ALBAWABA - The Chairman of the Board of the Aden Ports Corporation, Mohammed Alawi Amzarba, stated that maritime insurance fees imposed by protection and indemnity (P&I) clubs on ships and vessels arriving at Yemen's government ports have increased by 200% due to the rise in piracy and ship hijackings in the Bab el-Mandeb Strait and the Red Sea waters.
Amzarba confirmed that a significant portion of international trade now relies on the safe maritime passage of the Cape of Good Hope, south of Africa, instead of the Bab el-Mandeb Strait and the Red Sea waters. This shift has led to increased insurance costs for ships transiting through this secure maritime route. Consequently, shipping companies have raised shipping rates to compensate for the higher insurance costs.
These measures will burden Yemeni traders and cargo owners, and will impact consumers by raising commodity prices. Amzarba explained that the war that erupted after the Houthi coup in 2015 has caused significant losses to the private sector in Yemen, as hundreds of millions of dollars have been spent on insurance costs to convince ship owners to come to Yemeni ports, which are considered conflict-prone areas.
Amzarba emphasized that efforts to reduce insurance costs are still ongoing, with a government delegation currently negotiating in London with British P&I clubs to reach agreements that will lower the high insurance costs. These efforts will initially include the port of Aden in the first phase and the port of Mukalla in the second phase.
It is worth mentioning that the Yemeni government signed a preliminary agreement with the United Nations Development Programme in August to reduce maritime insurance costs for ships heading to Yemen's government ports, following a significant increase in these costs due to years of war in the country.
The international maritime passages in the Red Sea and the Arabian Sea are witnessing escalating disruptions due to ongoing Israeli attacks on Gaza and the attacks launched by the Houthis on Israeli vessels. As a result, the United States has formed an international alliance to secure global trade in that region.
