While Lebanon’s geographic position as the gateway to many nearby Arab states has historically reaped economic benefits, the recent conflict in Syria means the country’s once favourable location now presents significant challenges.
The closure of the border between the two countries due to turmoil in Syria has had a severe impact on income streams that previously played a key role in Lebanon’s supply chain.
Cargo volumes at the main port, Beirut, have dropped as border closures and safety concerns have halted the flow of goods by road to final destinations in Iraq and Syria. Indeed, Lebanon’s national supply chains and intermodal freight transport systems have been significantly affected due to the complete halt of land transport between Lebanon and its neighbours as a result of tighter security measures and the closure of some transit points.
However, despite the challenges, the Lebanese economy continues to perform modestly, due in part to a shift from land transport to air and sea freight, with supporting solutions including a Ro-Ro service for some exports such as fruit and vegetables introduced at a subsidy for a limited time and funded by the Ministry of Transport. While it is questionable how sustainable such a weighting toward sea-freight is as a permanent solution, it does offer a logical, cost-effective short-term strategy.
More opportunities exist for sea transport to support Lebanon’s supply chains. Its second port, Tripoli, has a fully operational berth servicing mainly ro-ro and bulk carriers and will establish a berth dedicated to container lines by the end of 2016. The port of Beirut is used as a transhipment hub for major container lines, whose mother vessels call at the port to offload containers that are then loaded onto feeder vessels for distribution elsewhere in the East Mediterranean.
Such opportunities help to maintain a degree of optimism amid great uncertainty. But those in the shipping industry seeking to take advantage of the opportunities should remain mindful of current challenges and employ accessible skill strongholds to ensure the country remains integral to companies’ regional supply strategies.
Deliver on promises
For those continuing to trade with Lebanon, shipping logistics providers must deliver on their promise of efficiency, costs-effectiveness and transparency for the management of supply chain risk and disruption. Only then can they be assured that their goods will be kept moving and delivered as efficiently and consistently as possible. Otherwise, business profitability will be eaten into.
In addition to keeping goods on the move, service providers must maintain quality, safety and compliance while working within challenging operating conditions. Robust HSSE policies as well as strict guidelines around compliance and ethics adherence remain imperative.
Ultimately, shipping and logistics suppliers must continue to think laterally in order to keep Lebanon’s supply chain on the move for as long as the country remains ‘locked out’ of key strategic trade routes hampered by conflict. Improvements at Lebanon’s key ports, underpinned by the local contacts and global standards of organisations will ensure the country remains open for business, paving the way for increased economic prosperity in future.
Simon Bejjani is managing director of GAC Lebanon.