port Performance in Gateway Logistics 12. Larry Lam (chairman of PORTEK International Ltd.), ‘Cascade Effects in Container Shipping: Implications for regional and feeder ports’, TOC Asia 2008. 13. Theo Notteboom & Jean-Paul Rodrigue ,The next fifty years of containerization: container vessels, liner shipping and seaport terminals, AAG 2007, San Francisco. 14. UNESCAP, Free Trade Zone and Port Hinterland Development, 2005. 15. Hui-huang Tai, Cherng-chwan Hwang,Analysis of Hub Port Choice for Container Trunk Lines in East Asia, Journal of the Eastern Asia Society for Transportation Studies, Vol. 6, pp. 907 - 919, 2005 16. Professor Shou Ma, Lectures on ‘Port Marketing’, IRPMO, Jan 2007. 17. Kieran Ring, Lecture on ‘ Development of Transhipment in IRI Ports’, IRPMO, Bandar Abbas, May 2010. 18. World Bank, Port Reform Toolkit, 2nd ed., 2007. 19. Financial statements of the mentioned Global terminal Operators in 2015. 20. Prof.dr.ir. Niko Wijnolst, ‘European Maritime Clusters,Open Innovation and European Research Policy’, ECMAR Conference Amsterdam, 31 May 2007 21. Humberto Moyano , ‘Port R&D in Europe’ , European Maritime Day Stakeholder’s Conference, Port of Gijon, 19th May 2010. 22. http://www.globeinst.org 23. www.ecoports.com Volume.7 / Autumn 2017 Payam Darya

143 Interview Hamburg Port: a Key Player in Iran- Germany Relationship By: Fatemeh Moonesan

In the past few years, digitalization has gained momentum and today, the digital transformation of assets, information flows and port activities is one of the greatest changes in shipping industry, on the other hand, security emerges as a key property needing attention in order to control operational and safety risks. In other to collect more on this issue, Payam Daya magazine has conducted an exclusive interview with Mr. Axel Mattern. CEO, Port of Hamburg Marketing, the transcript of this interview could be accessed in the following. Volume.7 / Autumn 2017 Payam Darya

144 What are your views regarding a multipurpose service followed. the collaboration history of Well-established business IRISL and Hamburg Port? relationships, such as between Germany is traditionally Many IRISL, the Hamburg shipping Iran’s largest western trading international agent Peter W. Lampke (PWL) partner, and Hamburg, as and the terminal operator C. Germany’s largest seaport, has shipping Steinweg (Süd-West Terminal), always played a key role in the companies came to bear again. Since then, relationship of both countries. are now the cargo volume developed Hamburg has been the location operating very positively. From 2015 of the Consulate General of the again at the to 2016 the container volume between Hamburg and Iran Islamic Republic of Iran since Iranian coast 1858. For generations, very increased from 600 TEU to close and friendly relationships more than 11,700 TEU. In the have been maintained in first three quarters of 2017 the Hamburg with companies and volume grew up to more than state organizations in Iran. Even 16,000 TEU. And that’s just the the trade sanctions between beginning. There is still a lot of 2009 and 2016 could not break potential to be expected. this narrow band.

After easing of the economic Volume.7 / Autumn 2017 sanctions, IRISL started a Given that IRISL’s history has container service (ECL Europe reached its 50th year, what are Container Line) in March 2016 your view regarding this line? connecting Hamburg and the IRISL is the state shipping Persian Gulf. Just a month later, company of one of the largest Payam Darya

145 Interview

economies in the Middle of Hamburg, while minimizing East. The country has a huge its environmental impact. economic and infrastructure In addition, smart PORT is pent-up demand. This offers For constantly being developed and adapted. great potential for IRISL. generations,

The opening of the Iranian very close What major challenges did market has also increased and friendly you face while establishing the number of competitors. relationships and implementing smart Many international shipping have been technologies? companies are now operating maintained in Since 2013 we have been again at the Iranian coast. prototyping and implementing Hamburg with new technologies in our port for Therefore, the investments companies us and for our customers. The IRISL is making in expanding and state smartPORT Hamburg Initiative its fleet to remain competitive was founded in order to bundle are hugely important. The organizations in Iran and coordinate the realization of development shows that IRISL the vision “Port of the Future” is on the right way. Even if the of the Hamburg Port. Until cargo potential of Iran is still today more than 30 projects far from exhausted and the were finished. Some were port infrastructure needs to be totally successful, some were expanded, IRISL has already failed. We do these projects with established itself among the agility. When we fail, we think top 25 container shipping of new ideas or solutions and companies in the world, with a try again. This “trial-and-error” clear upward trend. seems to be so unconventional for an organization like What are the most significant Hamburg Port Authority. But (positive) impacts of using we have a lots of learnings out smart technologies in of them which we can profit for Hamburg Port’s activities and our journey to become one of performance? the most intelligent seaports of With the current possibilities the world. of fast growing technologies like Internet of Things, Big When did Hamburg Port Data, Artificial Intelligence, began the process of using Virtual and Augmented Reality, smart technologies? When was Drones, Blockchain, etc., we the need for applying smart see a lot of potentials that technologies felt? When was many processes within the port this process operationalized? could be managed differently, 2013 was the start of the official or totally redesigned for much smartPORT program.

