Continental bridge: Israel's gateway to Arab countries

Israel has become a key intermediary in the shipment of goods between Arab and other Muslim-majority countries.

By JOE CHARLAFF/THE MEDIA LINE
December 5, 2017 11:43
4 minute read.
Continental bridge: Israel's gateway to Arab countries

Satellite view of Israel and the Middle East. (photo credit: COURTESY NASA/PUBLIC DOMAIN)

 
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Prompted by reports of crumbling taboos and clandestine meetings between Israel and Arab nations with no formal diplomatic relations with the Jewish state, each example of economic intercourse or significant trade resonates as a headline story.

Yet, those who have worked in international business are rife with examples of longtime interaction that denies today’s newspaper but which have set the parameters for the marked increase in trade we currently see.

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Israel has in recent years become a key intermediary in the shipment of goods between Arab and other Muslim-majority countries, primarily because of the unrest in Syria. Israel has been serving as a continental bridge for Turkish-Jordanian trade, in particular, as well as for freight making its way to Turkey from other nations. 

Prior to the outbreak of the Syrian conflict, cargo trucks originating from Turkey could transit Syria into Jordan and then onto Saudi Arabia and other Gulf nations. However, the instability along the Turkey-Syria frontier led to the creation of a special initiative, whose logistics are run by the Israeli company Tiran Shipping, located in Haifa.

With offices in Ashdod, at the border crossing with Jordan—the Sheikh Hussein Bridge—and also at Ben Gurion airport, Tiran serves as a broker for corporations, including the Turkish Akdeniz Shipping Lines, whose commercial boats anchor once a week in Haifa Port. It currently also acts as an agent for the Turkon Line, a private Turkish company, which is the biggest shipping operator along the Israel-Turkey route.

“This project began to provide a service to the Jordanian market,” David Behrisch, Managing Partner of Tiran Shipping, told The Media Line. “As a forwarding company we handle cargo to [other] Arab countries but it doesn’t go directly. The [goods] have to be shipped on switched Bills of Lading [to hide the fact] that they come from Israel."

Behrisch recounted that the first time goods passing through Haifa were sent to Saudi Arabia the documentation had to be substituted in Jordan. When the trucker arrived at the Saudi side of the border the customs officer suspected the papers were fake and asked for the proper documents, originating from Israel, which were produced before the shipment was cleared to continue.

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The trips from Haifa to the Jordanian-Saudi border crossing were eventually stopped though, as Riyadh and Israel do not maintain open diplomatic relations.

“That was the shortest and easiest route going via Saudi Arabia which from a logistics point of view was the [gateway] to other countries such as the UAE, Yemen, Qatar,” Behrisch added. He said that Turkish goods are presently shipped to Saudi Arabia from the port of Iskenderun to Duba, via the Suez Canal, a costly route.

“As far as shipping [directly] to and from Turkey there is no problem,” he elaborated, “trade with Turkey is growing every year.”

Asked which Arab countries he is able to ship to, Behrisch answered Egypt and Jordan, although some cargo has recently crossed via Turkey into northern Iraq.

As per Amman, a bridge is presently being built to connect the Israeli and Jordanian free trade zones. Containerized cargo shipped to Jordan has be unpacked on the Israeli side—which has inferior infrastructure—and then loaded onto Jordanian trucks, an expensive and time-consuming process that can cause damage to goods.

“At the end of the day,” Behrisch explained, “the Jordanian receiver is paying those costs.”

By contrast, materials destined for Jordan that are transported by truck from Turkey, Bulgaria and Romania do not have to be unloaded in Haifa, but rather can pass on after customs and security checks.

Jordan imports raw materials for its textile industry; second hand trucks, new trailers, steel and other consumer goods; as well as produce such as apples, kiwis, bananas and onions.

Amman also exports textiles to the United States, in addition to agricultural products to Russia and Hungary, via Haifa.

Gabi Bar, Deputy Director General for Palestinian Affairs and Egypt and QID (Qualifying Industrial Zone) at the Israeli Ministry of Economic Affairs, revealed that Jerusalem has three direct transportation routes to the Arab world.

The first is through the Palestinian Authority, with which Jerusalem has various protocols. “Goods are sent through the passages between Israel and the PA—the main land route is the Allenby Bridge,” he told The Media Line.

The second is to Jordan, with which Israel has formal peace and trade agreements. Goods are sent through the Sheikh Hussein Bridge, near Beit She’an in the north, or through the Arava passage, close to Eilat in the south. 

With Egypt, goods are shipped through the Nitzana crossing in southern Israel. In addition, goods pass from Haifa to Port Said or Alexandria in accordance with open trade policies.

Bar pointed out that there are three countries Israel classifies as enemy states: Iran, Syria and Lebanon.

Accordingly, Israeli law bars citizens from having direct or indirect ties with these countries. He added that it is possible to ship merchandise to a few other Arab nations, which in many cases requires changing the Bills of Lading because they do not recognize or allow direct shipments from Israel.

According to Behrisch, there are about 10,000 exchanges annually between Israel and the Arab World, with the value of the trade approximating $300 million. 

This past April, Israel’s transport minister proposed linking the country’s freight railway network with Jordan and Saudi Arabia, an idea that was presented to US President Donald Trump’s Middle East envoy. Under the proposal, goods would travel by rail from Israel’s Mediterranean port of Haifa through Jordan to Saudi Arabia’s Gulf port of Dammam.

Israel is still awaiting approval for the initiative.

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