Israel's Ashdod Port, one of the largest ports of the country and a crucial asset for the national economy, is continuing to operate normally despite the ongoing conflict between Israel and Hamas, according to the executive chairman of the Ashdod Port Company's board of directors, Shaul Schneider.
Talking to Container News, he pointed out that employees of Ashdod Port Company continue to maintain operational continuity for the Israeli economy and are working even faster, understanding the importance of maintaining the normal operations of the port.
Port of Ashdod, the only state-owned port in Israel, is operating 24/7 with employees working longer shifts mainly for two reasons. The first reason is their own safety. According to Schneider, it is safer for port employees to remain at the port area, rather than be on the road in order to return home. Additionally, Israel's military has recruited 10% of the Ashdod Port Company personnel, and therefore, the remaining staff must fill the gap.
Regarding special measures and guidelines that the Israeli ports may have received from the government, Shau Schneider said there are no special regulations for Ashdod Port. "We are trying to maintain our normal operations under such circumstances," he noted.
Schneider also told Container News that the port is in contact with shipping companies, which for now keep moving cargo and goods through the port without any significant disruption.
Possible expansion of the conflict - Potential risks
At the time, we have not seen the conflict between Israel and Hamas cause difficulties in global trade. However, a possible expansion of the conflict could create challenges in crucial shipping lanes.
Christian Roeloffs, co-founder and CEO of Container xChange, an online platform for container logistics, explains, “In the case of the conflict in Israel, any expansion of the hostilities beyond the country's borders could introduce risks to two vital shipping choke points. The Suez Canal, a critical waterway for various commercial vessels, including container ships, may face disruptions. Similarly, the Strait of Hormuz, a backbone for oil and gas shipping, could be affected. However, the extent of these effects will largely depend on the conflict's expansion and duration.”
On the other hand, Israel represents a relatively small market for container shipping, with its primary ports of Ashdod and Haifa accounting for just 0.4% of global throughput and therefore, the threat of disruptions to container trade flow through the Mediterranean region remains limited, according to Container xChange's analysis.
First war-related surcharges
However, it is still important to see the impact of the conflict on container rates in and out of Israeli ports. Container News asked Schneider about his information and estimations about possible trends in Ashdod port box rates. He believes that shipping lines will not increase their rates in Ashdod and he said that he has not seen any rate increases, surcharges or additional fees so far. He expressed, however, his concerns about possible increased insurance costs.
In any case, South Korean ocean carrier HMM has already announced a war risk surcharge (WRS) on Israel cargo in a customer advisory on 18 October.
"As costs increase by deterioration situation from/to Israel, we would have to inform our customers that we implement the WRS with immediate effect on all equipment types to maintain our service from/to Israel," said HMM in its announcement.
HMM's WRS is as follows:
Israeli container carrier ZIM has also announced an additional fee. "In light of the war situation, insurers have imposed an additional war risk insurance premium on all vessels calling Israeli ports, which we are now obligated to pay in order to maintain service to and from Israel," said the company in its latest update.
ZIM has decided to implement the following new War Risk Premium (WRP) for cargo to/from Israel effective from the 12 October Gate-In date.
|War risk premium Surcharge
|ZMP, MGX, SAM, ZCA