AMMAN – Recent tensions
in the Red Sea, stemming from the Yemeni-based Houthi movement’s blockade of
ships destined for Israeli-occupied territories, have prompted numerous
shipping companies to reroute their vessels. This shift avoids the traditional
route through the Egyptian Suez Canal in the north, which connects to the
Mediterranean Sea. The blockade, a show of solidarity in support of
Palestinians amid Israel's war on Gaza, has created cascading effects
throughout the region.
اضافة اعلان
The rerouting of vessels has led to increased
costs and time for cargo deliveries. Additionally, both oil prices and
insurance premiums have surged in response to the disruption caused by the
altered shipping routes.
Imad Al-Dean Al-Kara, an employee at a shipping
company, informed
Jordan News, "There is concern about a decline in
shipping and an increase in commodity prices because most shipping lines are
affiliated with European companies or are in collaboration with the Zionist
enemy. Since the Houthi group attacked the Red Sea, shipping prices have
tripled. For example, the price of a container from Hong Kong went from $1,400
to $8,000."
He added, “These factors hinder the
continuity of shipping operations for us as a Jordanian company, and we are
actively seeking alternatives to European shipping lines to ensure reasonable
shipping costs and smooth delivery.”
Insurance on goods has increased
In addition to seeking alternatives, Tabarra
noted that insurance on goods has increased, sometimes even more than the
commercial invoice itself. Emphasizing that this can reflect on the increase of
commodity prices, and lead to delays at sea. “This might also push certain
traders to monopolize goods or purchase them from alternative regions,” he
said. Tabarra predicted that if the blockade persists, the shipping sector will
experience an unprecedented increase in costs.
Furthermore, Vice Chairman of the Amman
Chamber of Commerce, Jamal Al-Rifai, told
Jordan News, "The Houthis
have declared their intention to target ships owned by Israel or heading to the
Zionist entity. Naturally, the impact of these attacks would be limited to
goods coming from India, the Far East, and Africa. However, shipping companies have
imposed increases on all goods arriving at the Red Sea, including those passing
through the Suez Canal."
Rifai considered these cost increases to be
inexplicable and unjustified, speculating that the reason might be an agreement
among global shipping companies to raise shipping prices for goods. He said,
“In the city of Aqaba, we are experiencing a rise in wages. A month ago, the
shipping fees for a single container coming from China were $2,500-$3,000, but
now they have increased to $5,000.”
Redirect goods to other ports
With the increased routes, he added there are
no available bookings for goods heading from Aqaba, “There are also requests to
redirect goods to other ports like Jebel Ali and Dammam, and then transport
them to Jordan by land."
He added, “What concerns us in Jordan is,
firstly, ensuring the continuity of supply chains. We are not worried about it
because we will work to find alternatives and solutions to reduce shipping
costs. Secondly, we aim to have reasonable shipping costs so that the increases
do not negatively impact the citizens.”
Rifai emphasized that price increases are
inevitable because shipping lines have suddenly and directly imposed fees on
goods, even on those that arrived in Aqaba before the blockade, citing it as
related to war risks. He affirmed that these decisions come from external
shipping companies due to the increase in insurance premiums due to the risks
of war, considering the increase to be significant.
A decision to prohibit the export and
re-export a range of goods
The spokesperson for the Ministry of
Industry, Trade, and Supply, Yanal Barmawi, told
Jordan News Minister
Yusuf Al-Shamali decided last week to prohibit the export and re-export of a
range of goods following a recommendation from the Food Security Council. In a
statement, he said “This decision is in response to the increased shipping
costs arising from tensions in the Red Sea. The objective is to safeguard food
stocks, meet local market demands, and uphold price stability in the domestic
market.” He stressed the government's decision encompasses essential
commodities such as rice, sugar, and vegetable oils, including corn oil,
sunflower oil, palm oil, and soybean oil.
Political economist Zayyan Zawaneh told
Jordan
News “It is crucial to begin by clarifying that navigation in the Red Sea
is generally safe, excluding occupation ships and those heading to its ports.
However, predictably, the United States seized upon this as a pretext to ally
ostensibly to protect navigation in the Red Sea. They deployed warships to both
the Arabian Gulf and the Red Sea, escalating risks for everyone and creating
fertile ground for new conflict zones…. causing delays in the flow of goods.”
He added “These ‘maritime routes’ also form
an integral aspect of the ‘political geography’ of nations, resistant to
alteration. Jordan is intricately connected to this dynamic and inevitably
affected by it.”
He noted that the government's strategy
involves reinforcing a blend of both land and sea trade routes with its
counterpart Egypt. Simultaneously, it persists in calling upon the global
community and the US to cease hostilities, recognizing it is the most humane
and sustainable solution.
In addition, Mazen Irsheid told
Jordan
News “The Red Sea is a major route for shipping oil, natural gas, and
consumer goods. The attacks have compelled major companies like BP [British
Petroleum] and Evergreen Line to suspend their operations in the Red Sea. This
results in delays and additional costs, as ships must take longer alternative
routes, such as around the Cape of Good Hope, adding approximately 10 days to
voyages and millions of dollars in costs. And, there is an escalation in
shipping costs and delays in the arrival of goods. During the 'Ever Given'
crisis, container shipping costs surged from $2,000 to $14,000. This
illustrates how security tensions can significantly amplify costs.”
An impact on global trade
The extension of the blockade, he noted is
much more than just increased prices or delayed shipping of goods, some
companies like Maersk and Hapag-Lloyd, are considering altering their ship
routes away from the Red Sea to mitigate risks, “These changes indicate the
potential disruption of global supply chains and an impact on global trade.”
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