Gulf tanker incidents to raise shippers’ costs, cut traffic

In this picture taken on Tuesday, April 7, 2015, and released by the semi-official Fars News Agency, Iranian warship Alborz, foreground, prepares before leaving Iran's waters, at the Strait of Hormuz. (AP)
Updated 21 July 2019

Gulf tanker incidents to raise shippers’ costs, cut traffic

  • Many of the 2,000 companies operating ships in the region have ordered their vessels to transit the Strait of Hormuz only during the daylight hours and at high speed

WASHINGTON: Recent seizures and attacks aimed at oil tankers in the Strait of Hormuz will raise insurance rates for shipping companies and, if unchecked, reduce tanker traffic in the vital waterway, according to energy experts.
Britain’s foreign secretary said that Iranian authorities on Friday seized two ships, one flying under the British flag, the other registered in Liberia. The events occurred in a passageway that carries one-fifth of the world’s crude exports.
“If this kind of problem continues, you might see people start to shy away from the (Persian) Gulf or try to reflag — not be a British tanker,” said energy economist Michael Lynch.
The near-term impact will fall most heavily on the shipping industry in the form of higher insurance rates, said Lynch, who is the president of Strategic Energy & Economic Research Inc.
Richard Nephew, a Columbia University researcher who wrote a book on sanctions, also believes the tanker seizures could create “a real risk premium” for companies that operate in the Gulf and insurers that underwrite them.
“Certainly we’ve seen concern with this in the past on sanctions grounds, and I would imagine security groups would be a far more complicating element,” Nephew said.
On Friday, Iran’s Revolutionary Guard said it took the British tanker Stena Impero to an Iranian port because it allegedly violated international shipping regulations. An Iranian news agency said the Liberian-flagged Mesdar was briefly detained and then released after being told to comply with environmental rules.
The seizures marked a sharp escalation of tension in the region that began rising when the Trump administration withdrew from a 2015 nuclear deal with Iran and imposed severe restrictions on Iranian oil exports and other sanctions.

FASTFACT

The British navy seized Iran’s Grace 1 tanker in Gibraltar on July 4 on suspicion of smuggling oil to Syria in breach of EU sanctions.

Many of the 2,000 companies operating ships in the region have ordered their vessels to transit the Strait of Hormuz only during the daylight hours and at high speed. But only a handful of the companies have halted bookings.
The tensions in the Gulf also pushed oil prices slightly higher. Brent crude, the international standard, rose 0.9 percent to $62.47 a barrel on Friday, while benchmark US crude gained 0.6 percent to settle at $55.63.
There’s a long history of shippers enduring threats in the region.
“There have always been little problems around the Gulf where people will say, ‘You’re in our territorial waters,’ but usually that doesn’t go so far as the seizure of tankers,” Lynch said.


Egypt’s creative solutions to the plastic menace

Updated 24 August 2019

Egypt’s creative solutions to the plastic menace

  • Egyptian social startups are taking alternative approaches to fostering awareness and reducing waste
  • While initiatives around the world are taking action to combat this problem, some Egyptian projects are doing it more creatively

CAIRO: Global plastics production reached 348 million tons in 2017, rising from 335 million tons in 2016, according to Plastics Europe. 

Critically, most plastic waste is not properly managed: Around 55 percent of it was landfilled or discarded in 2015. These numbers are extremely concerning because plastic products take anything from 450 to 1,000 years to decompose, and the effects on the environment, especially on marine and human life, are catastrophic.

While initiatives around the world are taking action to combat this problem, some Egyptian projects are doing it more creatively.

“We’re the first website in the Middle East and North Africa that trades waste,” said Alaa Afifi, founder and CEO of Bekia. “People can get rid of any waste at their disposal — plastic, paper and cooking oil — and exchange it for over 65 products on our website.”

Products for trading include rice, tea, pasta, cooking oil, subway tickets and school supplies.

Bekia was launched in Cairo in 2017. Initially, the business model did not prove successful.

“We used to rent a car and go to certain locations every 40 days to collect waste from people,” Afifi, 26, explained. “We then created a website and started encouraging people to use it.”

After the website was launched, people could wait at home for someone to collect the waste. “Instead of 40 days, we now could visit people within a week.”

To use Bekia’s services, people need to log onto the website and specify what they want to discard. They are assigned points based on the waste they are offering, and these points can be used in one of three ways: Donated to people in need, saved for later, or exchanged for products. As for the collected waste, it is given to specialized recycling companies for processing.

“We want to have 50,000 customers over the next two years who regularly use our service to get rid of their waste,” Afifi said.  

Trying to spread environmental awareness has not been easy. “We had a lot of trouble with initial investment at first, and we got through with an investment that was far from enough. The second problem we faced was spreading this culture among people — in the first couple of months, we received no orders,” Afifi said.

The team soldiered on and slowly built a client base, currently serving 7,000 customers. In terms of what lies ahead for Bekia, he said: “We’re expanding from 22 to 30 areas in Cairo this year. We’re launching an app very soon and a new website with better features.”

Go Clean, another Egyptian recycling startup dedicated to raising environmental awareness, works under the patronage of the Ministry of Environment. “We started in 2017 by recycling waste from factories, and then by February 2019 we started expanding,” said founder and CEO Mohammed Hamdy, 30.

The Cairo-based company collects recyclables from virtually all places, including households, schools, universities, restaurants, cafes, companies and embassies. The customers separate the items into categories and then fill out a registration form. Alternatively, they can make contact through WhatsApp or Facebook. A driver is then dispatched to collect the waste, carrying a scale to weigh it. 

“The client can be paid in cash for the weight of their recyclables, or they can make a donation to a special needs school in Cairo,” Hamdy explained. There is also the option of trading the waste for dishwashing soap, with more household products to be added in the future.

Trying to cover a country with 100 million people was never going to be easy, and Go Clean faced some logistical problems. It overcame them by hiring more drivers and getting more trucks. There was another challenge along the way: “We had to figure out a way to train the drivers, from showing them how to use GPS and deal with clients,” said Hamdy.

“We want to spread awareness about the environment everywhere. We go to schools, universities, companies and even factories to give sessions about the importance of recycling and how dangerous plastic is. We’re currently covering 20 locations across Cairo and all of Alexandria. We want to cover all of Egypt in the future,” he added.

With a new app on the way, Hamdy said things are looking positive for the social startup, and people are becoming invested in the initiative. “We started out with seven orders per day, and now we get over 100.”