Many truckers could not afford simple tire repairs, let alone pay to fix the extensive damage to the vehicles caused by the Aug. 4 Beirut port explosion. (Credit: AFP)
BEIRUT — An open-ended truck owners’ strike at Beirut port that risked causing widespread goods shortages within days was averted on Monday when the Public Works and Transportation Ministry stepped in to hear the carriers’ demands.
The truck owners’ union at Beirut port had announced a complete suspension of operations the previous Thursday in protest of their present payment terms, under which they continue to be paid on the official lira exchange rate with the dollar — LL1,507.5 — while the central bank’s platform rate is more than double that and the parallel market rate is far higher. The union suspended its strike the following day after a meeting was scheduled with the transport minister on Monday to discuss demands.
Caretaker Transport Minister Michel Najjar has since promised that his ministry will conduct a detailed study with a view to amending the truckers’ payment terms and that, on completion, the study will be referred to cabinet for appropriate decision-making. The truck owners’ main request of the minister is that importers and forwarding agents be instructed to pay them partially in US dollars and partially in Lebanese lira at Banque du Liban’s platform rate of LL3,900 to the dollar.
For now, with hope for a change in payment terms squarely placed on the minister’s word, the truckers continue to operate, transporting all manner of goods and raw materials to and from Beirut port.
But who are these truckers, what challenges do they face and what would have happened had they persisted in their halt of operations?
‘They are irreplaceable’
The truck owners at Beirut port are an essential mechanism within the supply chain that moves goods and materials through the port and onward to factories and distribution centers across the country.
Without the service provided by the truck owners, transportation of materials and goods received by the port to businesses and industries “throughout the country and beyond would come to a complete standstill,” spokesperson for the truck owners’ union Chafiq Bousaid told L’Orient Today.
Bousaid added that after two days of the carriers striking, the Lebanese market would start experiencing shortages of goods and raw materials across the board, but especially in the food and medical sectors.
The head of the Medical Equipment and Devices Importers’ Syndicate, Salma Assi, affirmed this claim, telling L’Orient Today that a truckers’ strike would impact importers’ ability to receive medical supplies.
Similarly, the head of the Syndicate of Importers of Foodstuffs, Hani Bohsali, said that the truckers’ decision to stop operations would not only impact the food sector alone but all sectors at once.
“[These] carriers are the only delivering entity for all importers and they are irreplaceable,” he said.
However, truckers, given their present rate of pay, say it is becoming increasingly untenable to continue operations. With the dollar trading as high as LL15,300 earlier this month, the value of the truckers’ earnings has plummeted by almost 90 percent.
Bousaid said that without payment in dollars, the carriers will be unable to sustain their work.
The union carried out a one-day warning strike on Feb. 26, but saw no reaction or changes in their payment terms as a result.
The truckers subsequently decided to up the ante on March 18 by announcing at a press conference that they would strike until their grievances were addressed. The following day, the truck owners suspended the strike for 48 hours after an initial solution was reached for a potential transport tariff with the director-general of Land and Maritime Transport, Ahmed Tamer.
The union was then promised a meeting with the caretaker transport minister on Monday to discuss their demand.
Who is a ‘trucker’?
Anyone who owns a red plate and a suitable haulage vehicle can be a trucker at Beirut’s port, as they are private operators. The forwarding agents at the port engage truckers on a shipment-by-shipment basis to transport goods throughout the country and, sometimes, across the border to Syria.
“There are a total of 1,800 trucks in Lebanon owned by 700 individuals, of which 600 are registered in the syndicate,” Bousaid said.
Samir Trad, who owns four trucks operating at the port, said truckers’ services are typically engaged through unofficial verbal agreements with forwarding agents. These forwarding agents are contracted by importers to arrange the transport of their goods.
The carriers deliver all kinds of cargo, including wheat, cattle, metal and steel, vegetables, merchandise materials and raw materials for manufacturing, Trad said, adding that “delivery points extend all over Lebanon and into Syria.”
Costs ‘too much to bear’
Being embedded in the import industry, these truckers have felt the reverberations of Lebanon’s financial collapse since the very first cracks appeared in mid-2019 as dollars became less and less available through official channels and the exchange rate on the parallel market began to deviate from the peg established in 1997.
By June 2020, even a damaged tire was sufficient to put a truck completely out of action, as the cost of the replacement became too much for the private operator to bear, Bousaid explained.
However, the explosion that ripped through the Beirut port on Aug. 4, killing more than 200 people, injuring thousands and causing damage to large swaths of the city, made punctures and damaged tires relatively minor concerns.
