Improvements at Yemen’s ports are needed to ease the cost of importing basic supplies, including food, to the country, according to the United Nations Development Programme.
In Yemen, which has been at war since 2015, 5 million people are one step away from famine. Nearly 50,000 are already experiencing famine, and more than 16 million people are food insecure. The country imports 90% of its food.
Yet the cause of food insecurity is not the availability of food, but its price, UNDP Yemen Resident Representative Auke Lootsma told Devex.
“When it comes to the cost of food, various research shows that transport cost is making up 50% of the cost of food in Yemen. Now, why is this important, other than being astronomical in the first place?” Loostma said. “Almost all food is imported … It makes it very vulnerable to global price shocks, but also anything that contributes to the cost of food is easily felt in the market price by the ordinary Yemeni.”
The cost of wheat has doubled during the war, according to UNDP. A population affected by job losses and salary reductions during the six-year conflict cannot afford to buy food at such prices.
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World Food Programme Executive Director David Beasley has described the “totally man-made” situation in Yemen as “hell.” The agency needs $1.9 billion to provide necessary food assistance in 2021, while a recent international pledging conference for the country only raised $1.67 billion of the $4 billion the U.N. requested for all its agencies operating there.
Because of current regulations, any food and other cargo being shipped to Yemen must first be inspected at a port outside the country, such as in Djibouti or Saudi Arabia. This means it must be unloaded in a third country, inspected, and then reloaded. Lootsma said this process adds time and costs to shipping to Yemen, because goods cannot be sent straight there.
Insurance companies also charge extremely high rates for war insurance risk premiums, which makes the cost of shipping to Yemen as much as 16 times higher than something arriving in neighboring Oman, he said. Insurance costs for shipping goods, including food, to the Port of Aden can reach hundreds of millions of dollars.
Once a ship finally does make it to port, damage from the war, lack of maintenance, and other infrastructure issues contribute to long wait times. Lootsma said a ship can spend 16 days anchored outside the port before it may enter, and then 10 days at berth while it is unloaded. Ships then leave empty because Yemen doesn’t have any goods to export, making the system even more inefficient for shipping companies.
“We decided to have a closer look at these ports and see what it is that we can do to improve efficiency, the productivity of the ports themselves, how we deal with these insurance and these inspection issues, and how, in turn, we can then reduce the price of food in country to really deal with food security issues,” Lootsma said.
“We have no time to waste. There is a looming famine in Yemen and the sooner we can put this [port overhaul] in place, the more immediate effect it will have on the well being of the overall Yemeni population.”— Auke Lootsma, Yemen resident representative, UNDP
The Port of Rotterdam in the Netherlands, which has done peer-to-peer port consultancies in the past, became involved in this process with UNDP at the request of the Dutch ambassador to Yemen.
The public-private partnership brought a team from the Port of Rotterdam to visit Yemen to examine port operations and infrastructure, and to make recommendations for improvements that could expedite the import of food and other necessary goods.
They first conducted assessments of the Ports of Hodeidah, Salif, and Ras Issa in 2019, and last year assessed the ports of Aden and Mukalla.
“We have the knowledge and expertise to do these kinds of assessments, and also credibility to do them in an independent, honest way,” said René van der Plas, director at Port of Rotterdam International.
“What we found is that in these ports, management and the maintenance departments did an incredible job because they were able to keep the ports operational to quite a large extent … but there is a lot of maintenance to do. There’s a lot of improvements to do to improve cargo handling and also the field of safety and sustainability.”
The team from Port of Rotterdam came up with a list of recommendations for the Ports of Aden and Mukalla, which would cost $50 million for an emergency intervention to address immediate shortcomings.
“Ships that come into port, they have to discharge the cargo by their own means. They have to use their own cranes to be able to discharge the cargo in that part of the port,” Lootsma said. “This is certainly delaying the operation because the cranes that are currently not working are capable of lifting many more tons than what the ship cranes can do. That itself is a reason why things get delayed quite a bit.”
UNDP also hopes to convince the warring parties in Yemen to forgo the mandate that cargo arriving in the country be inspected at a third port in the region, saving time and cost necessary for that additional journey. Lootsma said the customs authority can also contribute to decreasing the bottleneck by increasing the pace at which they process goods entering the country.
The Port of Rotterdam has not been asked to provide more assistance beyond its assessment, but van der Plas said it would be open to further involvement in port improvement efforts.
Lootsma said UNDP is hoping the international community will step up to overhaul the ports, while it is also looking to the World Bank for potential funding. He said UNDP is recommending the creation of a $50 million to $75 million insurance guarantee fund for shipments to Yemen, which will cut down the $250 million that insurance currently costs and have a direct impact on the cost of food per kilo.
While some of the suggested reforms — such as lifting the third-country inspection regulations and establishing an insurance guarantee — could have immediate effects on port operations and therefore food prices, others will take longer to impact its cost, Lootsma said.
“We have no time to waste,” Lootsma said. “There is a looming famine in Yemen and the sooner we can put this in place, the more immediate effect it will have on the well being of the overall Yemeni population.”
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