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Egypt port strike forces redirection of shipment via Israel

Freezing of operations at Ain Sokhna prompts a local firm shipping Turkish goods to Saudi Arabia to bypass Egypt, in a further blow to an already troubled economy

Ahram Online, Sunday 14 Oct 2012
Egypt port strike
Looking for alternatives?: a cargo ship makes its way along the Suez Canal (Photo: Reuters)
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A labour strike at the Egyptian port of Ain Sokhna is forcing a local transit company to ship Turkish goods through Israel instead.

Turkish shipments for Saudi Arabia, set to pass through Ain Sokhna, will now use the Israeli port of Haifa and transfer overland, Kadmar, the Egyptian firm organising the transport, said on Saturday.
 
Workers at Ain Sokhna port, on the southern edge of the Suez Canal, launched a full strike on the same day, bringing shipping operations to a standstill.
 
The Kadmar-handled consignment of frozen food was due to sail from the southern Turkey port of Iskendrun to Port Said, Egypt, before being moved overland to Ain Sokhna. From there it would continue by sea to the Saudi port of Duba.
 
But suspension of activities at Ain Sokhna means the Turkish ships will now unload at Haifa, northern Israel, and move goods to Saudi via neighbouring Jordan, a Kadmar official told Ahram Online.
 
It is the second change of direction for the shipment, after armed conflict in Syria forced exporters to find alternatives to their regular overland route. Anti-Assad rebels seized several Turkey-Syria border crossings in late July, cutting off a vital regional transit point.
 
"In August we managed to cut a deal with the Turks to get the shipping route to pass through Egypt. We had competition from the Israelis but we presented a better offer," Mohamed Abdel Gawad, head of Kadmar's Suez office told Ahram Online.
 
Now it seems the deal is in doubt.
 
Kadmar sent a statement on Sunday to DP World, Ain Sokhna port's operator, saying the strike was "damaging" both its company finances and Egypt's economy as a whole.
 
The company also indicated that if the freeze continues, the port's deal with the Turkish exporters might be cancelled.
 
Kadmar organises five shipments a week between Iskenderun and Port Said, a journey that takes around 18 hours. 
 
The deal brings Egypt around LE25 million per week in port, transit and customs fees, according to Abdel Gawad.
 
The Ain Sokhna strike entered its second day on Sunday with workers blocking all entry points to the port, according to several officials contacted by Ahram Online.
 
Workers are demanding the reinstatement of eight of their colleagues dismissed last week, according to Ashraf Eissa, a union representative.
 
Operator DP World temporarily shut down the port in February during a five-day stike by workers demanding profit shares and risk allowances. 
 
Several hundred employees staged another partial strike in late June, saying that management promises had still not been fulfilled.
 
"The biggest loss is for Egypt," a senior management source said on Sunday, speaking on condition of anonymity. 
 
"We had plans to expand this shipping route to take Egyptian goods to Saudi too, and now that will be affected."
 
Egypt's main port for cargo from the Far East, Ain Sokhna's location at the southern end of the Suez Canal makes it popular loading point for companies which use overland routes through Egypt to avoid paying the higher transit fees for the waterway.
 
In March, the Suez Canal Authority hiked toll fees for all vessels by 3 per cent, saying tariffs had not been changed for the previous three years.
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