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Viewing cable 07CASABLANCA192, CASABLANCA PORT'S CONGESTION CRISIS

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Reference ID Created Released Classification Origin
07CASABLANCA192 2007-09-22 10:47 2011-08-24 16:30 UNCLASSIFIED//FOR OFFICIAL USE ONLY Consulate Casablanca
VZCZCXRO5062
PP RUEHBC RUEHDE RUEHKUK RUEHROV
DE RUEHCL #0192/01 2651047
ZNR UUUUU ZZH
P 221047Z SEP 07
FM AMCONSUL CASABLANCA
TO RUEHC/SECSTATE WASHDC PRIORITY 7844
INFO RUEHRB/AMEMBASSY RABAT 8092
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHEE/ARAB LEAGUE COLLECTIVE
RUEHLO/AMEMBASSY LONDON 0306
RUEHFR/AMEMBASSY PARIS 0593
RUEHNK/AMEMBASSY NOUAKCHOTT 2287
UNCLAS SECTION 01 OF 02 CASABLANCA 000192 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EWWT MO
SUBJECT: CASABLANCA PORT'S CONGESTION CRISIS 
 
REF: (A) 06 RABAT 527; (B) 06 RABAT 2248 
 
1. (SBU) Summary.  Explanations abound for the Port of Casablanca's 
congestion crisis, which has emerged over 
the last month as a major threat to Moroccan exports.  Government 
and port officials suggest that an increase 
in imports and an overabundance of containers left in storage have 
precipitated the problem.  Others cite 
more deeply rooted issues, including ineffective port reform, 
related labor unrest and poor infrastructure. 
The crisis could be construed as a side-effect of the recent 
reorganization or an indication of faltering 
reform.  Either way, efforts to improve the port's competitiveness 
are floundering, and port officials 
and operators are seeking ways to weather the storm. 
End Summary. 
 
------------------------- 
INCREASED SHIPPING VOLUME 
------------------------- 
 
2. (U) Throughout the summer and into the fall, 
congestion has plagued the Port of Casablanca. 
Normally, Casablanca receives more than 3,400 
vessels annually which account for over 37 percent 
of the total commercial shipping arrivals in Morocco. According to 
Jamal Benjelloun, Director General of 
the National Port Agency (ANP), an unanticipated rise 
in shipping volume during the summer of 2007 explains 
part of the problem.  The agency predicted a nine 
percent increase over 2006, but the current figure is closer to 15 
percent. 
 
3. (U) The fact that the situation came to a head over 
the past month is not surprising, given the confluence 
of the Islamic holy month of Ramadan and the start of school this 
year.  Both bring a large volume of 
specialty imports.  Another factor in the high shipping volume this 
year is increased grain imports, made 
necessary by Morocco's drought.  The country imported 
80 percent more corn, wheat and barley by the end of 
July 2007 than it had during the same period in 2006. 
69 percent of this grain went through Casa Port. 
Mohamed Abdeljalil, Director of the Port Management 
Company (SODEP) - the state commercial operator that replaced the 
state's monopolistic Office of Port 
Management (ODEP) - also points out that Morocco 
is engaged in numerous, large-scale construction 
projects.  As a result, the country imports sizeable quantities of 
steel and timber.  (Note: In summer 
2007, SODEP rebranded itself as Marsa Maroc, 
creating a new, more "patriotic" corporate identity). 
 
--------------------------------------- 
TOO MANY CONTAINERS, NOT ENOUGH STORAGE 
--------------------------------------- 
 
4. (U) Increased imports aside, government officials 
blame port congestion on companies leaving too many containers in 
the port's limited storage areas.  The problem has gotten so bad 
that some containers are 
stored outside the port's confines.  At a September 12 meeting held 
by the Wali of Casablanca and attended 
by a range of port actors, the Wali urged importers 
to move their containers in less than 15 days or face 
heavy fines.  Mohamed Chaibi, Vice President of the 
General Federation of Moroccan Enterprises (CGEM), 
made a similar plea the week before at a well-attended roundtable on 
promoting Morocco abroad. 
 
