Occupied Jerusalem- The port of Eilat is on the verge of collapse due to the attacks launched by the Houthi Ansar Allah group, which continues to blockade the Red Sea and attacks ships passing through it and heading to the port or the Suez Canal in response to the Israeli aggression on the Gaza Strip, which has caused an 85% reduction in shipping traffic in the port.
With the paralysis of shipping and commercial activity in the Israeli port for more than 8 months and fears of its bankruptcy, its management threatened to dismiss between 50 and 60 employees out of 120, if the Israeli government does not allocate urgent and special budgets for the port, as the continuation of the war on Gaza threatens to close it.
Importance of the port
The Israeli government had previously prepared a plan to expand the port of Eilat with a 400-meter-long quay, a 16-meter-long container draught, and a railway link to the central and northern regions. However, the plan was suspended due to the war on Gaza, according to the economic newspaper De Marker.
Eilat is the only Israeli port that is not located on the shores of the Mediterranean Sea, and ships coming to it from the south and east do not need to pass through the Suez Canal. Therefore, according to the newspaper, it is a unique strategic asset for Israel. Despite this, the amount of goods passing through it is much less than other ports.
The port primarily serves car importers, as vehicles coming from East Asia pass through it. It is also considered a starting point for potash exports to the Far East, specifically to India and China, as well as receiving ships and containers that ship with them the needs of the Israeli economy and market, including equipment, machinery, raw materials, food and supplies, and various imported goods.
The port of Eilat was privatized in 2013, when Jewish businessmen bought it from the Israeli government with their own money, through the Babu Shipping Company, for 122 billion shekels ($33 billion), as part of an agreement until 2028, with an option to extend it for 10 years. The company currently employs about 120 workers under collective agreements, and about 70 security workers under a direct labor system.
The two years prior to the outbreak of the Israeli war on Gaza were a period of prosperity for the southern port, as Eilat witnessed a significant increase in the amount of goods passing through it, and it was the main entry point for vehicles into Israel.
In 2022, 166,000 vehicles were unloaded at the port, in 2023, 150,000 vehicles were unloaded, while in 2024, no vehicles were unloaded, according to official data issued by the port administration.
On the verge of collapse
In light of the worsening Eilat crisis, the Chairman of the Board of Directors and owner of the port, Avi Hormero, sent an urgent letter to the Israeli Minister of Transportation, Miri Regev, in which he requested an emergency session to be held on the issue of the Eilat port and to discuss ways to prevent its collapse, according to what the economic newspaper, Calcalist, reported today, Wednesday.
In his letter to Regev, Hormero said, “The port of Eilat is in a critical situation, closed due to the war and the Houthis’ closure of the Bab al-Mandab shipping lane.” He added that despite this, he and his partners, the company owners, bear the burden of the huge expenses of continuing the ongoing maintenance work of the port and paying the salaries of employees for the past eight months.
Hormero added in his letter that he believes that no commercial company would face the kind of challenges that the company that oversees the management of the port of Eilat faces, “which constitutes the national shipping infrastructure, and is a strategic asset and reserve for Israel’s trade, but has not received any budgets or any government financial support,” he said.
According to the chairman, he has no choice but to start laying off workers, by activating Article 9.2 of the collective agreement with the government from 2002 and starting by laying off about 50 to 60 workers.
Hormiro asked the Minister of Transport to intervene and find a solution before starting the layoffs.
The port administration had previously announced last March the dismissal of all workers, but a settlement was later reached with the Histadrut labor union, preventing their dismissal. The Knesset Economic Committee, headed by member David Bitan, threatened the port owners with nationalization if the workers were dismissed.
Millions in losses
As Houthi attacks escalate and the war continues, the port has become empty and its workers are threatened with expulsion, while the Israeli government threatens to nationalize it again, while the port’s CEO, Gideon Golber, deals with all these problems and challenges.
The economic newspaper quoted Golber as saying that there is no commercial activity or shipping in the port, and that it is important to stress – according to him – that this is not due to mismanagement, and not because the employees are unprofessional, but rather “the main reason is the war on Gaza and the attacks of the Houthi group, as we lose between 6 and 10 million shekels ($2.5 million) per month.”
He considered Eilat to be “Israel’s national infrastructure”, as goods are transported through it via trade with Europe and East Asia, and described it as “the most important sea border crossing”.
He explained that if a comprehensive war broke out on the northern front and the missiles reached the ports of Haifa and Ashdod, “Israel would be under siege, and for this reason the passage to Eilat must be opened immediately.”
But Golber questioned the effectiveness and usefulness of the US-led international coalition forces in the Red Sea, stressing that shipping companies are not ready to trust the coalition countries.
“No one is willing to take the risk, and insurance prices are high,” he said. “So I don’t understand why Israel can’t find a solution. It’s not reasonable for armed organizations to limit the global economy.”
