BDP ISSUES WARTIME ADVISORY FOR SHIPPERS

BDP ISSUES WARTIME ADVISORY FOR SHIPPERS    BDP International, a Philadelphia-based transportation and logistics services company, issued an advisory on Monday to its shipper customers saying, “an imminent military engagement in Iraq can be expected to have modest impact on global freight transportation and logistics.”
   However, it would be prudent for shippers with business in the Middle East to use alternate sourcing, increase forward safety stocks, and plan for freight diversion to other ports and holding facilities, BDP said.
   Shippers should also budget for war and fuel surcharges on transportation, and for the expense of higher security among their warehousing and distribution center partners, “particularly where hazardous materials may be targeted as components for weapons of mass destruction and local acts of terrorism,” the BDP advisory said.
   “The Gulf War in 1991 had a limited effect on commercial ocean container shipping overall. Carriers imposed various risk surcharges and insurers became understandably nervous, all of which played out through a temporary pass-along of cost increases,” the advisory noted.
   “However, the international freight transportation system was generally unaffected by what turned out to be a brief, localized conflict,” BDP explained.
   “Possible service disruptions of shipments from Africa via the Suez Canal to Europe and the U.S. East Coast remain a concern today, as they did during the first Gulf War (though the Canal did not close during the 1991 conflict). Notwithstanding the levy of a war risk surcharge, landbridge services through the U.S. West Coast would become an ocean transportation contingency in the event of a service disruption at the Suez Canal.
   “In the air cargo segment, a war in Iraq is expected to have little impact on capacity, except during the earliest stages of engagement,” the BDP advisory said.