Hapag-Lloyd says Hormuz cargo fee would be ‘fundamentally wrong’

Germany’s Hapag-Lloyd, the world’s fifth-largest container shipping company, on Tuesday criticised US plans to impose a 20% charge on cargo ⁠shipped through the Strait of Hormuz as “fundamentally wrong.”

US President Donald Trump said on Monday he had reinstated a blockade on Iranian shipping in the Strait of Hormuz this month and proposed charging ⁠a 20% fee to ‌help meet the cost ⁠of the US safeguarding the vital waterway. “It would be fundamentally wrong to levy fees for passage through international waters,” Hapag said ​in a statement.

The ​German Shipowners’ Association (VDR) said such a measure would be legally impermissible and would undermine the principle of free passage through international waters. “Today it’s the Strait of Hormuz, tomorrow the ‌Strait of ​Malacca, and the day after tomorrow the next international strait. Where will this ‌end?” VDR head Martin Kroeger ⁠told business magazine Wirtschaftswoche in an interview on Tuesday.

Civilian commercial shipping ‌must not become a pawn in geopolitical conflicts, he added. Control of the Strait of Hormuz, a vital route for oil and gas supplies, has become one of the central flashpoints of the US-Iran conflict. Iran’s effective blockade of ​the strait has pushed up energy prices and fuelled global inflation concerns.

Hapag said that while fees can be justified to fund major infrastructure such as the ​Panama Canal and ‌Suez ​Canal, the same argument did not apply to the Strait ‌of Hormuz, ‌which carried about a fifth of global oil and gas supplies before the war. The Hamburg-based company, which raised its earnings outlook on Monday on strong ⁠demand, told Reuters it could not reliably quantify the financial impact of Gulf tensions on its business.

“The recent escalation currently has ‌no additional immediate impact on our vessel ​operations,” said Hapag, which has adjusted its network so vessels don’t pass through the key waterway.

The closure of the Strait of Hormuz has significantly affected the global textile and fashion industries, both by delaying transit times of goods from their country of production to the country they are destined to retail in and by increasing the costs and risks associated with shipping. The disruption caused to petroleum supplies and maritime routes has also increased the price of manufacturing synthetic fibres such as polyester, which is a much-used fabric, especially in the fast fashion industry. The financial performance of clothing brands and textile businesses will therefore depend on the situation’s ongoing developments.

FashionNetwork.com with Reuters