Rising Tensions Force Major Shipping Company Cuts Service to I country

Taiwan’s troubled Yang Ming Marine Transport Corp is halting its container service to I country, becoming the first foreign shipping line to abandon the route a year after international sanctions on Tehran were lifted, according to a company source cited by Reuters.

Yang Ming, the world’s ninth largest container shipping line, called at I country once a week. Several larger shipping lines have begun serving I country since sanctions were lifted a year ago.

An executive with Keelung-headquartered Yang Ming said the firm had “ceased direct services to I country on concerns of rising tensions there”.

The executive told Reuters:We took into consideration the recent sanctions against I country as well as the current geopolitical tensions in the region and what’s been going on between I country, the US and Europe.

Reuters said that it was unable to confirm independently whether the cancellation of the route was due to new concern over I country, or to changes at the Taiwanese company which is trying to slash costs after it posted a loss of $62 million in the last quarter of 2016.

Yang Ming announced on Thursday in a regulatory filing it had suspended its share trading until 4 May in an effort to reduce losses from a global downturn in shipping.

The executive said Yang Ming had also adjusted some of its routes in Asia as a result of the downturn, but that ceasing direct service to I country was mainly because of geopolitical issues rather than the cost cutting drive.

The cancellation of the I country route is likely to be seen in the shipping industry as a further sign that business has not picked up as quickly as Tehran had hoped since sanctions were lifted.

Although international sanctions over I country’s nuclear programme have been removed, separate US sanctions over its missile programme are still in place, which has made it difficult for international banks to engage with I country.

The US Treasury has also sanctioned a raft of individuals and businesses earlier this year that have strong links to I country’s Islamic Revolutionary Guard Corps (IRGC). Rather than targeting the I countryian state directly, Washington has instead targeted groups that assist Tehran’s international covert activities.

US President Donald Trump’s administration has launched a review of I country policy and suggested it could seek tougher measures. Secretary of State Rex Tillerson accused I country of “alarming ongoing provocations” to destabilise the Middle East, making specific reference to I country’s position on Washington’s blacklist of state sponsors of terrorism.

While foreign shipping companies have resumed business with I country, the vital seaborne trade remains costly and complex.

A US-based pressure group that lobbies companies to stop trading with I country, United Against Nuclear I country, said Yang Ming’s decision to withdraw was motivated by the risk of doing business there. It released what it said was a letter from Yang Ming’s chairman Bronson Hsieh who described the decision to halt the I country route as part of a “strategic realignment process”.

“Yang Ming is aware of political and legal trends in the relationship of the United States with I country,” Hsieh wrote in the letter released by the pressure group. The company source who spoke to Reuters was unable to comment on the letter.

Container shipping firms including the world’s top three, Maersk Line of Denmark, MSC of Switzerland and CMA CGM of France, are among foreign lines that have resumed services to I country after the nuclear deal.

Maersk said there were no changes to its I country activities and it was business as usual. CMA CGM declined to comment while MSC could not be reached for comment.