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Lebanon 2015 | TRANSPORT | INTERVIEW

TBY talks to Chadi Houkayem, General Manager of Maersk Line, on the country's ports, the national trade balance, and trends in the sector.

Chadi Houkayem
BIOGRAPHY
Chadi Houkayem has served as General Manager at Maersk Lebanon since January 2010. He studied at St Joseph College, Aintoura, and then earned his Master’s degree in Strategic Management from Villanova University. He speaks Arabic, French, and English.

In terms of service, how does Maersk Line work to be the best in the sector?

For Maersk Line it has been an ongoing process to deliver better service. The latest change we implemented in terms of global service was through collaboration between Maersk and MSC. We have east and west trade service, and this is by far the biggest alliance we have in terms of sharing vessels. Beirut has always been looked at as an interesting location for the line. The industry is changing, and every line will be looking for value differentiators. In this sense the services will be shared with MSC, and we need to strive for something different.

How has the volume of containers through the Port of Beirut and the Port of Tripoli changed over the past few years?

The Port of Tripoli is not considered a main container port as most of the containers are going to The Port of Beirut since it has an advanced container terminal. The volumes are definitely bigger than they were a few years back, and this is not just due to growth in the market. The situation in Syria has caused a shift from land transportation to sea transportation, and that has caused some growth although it is still slow because it is diverted cargo. The market has not been growing 5% or 7% like other markets.

How does Lebanon's negative balance of trade influence Maersk Line's operations?

It puts more pressure on the lines because the costs will be higher. Eventually when it is not balanced, the movement of empty containers is not as lucrative as those that are full. The market is still beneficial though because of its size, and the cost at Beirut is not significantly high. Beirut is also serving the main services of Europe so it does not require a specific route. However, we are constantly looking at how to increase exports. So far we have a good market share on the export side in an attempt to create more balance for us.

What trends do you identify in the regional maritime industry?

The region has changed significantly, and there have been a lot of things going on all around us. Turkey has the highest growing ratio in the region, yet Syria is a different story as it is now out of the scope. Egypt has shown the highest profits in the last year, and for Lebanon, we took advantage of what was happening around us to a certain extent. The industry is working towards stepping into help move things towards positive growth.

How does the maritime sector in Lebanon compare to other transportation hubs in which you operate worldwide in terms of infrastructure?

The Port of Beirut is well adapted for the region, and the technology there is advanced. We do not have any issues in Beirut, and they operate a new generation of vessels. The challenge comes outside of the port in terms of infrastructure. We get customer complaints about not getting things quickly because of traffic jams and electricity problems. These issues affect production and cost of production. Infrastructure is doing well in some places, but in other places there is still a lot to do.

How do you assess the current regulatory framework in the Lebanese logistics industry?

Customs Administration is working on several changes, most recently with cargo being inspected. Some see it as a positive approach, whereas other see the implications being unfavorable, mainly for the traders. The customs and port administration are working on digitizing more of the systems. There is still a lot to be done, and most of the regulations date from 1940.

What steps should be taken to enhance the Lebanese logistics sector?

The sector is divided into two parts, between shipping lines and forward orders. Every segment has its own syndicates and chambers. Every part of the industry is trying to work on simplifying processes as it is benefit for us and the customers as well. We always see obstacles as catalyst to find solutions and make things more efficient. For example, digitizing the delivery order will help with this. Unfortunately it is not entirely possible because we still have to obtain a stamp and signature, and this is outdated.