Shipping Agents Warn of Shortages and Price Hikes of Imported Goods Over Red Sea Attacks


The Kenya Ships Agents Association (KSAA) has warned of a looming shortage and price hike of imported goods owing to militant operations along the Red Sea.

In a statement, the shipping agents noted that they had been forced to reroute their ships to evade the attacks by Yemen Houthi rebels who claim to be fighting against the sovereignty of Israel.

The association lamented that despite members rerouting the ships to the Cape of Good Hope route for safety concerns, they were incurring extra costs.

Additionally, the route is longer with the transit period increased between six to 15 days, a move that will result in a shortage of goods globally. 

A ship docking at the Port of Mombasa on January 11, 2024.

KPA

“The rerouting of ships will result in longer shipping distances, causing an upward surge in freight rates and disturbances in the supply chain. Delays in the smooth movement of goods are expected due to extended transit routes.

“Consequently, leading to a reduction in ships’ capacity and a reduction in container availability, along with a potential for an increase in insurance costs and liability for ship owners and insurers,” read the statement in part.

The association, further, explained that the additional costs incurred in the process would be passed down the import supply chain, ultimately leading to a hike in imported commodities.

It was also noted that the situation could worsen in the coming days as the United Kindom and the United States plan drone strikes against the rebel group.

However, the group called on the government to take advantage of the situation to boost its trade by improving connectivity to landlocked countries that will be more affected by the attacks.

“It is evident that a country like Ethiopia which relies on Djibouti Port, is much disadvantaged by this disruption.

“This clearly shows the need for the Kenya Government to expedite infrastructure building such as roads, rail and pipelines to facilitate inland connectivity from Lamu port in order to serve countries like Ethiopia among others,” read the statement in part.

Kenya relies on imports to complement goods that are locally produced. Some of the items imported include foodstuffs such as grain and cooking oil, fuel, motor vehicles and other household items.

Motorists at a petrol station in Kinoo along Waiyaki Way on January 7, 2023.

Kenyans.co.ke





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