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Shipping costs surge at Mombasa Port

Shipping costs surge at Mombasa Port

Price surge is as a result of the rising insecurity in Red Sea region (Courtesy photo)

In response to escalating insecurity along the Red Sea route, importers utilizing the Mombasa Port in Kenya are bracing for increased shipping costs, Kenya Ships Agents Association (KSAA) announced Wednesday. The heightened concerns stem from recent attacks claimed by Yemen’s Houthi rebels on British and American vessels, prompting major shipping lines, including those represented by KSAA, to reroute their vessels around the Cape of Good Hope. This alternative route, while ensuring safety, comes at a significant expense and directly impacts businesses and consumers across East Africa.

Juma Ali Tellah, the CEO of KSAA, emphasized the persistent challenges posed by the ongoing attacks, stating, “Despite efforts to normalize freight rates following events such as the Covid-19 pandemic and the Russia-Ukraine War, the ongoing attacks by Houthi Rebels present a persistent challenge.” The rerouting of vessels not only leads to longer shipping distances but also triggers an upward surge in freight rates and disruptions in the supply chain, causing delays in the movement of goods.

Moreover, the attacks are expected to have long-term ramifications on the freight business, including a reduction in ships’ capacity, container availability, and potential increases in insurance costs and liability for ship owners and insurers. The situation has prompted some vessels to attempt to mask their positions by pinging on other locations as a safety precaution when navigating the Yemen coastline.

Industry associations such as The Baltic and International Maritime Council (BIMCO) and the International Chamber of Shippers (ICS) have issued security guidance for navigating the Southern Red Sea and Gulf of Aden in response to the threats and attacks by the Houthis. The rebel group’s determination to continue the attacks despite international condemnation has led to retaliatory strikes by the US, UK, and their allies against Houthi targets in Yemen.

In late January, a coalition of 20 countries launched strikes against the Houthis, with the UK emphasizing that the strikes were aimed at disrupting and degrading the group’s capability to attack global trade and innocent mariners. Kenya has also joined the coalition opposing the Houthi attacks, signaling a united front in upholding navigational rights and defending mariners from illegal and unjustifiable attacks in the Red Sea region.

Courtesy: The East African

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