Marked by an insider language and a particular way of life, modern shipping and transportation has long established its very own culture of connecting nations, cultures, and markets. It has a history of its own, which reaches farther back than that of most other economic activities. Today, the industry consists of a huge variety of services and business specializations, and plays a significant role in the global economy.
Compared to its past roles in facilitating international trade and exchange and also viewed against national economic ambitions, Lebanon’s place in transportation has been small – one can even go as far to say dismal. The contribution of the transportation and shipping sectors to GDP is, in typical fashion, not precisely determined. For a nation reputedly mired in mercantilism, Lebanon recently has been awfully short on transportation essentials, beginning with ships and rigs.
With less than 100 vessels (the number exceeded 300 before 1975), the merchant fleet is not only marginal in size but also overage and, critics say, to a large part technically obsolete. Trucking is an underdeveloped industry too, where no government incentives are extended to either individual owner/operators or fleet owners. Banks are said to be overly reluctant in engaging into financing of either merchant vessels or trucks.
Governmental budget allocations to transportation have shrunk in the past five years. In 2002, the expenditure was 2%, and, as throughout the reconstruction era, the vast majority of these funds were committed to boost the infrastructure.
On the side of road construction, acceptable improvements were achieved but progress has been slower than intended, and nothing at all has progressed with respect to rail. Of all infrastructure measures, the airport rehabilitation and expansion project is most complete, even though it was weighed down with expectations that could not be met in the projected time frame.
In both sea and air transportation, Lebanon’s long-term hope and aspiration is to function as a regional transportation hub. The country’s shipping and transport experts have placed their strongest bets on sea-to-sea transshipment, whereby large container “mother” vessels would call on Beirut Port to unload and load cargo to smaller vessels that provide feeder service to regional ports, to Cyprus, Turkey, Syria, Egypt and eventually the Palestinian territories.
Sea-to-land transshipment plays a lesser role in the scenarios because of the limitations on ground transportation, which protectionist practices of governments in the region have created. Local players have voiced higher hopes for succeeding in multi-modal transportation that would also integrate air shipping into a regional hub function. Beirut, with its port and airport, has momentous potential to fulfill the function. Public sector entities have made industry-wide lauded efforts to improve operations of the facilities, reduce red tape, and act upon suggestions by the shipping industry. However, other ports and airports in the region are competing for the coveted role. The port of Tartous – a strong candidate for growth in the opinion of local experts – last year was granted a 50 million euro expansion loan by the European Investment Bank. In a venture that analysts considered less promising, the Israeli government only last month commissioned a feasibility study for a proposed railroad to link its Mediterranean and Red Sea ports and, in this way, establish a niche role in transshipment. Although the discussion over creating a transshipment hub in Lebanon has been very involved, the country still needs to convince all around that it does not only talk-the-talk of transportation but is able to walk-the-walk.
The good news is that beyond verbal commotion over the Lebanese possibilities, chances prevail for real motion in the transport sector. In air travel, national carrier MEA has been resuscitated and outlooks for passenger travel in 2004 are among the economy’s most positive indicators. Aware of this potential, new companies are targeting Beirut for charter and corporate aviation business.
The hottest current optimism factor in the shipping industry is Iraq. Although freight forwarding to Lebanon’s former top Middle Eastern trade partner still presents great security concerns due to the activities of insurgents, the second half of 2003 has already shown that the ports of Tripoli and Beirut could increase cargo throughput to Iraq. Here, 2004 could become the first year of a new future for the Lebanese shipping industry and, within realistic regional possibilities, see the country enter a new phase in writing forth its contribution to the very hands-on culture of connecting nations by shipping.
The alternative wouldn’t be pretty. At least for sea transportation, failure to bring Beirut up to transshipment hub function might condemn the ancient trade center to ‘walk the plank’ and fully plunge into shipping marginality.