What Impact After Cargo Giant Maersk Suspends Syria Operations?
Nov 30, 2023 674

What Impact After Cargo Giant Maersk Suspends Syria Operations?

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Danish shipping giant Maersk, one of the world’s largest cargo firms, has announced that it will suspend transportation operations to and from Syria from 2024, citing major logistical obstacles. The firm ships food and medical supplies to the country along with non-military equipment, but in full compliance with European Union sanctions, which prevent it from delivering fuel, military and security equipment. The corporation deals with the private sector rather than the government, and coordinates its work via offices in Damascus, Latakia, and Tartous.

Maersk’s decision to cease operations may encourage other Western multinationals still operating in Syria to follow suit. Those who remain must content with scarce goods, high insurance costs and the threat of sanctions, all of which implies low profits and high risks. That said, this is unlikely to significantly impact the movement of products to and from Syria. Small companies, from Russia, Venezuela and Colombia in particular, are likely to fill the gap in the cargo sector, including in illicit areas such as drug smuggling.

To some extent, the decision of one of the world’s top cargo firms to withdraw from Syria belies the regime’s past claims that Western economic sanctions are negatively impacting the supply of food, equipment and essential supplies to the Syrian public. However, Maersk’s move may damage production in regime-held areas and push more companies to leave the country. The poor quality of support services is also likely to push more companies to withdraw from the Syrian market as their operations become economically unviable.

The Syrian regime, which has channeled every available economic resource towards efforts to win the war and consolidate its authority, is keen to ensure that companies deal directly with Damascus. This poses a dilemma for local and international firms and institutions: become complicit with the regime or leave the Syrian market entirely. This threatens to damage the crisis-hit economy and cause more pain for Syrians already suffering dire circumstances in a country where the government fails to provide any real services and conditions are deteriorating by the day.

Maersk’s decision reflects the fact that paralysis is spreading to ever more sectors of the Syrian economy. It will damage the country’s ability to import and export goods, even if small companies rush to fill the shortfall in cargo services, especially as the regime imposes high taxes and fees which affect no fewer than 1,200 shipping firms. The decision is also likely to have major knock-on effects for an already struggling manufacturing sector.