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  24th November 2008 - STAR MARITIME
 

Shippers avoid Suez Canal due to piracy

MORE of the world’s big shipping firms are quietly diverting their fleets via South Africa’s Cape of Good Hope instead of risking Somali pirates in the Gulf of Aden, a senior industry executive said recently.

Rob Lomas, secretary-general of Intercargo, an industry group representing shipowners hauling dry commodities, said more firms were avoiding Suez – an extraordinary move in peace time.

“In hundreds of years of shipping experience, we’ve had incidents before when the Suez Canal has been closed – after the 1967 Arab-Israeli war for instance – but in terms of piracy it’s unprecedented,” he said after pirates seized a Saudi supertanker in the world’s biggest ship hijacking.

“For dry commodities, we do know there are companies that are weighing whether they should go through Suez or the Cape and we are aware of firms that have decided to go via the Cape,” he said.

Lomas was careful to point out, however, that there was no stampede by operators for the Cape and that international seaborne trade would always get through somehow.

At least three big well-known shipping companies, the world’s largest tug operator Svitzer, Norwegian chemical tanker group Odfjell, and a large liquefied petroleum gas operator have already publicly stated they are avoiding Suez.

Container ship operators too, which carry everything from hi-fis to toys, are weighing their options.

The US navy said pirates had taken the Saudi Sirius Star supertanker – laden with more than US$100mil worth of oil – to Haradheere port half-way up Somalia’s long coastline.

There is little evidence, however, that big oil tanker firms carrying most of the world’s crude oil are avoiding Suez, though many are expressing deep disquiet about Somali pirate activity.

Three of the Gulf’s top oil exporting nations – Saudi Arabia, Iran and Kuwait – said they had no plans to alter the path of their state-owned fleets because of the Somali pirate attacks.

Lomas, who declined to say which of his members had made the decision, said some firms could be re-routing on commercial grounds alone.

“Companies may naturally route through the Cape anyway for economic reasons. We have a very soft freight market at the moment for dry-bulk commodities, so people will assess the overall risk, including costs,” Lomas said.

He said firms would take into account Suez Canal toll fees, bunker (fuel) costs, insurance rates and extra voyage times.

Lomas said hull insurance rates had risen about 10% since the summer for voyages through the Gulf of Aden, driving costs higher via Suez.

It was not clear whether insurance brokers were pushing rates even higher after the latest major hijacking, though some industry experts said additional premiums charged were likely to keep on rising.

“You mix it all in and might find that the Cape is an attractive option anyway,” Lomas said. — Reuters

   
 

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