From Sea to Rail and Road: How Did Iran's Trade Get Around Maritime Restrictions?
Maritime restrictions have confronted Iran's foreign trade with lower trade volumes and higher transport costs. However, according to the head of the Trade Development Organization, part of the country's trade continues through alternative land, rail and sea routes.
Maritime restrictions have faced Iran's foreign trade with a decrease in the volume of exchanges and an increase in transportation costs; However, according to the head of the Trade Development Organization, part of the country's trade continues through land, rail and sea alternative routes.
According to Arjan's ambassador, Mohammad Ali Dehghan Dehnavi, head of trade development organization, in the press conference of the 30th National Export Day, referring to the high share of sea transportation in Iran's foreign trade, said: about 75 percent of the country's foreign trade weight was carried out by sea last year; Hence, maritime restrictions could affect a significant portion of imports and exports.
According to the statistics announced by him, the weight of the country's foreign trade has decreased by 34% in the first half of this year. Despite this drop, part of the exchanges have continued through alternative routes and using the capacities of the private sector.
Higher cost of trade than alternative routes
Referring to the difference between sea and land transportation costs, Dehghan Dehnavi said: Road and rail transportation costs more than sea transportation in many ways. The increase in demand for the use of alternative routes has also led to congestion at some borders and an increase in the cost of transporting goods.
According to the head of the trade development organization, despite these problems, part of the country's exports are still carried out and economic activists have been able to carry out part of their exchanges through alternative routes.
According to Dehghan Dehnavi's statements, in the mentioned period, the weight of foreign trade decreased by 35%, while the drop in export value was around 20%.
He related the difference between the decrease in weight and value of exports to the difference in the unit value of exported goods. According to him, the export of goods that are worth more than their weight has more economic justification against the increase in transportation costs; On the other hand, the additional cost of transportation may make the export of some goods uneconomical and remove them from this cycle.
The head of Trade Development Organization also announced a decrease of about 20% in the weight of imports in the mentioned period. According to him, the high share of basic goods with low unit value and high volume in the composition of the country's imports is one of the factors influencing the import situation.
Referring to import demand management policies, Dehghan Dehnavi said: Since the beginning of the year, programs for prioritizing imports and managing foreign exchange resources have been implemented, and the import of some goods, including some machinery related to new projects, has faced restrictions.
He emphasized that in the current situation, the supply of essential goods, raw materials and items needed for the continuation of production should be prioritized.
According to Dehghan Dehnavi, a significant part of the country's imports are raw materials, intermediate goods and machinery; Therefore, reducing the import of these items can affect domestic production.
Emphasizing that the continuation of foreign trade does not mean the absence of problems, he said: reducing the volume of imports and exports is not desirable and has its own economic effects. Therefore, alternative methods should be used to facilitate the import of the required production units.
The trade between Iran and Russia was realized with the national currency of the two countries
The capacity of some borders of the country increased by more than 100%
The head of the Iran Trade Development Organization announced the increase of more than 100% in the operational capacity of some borders of the country in the last few months and said: In order to reduce the border traffic, in addition to the development of facilities and manpower, it is also necessary to increase the reception capacity in the other countries, and this issue is pursued through commercial diplomacy and negotiations.
Referring to the approvals of the National Transit Headquarters to facilitate the passage of goods across the borders, Dehghan Dehnavi added: According to these approvals, trucks and commercial cargoes are supposed to cross the border with minimal formalities and customs formalities are to be performed at the internal customs and close to the destination. An action that can help reduce congestion and speed up the clearance of goods.
He stated that moving a large volume of goods by land route requires a large fleet and logistics coordination, and said: To transport 50,000 tons of goods by road, about 2,500 trucks are needed, and their provision and coordination can be time-consuming and lead to border traffic.
The head of the Iran Trade Development Organization also announced the weekly monitoring of the border situation and investigation of the causes of congestion and emphasized: The border conditions have improved compared to the initial months, but there is still traffic in some borders and measures are being taken to increase capacity and facilitate traffic.
56 exemplary and distinguished exporters are introduced
The head of the Trade Development Organization of Iran announced the selection of 56 companies as exemplary and distinguished national exporters and said that the ceremony of honoring these companies will be held on October 29, at the same time as the National Export Day.
According to Dehghan Dehnavi, this year 365 companies registered to participate in the selection process of sample exporters, after the reviews, 275 cases made it to the final stage of evaluation, and finally 43 companies were selected as sample exporters and 13 companies were selected as national privileged exporters. Premium exporters are companies that have won the title of exemplary exporter in several consecutive periods.
Referring to the holding of National Export Week programs with the aim of developing non-oil exports, removing trade barriers and strengthening cooperation between the government and the private sector, he added: This year, various specialized programs will be held in the field of commercial infrastructure and transportation corridors, export of knowledge-based goods and services, technical and engineering services, facilitation of commercial processes and development of commercial diplomacy.
The Deputy Minister of Security also announced a special program to honor exporters who have fulfilled their foreign exchange obligations on time. According to him, the development of exports, in addition to providing the currency needed by the country, also plays an important role in creating employment and increasing the GDP.
Referring to the initiative of holding one-week programs on the eve of the National Export Day, the head of the Iran Trade Development Organization said: Export development is a multifaceted issue and its realization requires the cooperation of various institutions. For this reason, this year, various programs have been planned with the participation of related institutions so that each institution in its area of responsibility can play a more effective role in supporting exports.
According to him, institutions such as the Ministry of Roads and Urban Development, the Ministry of Energy, the Presidential Scientific Vice-Chancellor, the Islamic Council, chambers of commerce and private sector organizations will participate in these programs.