KPA downplays impact of Suez Canal blockage as global reinsurers stare at losses
SHIPMENT: Kenya Ports Authority (KPA) has warned that while it is prepared to deal with the aftermath of the Suez Canal blockage crisis, refrigerated avocados headed to Europe and America could experience slight delays.The fresh produce is currently the main export commodity to Europe.
Rashid Salim, Acting managing director said major shipping lines plying the region’s trade routes had indicated that the negative impact would be a slight delay for their first carrier transshipment vessels.
“We will experience very minimal impact from the Suez Canal blockage in terms of container vessels as it will only affect cargo from Europe and the Americas that are normally transshipped from the Gulf ports,” he noted in a statement.
He said one vessel had left the Port of Mombasa to Europe which by the time of the incident had already cleared the Suez Canal.
Rashid noted that the blockage had been cleared and he did not foresee much of an impact given that imports are mainly from Asia.
Cargo from Europe and Americans accounted for less than 35 per cent of imports.
General Manager Operations and Harbour Master William Ruto said on the likelihood of any delays on grain vessels and possible bunching up of ship arrivals, the authority was prepared with reviewed operational strategies in place.
Fitch Ratings has said that the Suez Canal disruption is likely to cause a large loss for the reinsurance industry.
It will reduce global reinsurers’ earnings but should not materially affect their credit profiles, while prices for marine reinsurance will rise further as a consequence of the container ship Ever Given, grounding in the canal.
The giant container ship that blocked the Suez Canal for almost a week was fully floated on Monday and traffic in the waterway resumed.
Fitch estimates losses may easily run into hundreds of millions of euros. Accidents involving large container ships can cause property claims of over $1 billion (Sh109.4 billion), but these are mostly related to salvage.
However, the shipowner’s protection and indemnity club will probably also face claims from the owners of the cargo on the Ever Given and of the other ships that are blocked in the Suez Canal for losses related to perishable goods and supply chain disruptions.