--------------------------------------------- - 
PORT REFORM, POOR INFRASTRUCTURE ROCK THE BOAT 
--------------------------------------------- - 
 
5. (SBU) The port's problems run deeper than increased imports or an 
overstock of containers, however, and 
some fault port reform itself.  Mohamed Karia, 
Director General of Morocco's second largest shipping company, the 
International Maritime Transport 
Corporation (IMTC), blames the current crisis on the state's failure 
to carry out reform effectively.  A December 2005 law 
ended ODEP's monopoly and created two new entities: 
ANP, an independent port authority, and SODEP, a 
state-owned operator to manage cargo handling and commercial 
 
CASABLANCA 00000192  002 OF 002 
 
 
services.  The law's goal was to open 
the field to private operators, creating competition 
and reducing costs to make Moroccan ports more 
competitive (ref: A). In Karia's eyes, however, the reorganization 
is "a disaster thirty years in the 
making," with SODEP merely replacing ODEP as a state monopoly. 
 
6. (U) Not everyone is as pessimistic about port 
reform as Karia, but others agree that the recent reorganization has 
rocked the boat.  Amina Lamrani, 
Deputy Director of CGEM, characterized the port's 
current problems as a side-effect of reform and noted 
that workers feared losing their jobs, "as happens 
when you end a monopoly."  For their part, dockers 
have been disappointed that promised salary increases 
and benefits have not materialized.  In addition, they bemoan the 
lack of skilled labor, charging that new 
workers do not have the necessary experience or qualifications, 
particularly for dealing with the 
current crisis.  Benjelloun alleged that the problem 
is not so much the cargo handlers, who have stepped up their hours 
to help clear the port's backlog, but the ground transporters, who 
lack a sense of urgency. 
 
7. (SBU) Not only do ongoing labor issues impact the 
port's ability to operate efficiently, but so do 
equipment, transport and infrastructure deficiencies.  Surveying the 
port from the wall-length window of his seventh-floor office, Karia 
shook his head in dismay 
at the long line of trucks trying to leave the port. 
If there were an accident, he explained, the port's 
only exit would be paralyzed.  Workers complain that 
cranes and other key equipment are often out-of-order. 
A recent news article reported that trucks had left 
the port empty for lack of sufficient stackers to 
load cargo.  As Said Elhadi, Chairman of the 
Executive Board of the Tangier Med Special Agency 
(TMSA) phrased it, "Casa Port is not up to 
world-class standards."  Karia put it more 
bluntly: "It's a shantytown, not a port." 
 
--------------------------------- 
CRISIS CONSEQUENCES AND SOLUTIONS 
--------------------------------- 
 
8. (U) Unfortunately, Casa Port's congestion has significant 
negative consequences.  Although port 
reform was instituted to increase competitiveness, 
the port in Casablanca remains more expensive than its regional 
counterparts.  According to an article in the daily newspaper 
l'Economiste, a 40 foot container that spends 27 days in port as a 
result of congestion would 
cost USD 1112 in Casablanca, but only USD 747 in Marseilles.  As the 
current crisis continues, 
shipping lines are forced to charge their clients congestion fees, 
which get passed on to customers in 
the form of higher prices.  Benjelloun believes ships remaining in 
port beyond their allotted time should be penalized with progressive 
fees, but acknowledges 
that such a system raises costs and makes Casa 
Port less appealing.  Some ship owners have become so frustrated 
that they avoid Casablanca. 
 
9. (U) The situation at Casa Port has reached such 
dire straights that the GOM recently announced new measures.  On 
September 18, it pledged USD 11.3 
million for new equipment and 5.2 million to clear 
14 hectares of additional space.  Port officials and operators will 
also work to simplify procedures, and improve logistics and 
coordination. 
 
10. (SBU) Comment: The GOM's party line seems to be 
that high shipping volume and an overabundance of containers in 
storage have precipitated Casa Port's 
crisis.  Ongoing issues such as labor unrest and shoddy 
infrastructure clearly played a role as well, however.  Port 
officials and operators must move quickly to 
improve efficiency if they hope to make the port more competitive 
and ensure that last year's ambitious port reform achieves its 
objective.  The port's importance 
to the Moroccan economy makes their task all the more urgent.  End 
Comment. 
 
COLE