Some 20 percent of the truckers’ fleet of 1,800 was totally destroyed in the blast, while the remainder sustained varying degrees of damage, Bousaid said.
Prior to the blast, “truck owners who lost a tire had to stop running their trucks amid the increased prices,” Bousaid said. “Nevermind [the cost of fixing] an entirely destroyed truck that needs metal parts and motors.”
Most of the partially affected trucks are operating regardless of the damage sustained, Bousaid said, adding that a very small number of truck owners whose vehicles were severely damaged eventually repaired their trucks, while those who couldn’t afford essential parts had to retire their vehicles.
According to Bousaid, the truck owners have not yet received any insurance payouts for damage caused by the explosion, nor have they received any indication they will receive compensation from the state.
The government last year allotted LL150 billion to be distributed in compensation via the army to homeowners and businesses affected by the blast. On March 10, the Lebanese Army announced it had completed distribution of the whole amount, having covered less than a third of affected housing units.
“Aid is set to be distributed to the poor and people whose homes and shops were affected, but we remain afflicted,” Bou Said said. “Minister Najjar asked us to submit reports on damage; we will send [them], then wait and see what will happen next.”
No protection
According to researcher and Legal Agenda board member Karim Nammour, there is no legal framework that protects freelance operators, the category of the labor force into which these truck owners fall.
Freelancers’ work is typically governed by the contract they sign with the business engaging their services. However, in the truckers’ case, formal contracts are lacking and their services are generally commissioned based on verbal agreements with the forwarding agents.
“We are dwelling in a situation where we don't have a law but market rules, amid the inconsistent exchange rates and in the absence of a legal framework, a law for capital control and an economic rescue plan,” Nammour said.
Fierce competition
Alongside a depreciating currency and a catastrophic explosion, demand for truckers’ services has also fallen as COVID-19 pandemic-related restrictions brought industries and businesses to a halt and demand for imports dropped.
According to truck owner Ali Ibrahim, work has gone down by 80 percent due to the decrease in imports as a consequence of COVID-19 restrictions, the worsening economic situation in Lebanon and its resultant business closures, and the damage wrought by the Beirut port blast.
With less business available, fierce competition has developed between carriers.
Truck owners undercut each other to win business, Ibrahim said. If one truck owner suggests a renegotiation of his transportation fees, the forwarding agent can easily abandon the offer and agree to engage another truck owner at a lower rate.
Bousaid told L’Orient Today that a number of forwarding agents are using this desperation to negotiate even lower prices on the basis that the economic situation is negatively impacting the forwarding business too. Bousaid explained that truckers’ need to make money pushes them to agree to the forwarders’ lower prices: “There are not enough shipments and your colleague truck owner is agreeing to any price.”
Unsure where to turn
Although the union voiced one clear demand in late February, it went unanswered until the truck owners embarked on what they said would be an open-ended strike in late March.
Strike warnings were ignored by the port administration and “because of the unorganized nature of their labor, carriers were unsure of where to turn for help,” Trad said. Even the Transport Ministry was silent until Najjar approached the union following their announcement that they would indefinitely halt operations.
Prior to the ministry’s engagement with the issue, Bousaid weighed where to take the truckers’ concerns. “I was planning to eventually resort to the UN and EU offices in Beirut,” he said.
Stuck in a conundrum
Logically, if importers and forwarding agents are obliged to meet the truckers’ demands, their costs will rise, requiring that they offset this increase by changing the prices they charge respectively for their goods and services. This will lead to even more inflation in the country, Nammour warned.
Nammour told L’Orient Today that there is no solution besides state intervention. Without an economic or financial plan and without the issuance of a law that protects certain groups of people who might be affected by the situation, nothing can govern the rights of freelancers, such as truck owners, and no one can force any entity in the free market to use one exchange rate rather than another.
One forwarding agent told L’Orient Today that they stand with the truck owners and respect their demands, but fear losing their business with importers and manufacturers if they ask for more money.
“The importers are already struggling to get dollars to pay for the goods; if we ask them to pay us more for transportation, we will be met with refusal,” he said.
“As a forwarding agent, I would be sacrificing my business with the importer if I were to increase prices for shipments. There needs to be a consensus among all us agents on that matter,” he added.
Now that the Transport Ministry has decided to engage with the issue of truckers’ payment terms firsthand, questions arise. Will they be able to force private importers to pay more for transportation, or will they ask forwarding agents to deduct a percentage of their profit to truckers? And will such a decision anger other entities or be an end of an unorganized and unprotected group’s misery?
Many questions will remain unanswered until a plan is finalized.
In the meantime, Trad said, one question resonates in the minds of the truckers: “Will the minister live up to his promise, or are we fishing in an empty pond?”