The shooting continues in Iraq, but the rebuilding is also getting under way. The U.S. Treasury Department estimates that spending for reconstruction of Iraq will total $60 billion over five years. That means increased shipping volume from the U.S. to the Middle East.
Demand for shipping services, especially to Red Sea and Persian Gulf ports, already has created port congestion that has added as much as five days to shipping schedules. The demand, and delays, are expected to grow as Iraq's reconstruction moves into high gear.
The reconstruction will include everything from rebuilding ports to providing for garbage collection. Until Iraq is back on its feet, almost all of the staples that the nation once produced for itself - food, textiles, medicines and even some refined energy products - will have to be shipped in.
Ocean carriers serving the region have announced expanded routes and services or are considering them. Goods have already started to move. Under the initial contracts from the military and the U.S. Agency for International Development, cargo is being moved by carriers with U.S.-flag ships, such as Maersk Sealand and P&O Nedlloyd.
European and Arab carriers also are expected to win business as the initial reconstruction phase is completed and contracts permit more foreign participation. "We're ready when the market opens up," said Anil Vitarana, president of United Arab Agencies, which represents United Arab Shipping Co. in North America.
Cargo moving to Iraq now consists mainly of food and medicine for humanitarian aid and supplies for armed forces in the U.S.-led coalition. Commercial shipments still aren't moving in large quantities; the U.S. and United Nations trade sanctions against Iraq have been lifted only since May.
Many of the commercial shipments for Iraq's reconstruction will have to be transported overland. Reconstruction of Iraqi ports is taking longer than expected. While construction of new facilities has proceeded rapidly at Basra and Umm Qasr, the waterways leading to the Persian Gulf remain choked with the mines and wreckage of three wars in the past 20 years.
To meet that challenge, shipping service changes now under way will include reactivating the semi-dormant Jordanian "landbridge" between the Red Sea port of Aqaba and the Iraqi border, along with reopening Iraqi ports and land/sea routes between Iraq and Kuwait, Bahrain, Dubai and the Mediterranean.
Vitarana says UASC will restart service from Jebel Ali to Umm Qasr only when facilities at Umm Qasr open up. Meanwhile, the carrier is offering overland service from Aqaba via Zarqa, Mafraq and Al Mugat into Iraq.
Much will depend on how soon the Coalition Provisional Authority starts to effectively return power to Iraqis as it has begun to do. "Everyone is waiting for a government of Iraq to be formed," said Mazhar Samman, executive vice president of the National US-Arab Chamber of Commerce. "That will be a major sign of stability, favoring increased trade."
Although Iraq is by far the largest market to attract shippers, progress in negotiations between Palestinians and Israelis may yield equally significant long-term rewards. Among other things, the U.S.-sponsored "Roadmap" calls for creating secure transport links, ultimately opening direct links for Palestinian air, road and shipping facilities to the outside world. Construction of basic infrastructure, including roads, telecommunications, and water systems, in the West Bank and Gaza has an estimated cost of $10 billion.
Although cargo volume is expected to get a boost during the next several years from the reconstruction of Iraq and infrastructure development in the West Bank and Gaza, it's expected to be sustained by development of large regional free-trade zones that various Arab states are discussing among themselves and with the U.S.