Export costs will 'soar' if war in Iraq breaks out<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
The cost of shipping exports to the Middle East, Europe and
\nAfrica will soar by at least 35 percent if a war against Iraq
\ncomes to pass, according to an expert.<\/p>\n
Indonesian Shipowners' Association (INSA) chairman Barens Th.
\nSaragih told The Jakarta Post on Thursday that the higher costs
\nwould result from increased operating costs and war-risk
\nsurcharges imposed by shipping companies.<\/p>\n
\"For the shipping charges alone, which now range between
\nUS$1,100-1,200 per 20-foot container, the increase will be around
\n15 percent, while for the war-risk surcharge, shipping companies
\nwill add about $50-150 per twenty-foot container,\" said Barens.<\/p>\n
The increase in shipping costs was unavoidable as most ships
\nhad to sail by longer routes to avoid passing the Suez Canal for
\nfear of being hit by stray missiles as the canal was located only
\nabout 650 kilometers from Iraq.<\/p>\n
Thus, cargo ships would have to sail past South Africa en
\nroute for Europe, which would take much longer.<\/p>\n
Meanwhile, shipping companies would impose various surcharges
\nif the U.S. attacked Iraq. The war-risk surcharge for shipments
\nto Egypt and Israel would be $50 per 20-foot container and $100
\nper 40-foot container, $24 and $48 respectively per 20 and 40-
\nfooter for Syria and Lebanon, $40 and $80 respectively per 20 and
\n40-footer for Algeria, $75 and $150 respectively per 20 and 40-
\nfooter for Libya, and $125 and $250 respectively per 20 and 40-
\nfooter for Europe.<\/p>\n
The higher shipping costs would adversely impact on the
\ncountry's already fragile export industry.<\/p>\n
Local businessmen have said the looming U.S.-Iraq war has
\nalready dealt a blow to the country's exports, causing worries
\nthat Indonesia will not be able to reach its export growth target
\nthis year.<\/p>\n
Many buyers in Europe, Africa and the Middle East have started
\ncanceling orders for the country's prime manufacturing
\ncommodities, such as textiles and footwear.<\/p>\n
Europe, the Middle East and Africa together contribute to
\naround 50 percent of the country's total exports, which last year
\nreached $57 billion.<\/p>\n
On average, Indonesia's exports each year to Europe are worth
\nmore than $8.5 billion, the Middle East about $11 billion and
\nAfrica about $1 billion.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/export-costs-will-soar-if-war-in-iraq-breaks-out-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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