Terrorists Attack on US: Shipping counts its losses

• Billions were wiped off the value of shipping stocks on the New York Stock Exchange – some as high as 45 per cent. The cruise industry was the hardest hit while container shipping lines continued their long-running slide and stocks of tanker companies also saw their values fall.

• Container shipping lines and their customers face huge increase in the cost of shipping goods as a result of high war risk insurance premiums which comes into force midnight 28 September 2001. Effective the date, hull underwriters are to cancel all policies and reinstate them with 'held cover' clauses to provide for new war risk surcharges.The 'held cover' system, which allows insurers to manage risk by adjusting premiums hour by hour, now leaves ship owners in uncertainty.
  
  

• A large area covering the Persian Gulf, Gulf of Oman, Red Sea, Lebanon, Israel, Syria, Egypt and the Suez Can, Algeria and Pakistan has been made exclusion zone by insurance underwriters. Ships trading in those parts of the world are regarded as high risk and have to pay a surcharge on top of the general war risk premium effective worldwide.

• Shipping lines face the prospects of rising bunker prices, adding to the surge in cost of operation.

• Shippers (exporters and importers) face increase in freight rates and new surcharges that is expected to sharply increase shipping costs.

• Malaysian seamen serving onboard vessels calling at US ports will not be allowed to disembark from the ships following the publication of a list of countries which the US has identified a threat to its national security.

          Seafarers from the following countries, mostly Islamic, are

          also barred from entering the US Cuba, Egypt, Iran,

          Jordan, Kuwait, Libya, Maldives, North Korea, Pakistan,

          Palestine, Qatar, S Arabia, Simalia, Sudan, Syria, Tajikistan,

          Tunisa, Turkey, Turkey, Turkmenistan, United Arab Emirates,

          Uzbekistan, Yemen and Yugoslavia.

          Significantly, the ban does not apply to Indonesia, Bangladesh

          and the Philippines which are among the largest suppliers of

          seamen to world shipping lines, including American and

          European shipping lines.

• US shipping companies, including Maersk-Sealand, with vessels in the Maritime Security Programme (MSP) have been put on the alert that their vessels may be requisitioned by the US government to support military operations. Under the MSP about 47 vessels, belonging to 12 ship operating compaies, enjoy federal subsidy totaling US$2.5 million per vessel through fiscal year 2005 and are required to join the Voluntary Intermodal Sealift Agreement.

         In addition, another 114 ocean going vessels and another 397

         vessels such as tugs and barges are under the Voluntary

         Intermodal Sealift Agreement and could be mobilized could

         come under similar requisition programme.

• While the Far Eastern Freight Conference meets in London this week to discuss its voluntary ship withdrawal scheme and impact of the new war risk surcharges and warranties, the India Pakistan Bangladesh Ceylon Conferences have warned that they had no option but to pass on new war risk surcharges and other related costs to their customers.