With Ecuador in peak season, shippers are in a race to find alternative buyers and routes to market
Ecuadorean banana exporters are scrambling to reroute shipments to other markets and find alternative ports of entry as the situation in the Middle East deteriorates.
According to Richard Salazar, executive director of Acorbanec, the Middle East is the fourth biggest market for Ecuadorean bananas, accounting for around 11 per cent of total shipments.
“Sending fruit to other destinations, especially in Russia, Europe, Eastern Europe, the US, among others, is an option,” he told Fruitnet. “We are in peak season; however – there are signed contracts and real demand in these countries, and that generates uncertainty.
“As of 2 March, airspace and sea lanes are closed, particularly in the Persian Gulf region, affecting normal supplies to Kuwait, Bahrain, Qatar, and the UAE, which take approximately 1mn boxes of Ecuadorean bananas per month,” Salazar continued.
“The ports of Mersin in Turkey and Jeddah in Saudi Arabia have not yet experienced any logistical disruptions. Several shipping lines are exploring options to unload cargo at ports in Oman and Saudi Arabia and transport it overland to the Persian Gulf countries.”
Acorbanec said it are evaluating the situation daily. It noted that the most immediate impact will likely come from the increase in oil prices, which will undoubtedly affect shipping rates. Salazar warned that the logistics of direct distribution to Kuwait, the UAE, Bahrain, and Qatar could become increasingly complicated in the coming days.
On Monday, Maersk announced the immediate suspension of acceptance of reefer and hazardous or special cargo bound for the UAE, Oman, Iraq, Kuwait, Qatar, Bahrain, and Saudi Arabia. The shipper has also suspended new bookings between the Indian subcontinent (India, Pakistan, Bangladesh, Sri Lanka) and the Upper Gulf markets.
CMA CGM has also suspended all reefer cargo bookings to and from most Gulf and Red Sea countries with immediate effect and until further notice.
MSC is currently the only shipping line that has not suspended service to Saudi Arabia, but has implemented a complete temporary blockade to: Iraq, Kuwait, Bahrain, Qatar, the UAE, and Oman, without exception for cargo type or country within the region, until further notice.
Apart from elevated transit times, costs will definitely increase significantly when shipping to those regions, Niels Otte, division director fruit-/cargo-insurance at Aktiv Assekuranz Makler told Fruitnet.
