Attacks by Hutus raised the prices of goods in Montenegro: the cost of ship transport has increased by up to 300 percent since November

Freight rates for containers used to deliver goods from Chinese ports, which cost $1.400 and $1.800 in November, rose to $4.150 and $6.150 in February, respectively, while delivery terms were extended by two to three weeks.

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Illustration, Photo: Shutterstock
Illustration, Photo: Shutterstock
Disclaimer: The translations are mostly done through AI translator and might not be 100% accurate.

The cost of shipping goods from the main Chinese ports to the Montenegrin Port of Bar has increased by up to 300 percent since November, it was announced to Radio Free Europe (RSE) from Jadroagenta Bar, an agency that is a shipping and forwarding agent.

This is a consequence of the diversion of maritime traffic from the Suez Canal to an alternative route around Africa, due to attacks by the Yemeni Houthi rebels on ships in the Red Sea, which have been frequent since November 2023.

There is currently no precise and systematic data on the consequences of these price increases on the market in Montenegro, RSE research shows.

The Chamber of Commerce of Montenegro does not have data, and several large trading companies that import goods from China said that the increase in shipping container transport prices increased their retail prices by five to ten percent, and in some cases by 100 percent.

When asked by RSE how many goods from China arrive in the countries of the region via the Port of Bar, authorities from Bosnia and Herzegovina and North Macedonia replied that they had no data, while RSE did not receive an answer from Serbia.

RSE also sent a query about the consequences of more expensive sea transit of Chinese goods to the Embassy of China in Montenegro and to the Chinese business initiative "Cooperation between China and the countries of Central and Eastern Europe", but there was no response.

More expensive freight increases the final price of goods

Freight rates for containers used to deliver goods from Chinese ports, which cost 1.400 and 1.800 dollars in November, rose to 4.150 and 6.150 dollars in February, respectively, while delivery deadlines were extended by two to three weeks, according to Jadroagentu Bar.

China is the first in the list of countries from which Montenegro imports the most by sea, and the second in terms of total imports. Last year, goods worth around 425 million euros were imported from that country.

Consumer goods and general cargo, such as timber, metal products, ceramics, furniture, parts of machines and vehicles, raw materials and food industry products are mostly delivered to Montenegro from overseas markets in containers.

Impact on consumer prices

The more expensive maritime transport from China has increased the purchase prices for suppliers, which inevitably affects the final price paid by consumers, it was confirmed for RSE in large retail chains.

KIPS, a company for building materials and household furnishings, told RSE that their costs per container doubled, from 3.500 to around 7.000 euros, which caused the purchase price of their products to increase by ten to 100 percent. .

As they add, this will affect the final selling price of some products, which will become too expensive, so they are considering the option of giving up importing some goods, such as bathroom tiles.

The company Cungu & Co, which sells consumer goods, including furniture, expects the first delivery from the Far East in the coming days at new transport prices, which are 70 percent higher.

This will increase their selling prices by five to 10 percent, as they stated for RSE.

They also say that, in addition to goods from China, the price of transportation from other Asian countries, such as Indonesia and Vietnam, has also increased. A special problem is the delivery period, which has increased from about 40 days to 70-80 days.

In several shops of Chinese goods in Budva, it was unofficially confirmed for RSE that their prices have increased by ten percent since the beginning of the year, but they believe that this is not only a consequence of more expensive transport from China, but also of price increases in Montenegro.

If the situation around the Suez Canal does not calm down, the shipping and forwarding company Jadroagent Bar expects the price of overseas transport to continue to rise, which can lead to a stoppage or even a break in the supply chain.

Impact on global trade

About 40 percent of trade between Asia and Europe is carried out by sea, and due to attacks by the Houthis on ships, transit in the Suez Canal has decreased by more than 40 percent in the last two months, according to the United Nations Conference on Trade and Development (UNCTAD) in a February report.

Thus, by February, instead of through the Red Sea, 586 container points diverted navigation around Africa.

UNCTAD also cites specific examples: the number of specialized car carriers passing through the Red Sea dropped by more than half in December compared to the same month a year earlier, and almost no liquefied gas carriers currently use the Suez Canal, which caused a jump the price of gas.

The Suez Canal is the shortest maritime route between Europe and Asia, through which approximately 17.000 world ships passed annually.

Almost all the largest container companies now sail the route around the Cape of Good Hope, in southern Africa, which is about 3,5 thousand nautical miles (about 6.500 km) longer, Janko Milutin from the Association of Sea Captains of Montenegro told RSE.

He explains that, in addition to extending the terms and prices of goods delivery, it also affects the safety of ship crews and property.

Risks to seafarers

The area 12 nautical miles from the coast of Yemen is a war zone, and the entire Gulf of Arden and the southern part of the Red Sea have been declared a high-risk zone, says Captain Janko Milutin.

Four merchant ships owned by the two Montenegrin companies Barska and Crnogorska plovidba, with their slightly more than a hundred seafarers, are currently not sailing through the Suez Canal, according to data from the Association of Sea Captains.

Hutu militants
Hutu militantsphoto: REUTERS

However, the largest number of about 6.000 seafarers, estimated to be in Montenegro, sail on foreign companies. They usually bypass danger zones, but there are still those who use them.

"That's why seafarers have the right to request disembarkation from the ship if the company directs the ship that way, and if they decide to do so, they have the right to additional bonuses," reminds Milutin.

The World Economic Forum (SEF) said in a February report that the Houthis in Yemen have been using kidnappings, ballistic missiles and drones to target international shipping routes since November.

According to the British Maritime Trade Operation, 33 vessels have been attacked in the region since November, and 16 of them have experienced direct missile or drone attacks.

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