Container shipping firm Islamic Republic of Iran Shipping Lines (IRISL) expects to have regained by the middle of next year the business lost while Iran was subject to international sanctions, its chairman said on Thursday.
International sanctions were lifted in January following an agreement with world powers on Tehran’s nuclear program.
“Step by step, the problems have been resolved, removing many restrictions and limitations,” Mohammad Saeidi told Reuters in an interview at the Danish Maritime Forum conference in Copenhagen.
“I think at the maximum, by mid-2017 the whole thing will be in the normal manner [of] things.”
He said he hoped to see limitations on dollar transactions removed after next month’s US presidential elections.
“That will be one of the US commitments based on the agreement we signed last January … This is a very certain commitment by the US,” he said.
US banks are forbidden to do business with Iran under domestic sanctions still in force. European banks also face problems, since transactions with Iran in dollars cannot be processed through the US financial system.
A slowdown in global trade together with a glut of vessels has left the container shipping industry struggling with its worst ever market conditions, but Saeidi said the post-sanctions environment meant IRISL would be looking to expand its 156-ship fleet.
IRISL is negotiating with some shipyards and some makers
“We are negotiating with some shipyards and some makers and hopefully it would reach clear conclusions in the next three to four months,” he said.
The downturn in the industry forced one major player – South Korean container line Hanjin Shipping Co. Ltd – out of business in August, leaving an estimated $14 billion of cargo stranded.
Saeidi said Hanjin’s receivership had created “a little bit of a good market” for IRISL, because “now the [Hanjin] customers are approaching us to provide services from South Korea, China to Iran”.
Trade between Iran and Europe will pick up markedly next year, he predicted, with the Islamic Republic exporting petrochemicals while “we need many heavy industry and heavy machinery and power plants and power generation and new technology from the European zone”.
Overall, he saw the future of a difficult market in a positive light.
“We have some challenges. The overcapacity in the market is one of them. The low price and low freights is another… But generally I’m optimistic,” he said.
He declined to comment on whether IRISL would bid for Hanjin assets put up for sale, and said the planned merger of two other container shipping firms, Hapag-Lloyd and UASC, would not add to pressure on volumes in the Middle East.
“They have their own capacity and we have ours. We don’t have any problems with that.”
IRISL was discussing financing with Asian banks but would welcome offers from European ones.
“Before the sanctions we had a good connection with European banks and they financed many projects … After the sanctions there is no sign [of them],” Saeidi said.