Volume.7 / Autumn 2017 better efficiency today. Thanks Our biggest challenge therefore to its smart PORT philosophy, is how to sustainably grow the Hamburg Port Authority is in volume without requiring achieving sustainable economic more space and without growth and maximum benefit compromising with the ecology, for its customers and the people so that the port as the part of Payam Darya

146 the city could still be accepted processes in the Port of security by the citizens of Hamburg. Hamburg. Significantly more This can only be achieved with information about the container And the last question, how do intelligent technology. is available to help in the you make sure of the security intermodal transport. In the of mobility equipment and What tips and guidelines can future, the smart container may operations at Hamburg Port you offer to other ports who also be able to find its best way against the attacks from intend to set Hamburg Port as on its own. Hackers? their role model? Business critical processes A clear vision is needed. It What are the main upsides and of customers in the Port of is important to tell a holistic downsides of smart containers? Hamburg area are becoming story and reduce complexity by Advantage: more information, more and more dependent on IT dividing the vision into many greater transparency, faster systems. small projects. routing, better understanding Therefor we are utilizing of the requirements of state-of-the-art IT security What impacts do smart the customer and thus the methodologies and collaborate containers have on the possibility to respond to specific with other international Port embarking and disembarking customer requirements (new Cyber Security Centers. processes at Hamburg Port? business models and services Besides that it is important to Smart containers can will emerge). raise awareness at all levels, significantly increase the Hacker attacks and thus from board room to control efficiency of embarking increased demands on cyber room in a ship. Volume.7 / Autumn 2017 Payam Darya

147 Interview

Mohammad Ebrahim Tahsiri to PD: Volume.7 / Autumn 2017 We Gurantee! Payam Darya

148 Moalem Insurance had noticeable achievements in the field of insuring ships’ body and machineries; nevertheless, it ran into issues in cargo carrying insurance.

Moalem Insurance, initially known as Export Insurance Given that IRISL has been and Investment Company, was established in 1994, with the dynamically active in Iran’s collaboration of banking system for the purpose of expanding economy and international exports and providing credit insurance coverage for the maritime transportation for available risks. After the sales of the majority stocks of the over 5 decades, what are your company and under the decision of the new shareholders in views regarding the objectives, July 2007, the company was renamed Moalem Insurance. position and the performance Given the conditions of the country and the prediction of the of this company in the past, problems that shipping lines would potentially encounter, present and future? Moalem Insurance was purchased by the Islamic Republic I intend to respond to your of Iran Shipping Line (IRISL) so that IRISL could utilize its question in three phases: IRISL’s potentials in the insurance industry, and as well, insurance position, IRISL’s objectives, industry could provide coverage for IRISL ships. Moalem and IRISL’s performance. Insurance managed to stage a prosperous performance in I must first assert that the all the this regard, and this matter led to the formation of the first three above-mentioned issues insurance P&I in Iran. have to be introduced and Thanks to the P&I insurance coverage by Moalem Insurance discussed in the realm of IRISL at the sanctions’ era, IRISL managed to keep its fleet insurance. Therefore, I believe operational in the international waters. Besides, Moalem that IRISL’s entering insurance Insurance P&I was accepted and approved by Japan India industry via purchasing and South East Asian countries. Moalem Insurance’s shares Even though Moalem Insurance has been established for brought about a special position only 23 years, it has managed to occupy 35 % of Iran’s both for IRISL and for Moalem maritime insurance market. In addition, Moalem Insurance’s Insurance itself. Indeed, entering P&I insurances at the period when Iranian shipping IRISL’s entering insurance lines were under sanctions is deemed as a special success both

industry involved significant Volume.7 / Autumn 2017 for this company and for Iran’s national fleet. objectives which I am going to In order to discuss different angles of Moalem Insurance’s briefly point out. activities, the managing director and the head of the board The most significance objective of this firm, Mohammad Ebrahim Tahsiri, sat down in an that IRISL pursued when interview with Payam Darya. buying Moalem Insurance’s Payam Darya

