War footing at Ashdod port keeps supplies running for Israel

Practice drills, protective shelters and an Iron Dome air defence battery nearby have become part of everyday life at the Israeli port of Ashdod, its major port in the south of the country, with Haifa taking the supply strains in the Mediterranean in the north.

Ashdod is just 30 miles from Gaza, and is exposed to rocket attack. The added precautions are part of Israel’s determination to minimize any supply chain disruptions to Israeli consumers in general.

The entire port is dotted with protective shelters and the waiting time for staff under protection is around 10 minutes to ensure that even after a rocket falls there is no risk of falling shrapnel, port foreman Yigal Ben Kalifa told Reuters. “After that, everyone gets back to work,” he said, adding that “the Port of Ashdod is the artery of Israel’s economy and we are doing everything to ensure this won’t be damaged.”

The port accounts for 40% of Israel’s total seaborne trade including imports and exports, and has not had any direct rocket strikes. However, at least 20 ships were reported to have opted to divert from Ashdod to the northern Israeli port of Haifa in recent weeks, with Ashdod experiencing a 30% drop in volume week-on-week, according to Shaul Schneider, chairman of the Port of Ashdod’s board of directors. He added that “we believe that in a couple of weeks it will change and we’ll get back to normal”. He also noted that the port’s representatives were talking to shipping companies and importers to reassure them. “We are continuing to function under fire,” he said.

Schneider said that 10% of Ashdod Port staff had been recruited by Israeli army, but that Ashdod, which is the only state-owned port in Israel, was operating 24/7, with employees working longer shifts mainly for two reasons. The first reason was their own safety. According to Schneider, it is safer for port employees to remain at the port area, rather than be on the road in order to return home. Additionally, Israel’s military had called up 10% of the Ashdod Port Company personnel, so the remaining staff had to fill the gap.

Schneider said that, if there was an escalation around Israel’s northern border, the government had contingency plans for Ashdod to take on more trade from Haifa if needed.

Of the roughly 7,600 rockets that have been fired towards Israel from Gaza since October 7th, according to Israeli government data, fewer than 100 had targeted Ashdod, said Arieh Itach, security officer with Ashdod municipality.

The smaller port of Ashkelon, which is the closest to Gaza, is not technically shut but is effectively so.

Robert Peters of UK-based maritime security company Ambrey told Reuters that the company was advising clients that vessels could call at Ashdod. “We would advise that vessels wait further offshore than ordinarily, given the risk of collateral damage at sea,” he said, adding that “so far, we have not seen any merchant vessels damaged while in the port, which we are assessing is likely due to Iron Dome”.

The dwell time for imports into Ashdod had dropped to just 1.8 days by October 17th, compared to 3.4 days in September, according to analysis from supply chain platform project44.

War Risk Insurance premiums were expected to remain high until a formal ceasefire was brokered, said UK-based maritime risk advisory and security company Dryad Global. “Despite a slowdown in Hamas’ rocket strikes, the risk of collateral damage to Israeli port infrastructure remains substantial,” the company’s Noah Trowbridge said.

Christian Roeloffs, co-founder and CEO of Container xChange, has warned that “in the case of the conflict in Israel, any expansion of the hostilities beyond the country’s borders could introduce risks to two vital shipping choke points. The Suez Canal, a critical waterway for various commercial vessels, including container ships, may face disruptions. Similarly, the Strait of Hormuz, a backbone for oil and gas shipping, could be affected. However, the extent of these effects will largely depend on the conflict’s expansion and duration”.

Israel itself makes up a relatively small market for container shipping, with its primary ports of Ashdod and Haifa accounting for just 0.4% of global throughput.

South Korean ocean carrier HMM announced a war risk surcharge (WRS) on Israel cargo in a customer advisory on October 18th.  Israeli container carrier ZIM has also announced an additional fee. ZIM has implemented the new War Risk Premium (WRP) for cargo to/from Israel effective from the October 12th Gate-In date.

LineWar risk premium Surcharge
ZNI$50 per teu
ZMP, MGX, SAM, ZCA$100 per teu
TBX, LBX$80 per teu
ADE, TYR$50 per teu