Attacks on commercial shipping linked to the ongoing Middle East conflict are disrupting global supply chains, as vessels report being struck by “unknown projectiles” and operators alter routes and cargo plans.

According to Kennedys partner Shaan Burton, several incidents have been recorded thus far, including a Thai-flagged commercial vessel being hit 11 nautical miles north of Oman, causing a fire on board; a Japan-flagged commercial vessel sustaining minor damage after it was struck around 25 nautical miles off the United Arab Emirates coast; and a separate commercial vessel hit around 50 nautical miles north-west of Dubai.

“A number of the significant containership operators have issued notices to cargo owners advising them that they intend to treat the carriage as terminated and that they will take steps to drop the cargo at a nearby port,” Burton said.

Burton notes a degree of uncertainty around what is deemed as “a safe nearby port” with suggestions that some operators are effectively dropping off containers with no justification or rationale as to the choice of port.

“Aside from the obvious concerns with containers and goods being scattered around the region in less than ideal locations, there are additional factors that will impact ports and terminals,” she explained. "The global message is that the majority of ports remain open. However, there are of course exceptions in the UAE, Bahrain, Oman and Saudi Arabia. There are already signs that ports will begin to experience ‘vessel bunching’ as vessels are taking alternative routes and unplanned drop-offs at ports. In particular, port hubs such as Singapore and Rotterdam are already reporting that they are feeling the strain as those hubs absorb redirected cargo.”

The increase in container traffic at certain ports is also likely to lead to delays in unloading vessels, increased labour costs and a lack of suitable storage at ports, potentially leading to an uptick in claims for the loss and/or damage to cargo sat on the quayside. “Whether those losses are recoverable from vessel owners will depend on what contractual terms have been agreed between the vessel owners and the shippers," Burton added. "Similarly, whether those losses are recoverable under a cargo policy will depend on what cover has been provided. Many claims are likely to be for losses due to delay, which is, however, an excluded peril under the ICC(A) (see clause 4.5)."

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