Nadia Shahin, general manager at Amin Kawar & Sons Co., talks about Jordan’s shipping industry, its potential, and global trends.
How has the shipping industry been in the past few years?
By all accounts, shipping is in a state of enormous overcapacity especially in the container trade.
Slowdown in global economic growth has resulted in a slowdown in world trade creating overcapacity in almost all of the world’s trade lanes.
This overcapacity, coupled with the aggressive introduction of the mega-ships of over 18000 TEUs, has impacted freight earnings and resultant profitability.
Added to this, if the hype and buzz around the first China to UK freight train, which is part of the One Belt One Road initiative, is anything to go by, it could make the situation worse for ocean freight carriage.
So in conclusion, the shipping industry will have to use more sophisticated strategies to boost their performance and be able to face the challenges of overcapacity.
Key Trends will be increased mergers and acquisitions and increased alliances.
What are the most important trends and who are your customers?
It is fair to say that importers and exporters from all sectors both public and private are our customers. And the main trade lanes are China and Far East for imports and inbound cargoes and the Red Sea/Gulf, USA and India for exports.
The Trebil crossing point between Iraq and Jordan has been reopened. What does that mean for your company and the shipping industry as a whole?
The announcement has brought optimism and hope that we will witness a return of trade between the two countries and hopefully regain Jordanian exports and Aqaba transit volumes which we have lost since the closure of the borders.
It is important to say that the political and the economic environment today is not where it was three years ago and the challenges today are much bigger and will require more efforts from all stakeholders to rebuild these volumes and provide the incentive and added value to the trading partners.
During the closure, did you lose any shipping volume?
All transit cargo through Aqaba was lost. However, a margin of these lost volumes were compensated by an increase of imports to cover the local demand for Syrian refugees who have fled to Jordan since the Syrian war.
How important is Aqaba for the region’s commerce and industries?
The political stability and strategic position of Jordan serves to place the Kingdom and Aqaba at the forefront among many regional countries. However, to attract the investments that will support and drive the flow of commerce and trade to Jordan we will need to synergize the geopolitical and economic environment and most importantly provide an excellent infrastructure with low logistical and operational costs which will enable us to compete against the regional players. And most importantly we need to create an ideal and attractive investment climate to support these investments.
How do you see the industry developing in the medium and long-terms?
I believe that it will be some time before we see a recovery of our industry and we will witness further mergers and acquisitions and alliances among shipping companies.
However our shipping industry has a huge potential to be recognized for our future but only if we are able to provide a world-class port and logistics services.