Massive Backups at Israel’s Ports Taking Big Toll on Local Businesses

Some shipping companies are said to be avoiding Haifa and Ashdod due to backup of dozens of ships forced to wait weeks to unload cargo

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The port of Haifa, today
The port of Haifa, todayCredit: Rami Shllush

“Our exports are stuck. The imported raw materials we use are also stuck and in the meantime, Turkish products are replacing ours on store shelves in Europe,” said Hanan Cohen, factory manager for Shaniv-Sasatech, a company based in the Upper Galilee.

Like many others in Israel, the company has been disrupted by huge backups at Israeli ports. The firm makes household products and cosmetics and is a supplier of automotive-care products vital for local buses and trucks. Cohen warned that if the ports’ congestion problems aren’t solved soon, he will have to suspend some production after Independence Day next week.

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The backup has left between 40 and 60 vessels waiting to be loaded or unloaded, an unusually large number that has risen amid a surge of orders for imported consumer products and raw materials for industry. The ports don’t have the capacity to meet the demand.

Although the backups are occurring in Haifa and Ashdod, the ones at Ashdod are much more severe. But in Haifa the situation is bad enough that Shaniv-Sasatech has six containers of goods waiting to be shipped abroad. “No one can say when it will end,” said Cohen. “The last two months have seen a deterioration and now the whole system has collapsed.”

Leading manufacturers have appealed to Transportation Minister Miri Regev to find a solution as quickly as possible. “Merchandise, products and raw materials aren’t arriving on time, which is undermining Israel’s reputation as an exporter, hurting production and burdening cargo owners with extra payments,” they said in a letter to Regev. “The port backup affects the entire business sector and threatens survival of many businesses – importers, exporters, freight forwarders, shipping companies and their agents and trucking companies are all being severely affected.”

Ron Tomer, president of the Manufacturers Association, said the congestion is causing some shipping companies to avoid Israeli ports and even to cancel routes to Israel altogether.

In response, Haifa Port said, “In the face of high demand, we are managing the problem responsibly and through optimal use of resources.” A spokesman for Ashdod Port blamed a crisis in the global supply chain. “We believe that within three weeks we will be able to reduce the congestion and average number of waiting days to a reasonable level.”

But industry sources say the problem has been building up since at least 2017, when a hiring freeze at government-owned ports was imposed ahead of the opening of competing private ports, and that it won’t go away so soon.

Yoram Sebba, ‎president of the Israel Chamber of Shipping, said businesses reliant on imports of steel, cement, wood and other general merchandise have been hit the hardest by the backup.

Unlike container ships, which are allotted port time and manpower for unloading in advance, general cargo ships do not arrive at fixed times and wait in line to enter the port in an order determined by the kind of product they are carrying.

These days, said Sebba, the waiting time for that kind of merchandise averages 10 days before they can enter the port, but in some cases ships have to wait as much as a month before they can unload their cargo.

Moving on

“Cargo vessels won’t wait a month. Their job is to unload and move on to the next port,” he explained. “So, general-cargo ships have almost entirely stopped unloading at Haifa because they don’t have the time to wait.”

The port of Ashdod, last yearCredit: Ilan Assayag

Industry sources said that in 2019 there were about 20 ships waiting to unload at any given time at Israel’s ports. The average waiting time then was one week, compared with three to four now. General-cargo ships wait even longer. After they dock, many resort to using shipboard cranes to unload rather than wait for port cranes to do the job.

In 2020, the year of the coronavirus, the number of ships arriving at Israeli ports dropped sharply, but the waiting times to dock rose sharply. The average waiting time for general cargo at Ashdod Port was 44 hours in 2019 but rose to 99.3 hours in 2020, the sources said.

Another problem today is that Israeli ports are filled beyond capacity with empty cargo containers. “We’re stuck with thousands of empty containers in Israel,” said Gabi Ben-Harosh, chairman of the Shippers Council.

Container ships normally offload containers and take on containers filled with Israeli exports. Empty containers – the result of Israel’s chronic merchandise-trade imbalance – are supposed to be sent on to other ports. But importers, who are responsible for the containers once they leave the ship, don’t want to spend time dealing with the empty containers.

To cope with the overflow of empty containers, the government-owned Israel Ports Co. has opened an empty-container logistics center with a capacity of 20,000 containers. Ashdod Port has begun paying ships to carry empty containers to the ports where they belong at the expense of importers.

Ben-Harosh is threatening to boycott Ashdod port, where the empty-container problem is especially bad, saying truckers have no room to unload their containers. He said the solution is to establish more container logistic centers and to stop storing imported vehicles at the port in order to free up space. “This space is being used to park 40,000 cars. It’s insane,” he said.

Ben-Harosh said the opening of the private ports isn’t going to solve the problem. “Ships carrying 18,000 containers will be coming to these ports, not just those with 9,000 like today. We’re not ready for that. The ports operate 24 hours a day, but private warehouse terminals close at 5 P.M. in the evening. The situation will just get worse,” he explained.

The ports’ problems are compounded by a labor shortage. Recruiting new workers is a complicated process involving the unions, and today it has been made more complicated by efficiency measures aimed at reducing the ports’ payroll.

At Haifa, a contract including cost-cutting measures was signed two years before the port was sold to private interests. At Ashdod Port, a similar agreement was signed but only recently after seven years of negotiations.

The ports could take on temporary workers, but as industry sources explained, they have to be trained, and that takes several months. By that time, the new ports will be opened and they can train their own staff.

Another solution, which was discussed this week among Transportation Ministry officials, was to move workers between ports as needed, a system used in other countries. However, the only source for workers is tiny Eilat Port and there aren’t enough of them to fill gaps. In any case, the unions are likely to oppose such measures.

Tomer, of the Manufacturers Association, said a better solution would be to allow the private ports to begin operations earlier than their projected October launch date.

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