War Surcharge to Be Imposed on Freight for Middle East

With the US war against Afghanistan ahead, the foreign and domestic shipping companies have newly set a `risk surcharge for war`.

According to the Ministry of Maritime Affairs and Fisheries (MOFAT) and the shipping business circles yesterday, the Far Eastern Freight Conference (FEFC) plans to impose the risk surcharge for war from 8th. The FEFC is the consultation organization comprised of 16 domestic and foreign shipping companies such as the Hyundai Merchant Marine Co., the US`s APL, and the Denmark`s Maersk.

For the freight calling at Egypt, Syria, and Lebanon, the new regulation imposes 250 dollars per TEU (one `TEU` refers to a 20ft container).

The freight calling at Aden harbor of Yemen and Gida harbor of Saudi Arabia should pay 200 dollars per TEU. And just 10 dollars will be imposed on every TEU of the freight passing through the Suez Canal to Europe.

Besides the FEFC, the Independent Rate Agreement (IRA) also decided to enforce the emergent surcharge of 150 dollars per TEU in entire Middle Eastern areas from 8th.

An official of the shipping business circles said, ``Under the risk of the impending warfare, it is inevitable to impose the surcharge. For domestic companies, there are much freight bound for Europe passing through the Suez Canal.``

With the new charge system introduced, some exporting companies are anxious about the decline of profits due to the increase of the freight fare.

Meanwhile, as the war insurance fee has soared to a maximum, four times since the terrorist attacks on the U.S., the shipping business circles requested the government to establish the supporting measures such as the exemption of the special tax and the withhold of the increase of port dues.

In response to the request, the MOFAT said that since the consignors have mostly paid for the extra cost due to the war insurance, there is no just cause for the government to support the shipping companies.

Recently, the domestic shipping business circles and the consultation organization of war insurance companies located in London including the Lloyd Insurance Co. had agreed to increase the war insurance fee for ships from 0.009-0.01 percent of average freightage to 0.04 percent of it.

daviskim@donga.com