Importers of Far Eastern hardwood and plywood are bracing themselves for sharp increases in freight charges as a result of the September 11 terror attacks on New York and Washington.
The Far Eastern Freight Conference (FEFC), which represents shipping lines operating out of the Far East, announced this week that it was introducing a war risk surcharge of US$10/20ft container and US$20/40ft container to cover insurance premium hikes and the extra fuel shipping lines which were taken on to cope with route deviations.
The FEFC said the rise could be the first of many as insurance companies have so far only levied a relatively small increase in premiums.
A spokesman for the FEFC said: ‘The situation could change dramatically. For example, if the US did something decisive there may be a need for a large increase. It is all crystal ball gazing stuff at the moment.’
The FEFC admitted that instead of giving its customary four week notice of a hike in container charges, events may force it to put in place rises within days.
However, the conference does not believe shipping lines will be forced to use the Cape of Good Hope rather than the Suez Canal as they did during the Arab Israeli war in the early 1970s.
‘We are nowhere near the situation that existed then when the canal was blocked off because of disabled ships that blocked transit. Things would have to be pretty dire for that to happen,’ he said.
Timber importers are upbeat about obtaining sufficient plywood and hardwood supplies, even if Far Eastern supply lines are threatened by a deepening conflict.
DHH (Timber Products) Ltd financial director Dave Francis said that the Baltic states and South America could supplement Far Eastern sources.
He added: ‘It could cause delays and a certain amount of inconvenience but in a funny sort of way it could do the trade a bit of good by tightening supplies.’
