Fears Of Supply Disruptions Amid Rising Middle East Tensions


 
Video footage has emerged showing an Iranian military helicopter hovering above an Israeli-linked vessel and what appear to be troops descending on the ship. (AP pic)PETALING JAYA: Escalating tensions in the Middle East – including reports that Iran would strike at Israel – have sparked concerns among shipping groups of supply chain disruptions and higher insurance premiums.
Shipping Association Malaysia chairman Ooi Lean Hin said the geopolitical situation has raised the risk in global shipping.
Earlier today, Iranian forces seized a container ship linked to Israel after Iran blamed Israel for a strike in Syria this month which killed two Iranian generals.
International news outlets said Israel was believed to be preparing itself for a direct attack from Iran within days or even hours.
“The safety of shipping navigation is at great risk in the region,” Ooi said.
“War risk insurance premiums will increase, and supply chain disruptions will escalate, leading to an increase in shipping costs for the region,” he said, according to Bernama.
Ooi also said the developments in the Middle East have caused many shipping firms to direct most of their vessels through the Cape of Good Hope in recent months.
This meant these ships had to take a lot more time to reach Malaysia, he said. “Freight and insurance costs have recently increased,” he added.
The Selangor Freight Forwarders and Logistics Association also said shipping companies have avoided the Red Sea and Suez Canal routes in fear of being targeted.
Its president, Tony Chia, added that the freight forwarding industry was waiting to see the next course of action by shipping companies amid recent developments.
Federation of Malaysian Freight Forwarders vice-president Alvin Chua said Malaysia will particularly be affected by a reduction in shipping capacity to Europe. “We will have fewer vessels with the longer sailing time,” he said. - FMT


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