(photo credit: Ariel Jerozolimski [file])
All shipping companies serving Israeli ports have agreed to cut their heightened war risk surcharge on Israel-bound containers by 37.5 percent effective September 1, the Manufacturers Association of Israel said Thursday.
"They came to the realization that in the current situation, both [Mediterranean] ports are fully active and the risk of harm to their ships is in fact non-existent. We are therefore demanding that the surcharge be canceled altogether," said MAI shipping committee chairman Zvi Plada.
Israeli shipping giant Zim's decision to drop the surcharge beginning August 27 also influenced the foreign liners' decision, he said.
It is "absurd" that the war risk surcharge applies to containers entering the Port of Eilat but not those destined for the adjacent port of Aqaba, Jordan, he added.
Even once the reduction comes into effect - bringing the surcharge to $50 per container down from $80 - the surcharge will cost Israel's business sector $100,000 daily, of which $65,000 will be paid by Israeli industry, Plada said.
To date, Israeli industry, commerce and agriculture have had to pay about $15 million because of the decision by international insurance companies to hike the surcharge to hundreds of dollars per container in the third week of July, Plada estimated. Private customers - including new immigrants - have also been subject to the surcharge on containers brought into the country.
Most shipping liners scaled back the surcharge by 30% in mid-August. 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 he expects the surcharge to be brought back to its prewar level within the next two to three weeks.