News / Box volumes are back at Beirut Port – but so is corruption and instability

Three years after the port explosion in Beirut, container shipping has returned to normal – but political and economic instability means the port may lose out to other regional hubs in the future.

According to government officials and analysts, the container port in Beirut, an industrial and logistics hub for the region, is back to its former capacity following the horrific explosion just over three years ago – but is still plagued by significant problems.

“I worked for the ministry at the time of the explosion [on 4 August 2019]. Then, we were giving trade licences where we moved a 100% of the exports and imports north, to the port in Tripoli. But six months on, operations at the port [Beirut] were back to normal,” Violette Abi Abboud, former economist at Lebanon’s Ministry of Economy exclusively told The Loadstar.

Although capacity returned, Lebanon was, and still is, facing an economic crisis. Since the government began experiencing a liquidity crisis in 2019, and defaulted on its foreign debt in 2020, the Lebanese pound, which was pegged to the US dollar, at LBP1,500 to $1, has lost over 90% of its value.

Ms Abi Abboud, who was also a trade analyst at the time in Lebanon, said although this inflation hit the locals, it also fundamentally affected the ability of foreign companies to operate in the country.

“During the crisis, most of the companies were not able to withdraw US cash. So that is what basically affected the trade,” she explained.

Her views are echoed by economic analysts outside the government in Lebanon. Dr Naji Sfeir, economic professor at a university in Jounieh, north of Beirut, said: “Since the explosion, there is still significant damage to the siloes and some of the warehouses, but the cranes at the harbour are now back to capacity.

“Despite this, the problems of corruption and lack of transparency remain at the port, and if we do not address these issues, in three years’ time we are estimated to lose 35% to 40% of our trade to the Gulf [countries].”

After some geopolitical skirmishes, Beirut port is now primarily operated by CMA CGM, a joint French-Lebanese company, which last year announced a $33m investment to update and rebuild the infrastructure. Despite this, economists believe this investment, although welcomed, does not solve the issues of corruption plaguing the country and government.

“CMA CGM has employees who are paid in dollars, but the government officials there are still paid in Lebanese currenncy, and they have families to support,” said Dr Naji. “These custom officials cannot afford to feed their families on the wages the government pays and hence are easily open to bribery and corruption.”

Indeed, it is the lack of transparency and corruption at the port that is still having an effect on companies that choose to ship to Lebanon. For instance, a spokesperson for UK-based DFS Worldwide, that used to provide container shipping to Lebanon for very competitive prices, said it had to pull out, for “logistical” and “corruption reasons”.

Despite many foreign logistics and shipping companies choosing to cease or limit their operations in Lebanon, some specialist logistics providers, often run by Lebanese expats with strong family connections in the region, are filling the gaps and helping navigate the local bureaucracy and customs.

“One of the positive things we have going for us is our strong local and expat community,” said Dr Sfeir, “and it is this community that rebuilt after the port explosion, and it is this community that will be needed if we are to solve Lebanon’s economic crisis”.

Photos 2023

Beirut 2020