As the global debate over the reopening of the Strait of Hormuz continues there are warnings the strain on the global supply chain are already being felt.

As Iran said it would allow vessels from designated countries to transit the Strait US president Donald Trump has called on NATO allies to support efforts to escort merchant vessels through the waterway.

However, the Greek government has said it wants to see a solution which allows all vessels the ability to pass through the strait, while Secretary-General of the International Maritime Organization, Arsenio Dominguez has said that warship escorts are not the solution and the threat to seafarer and vessel safety.

Shaan Burton, (pic) partner at law firm Kennedys said the world’s trading system and ports are already being impacted by the inability to move oil and gas.

“The war with Iran has reached critical levels with an increase in direct attacks on commercial container vessels. Vessels continue to be hit by ‘unknown projectiles’, she explained. “These include, a Thai-flagged commercial vessel which was hit 11 nautical miles north of Oman, causing a fire on board, a Japan-flagged commercial vessel sustained minor damage after it was struck 46km (around 25 nautical miles) off the United Arab Emirates coast, and a third commercial vessel was hit 93km (around 50 nautical miles) north-west of Dubai.

“This will inevitably lead to a considerable strain on the supply chain worldwide.”

Burton continued: “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.

“So, what happens when those goods are dropped at a ‘nearby’ port? It is questionable as to 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 the containers are dropped off.

“However, 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 UAE, Bahrain, Oman, and Saudi Arabia, of which some ports have advised that operations are suspended and others reporting significant delays.

“There are already signs that ports will begin to experience ‘vessel bunching’ as vessels are taking alternative routes and unplanned drop-offs at ports,” Burton continued. “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 particular ports is likely to lead to delays in unloading vessels, increased labour costs, and a lack of suitable storage at ports. It is highly likely that this, in turn, will lead to an increase in claims for the loss and/or damage to cargo sat on the quayside – particularly where the ports are unable to provide adequate storage.”

“Whether those losses are recoverable from vessel owners will depend on what contractual terms have been agreed between the vessel owners and the shippers,” she concluded. “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).

“There are also likely to be claims from the ports and terminals themselves. Most ports and terminals will be insured through the local market so it will depend on what regional cover has been issued.”

‘‘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.’’

Shaan Burton, Kennedys