The conflict in Iran could raise cargo transport costs from Asia to Europe by at least 10 per cent, according to Hong Kong sector representatives, as major shipping companies suspended bookings to and from the Middle East or imposed significant war-risk surcharges.
Lawmaker Tommy Chung Ki-fung, who represents the import and export constituency, explained on Wednesday that rising fuel prices and longer voyages, among other factors, would lead to the higher shipping costs.
“I’d be more conservative in saying that overall shipping costs would rise by at least 10 per cent. It might not increase several-fold because no clients would ship then, so shipping companies might have to shoulder some of the costs brought about by the conflict,” Chung told a radio programme.
The US-Israel strikes on Iran have disrupted the global supply chain as cargo ships in the region must make a detour to bypass the Gulf. US President Donald Trump warned that the war could last “far longer” than five weeks.
The world’s largest container shipping line, MSC, has suspended all bookings for worldwide cargo to the Middle East from March 1 until further notice.
Shipping company CMA CGM announced an emergency conflict surcharge from US$2,000 for every standard 20-foot equivalent unit (TEU), while Hapag-Lloyd would levy a war-risk surcharge from US$1,500 per TEU.
“When shipping costs were low, the shipping charge could be less than US$2,000 each. So [together with the surcharge], the impact could be significant,” Chung said.
