War Risk Fee in Middle East

In view of the threat of war in the Persian Gulf and the sharp rise in insurance costs, the first liner shipping companies introduced a war risk surcharge for shipments to and from the Gulf states. This affects traffic with Oman, the United Arab Emirates, Bahrain, Saudi Arabia (Dammam and Jubail), Kuwait and Iraq.

In contrast to various other surcharges, which are hardly comprehensible for customers, the lines can argue in this case probably good reasons. Since the acts of sabotage and attacks on tankers off Fujairah and in the Strait of Hormuz in May and June, the carriers or shipowners whose ships they charter have had to pay high extra premiums for hull insurance. These "extra war risk premiums" for trips to the high-risk area are said to have settled at around 0.2 percent of the ship's insurance value. This means that an extra premium of around USD 50,000 per passenger will be charged for a container ship costing USD 25 million. This will increase the daily costs of the ships by several thousand US dollars during their stay in the risk region. In addition to the insurance, significantly higher fuel costs also have an impact because the container ships cross the region at higher speeds for safety reasons, a spokesman for feeder operator X-Press Feeders told the DVZ. This fee is at the expense of the goods. We will pass on the War Risk Fee accordingly.

 

Source: DVZ

Image source: Pixabay_Free-Photos

Go back