China · Iran · Financial Times · Strait of Hormuz · Fortune Technology
Iran’s economy runs into another blockade
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The U.S. naval blockade on Iran is already crushing its economy, and efforts to divert shipments over land are not providing much relief.
Key facts
- Majidreza Hariri, the head of the Iran-China Joint Chamber of Commerce, said last month that transporting a single container between Iran and China via ships costs about $3,000, according to Hariri
- Given that 2 million containers pass through Iran’s southern ports annually, he estimated that heavier trade burdens will translate to about $18 billion in additional transportation costs alone every
- Before the war, more than 80% of Iran’s trade tonnage transited by sea via southern ports, but that’s been closed off
- A Turkish truck driver hauling used cars into Iran told the Financial Times that wait times at the border on the return trip can reach 24 days
Summary
Before the war, more than 80% of Iran’s trade tonnage transited by sea via southern ports, but that’s been closed off. As a result, convoys of trucks have flooded land routes along Iran’s borders with Turkey, Pakistan, Afghanistan, Iraq, and Turkmenistan. But bureaucratic hurdles, such as long customs checks, and infrastructure that wasn’t designed to handle so much volume have produced massive traffic jams. Lines of trucks stretch for miles, and drivers sometimes wait more than three weeks to finally bring their cargoes across a border.