149 Interview

shares was closely tied to the lines, central insurance agreed political conditions, seeing that to enter P&I insurances via Iranian enemy’s major intention Moalem Insurance. In fact, was preventing IRISL fleet IRISL’s this matter had to happen. The from venturing in international entering decision was made and put waters. Nevertheless, focused insurance into practice successfully. The attention and the P&I coverage collaboration of IRISL experts that Moalem Insurance provided industry via and central insurance led to the alleviated the sanctions to a purchasing foundation of P&I in Iran, and large extent. Moalem special coverage services were After the lifting of the sanctions, Insurance’s offered through cooperation and the objectives were shifted to shares support of central insurance. the development and expansion brought of maritime insurance in Iran. What issues and challenges To this end, Moalem Insurance, about a did you have to face while as the first and the only maritime special founding P&I in Iran? insurance firm in Iran, intends position both The most significant to launch a maritime insurance for IRISL and challenge ahead of founding section in the near future. for Moalem P&I insurance services was As far as the performance Insurance receiving reinsurance, because of IRISL is concerned, I the coverage that the ships itself. can state that through many needed were really extensive. years of insurance activities, This challenge was overcome IRISL’s impact has vividly by the collaboration of central revealed itself in insurance insurance and government, industry, in such way that all and it did not deter Iranian IRISL Group’s vessels, staff fleet from their venture since and properties have been other countries accepted this covered by Iran’s insurance insurance. The trade still went industry; and this trend has on. been growingly improving. It can be prognosticated that Other than Moalem Insurance, once Moalem Insurance enters has any other Iranian the stock exchange market, insurance firm entered P&I maritime-based firms will be insurance? highly interested to purchase its Negative, Moalem Insurance shares. is the only Iranian insurance that has entered P&I insurance. What goals did Moalem Other insurance firms have Insurance pursue when it provided their support through commenced to insure IRISL supplying reinsurance, though. fleet? Initially, insurance industry What challenges and Volume.7 / Autumn 2017 was not highly interested to problems were insurance enter P&I insurances; yet, firms, particularly Moalem through collaborating with Insurance, faced with at the the government and shipping sanction’s era? Payam Darya

150 As a matter of fact, political placed in the list of sanctions issues apart, sanction brought by the European Union and US about benefit for Iran’s Treasury, and this caused many insurance industry. Prior to After the banks to refuse from accepting sanctions, Iranian shipping lifting of the Moalem Insurance policies. lines showed no interest in sanctions, using domestic insurance, and How did the execution of this trend was the main reason the JCPOA influence the activities why sanctions laid serious objectives of insurance companies? consequences. Had Iranian were shifted Once JCPOA was executed, shipping lines collaborated to the over 20 international insurance with Moalem Insurance instead development brokers had already entered of foreign insurance brokers, and Iranian market to find a chance they would not be facing to offer their services. But we problems for receiving their expansion were still encountering two compensation at present. These of maritime challenges: first, brokers had compensations were set since insurance in to include some conditions in several years ago, though. Iran. their policies to prevent from The fact that undergoing losses of domestic insurance sanctions is not a good even industry in case the sanctions cannot be denied. Nonetheless, were reinstated. The second the sanction gave rise to good problem, as well, involved potentials as far as Iranian paying and receiving the maritime insurance industry compensations. That is to is concerned. In fact, Iranian say, transferring money was insurance firms, particularly a big issue. Negotiations Moalem Insurance, managed to were commenced with a large stage a successful performance. British broker (RFIB), and Along with P&I insurance, primary agreements were Moalem Insurance was able made. The broker promised to cover ships’ machineries, as to pave the conditions for well. However, the insurance Moalem Insurance to use of ships’ body and machineries foreign capacities for maritime was far different from P&I insurance purposes. insurance. International ports We do hope that by the are not as strict about the upcoming 45 days, when the insurance of ships’ body and deadline for the renewal of machineries as they are about IRISL ships’ body insurance is P&I. due, the insurance policies of Moalem Insurance had this British broker will have noticeable achievements in the been sent to Moalem Insurance field of insuring ships’ body so that we could obtain the and machineries; nevertheless, approval of central insurance, Volume.7 / Autumn 2017 it ran into issues in cargo as well. Provided that the carrying insurance. Due to the current problems are tackled, services that Moalem Insurance we will dedicate a share of the offered to IRISL fleet, it was market to this broker.

