As tensions between the U.S. and Iran have led to a significant decrease in shipping traffic through the Strait of Hormuz, coupled with threats of maritime blockades from Yemen's Houthi rebels, South Korean export companies are facing increased logistical burdens in the Middle East. KOTRA has decided to expand its support by providing information on alternative ports and transportation cost assistance to mitigate export disruptions. The Houthis have declared a maritime blockade against Saudi Arabia, warning shipping companies to avoid Saudi ports.
According to KOTRA, South Korean exporters are utilizing alternative routes through ports outside the Strait of Hormuz, including Khor Fakkan in the United Arab Emirates, and Sohar and Salalah in Oman, as well as Jeddah in Saudi Arabia.
However, congestion at these alternative ports is worsening. It currently takes 2 to 3 weeks for vessels to enter Sohar and Salalah, while Jeddah is experiencing delays of over 2 weeks due to the influx of cargo rerouted from Hormuz. Inland transportation costs have also more than doubled compared to previous rates.
Shipping traffic through the Strait of Hormuz has sharply declined since the resumption of hostilities between the U.S. and Iran. The risk of vessel attacks has led some ships to halt their voyages or turn back, while war risk insurance premiums have surged.
KOTRA is monitoring the operational status of 24 ports and alternative routes daily through its 13 trade offices in the Middle East. This information is provided to companies in the form of reports on the 'Current Operations of Major GCC Ports' and 'Logistics Routes by Alternative Ports.'
Costs incurred after arriving at local ports, such as storage fees, customs duties, and inland transportation costs, are supported through KOTRA's overseas joint logistics center program, with up to 24 million won available per company. The scope of inland transportation cost support has also been expanded to include overland transport between the six GCC countries.
Maritime and air transport costs from domestic departure points to local ports can be supported with emergency vouchers of up to 60 million won. Companies already utilizing export vouchers can also apply for the overseas joint logistics center program.
By combining these two programs, companies can receive support totaling up to 84 million won for international transport and local logistics costs.
KOTRA has expanded its joint logistics centers in the Middle East to 17. Companies that have exported to 22 Middle Eastern countries from 2023 to this year can utilize up to three joint logistics centers.
From March 3 to July 21, KOTRA's emergency response consultation center received 1,088 inquiries related to the Middle East. Of these, 215 were logistics-related, accounting for about 20%. The main issues included increased costs due to rerouted transport, cargo returns, and a lack of local information.
Kang Kyung-sung, president of KOTRA, stated, "Logistics in the Middle East is directly linked to export feasibility and costs. We will provide local information promptly and operate support programs flexibly according to the situation."
* This article has been translated by AI.
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