A shipping container full of cosmetics is due to make Israeli shipping history soon when it is unloaded at the Eilat port. The container of toiletries was loaded at the port of Dubai in the United Arab Emirates, shipped from there to the Jordanian Red Sea port of Aqaba (just across the border from Eilat). From there it will make its final, brief naval voyage to Israel’s Red Sea port of Eilat, on its way to the West Bank town of Hebron.
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If things go according to plan, the container will make the journey from start to finish in about a week. That’s a fraction of the four weeks it took previously due to the lack of official trade ties between Israel and Dubai, which had forced Palestinian importers to ship goods to a European port and from there to the Israeli port of Ashdod.
“Importing a container via the Aqaba port costs half,” says Uri Ben-Naim of G&B Cargo, the company importing the cosmetics container. If this initial pilot works, he says, another 36 containers will follow the same route. “It has to be in Israel’s interest to cultivate an alternative to the [Mediterranean] ports of Haifa and Ashdod,” he said.
Those sentiments were backed by Avi Cohen, who owns the Hacohanim paper-importing firm. “Importing Chinese paper via Aqaba cuts the number of shipping days in half, and the transportation costs for the container drop from $2,000 to $1,200,” he said. “Once they understand the potential, the sky’s the limit. The time has come to put up a fight against the big ports.”
This week, the prospect of importing container goods to Israel and the West Bank via the Jordanian port of Aqaba was the focus of an Eilat conference called “Eilat – Gateway to the Arab World,” attended by 50 Palestinian businesspeople along with staff from the Aqaba port and Israeli customs officials.
“We’ve also visited the Haifa and Ashdod ports, but the visit to Eilat has special importance because of its proximity to Jordan,” said Muhyiddin Mohamed Sayed Ahmed, the PR coordinator at the Hebron Chamber of Commerce and Industry. “There’s sensitivity in the Arab world over trade with Israel, so it’s done through intermediaries,” he admitted. “If the Eilat port provides good prices and service, everyone will switch over to working there. What interests businesspeople is what ultimately goes into their pockets, so if it guarantees them that they will pay $20 less to ship a container to the West Bank, they will run to Eilat too.”
With the dominance of the Haifa and Ashdod ports, the port of Eilat – which was turned over to a private company about a year and a half ago – is looking for new business and how it can offer a comparative advantage to customers. “The peace process begins from the bottom, by creating economic value for the two peoples,” says Israel Shipyards owner Shlomi Fogel, who indirectly owns a stake in Eilat’s port operations. “Opening the Israeli market to Arab imports could reduce costs and lower the cost of living,” he added.
Realizing such a vision still appears to be a distant prospect, however. The regular shipment of goods via Ashdod still pays off for Palestinian importers, and barriers remain to importing merchandise from the Arab world via Eilat. Furthermore, exporting to the Arab world through the southern Red Sea port is not currently viable. Some of those attending this week’s conference in Eilat, including customs brokers, raised questions over the route from the Arab world via Aqaba, including the issue of security inspections, commitment to specific deadlines and regulatory issues.
Eilat customs officials noted that the ongoing cost of maintaining security-scanning equipment at the port would cost about $1 million per month. There is no logic, they said, in stationing it at the port for two containers. But Eilat port officials said that without such equipment, import volume at the port would not grow. “When you encounter the word ‘security,’ no one in Israel can help, and no one will convince me that security at the Eilat port would be different from that at the other ports,” said Ahmed from the Hebron Chamber of Commerce.
Tariq al-Hayat, a Palestinian customs broker from Nablus, added, “The Eilat port is not big enough to serve as a main gateway for imports, but instead would provide a partial alternative. So it needs to focus only on those operations for which it has a comparative advantage.”