Payam Darya

151 Hafez Darya Arya Shipping Company (The Container Arm Of IRISL Group) Being the largest container transportation company in the Middle East and ranking 18th in the world, Hafez Darya Arya Shipping Company owns 31 container vessels of various sizes with aggregate capacity of 92,000 TEU and operates 9 weekly loops as follows: 1. HDM Service : Deploying 6 vessels including 5 vessels of 6500 TEU capacity, and 1 vessel of 5100 TEU covering all ports in Far East and North China up to Persian Gulf and Middle East. 2. SCP Service : Using 6 vessels including 3 vessels of 5100 TEU capacity, 2 vessels of 3300 TEU and 1 vessel of 2700 TEU connecting South and Central China to PG and Middle East. 3. ISC Service : Employing 3 vessels of 2200 TEU capacity, connecting Singapore, Port Klang and all ports in South East Asia to Middle east. 4. SAS Service : Using 2 vessels of 1000 TEU capacity, making a direct connection between South Iranian ports and Indian Subcontinents to East African ports of Mombasa, Darussalam, and Zanzibar. 5. ECL Service : Deploying 5 vessels including 4 with capacities of 2500 TEU and 1 with 2700 TEU respectively. Making fast connections between all European and Mediterranean ports up to Persian Gulf. 6. IIX Service : Operating 3 vessels of 1100 TEU capacity in average, making an exclusive and direct connection from India to Umm Qasr of Iraq, Iran and Emirates. This service is on a VSA with one of major carriers of the world. 7. XPG Service : Deploying 5 vessels including 4 with capacities of 1100 TEU and 1 with 300 TEU connecting all Southern Iranian ports of Bandar Abbas, Bushehr, Bandar Imam Khomeini, Assaluyeh and Khorramshahr to Dubai, Umm Qasr, etc. 8. SCY Service : Operating with 1 vessel and capacity of 1000 TEU, which provide facilities and services connecting Srilanka, Myanmar and Bangladesh ports together. 9. AME Service : Slot Exhange with major East – West carriers which connect Far East ports to North Europe. Hafez Darya Arya also operates more than 271,000 TEU of owned containers while any extra required numbers can be leased whenever and wherever required to satisfy customers, demands State-of-the-art-web-based software system and on line tracking and container tracing system is another facility provided by Hafez Darya Arya Shipping Company to our esteemed clients. Further information may be available through our website: www.hdasco.com You may make your inquiries, suggestions, complaints, Tracking, etc, using our auto answering number of +98-21-23842000, or directly to:

Management office: Tel : +98 21 23843701 Fax : +98 21 23843702 Email: [email protected] , [email protected]

Marketing and Customer Service Division: Tel : +98 21 23843199 +98 21 23842000 Fax : +98 21 26100740-1 Email : [email protected]; [email protected]; [email protected]

Operation & Capacity Management Division: Tel : +98 21 23843182 Fax : +98 21 23843704 Email : [email protected] [email protected]

Container Operation Department: Tel : +98 21 23843156 Fax : +98 21 23843705 Email: [email protected]; [email protected]

Financial Department: Tel : + 98 21 23842660 Fax : +98 21 23843707 Email : [email protected]

Planning & Development Office - Responsible for attending Customers’ Complaints, supervising Forwarders & Agents The Advantages & Privileges Customers Will Enjoy When Utilizing HDASCO Services : as well as overseas representatives’ performances Exemption from flag tax. Tel : +98 21 23843246 Competitive freight rates and flexible transit time. Fax : +98 21 26100748 Extensive agency network facilities in Asia, Europe, Persian Gulf region and Africa. Email : [email protected] Transportation services (Sea, Road and Rail) to Iran and CIS countries in collaboration with IRISL Group affiliated companies. [email protected] Online services to customers in the scope of freight and equipment tracking. (Agents’ Performances): [email protected] Holding of training courses related to marketing and port operations in IRISL Training Institute. (Attending Customers’ Complaints): [email protected]

www.hdasco.com Bulletin

The International North-South Corridor key to Iran’s trade News

Iran-Norway First Maritime Trade Conference Role of National Fleet in Iran’s Economy and International Trade to be Elaborated

