The Iran war is raising the cost of getting goods into Somalia. The strain is showing in new shipping surcharges, the loss of a carrier’s route to Berbera, and the return of piracy off the coast.
The Iran war is in its fourth month, and the cost of bringing goods into Somalia has climbed sharply. Whether it is manufactured goods or fuel, importers are paying a premium, through delayed cargo, higher fuel prices and shipping surcharges. Somalia has felt the cost of the conflict from the start.
Those delays trace to the Strait of Hormuz, which normally carries about a fifth of the world’s oil and a large share of its fertiliser and has been all but shut. Shipping lines now avoid it and the southern Red Sea, sending cargo the long way around the Cape of Good Hope. Somalia brings in almost everything it consumes by sea, much of it from or through the Gulf, and prices its trade in US dollars, so the longer, costlier voyages pass straight into its import bill.
The longer voyage is only part of the bill. On top of it, the large container lines have layered a series of emergency charges, and Maersk’s rates now carry an emergency risk surcharge, an emergency bunker surcharge and a contingency charge on cargo bound for Somali ports.
The clearest sign of the strain is the outright loss of a route. In April, Maersk suspended bookings to Somalia’s north-western port of Berbera, directing customers to Djibouti, Mogadishu and Mombasa instead. The company attributed the decision to scheduling changes, and its agent in Berbera, Integrated Shipping Services, said publicly that it was unrelated to security. The timing is hard to square with that, coming as Maersk pulled back across parts of the Gulf region.
While Berbera is still served by other lines, the withdrawal of one of the world’s two largest container carriers pushes cargo onto longer and costlier routings and onto rival hubs, and the bill is passed to importers.
There is also the question of maritime safety outside of the Iran war. The waters off Somalia, calm for much of the past decade, have been reassessed as severe for piracy. Maritime monitors recorded merchant vessels held this year and a hijacked dhow used as a base for further attacks. The wider disorder in the region has given the practice room to return. For now this is a risk rather than a settled cost. But it threatens to add a second premium on top of the war-risk charges already in place, to raise insurance costs for Somali importers and exporters alike, and to heighten the danger on the very Gulf of Aden lanes onto which diverted cargo is being pushed.
