High Shipping Costs Are Here to Stay, Says Bloomberg
By Henry Ren (Bloomberg) Stubbornly high shipping expenses for businesses are getting sealed into contracts for the next 12 months, forcing companies to pass the extra costs on to consumers....
Ships transiting the Suez Canal, which handles about 8 percent of world trade, slid by 16 percent last month amid riots that led the Egyptian military to bolster security in order to keep the waterway open.
About 1,311 vessels navigated the 120-mile waterway in January, compared with 1,559 at the same time a year ago, according to figures from the Suez Canal authority. Tankers carrying crude or refined-oil products, the biggest users of the canal, dropped to 267 last month, from 318 in January 2012, and 331 in December, data show.
Traffic is falling because of the riots and violent protests which are ongoing, according to Michael Frodl, founder of C-LEVEL Maritime Risks, a Washington-based company advising banks, transport companies and insurers.
“Almost one ship in five avoided the Suez Canal in the last week in January, as the violence raged,” Frodl said in an e-mail today. “The riots in the last week of January really hurt transits and revenues, that’s the unavoidable conclusion.”
Traffic through the waterway is normal and operations at the Suez Canal Authority’s facilities in the Egyptian city of Port Said haven’t been affected, Lieutenant General Mohab Mamish, head of the authority said in an e-mailed statement today. Gates outside of the Port Said Authority’s building have been shut, Major-General Ahmed Naguib, head of the Said Ports Authority said by phone.
Demonstrations yesterday forced the evacuation of the canal authority’s building. Violence late last month in Port Said and two other canal cities left more than 30 people dead. That prompted emergency measures and a curfew amid demonstrations and street battles and led the army to deploy helicopters and cameras to improve security.
At least one port agent said it temporarily suspended services to ships transiting the canal in late January because they couldn’t guarantee safety to ports at the canal, which earned $5.13 billion tolls in 2012, authority figures show.
In 2011, about 17,799 ships went through the canal, connecting the Red Sea with the Mediterranean Sea, carrying 691.8 million tons of cargo. That’s equal to about 8 percent of world trade, figures from the Suez Canal Authority and United Nations Conference on Trade and Development show.
– Michelle Wiese Bockmann, Copyright 2013 Bloomberg.
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