CMA CGM, the world's fourth largest container company, will impose a war risk surcharge of $36/TEU on goods destined for the Middle East.

The French shipping giant stated that insurance costs have continued to rise due to six oil tanker attacks near Iranian waters in the past two months. Starting from July 5th, surcharges will be imposed on all trade routes between Oman, the United Arab Emirates, Qatar, Bahrain, Saudi Arabia (Dammam and Jubail), Kuwait, and Iraq. The United States and China will add surcharges starting from August 1st.

CMA CGM has joined the ranks of X-Press Feeders, warning customers that transportation costs in the Middle East region will increase. In a recent report to clients, X-Press Feeders detailed their war risk surcharge plan. It is believed that other shipping companies may also follow suit.

The roll on/roll off department of Nippon Yusen Kaisha (NYK) also charges a war risk surcharge of $2.8 per cubic meter on all ships passing through the Strait of Hormuz and Gulf of Oman, effective July 24th.

Andy Lane, a container shipping consultant in Singapore, commented on the CMA CGM news that if the surcharge continues for a period of time, the liner mode in the Middle East may change.

Ryan said, "If the premium is high and continues, then it will pass on some new advantages to ports such as Sohar, and to some extent, it will also pass on the advantages of Fakkan Port to Jebel Ali Port or Abu Dhabi Port

The additional premium has had a significant impact on the trading of oil tankers in the region. The additional insurance premium for transportation outside the Gulf of Mexico is currently set at 0.125% to 0.25%, which makes the additional insurance premium for $100 million ultra large container ships as high as $250000.

UAE Shipping Levies War Risk Surcharge (WRS) in the Middle East

According to the recent maritime accidents in the Gulf region, ship insurers have decided to include war risk in the insurance premium to cope with the increasing risks in the region. Therefore, in order to continue providing uninterrupted services in the Middle East, Emirates Shipping must quickly recover the relevant fees from the shipper.

For all goods in the Middle East region, a war risk surcharge will be levied based on the following fixed fees:

Scope: All goods traveling to/through the Middle East (excluding Chinese exports)

Quota: 52 USD/TEU

Effective date: July 7, 2019 (sailing date)

Payment term: to be paid by the freight payer

MSC Levies War Risk Surcharges in the Middle East and Venezuela

Given the tense situation in the Middle East, Mediterranean shipping companies are imposing war risk surcharges on all goods entering and exiting the Arabian Gulf (Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia: Dammam, Jubail).

Starting from July 8, 2019, a war risk surcharge of $40/TEU will be levied on all trade routes (excluding the United States and China), while China and the United States will be charged an additional $40/TEU starting from August 1, 2019 (bill of lading date); The above fees shall be borne by the freight payer.

In addition, it is understood that due to the chaotic situation in Venezuela, MSC, the world's second largest shipping company, announced to customers on June 9th that it will impose additional fees on goods destined for politically unstable Latin American countries.

MSC stated in a report to its clients that "at the time of the implementation of sanctions related to Venezuela and the ongoing political turmoil in the country, MSC is imposing war risk premium surcharges on goods from global destinations, which will take effect immediately." However, there was no specific standard for how much additional fees will be charged to customers heading to Venezuela in different route markets.

Reuters recently reported that Hamburg Sud, now owned by Maersk, and King Ocean Services, headquartered in Miami, have added a surcharge of $1200 per container for Venezuelan shipments.

Attention when exporting to Libya! Herbert announced the imposition of war risk surcharges!

Due to the emergency situation in Libya, the shipping company Hebrot will adjust its War Risk Surcharge (WRS) for all exports and imports from Libyan ports.

Fee standard: $100/TEU

Effective Date: July 17, 2019

If the situation in Libya improves, we will consider exempting or reducing the above-mentioned additional fees, "Hebrot said in a statement

Herbert's notification is as follows

Industry analysts say that if the domestic war in Libya continues, considering the background of the evenly matched strength of all parties in the conflict, the war may be prolonged. Previously, the United States, Britain, France, Italy, and Gulf Arab countries have jointly requested all parties in Libya to maintain "restraint" and accept the mediation and mediation of the United Nations.

The United Nations Secretary General's Special Representative for Libya, Hassan Salam, warned the Security Council in May that Libya was on the brink of a full-scale civil war.

We would like to remind freight forwarders and shippers that if there are goods exported to the Middle East, Libya, and Venezuela, they should pay attention to the possibility of increased transportation costs and delays, and purchase insurance when necessary.

Attachment: Additional risks for marine insurance: war risk, strike risk

General additional insurance

General additional insurance cannot be covered as a separate item, but can only be added to one or more general additional insurance based on the characteristics and needs of the goods, on the basis of insurance against FPA and WPA.

Special additional insurance

1. War risk

When adding war insurance, the insurance company shall be liable for compensation for losses caused by war and other hostile acts within the scope of responsibility specified in the war insurance clauses. War insurance cannot be insured as a separate item, but can only be added to the basic insurance coverage. The insurance liability shall continue until the goods are discharged from the destination port specified in the insurance policy and discharged from the sea vessel. If the goods are not unloaded after the sea vessel arrives at the destination port, the maximum period is 15 days from midnight on the day the sea vessel arrives at the destination port.

2. Strike insurance

Strike insurance is a special additional insurance that is added to ocean freight insurance. It only covers direct losses of the insured goods caused by strikes. If indirect losses are caused by strikes that prevent the normal transportation and loading and unloading of goods, the insurer is not responsible for compensation. The insurance period of strike insurance is the same as that of basic marine cargo insurance, which is subject to the "warehouse to warehouse" clause.

If the insured has already covered war risk on top of the basic marine cargo insurance, and also needs to cover strike risk, according to the international insurance market practice, there is no need to pay a separate premium for strike risk. If strike insurance is added to the basic insurance, the insurance premium must be paid at the war insurance rate.