One-day conference of Iran-Norway Maritime Trade Opportunities was held in Oslo with the participation of Mohammad Hassan Habibolahzadeh, Iran’s Ambassador to Norway, The chief executive officers of Islamic Republic of Iran Shipping Line IRISL and National Iranian Tanker Company NITC as well as senior managers of both companies. In One-day conference of Iran-Norway Maritime Trade Opportunities which was inaugurated by the speech of Wegger Christian Strømmen ,Secretary General of Norwegian Ministry of Foreign Affairs, MANA correspondent reported, Dr. Mohammad Saeedi, CEO and the Chairman of the Board at IRISL, Sirous Kian Ersi CEO of NITC, the CEO of the Norwegian Shipowners’ Association, Lars Nordrum Norwegian ambassador to Iran and some managers of active Norwegian corporations in shipping and maritime sectors, delineated Dr. Mohammad Saeedi, CEO and head of the existing and potential opportunities of the board at IRISL delineated the strategic cooperation between the two counties in the position of Iran in the region and Silk Road fields of maritime and shipping. route and asserted that relying on rich and In this conference, Sturla Henriksen, the CEO abundant oil and gas resources,vast mines, of the Norwegian Shipowners’ Association skillful and trained workforce, industry elaborated on the capabilities and merits of sector, appropriate infrastructures and large Norwegian Maritime Industry and pointed domestic and regional market, Iran provides out that utilizing state-of-the-art technology great opportunities for European countries, and equipment, sophistication as well as including Norway to develop and expand enjoying rich experience of operating in deep cooperation in the fields of maritime and waters, have pave the ground for Norway shipping. Volume.7 / Autumn 2017 to expand collaboration in the maritime and Dr. Mohammad Saeedi continued that shipping sectors. today and following the execution of He also added: an appropriate opportunity JCPOA, European countries must offer for promoting trade ties between the two long term practical approaches in banking countries in other fields such as oil, gas and relationships between European Union and

Payam Darya aquaculture has also been provided. Islamic Republic of Iran , which can be put 154 into action. Referring to the long-standing history for This official figure also remarked that Iran-Norway cooperation in the field of developing trade and financial ties as well as shipping , Sirous Kian Ersi, CEO of NITC increasing technical and engineering services stated that given strong political ties between require a strategic and unlimited relationship the two countries, JCPOA is an excellent between Iranian and European banks. opportunity for developing the ties in the Most of the technical issues will be maritime sector. resolved through extensive and professional He further counted his company’s plans for negotiations between the banks of both cooperation in the field of LNG, classification parties, according to Saeedi. and technical services. He also elaborated on the position and the Norwegian ambassador to Iran and other significance of national fleet in enhancing speakers of this conference also expressed and promoting economy of country in the their perspectives with regards to issues various aspects of international trade. such as facilitating offering bank loans and IRISL fleet’s returning to international investment, enjoying new technologies in market and revival of its services in the most ships fuel, cutting edge navigation and smart paramount ports worldwide was among other ships, providing port and maritime services, issues discussed in this meeting. training and promoting efficiency. Volume.7 / Autumn 2017 Payam Darya

155 News

Iran’s 29,000-Ton Exported Wheat to Reach Italy

The managing director of IRISL Bulk Division announced today that the 29-thousand-ton wheat cargo which was shipped to Italy a while ago has reached its destination. Aliakbar Ghonji told MANA correspondent that the carrier ship operated under the management of IRISL Bulk Division, and it transported the second round of Iran’s wheat exports to Italy. The ship, Ghonji added, was loaded with 29 thousand tons of wheat and left Imam Khomeini Port for Italy on October 4th 2017. Ghonji continued that IRISL Bulk Division is continuously endeavoring to expand and develop itself, and is fully prepared to transport any export Trading Corporation of Iran Yazdan Seif, had and import bulk and general cargo to and from Iran. publically announced the export of 29 thousand Earlier in October, the CEO of Government tons of wheat to Europe and Italy.

CMA CGM Reports Solid Results for Q3

CMA CGM, the world’s third-largest container per container carried. shipping group, posted a third-quarter net profit As a result, revenues in the third quarter of 2017 of $323 million, up from $219 million in the have sharply risen by 27.7% to 5.7 billion USD. previous quarter and a $268 million loss a year CMA CGM reported a core EBIT margin of earlier. 10.0% to 568 million USD in the third quarter During the third quarter, volumes carried by CMA of 2017. CGM experienced a strong growth of +11.6% in CMA CGM thus maintains its leadership comparison to Q3 2016. During the period, CMA within the sector in terms of profitability. This CGM carried close to 5 million containers, a performance results from the Group’s ability to record figure, MANA correspondent reported. leverage its size and global network to optimize This increase can be explained by the strong both revenues and costs, despite rising fuel prices. growth in volumes carried through OCEAN In light of the Group’s results and the improved Volume.7 / Autumn 2017 Alliance, on the Asia-USA and Asia-Europe outlook for the shipping industry, the rating routes, as well as on most of the North-South and agency Standard & Poor’s upgraded the CMA Intraregional routes. CGM Group’s rating to B+ with a stable outlook; The increase in freight rates seen at the beginning more recently, Moody’s adopted a positive of the year has continued through this quarter, outlook of its B1 rating.

