RIYADH, 13 April 2003 — Many Iraq-bound vessels have been diverted to Dammam because the US troops controlling the Iraqi port of Umm Qasr, the country’s only gateway in the Gulf, have barred consignments from other countries from entering the war-ravaged country. Some of the Iraqi-bound cargo ships have also docked in Kuwait, hitting transshipment business badly and raising war-risk freight fees.
A few Iraq-bound ships, which set sail before the war carrying wheat, rice and sugar from India, are currently stranded in the Gulf and are incurring demurrage of $4000 per day, according to shipping industry sources. However, the shipping lines in the Gulf are hopeful of doing brisk business if normalcy returns to Iraq.
The sources said that Dubai could benefit as the regional transshipment hub from large-scale humanitarian operations in post-war Iraq.
According to the United Nations World Food Program (WFP), nearly 430,000 tons of food will be needed every month to feed at least 10 million Iraqis. Prior to the war, some 60 percent of the humanitarian aid to Iraq passed through Dubai to Umm Qasr.
Referring to the increase in freight fees, the sources said that major shipping lines operating in the Gulf have raised war risk fees but the effect on international trade has been minimal. Most of the ports along the Gulf coasts including Saudi ports have reported turmoil in shipping business since the war broke out.
Of late, the number of docks in the Saudi ports has increased, resulting in increased dock productivity and reduced handling cost. But this trend has also been affected by the war.
