JORDAN: NO INCREASE IN INSURANCE OR SHIPPING

S E C R E T AMMAN 004533

SIPDIS

E.O. 12958: DECL: 08/13/2012
TAGS: MOPS ETTC EPET PREL IZ JO
SUBJECT: JORDAN: NO INCREASE IN INSURANCE OR SHIPPING
CHARGES SINCE MARLO ADVISORY

REF: A. AMMAN 4506


B. AMMAN 3893

Classified By: DCM Gregory L. Berry. Reasons 1.5 (b) and (d)


1. (c) Summary. According to the head of the Jordanian
Shipping Agents Association, the July issuance of a "special
advisory" by the Maritime Liaison Office (MARLO) in Bahrain
has not resulted in an increase in either insurance or
freight charges for Aqaba shipping. End Summary.


2. (c) Senior Jordanian officials, including in recent
meetings in Washington, have alleged that the July 8 special
advisory that the MIF was "planning to resume" maritime
interception operations in the Gulf of Aqaba had led to an
increase in insurance and/or freight charges for cargo
shipped via the port of Aqaba. The Prime Minister told the
Ambassador August 5 that it was now cheaper to deliver goods
to Syrian ports and transport overland to Jordan than to ship
directly to Aqaba.


3. (c) However, Captain Mohammed Dalabieh (please protect)
the director of the Jordanian Shipping Agents Association and
former Aqaba Port Director, told econ chief August 11 that
neither set of costs had been affected by the MARLO advisory.
Dalabieh said that approximately four months ago he and the
Jordanian embassy in London convinced Lloyds and other
insurance companies to discontinue "war risk" insurance
surcharges that had been imposed on ships calling at Aqaba
since military activity began in Afghanistan in October 2001.
Shipping lines had been passing these surcharges (which,
Dalabieh said averaged about usd 4.50 per ton) on to
shippers. When the surcharges were ended, the lines only cut
their rates by about usd 2.00 to 2.50 per ton. Nevertheless,
Dalabieh did not believe that the higher costs had affected
port usage.


4. (c) Dalabieh said he understood that a resumption of MIF
inspections was not likely. He was more concerned about the
potential impact on Aqaba port activity of possible military
action against Iraq. He said he expected that renewed war
risk surcharges would result in a cut of about 50 percent in
ships visiting Aqaba, cutting vital foreign currency earning
exports of phosphates and potash by at least that much.


5. (S) Comment: We are continuing to keep a close eye on
port traffic to ensure that there are no more surreptitious
attempts to move illicit shipments out of Aqaba.
Gnehm