Suez blockage requires Israel to rethink route - opinion

The European ports that were left empty will, within a week, experience a massive overload when ships start arriving all at once. On the other hand, Israel was only marginally affected by the traffic jam, at least concerning imports from the East, despite the almost complete dependence on the Suez Canal for arriving goods. Concerning exports from Israel, the story is totally different. 

Almost all consumer goods in Israel are imported from the Far East and include, among other things, electrical appliances, furniture, clothing, shoes, and dried and frozen food. In effect, everything that is imported from the Far East, including goods for industry, arrives by means of the container shipping lines. As a result of the Suez Canal being blocked, all these shipments have suffered delays of between 10 to 14 days on their way to Israel. 

Some of these goods still have not reached Israel, due to their arriving via a round-about route and were offloaded at replacement ports, such as in Italy. In total, the delays on imports from the East are estimated at some three weeks in the worst cases. This is not something that will critically affect the Israeli importers, who do not work on stocks of two weeks in advance but rather look forward for at least half a year. 

However, the effect of the canal’s blockage came from a different direction, which was on the Israeli exports to the United States. The line that runs from India through the Suez Canal stops off at Haifa Port and from there goes directly to the United States. The line serves for loading export goods from Israeli ports to the American market. As a result of the traffic jam in the canal, this line skipped Haifa on its way to the US, thus Israeli export lost its fast line towards America. 

For some three weeks, exports to the United States were delayed and suffered from long waiting times. Some of the exporters could not meet their schedules vis-à-vis the American importers for supplying the goods that they had committed to. This is not a minor matter. The fast shipping line from Haifa Port to the US is responsible for, among other things, transportation of agricultural products. In order for the goods to reach American markets while they are still fresh, they need to be sent via the fast line which takes about 10 days from port to port. 

EVEN THE slightest delays will result in the goods not being able to be sold. An Israeli farmer who had guaranteed supply to an American retail chain could have chosen one of two possibilities: First, to give up on the deal and look for other markets, or second, shipping via air freight, which significantly raises the costs of the shipments. Let us not forget that as a result of the COVID-19 pandemic, air freight capacity has been reduced, so this alternative did not provide a full solution for these exporters. Even the other shipping lines that take some 20 days between Israel and the US and are meant for less sensitive goods. These lines filled up rapidly and many exporters experienced very significant delays.

Considering that the effect on the arrival of goods from Asia to Israel was not significant, one still needs to remember that nonetheless there was a delay of some two weeks. What would have happened if the canal had been blocked for half a year or even more? Currently, the commercial shipping lines to Israel cannot serve as an alternative to the canal. Cars and freight shipments arrive to Eilat Port mainly on relatively small ships. The port’s infrastructure is not prepared to receive giant ships, only medium and small ones. 

This, plus the fact that the port is located far from the center of the country and the costs of transferring containers from there by land are high, makes this option almost not viable. Today, there is already land transportation that goes through Saudi Arabia or via Aqaba Port in Jordan, but they too only allow a limited transfer of containers and cannot serve as a replacement for the Suez Canal.

Much has been said about future peace agreements with Saudi Arabia. If and when they are signed, rail lines will be laid down from the Jebel Ali port in Dubai to Haifa Port. However, this is a solution that will take many years to be implemented. In addition, it cannot supply a suitable alternative to the quantity of goods that come by sea. Some 5,000 containers arrive in Israel from Asia every week. A train will be able to handle only hundreds of containers instead of thousands and therefore will not be able to serve as a substitute route. It must be remembered that today, some 95% of the goods that arrive in and leave Israel do so by sea.

One of the solutions that can constitute an alternative for importing goods from the East is Turkey. Already at the start of COVID-19, when China was closed to the rest of the world, massive imports from Turkey began as an alternative to China. Not only Israel did this, but also many other countries. The Turkish market manufactures almost all the types of goods that are imported from the East, from electrical appliances to shoes and furniture. Even more important, the arrival times via shipping lines are set, regular and faster than those from the East. The cost of Turkish goods is higher than those from China, but in a world of abundance, there will always be someone who will pay for that.