Africa: MSC Imposes War Surcharge On Africa Routes As Shipping Risks Rise

Mediterranean Shipping Company will add new charges on several trade routes to Africa as tensions in key maritime corridors disrupt global shipping.

The Swiss shipping group said the “war surcharge” took effect on March 5 and affects cargo moving from the Indian subcontinent and Gulf countries to African markets.

The measure will raise freight costs for shipments to East Africa, West Africa, South Africa and islands in the Indian Ocean.

MSC said dry cargo from the Indian subcontinent will face a surcharge of $500 per 20-foot container. Refrigerated containers will incur a $1,000 surcharge per unit.

Shipments from Gulf countries to Africa will face higher charges. The company plans to add $2,000 for a 20-foot container, $3,000 for a 40-foot container and $4,000 for refrigerated units.

The new fees come on top of existing freight rates on routes connecting Asia and the Middle East to African ports.

MSC said the decision reflects deteriorating maritime security conditions in two strategic sea corridors: the Strait of Hormuz and the Bab el-Mandeb Strait, which links the Red Sea to the Gulf of Aden.

Disruptions in these passages increase insurance costs and force ships to take longer routes, raising transport costs.

For African economies that rely heavily on imports, higher shipping rates could push up prices for goods transported by sea, including food products, consumer goods and industrial inputs.

MSC has introduced similar surcharges during periods of market volatility, including during the energy crisis linked to the Russia-Ukraine war.

The company has recently expanded capacity on routes to West and Central Africa, deploying larger container ships capable of carrying up to 24,000 containers.

Key Takeaways

Shipping disruptions in strategic maritime corridors often transmit quickly into African economies because of the region’s dependence on imported goods. Most consumer products, food items and industrial inputs in West and Central Africa arrive by sea, primarily from Asia and the Gulf. Even small increases in container shipping costs can translate into higher import prices. Freight rates surged globally during the pandemic due to port congestion, supply chain bottlenecks and container shortages. Although costs later declined, volatility remains tied to geopolitical risks in key trade routes. The Bab el-Mandeb Strait and the Strait of Hormuz are among the most important passages in global shipping. Large volumes of trade between Asia, the Middle East, Europe and Africa pass through these waterways. When security conditions deteriorate, shipping companies often introduce war risk surcharges or adjust insurance premiums to cover potential losses. For African importers, these additional costs can cascade through supply chains, affecting wholesalers, retailers and ultimately consumers. The impact is especially significant in countries where imported goods represent a large share of consumption and where inflation is sensitive to changes in logistics costs. As a result, maritime security developments far from African shores can have direct effects on prices and economic stability across the continent.

Sign up for free AllAfrica Newsletters

Success!