Payam Darya enabling an increase of 14.4% in average revenue 156 Panama Canal Welcomes 1st Cruise Ship in 2017/18 Season

On November 7, the Caribbean Princess became Panamax and Neopanamax locks during the the first cruise vessel of the 2017/2018 cruise upcoming 2017-2018 cruise season, which season to transit the Expanded Panama Canal. officially began on October 2, 2017. As part of its roundtrip itinerary, the Caribbean In April 2017, Disney Cruise Line’s Disney Princess, operated by Princess Cruises, did a Wonder became the first cruise ship to transit turnaround transit through Agua Clara Locks on the Expanded Canal. This season, the ship will the Atlantic side, MANA correspondent reported. traverse the waterway again along with the The cruise ship began its roundtrip 10-night Caribbean Princess, Carnival Freedom, Carnival itinerary from Ft. Lauderdale, Florida, passing Splendor and Norwegian Bliss. through the Bahamas, Cartagena (Colombia), Together, the five ships will make a total of 20 Cristobal (Panama), Limon (Costa Rica) and the transits, and 11 new cruise ships will transit Cayman Islands with 3,086 passengers on board. either the Canal’s Panamax or Neopanamax The 112,894 gross ton Caribbean Princess was locks for the first time. These vessels are from built at Italian Fincantieri Monfalcone shipyard the following lines: Princess Cruise, Norwegian in 2004 and has a maximum capacity of 3,600 Cruise, Carnival Cruises, Silversea Cruises, passengers. Viking Ocean Cruises, Lindblad Special The Panama Canal expects to receive Expedition and CMA CGM. approximately 236 cruise ships through the Volume.7 / Autumn 2017 Payam Darya

157 News

Digitalization Is a Must If You Want to Survive

The rise of digitalization, the Internet, cloud digitalization and innovation to provide the market computing and E-commerce is starting to with new products, there is a huge chance their revolutionize the trading patterns, emerging as the businesses will be diminished and they will get true engine of the future growth of world trade. replaced by new market entrants from outside the According to MANA, despite technical advances industry. and construction of ever bigger and more complex Namely, there has been an exponential increase ships that have been used to improve the efficiency in technological solutions aimed at addressing of the industry and cutting costs, the fundamental evolving customer needs which are being way the industry works has not changed over introduced to the market by a growing number the last 40 years, since the introduction of the of tech start-ups. The strategic advantage of these container in the 1970s, according to Tim Smith, companies is that they bring the technology and Maersk’s North Asia Chairman. capital from outside the industry. Speaking at the World Knowledge Forum in Seoul, As explained by Smith, traditional players have to South Korea, Smith said that digitalization is set to learn how to evolve so as to fight off the threats change the landscape in shipping and logistics. from disrupters from outside. Numerous opportunities for improving business In order to do this, considerable investment is performance can be reaped from the big data, saving needed in the personnel hiring and changing the hundreds of millions of dollars to companies such mindset of business owners. as Maersk which has 600 ships around the world. Maersk has been busy with the hiring of IT “We have to embrace digitalization of the market professions in order to be able to catch up with the now if we want to survive. The market would not changes brought about by the digitalization and at wait for traditional players in the industry to catch the same time seize the opportunities stemming up with modern technology,” Smith said. from the modern technology, Smith added. Hence, if traditional players do not embrace Volume.7 / Autumn 2017 Payam Darya

