In an effort to cut down long waiting time for shipments, Egypt will keep its ports open for 24 hours a day. This was made known on Wednesday by its Transportation Minister Hesham Arafat.
According to Reuters, Arafat said the extended port hours would come at no added cost to shippers. He also did not specify when the new hours would take effect or how long the new policy would remain in place.
Although this move is seen as a positive one to avoid paying demurrage, a Cario based trader told Reuters that this move might not solve the issue, because the crowded port is caused by lack of storage space.
“Some of the storage areas inside the port don’t have enough space to discharge the whole quantities,” the trader said.
Since last year, traders have complained of growing demurrage fees—costs borne by suppliers if they fail to unload their ships on time—caused by long delays for their vessels at Egyptian ports and this has raised the cost of doing business in the country. The traders also end up adding risk premiums of up to $500,000 on individual cargoes.
Over the last year, grain traders have added huge premiums on shipments headed to Egypt, the world’s largest wheat buyer, due to soaring demurrage fees. As a result of this, Egypt’s state grain buyer General Authority For Supply Commodities (GASC) set new tender terms in February to cap demurrage fees after major suppliers shunned state wheat tenders.
With a fast-growing population, Egypt will continue to need large amounts of foreign grain. The country spends billions of dollars on grain each year to provide bread for its 90 million people. The country is also working to clamp down on smuggling in order to ensure that it doesn’t pay more than necessary to help feed its population, half of whom live near or below the poverty line.