Egypt: Shipowners nervous
Many ship owners, concerned that there will be delays in cargo reaching their destination due to on-going unrest in Egypt, are looking at alternative routes.
Egypt: Ongoing unrest, rise in piracy make shipowners nervous
The 120-mile long Suez Canal, which for decades has been an important shortcut connecting the US and Europe with the Indian Ocean and its Asian ports, faces the threat of closure. Today, many ship owners, concerned that there will be delays in cargo reaching their destination due to on-going unrest in Egypt, are looking at alternative routes to avoid the canal. However, high fuel costs are deterring some ship owners from re-routing.
Typhon believes that its anti-piracy deterrent protection model can assist ship owners with transiting the canal safely and passing through piracy zones instead of feeling as though they have no choice but to consider re-routing which would result in a more expensive and longer journey.
Typhon’s services also comprise ports security- a service which the Egyptian government could potentially incorporate into its coastal protection model, with protesters said to be blockading vessels. Some governments are employing the services of professional protection companies for guarding their country’s ports, particularly ports to which extremely valuable cargo such as oil is transported.
Ant Sharp, CEO of Typhon, said, “Shipping companies are concerned that escalating tensions in Egypt are affecting wider trade with the country. The unrest which includes some disruptions along the Suez Canal is a major cause for concern for shipowners, charterers and the government. Re-routing will be a big issue for Egypt which heavily depends on the fees it charges ships for permission to transit the canal. In short, one of
Egypt’s major sources of foreign revenue is the canal. Revenue has been in decline for several years due to a decrease in transits and the rise of piracy off the coast of Somalia.
“Should Egypt continue to increase transit toll fees to boost revenues and should there be a rise in shipowners re-routing and an increase in piracy due to incessant unrest, the steady decline of the country will only continue and countries will cease to trade with Egypt”.
Ant concluded, “But if shipowners really weigh up the pros and cons, in terms of cost savings, they will see that the massively high fuel prices involved in re-routing around say the Cape of Good Hope, would be more expensive than incorporating a bespoke private protection model, like that of Typhon’s, into their business and transiting the canal”.