158 Europe’s Shipbuilding Industry Under Threat

A holistic industrial strategy for the European supply chain industry can survive and grow or maritime technology sector is urgently needed, will decline and fail. Strategic moves of overseas according to an E.U.-sponsored study. countries towards their own shipbuilding and According to MANA correspondent, the Study on maritime equipment industries, characterized New Trends in Globalisation in Shipbuilding and by more local content requirements, more Marine Supplies – Consequences for European protective national shipbuilding policies, more Industrial and Trade Policy found that individual financial support and subsidies, and uneven shipbuilding nations in Europe seem too small implementation of environmental regulations will and too weak to cope with competitive pressure create even bigger challenges for the European from Asia, where countries have a targeted maritime technology sector. national shipbuilding strategy. Hence, only a Without a holistic industrial strategy specifically clear targeted E.U. shipbuilding policy offering designed for the European maritime technology an integrated and unified approach towards industry, aimed at supporting industrial growth international competition will help Europe to by concrete measures, the future survival of the cope with its competitive and societal challenges. industry may be seriously at risk, states the report. As an individual shipbuilding and maritime Strategically, the study also highlights that the technology nation, Germany follow Korea, China, European maritime technology sector is needed the U.S. and Japan in fifth position. Germany is to keep, in a changing geopolitical world, the followed by Norway in sixth position. The U.K., control of the maritime domain to guarantee the Italy and France follow in eighth, ninth and tenth defense and security of Europe and its citizens. position respectively. The study makes a number of recommendations During 2015-2016, the ordering of commodity including the creation and integration of ships and offshore vessels has seen a dramatic provisions catering for the specific interests of reduction, which has affected the big shipbuilding the European maritime technology industry into nations in Asia, in particular, and put large parts future negotiations of free trade agreements. of their industry at stake. In contrast, Europe has Shipbuilding and technology organization SEA moved into a more comfortable position over Europe’s Secretary General Christophe Tytgat the last three years when looking at the value says: “This study clearly demonstrates that of their shipbuilding orderbook because of its notwithstanding the current good shape of the concentration on special high-tech and high value European orderbook in value terms, the maritime ships. Although the European equipment industry technology industry in Europe cannot feel safe or benefits from this situation, they also suffer from be complacent. The study clearly acknowledges a decreasing demand from the Far East and other that European shipyards or European maritime parts of the world as a result of the lack of orders equipment manufacturers will come under severe in these regions. pressure over time, due to growing protectionist A long-term demand for shipbuilding is still policies and with China preparing to enter the Volume.7 / Autumn 2017 forecast, but for the near to mid-term, 2016-2025, high-tech ships market sector as a political the need for new orders for the commodity ship objective.” types is expected to remain very low. According The study was produced on behalf of the to the study, the next 10 years will determine European Commission by BALance Technology whether the European shipbuilding and marine Consulting. Payam Darya

159 News

Second Half of 2018 Will be Turning Point for Tanker Market

Falling global crude inventories and increased Despite substantial focus on orders placed earlier vessel scrapping to drive market recovery, says in 2017 with deliveries scheduled in 2018 and chief executive Robert Macleod 2019, Mr Macleod believes that the number According to MANA , FALLING global crude of vessels scrapped will exceed the number of inventories coupled with an increased pace of newbuildings delivered ahead. scrapping could lead to a turning point for tanker His view comes on expectations of tighter market markets in the second half of 2018, according to supply next year as older tonnage exits the global Frontline chief executive Robert Macleod. fleet and as oil demand increases. He noted in an earnings webcast that crude Approximately 20% of the VLCCs in the inventories worldwide are starting to decline worldwide fleet could potentially be scrapped in after hitting a peak in 2016 though present crude the years ahead. oil tanker freight rates have yet to reflect that “When you consider that the current VLCC order demand. book is equal to about 13% of the existing VLCC “We’re eating into inventories and we could fleet, it’s easy to see how supply dynamics can also see that the higher [oil] price leads more quickly change,” said Mr Macleod. oil to the market, which obviously is something Looking further ahead, he said that in order to that we would benefit for in the tanker market comply with upcoming environmental mandates straightaway.” from the International Maritime Organization, Although newbuilding deliveries have progressed shipowners will be inclined to increase scrapping through this year at a rapid clip with 44 very large of older tonnage. crude carriers and 48 suezmax tankers delivered “Vessels that are 20 years old today will almost and a couple more due later, low spot market surely be removed from the global fleet. If they rates combined with a 50% rise in demolition are not being scrapped, they will be sitting idle

Volume.7 / Autumn 2017 values over last year could incentivise owners to and completely uneconomical.” scrap more tonnage, said Mr Macleod. Mr Macleod also expects weak freight 2017 saw nine suezmax tankers and 10 VLCCs rates, reduced financing alternatives and the scrapped to date, which he views as a substantial environmental regulations to facilitate more rise over 2016, with the pace to pick up further consolidation, which “would be positive for the into 2018. tanker market. Payam Darya

