Ashdod Port operating day and night [pg.17]

Traffic rerouted from Haifa; delays and higher costs likely.

Israeli industry, importers and exporters continued to struggle with the crisis in the North on Wednesday as difficulties accumulate since the closure of the Port of Haifa. The Port of Ashdod will work around-the-clock to absorb traffic diverted to the country's smaller southern port from Haifa, thanks to a joint effort by the Manufacturers Association of Israel, the Histadrut labor union, shipping companies and the ports themselves, the association said Wednesday. The Haifa port has been paralyzed since Sunday by Hizbullah's rocket attacks on northern Israel. The Ashdod Port Company said Wednesday morning that, since the beginning of the week, some 15 cargo ships bound for Haifa had docked in its ports so far. Additionally, all ships in Ashdod that were supposed to continue to Haifa decided, instead, to unload all of their containers in Ashdod. Three passenger ships destined for Haifa also were diverted to Ashdod, the company said, adding that the port had been operating at peak since the closure of the Haifa port. "We are nearly doubling operations in terms of the number of ships being handled," said Ashdod Port Company CEO Shuki Sagis. He said, however, that the actual amount of increase in the volume of containers was still unclear. Sagis called on shippers, customs agents and others involved in the port's operations to help the port workers and dedicate themselves to the tasks at hand in order to prevent damage to Israeli commerce and industry. "We are working in full cooperation with the workers' committees for work at maximum output, including back-to-back shifts and additional hours, in order to prepare for the arrival of additional ships ... to help exporters and importers as much as possible and to give a hand to the Port of Haifa," Sagis said. "There is incredible pressure on the port," said Zvi Fink of Globus International Packing, Shipping and Moving. "They're doing their best, but they're not in a normal situation." The overload is causing increased costs and delays in handling goods being brought into the country at the port itself, while many other containers bound for Israel are currently waiting in other Mediterranean ports for Ashdod to absorb the current load. "Ashdod's full up. There's no room anymore," Fink said, but he was confident the system was doing well given the circumstances. "The Israeli shipping business is strong and sophisticated ... Israel is a pretty sophisticated country when it comes to dealing with emergencies ... and things don't fall apart here as they may have elsewhere." Strikes like those that closed both ports down two years ago also helped condition Israeli shippers to handle such a crisis, he added. The Manufacturers Association advised the country's industrialists to take advantage of the Ashdod Port's additional night watch to allow the port to more efficiently handle the overload and enable the manufacturers themselves to send more goods to the port and maintain output levels. The association came to an agreement with Homefront Command to allow import containers into the country, in order to prevent a shortage of raw materials for Israeli industry. Simultaneously, the Israel Export Institute and customs officials of the Israel Tax Authority agreed to allow exporters to take back containers trapped at the Port of Haifa and transfer them to Ashdod. Having already exited Israel's customs envelope, the stranded exports may be released back into the country with a simple Port of Haifa form cancelling the export with no need for approval by the customs authority, according to the deal. Gad Schaefer, chairman of the Israel Shippers' Council, which represents importers and exporters, said that insurance companies' war risk premiums had increased "tenfold and more," while other costs had also risen due to the port's closure. Importers bringing in goods destined for Northern Israel, for instance, must add the cost of having them brought from Ashdod, he said. Advocate Amos Konforti suggested that exporters strained by the situation refrain from claiming a legal "Act of God" (koah elyon) in order to buy time to fill clients' orders. Such a "concrete, legal" declaration would also allow the client a period of time in which to seek a back-up supplier with which the Israeli manufacturer might be replaced permanently, which would weaken the image of Israel's business community. "Activating the force majeure clause would substantially identify the Israeli manufacturer with an area suffering from terror and violence, a situation which we as Israeli suppliers very much wish to avoid," he said. In the long-term, foreign businesses incorporating Israeli parts in a finished product - whether in the hi-tech sector, auto industry or textiles - could also be deterred from making the Israeli manufacturer an exclusive supplier in such a scenario, he added.