10% rise in costs expected as shipping firms halt Middle East bookings, add risk charges
Hong Kong sector representatives expect increase to be driven by rising fuel prices, longer voyages, war-risk charges and higher insurance costs
The conflict in Iran could raise cargo transport costs from Asia to Europe by at least 10 per cent, according to Hong Kong sector representatives, as major shipping companies have suspended bookings to and from the Middle East or imposed significant war-risk surcharges.
Lawmaker Tommy Chung Ki-fung, who represents the import and export constituency, explained on Wednesday that rising fuel prices and longer voyages, among other factors, would lead to higher shipping costs.
“I’d be more conservative in saying that overall shipping costs would rise by at least 10 per cent. It might not increase several-fold because no clients would ship then, so shipping companies might have to shoulder some of the costs brought about by the conflict,” Chung told a radio programme.
The US-Israel strikes on Iran have disrupted global supply chains as cargo ships in the region must make a detour to bypass the Gulf. US President Donald Trump has said the war could last four to five weeks, but the American military had the capability to go “far longer” if needed.
The world’s largest container shipping line, MSC, suspended all bookings for worldwide cargo to the Middle East from March 1 until further notice.
Shipping company CMA CGM announced an emergency conflict surcharge from US$2,000 for every standard 20-foot equivalent unit (TEU), while Hapag-Lloyd would levy a war-risk surcharge from US$1,500 per TEU.