160 Improved Box Line Performance Props up Maersk Results

REVENUES at Maersk’s Transport and Logistics negative development in Maersk Line volumes division rose 14% in the third quarter on the back of 2.5% and increase in unit cost of 3.9% at fixed of improved freight rates, taking the group’s bunker prices.” container division to a profit of $290m. Maersk Line reported a profit of $220m compared According to MANA, Group revenue increased to a loss of $116m last year. by $973m to $8bn with a $771m increase in Market demand growth remained at 5% compared Maersk Line, mainly due to higher freight rates. to the same period last year while nominal supply AP Moller-Maersk reported an underlying profit grew 3%, Maersk said. The development in from continuing operations of $248m, up from market fundamentals was reflected in freight a loss of $42m in the corresponding quarter last rates, which increased 14% compared to the third year, as profits from Transport and Logistics were quarter of 2016, but declined slightly from the offset by a loss of $15m in its Energy division. second quarter of 2017. The underlying profit was positively affected Maersk’s average freight rate was up from $1,811 by the increased freight rates in Maersk Line per feu in the third quarter of last year to 2,063 compared to the third quarter of 2016, although per feu this year. But unit costs also rose, from there was a 2.5% decrease in volumes as well as $1,991 per feu last year to $2,135 per feu this increasing unit cost due to the cyber attack and a year. 26% higher bunker price. Maersk said its acquisition of German carrier At a group level, however, a $1.8bn impairment Hamburg Süd was progressing as planned, with at Maersk Drilling following its classification as expected closing by the end of this year. Maersk a discontinued operation, and impairments of Line has a binding offer to divest Mercosul Line $374m at APM Terminals, led to a net loss of and has received unrestricted approval from the $1.5bn. For continuing operations, the loss was Brazilian regulators to acquire Hamburg Süd. $120m. Meanwhile, APM Terminals reported an Transport & Logistics reported a revenue growth underlying profit of $110m, up from a loss of of 14% to $8bn. Performance was challenged $126m last year, but was “negatively impacted by the June cyber attack, of which the financial by the challenging market conditions” with impact is in the range of $250-$300m. The cyber overcapacity in the industry leading to pressure attack primarily impacted July and August and on profit and margins, and additional costs related the vast majority of the blow is related to Maersk to the cyber attack. Line, which reported an underlying profit of The reported loss of $267m and negative return $211m and a return on invested capital of 4.3%. on invested capital of 13.3% was affected by “The revenue increased in Transport & Logistics impairments of $374m related to terminals in by 14% and was mainly driven by higher revenue markets with challenging commercial conditions, in Maersk Line,” said chief executive Søren Maersk said. Skou. “Market fundamentals stayed positive, Maersk added that its orderbook of seven 20,600 Volume.7 / Autumn 2017 with global container volume growth at 5% in teu second-generation Triple-E vessels, and 13 the third quarter compared to the same period smaller ships, represented 7.4% of its current fleet last year and an increase in nominal supply of and that it had no current plans for new orders. 3%. However, contingency initiatives related to recovery after the cyber attack resulted in a Payam Darya

161 In the presence of Dr Rouhani; Phase 1 of Shahid Beheshti Port Development Plan in Chabahar inaugurated

President Hassan Rouhani inaugurated Phase 1 of Chabahar’s Shahid Beheshti Port Development Plan with guests from 17 foreign countries taking part. President Rouhani told reporters after putting Phase 1 of Shahid Beheshti Port Development Plan into operation: “The North- South Corridor is very important for the region and the world and today, we are happy that its first Shahid Beheshti Port. phase has been put into operation and we hope Chabahar Port is an interconnector between that we can construct the other phases as soon as South-East Asia, Central Asia and Afghanistan. possible”. The development of Chabahar Port is a driving Dr Rouhani added: “This port has a special force for the country’s economic development, position and situation, which can shorten the especially the South East, and port operations can North-South Corridor and connect it to the create added value and employment in the south- ocean”. east of Iran. Stating that other international south-north The president said: “Neighbouring countries corridors will end in the Persian Gulf, he said: east of Iran, like Afghanistan and our northern “This corridor is and its operation is very neighbours in Central Asia are linked to southern important for the economy”. Iran and the open waters and the ocean through In the first phase of the port of Shahid Beheshti, this corridor, and this matters politically to us 15 million cubic meters of dredging, 203 hectares and will develop our relations with eastern and of new land, and 1,650 breakwaters have been northern countries and even Europe in the future”. constructed, and its basin depth is 16.5 square He also said that the operation of this port is very meters. important for Sistan and Baluchistan province, Currently, 100,000-ton ships are capable of adding: “Connecting the nationwide railway to mooring, and this can play a significant role in Chabahar can also create an even better condition the import and export of basic goods. Volume.7 / Autumn 2017 for this region”. The next four phases of Shahid Beheshti Port will Chabahar’s Shahid Beheshti Port is one of the be completed and put into operation, which will largest development projects that has been able to eventually reach 82 million tonnes. increase the capacity of the port from 2.5 million A total of $1 billion has been spent on preparing tonnes to 8.5. and equipping the first phase of Chabahar’s Payam Darya

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50 Years of IRISL Narrated by Image Volume.7 / Autumn 2017 Payam Darya

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167 How to Advertise in Payam Darya :

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