Shipping lines scale back war risk surcharge [p. 15]

By DANIEL KENNEMER
August 13, 2006 23:48
1 minute read.

Shipping lines operating out of Northern Europe, Portugal and the Baltic Sea - together representing the majority of sea traffic to and from Israel - will cut their heightened war risk surcharge on Israel-bound containers by 30 percent. "Since in time it became apparent that the risk was not as high [as the companies had thought], the companies began reducing the war risk surcharge," Manufacturers Association transport committee chairman Zvi Plada said Sunday, noting that Zim was the first liner to cut the surcharge. The liners' decision will bring the average surcharge on a 20-foot container down to $85 from $115, reducing the total cost to the Israeli economy to $300,000 daily from $450,000. Prior to the outbreak of fighting in the North, the war surcharge amounted to only $9 for a small container and $18 for a 40-foot container, Plada said. Companies that have yet to reduce their surcharge include Maersk, China Shipping, and Israel-based Allalouf & Co. Shipping, alongside other shipping lines from China and those operating from Black Sea ports, he said. Efforts by the government to pressure international insurance companies to cut the surcharge through Inbal - the government's own insurance provider - failed to recruit clients among the shipping lines, since the Inbal policy did not cover damages related to injury of crew members or loss of profit, he said. The surcharge would drop "significantly" once a cease-fire agreement is signed or takes effect, but still would be several times higher than the pre-war level, Plada predicted. "Once the surcharge is raised, it takes some time to bring it back down." To date, Israeli industry, commerce and agriculture have had to pay nearly $10 million because of the insurance companies' decision to hike the surcharge in the third week of July, he said. Plada stressed that the Port of Ashdod has managed to stay on top of the drastic increase in its burden since the partial closure of the Haifa port, so there has been "almost no damage" to Israeli exports and imports.


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