BMI View: We expect moderate growth across Israel's ports in 2015, which will benefit from the base effects of a rebound in economic growth following disruption caused by the Operation Protective Edge conflict in 2014. The port of Haifa will return to growth following two years of decline in its container throughput. The Israeli ports sector is undergoing a state of flux, with the major ports set to be expanded with new, privately operated, terminals, which will be able to handle the larger vessels that are becoming the norm on the key Asia-Europe trade route on which Israel stands. However, the se developments face strong opposition from current port workers and unions , which is impacting throughput .
Headline Industry Data
2015 port of Haifa total tonnage throughput to grow by 2.8%, and to average growth of 3.7% to 2019.
2015 box handling at Haifa will expand by 1.8% to 1.22mn twenty-foot equivalent units (TEUs). Positive growth projected to continue in 2016 and average 3.0% from 2015 to 2019.
Israel's total trade is forecast to see real growth of 2.8% in 2015, from a 3.5% expansion in imports and a 2.0% growth in exports. Total trade growth will average 3.8% over the medium term.
Key Industry Trends
New Terminal Concessions Awarded: In April 2015, it was reported that Israel Ports Company had granted two concessions to operate and maintain Ashdod's Southport terminal and Haifa's Bayport terminals to Terminal Investment Limited and Shanghai International Port Group, respectively. The winners will complete the development of their respective terminals, and operate and maintain the facilities for 25 years from 2021. The terminals will have two quays with a total length of about 1,600m and maximum waterside depth of 17.3m. The concessionaires will also procure and install operational equipment such as vehicles, cranes, information management systems and other equipment required. The initial capacity for both terminals is expected to be 800,000 twenty-foot equivalent units.
Further to the new facilities being developed, which will be able to handle the largest ships afloat, there are plans in place to develop a railway which will link the two new terminals with the Red Sea port of Eilat. While Eilat's container handling is negligible at present, the hope is that the railway will provide an alternative route when the Suez Canal suffers from congestion, something which is expected to increase over the long term.
New Zim US Service Via Suez: In April, Zim announced a new service that would launch at the end of May. The Zim Seven Star Express (Z7S) will have a rotation connecting Southern China and South East Asia and the Indian Subcontinent with the East Coast US ports of New York, Savannah and Norfolk. The service will sail through the Suez Canal, and is part of a wider trend - for both Zim and the wider container shipping sector - whereby companies serve the US through sailing via the Egyptian waterway, in order to avoid the congestion at US West Coast ports. According to the company, the new service will be the fastest connection between Vietnam and the US.
Key Risks To Outlook
The major risk to our projections at present remains the uncertainty over industrial action at the ports of Haifa and Ashdod. Workers at the existing ports are unhappy over the plans for new, private, terminals. Other risks come from regional unrest in neighbouring Egypt and Syria, and doubts over the tentative recovery we forecast in the eurozone, a key trade partner for Israel.