March 28, 2003	Friday	Muharram 24, 1424

RIYADH, March 27: The war on Iraq has begun to hurt business throughout the region, and military supplies from the US are clogging shipments.

A number of importers from the US have been advised by various shipping lines that Middle East traffic is getting overbooked. Consequently, it is becoming very difficult for US exporters to the Middle East to find booking space on vessels. This is resulting in unexpected shipping delays from the US, affecting the production schedule of a number of manufacturing companies here in Saudi Arabia and the rest of the Gulf.

Shipping industry sources here reveal that the Maersk Line vessels sailing into the Middle East have almost been completely booked by the military and are now utilized by them almost exclusively for their supplies. Maersk is one of the leading shipping lines and has a regular service to and from this region. Other shipping lines are also reporting of pressure on space booking for the Middle East because of the spillover effect due to the military bookings.

An additional fuel surcharge has been levied with immediate effect on all shipments to the US. It has been learnt a $50/100 surcharge per 20 foot/40 foot container has been levied on shipments to the US. Even shipments at the harbour waiting for loading on board will also incur the additional cost.

US exporters to this part of the world are required to submit export papers in advance and only after a thorough inspection and clearance by the Customs authorities that goods intended for Saudi Arabia can be put on board. This clearance is taking quite some time because of the backlog at some of the US export ports.

Many manufacturing houses have already diversified their sources for their raw material so as to offset the new logistic and supply line problems.