War on Gaza raises shipping risks, threatens Israeli supply chain: FP
4 Min Read
A major Taiwanese cargo shipping line recently declared "force majeure," a contractual clause that releases parties from liability in exceptional events like wars and natural disasters.
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Shipping containers are seen stacked on the Evergreen terminal at the Port of Los Angeles in San Pedro, Calif., Tuesday, Nov. 30, 2021 (AP)
Writer Elisabeth Braw wrote on the Foreign Policy website that the ongoing war on Gaza has brought significant repercussions to the shipping industry in the Middle East, including Israeli ports in the occupied territories.
One of the notable developments, Braw argues, is that a major Taiwanese cargo shipping line recently declared "force majeure," a contractual clause that releases parties from liability in exceptional events like wars and natural disasters.
This declaration was made in response to the war on Gaza and led to the cancellation of a planned vessel stop at the regime's port of occupied Asdud. The reason given for this change was the "persisting unsafe situation" in the region.
Evergreen Line Declares Force Majeure on Israel Shipment https://t.co/L8JGQKqU8B
— UW Maritime Law (@UW_Maritime_Law) October 18, 2023
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Occupied-Asdud Port is strategically located, serving as a crucial maritime gateway for various goods traveling to and from the occupied territories. However, it is also situated near the Gaza border, making it particularly vulnerable during the conflict.
The safety concerns prompted the diversion of a vessel to Haifa Port in the occupied northern territories, requiring an additional logistical effort to transport the cargo to its intended recipients. As a result, Asdud Port witnessed reduced activity, while Haifa had to handle an increased volume of shipping traffic.
Other shipping lines and their insurers are also reevaluating the wisdom of calling at Israeli ports during the conflict. Palestine's waters were already considered high-risk for shipping, and now the risk premiums have increased significantly, causing a financial burden on shipping lines.
"Israel's" impending ground invasion of Gaza further raises concerns about the safety and costs associated with merchant vessels' journeys to and from Israeli ports.
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The Israeli economy is highly dependent on imports, particularly for essential commodities like sugar, vegetable oils, grain, and other raw materials for the food industry.
The Israelis import nearly three times the amount of food and agricultural products that they export. These goods mainly pass through the ports of Asdud and Haifa, making the stability of these port operations crucial for the Israeli supply chain.
As a result of the increased risks and costs, shipping lines are passing on these expenses to their customers, adding surcharges per container. The assessments made by shipping lines and their insurers regarding the war on Gaza and the potential for broader regional warfare are of significant importance for the regime, which primarily relies on sea routes for its trade.
The complexity of calling at Israeli ports has been exacerbated by operational challenges, including long waiting times for vessels to enter the port. Now, the actual threat of missiles and other calamities impacting ships in Asdud further complicates shipping in the region.
Moreover, the potential involvement of the Lebanese Resistance Hezbollah in the conflict could pose additional risks to ports like Haifa. In the event of Hezbollah's participation, the risk level for Haifa Port would increase considerably, with concerns about potential collateral damage to ships and operational disruptions.
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The war on Gaza has thus introduced significant challenges and risks to shipping in the region, affecting the operations of Israeli ports and raising concerns for shipping lines and their insurers.
The potential involvement of Hezbollah is likely to further complicate the situation for the Israelis, potentially impacting the supply of essential goods to the occupied territories.
