A combination of security fears, increases in insurance . . .[restrict]premiums and a lack of money to fund imports is seeing cargo figures plummet and shippers steer away from Libya.
“The current events are scaring ship owners and operators away, with Libyan waters classed as a war zone and unrest potentially leading to unpredictable anchorage times and hence demurrage costs,” Libyan maritime expert Captain Omar Fanoush told the Libya Herald. “As well, there is the fear of losing control of ships or crew.”
The CEO of Italy-based Med Cross Lines Loris Trevisan said, since Libya was now considered by insurance companies as a ‘war-risk’ country, shippers were having to pay heavy extra premiums when calling at Libyan ports. “Volumes have decreased dramatically and we have, for the moment, been concentrating more on other alternative markets such as Algeria and Egypt.”
Not all companies are being affected by insurance hikes, however, said Turkish firm Sana Lines. The shipping line admitted, however, that other problems at Tripoli Port had forced it to cancel its three last scheduled calls.
Although Libya’s ports have remained open, the recent escalation of violence in and around the capital provoked security fears amongst many port workers – from stevedores to truckers – many of whom stopped turning up to work at the height of the fighting. Vessels unable to unload their cargo racked up huge demurrage costs and some had no choice but to go elsewhere to sell their cargo.
It is not only the clashes that have caused imports to plummet. “The confusing political situation and security unrest resulted in the stoppage of proper bank operations, such as letters of credit and SWIFT transfers to support imports, and so people have had to use the black market to fund their deals,” Captain Fanoush said. He added that this had already led to exchange rates rocketing by as much 30 percent.
Trevisan said that ongoing banking problems in Libya had seen cargo figures steadily decrease over the last five to six months and estimated that imports from Italy and Europe had dropped 75 percent during the last three months.
Both Med Cross Lines and Sana Lines are optimistic about the future, however, with Sana Lines planning to resume Tripoli calls from its next voyage. Med Cross Lines, which Trevisan said within two years had become a major player in the Libyan shipping market, expects to restart calling at all major Libyan ports in the next one to two months.
“Our company was established to be one of the major transport players in the reconstruction of Libya and we confirm our commitment,” he said, adding that Med Cross Lines was looking at increasing its numbers of vessels and port calls, as soon as the security situation improved and cargo flows resumed to normal levels.
The Libya Herald first appeared on 17 February 2012 – the first anniversary of the Libyan Revolution. Since then, it has become a favourite go-to source on news about Libya, for many in Libya and around the world, regularly attracting millions of hits.