By Andrew Mills, Nazih Osseiran and Sarah El Safty
DOHA, April 15 (Reuters) - Until the Iran war, shipments of Austrian spruce timber to Qatar, where the wood is used to support concrete and make basic frames on construction sites, were a matter of routine.
The standard 2x4, as it is known in the building trade, was typically sourced from Austria in Europe, shipped to Dubai’s Jebel Ali port, transferred to a feeder vessel and delivered to Qatar’s Hamad Port in about 45 days.
It must now be offloaded,
trucked overland and reloaded onto new ships, adding thousands of dollars in costs and months to delivery times, as the effective closure of the Strait of Hormuz has caused unprecedented disruption to oil and other trade.
BEAMS OF WHITE WOOD REFLECT WIDER CHAOS
Anything from medicine to basic foodstuff and the 2x4 beams of spruce, referred to as white wood, are caught in the upheaval.
The two-inch (5 cm) by four-inch beams of white wood that come in various lengths are not a strategic resource, but any shortage would slow activity in the construction sector and drive up costs.
A building materials supplier in Qatar, who shared details with Reuters on condition of anonymity, said that when the U.S.-Israeli airstrikes were launched on Iran on February 28, unleashing a new phase of Middle Eastern conflict, he had 17 containers of white wood on their way.
Each container holds around 2,850 beams of Austrian spruce, worth about 15,000 euros ($17,702).
The cargo left the Croatian port of Rijeka as planned, but instead of sailing to Jebel Ali, was diverted to Khor Fakkan on the UAE’s east coast, avoiding a transit of the Strait of Hormuz that would have been required to reach Jebel Ali.
After that, the timber was trucked to Abu Dhabi and reloaded onto feeder vessels bound for Doha. The detour added a surcharge of about $3,600 per container - some shippers quoted the supplier surcharges as high as $5,000 per container - more than triple the normal cost of shipping a 40-foot container of timber from Europe to Qatar, the supplier said.
Even after being rerouted, the cargo has yet to arrive in Qatar and delivery is expected to take another one to two months.
At the same time, several containers of plywood that the supplier had ordered were loaded onto feeder vessels at Jebel Ali and spent weeks at sea before being returned to port, underscoring how importers lose control over shipments once they are on the water.
RISING COSTS FOR BASIC GOODS
Before the conflict, the supplier said he would sell a standard 2x4 for around QAR 23–25 ($6.30–$6.90) per piece. Additional costs caused by rerouting and longer transit have pushed his selling price to QAR 35-37 ($9.60–$10.20) per piece.
Future shipments could be more expensive. Routing timber via Saudi Arabia’s Red Sea port of Jeddah, which is a possibility under consideration, would involve higher shipping charges and trucking 1,500 kilometres across the Arabian Peninsula to Qatar, further raising per-piece costs.
Other supply chains are equally disrupted.
Before the Iran war broke out, logistics firm Geodis had planned to fly medicine from the UK to Dubai in about four days. Now the journey traversing land and sea is expected to take about 40 days.
For a container of onions travelling from the western shores of India to a warehouse in Dubai, a week-long journey is now a three-week ordeal at twice the cost, according to Ravi Punjabi, Managing Director at Avalon General Land Transport, a UAE-based logistics company.
SOME COUNTRIES MORE AFFECTED THAN OTHERS
Dubai and the wider United Arab Emirates, which have built their economies on being a regional hub for tourism and trade, have the advantage of ports - Fujairah and Khor Fakkan - on the Arabian Sea outside the Gulf.
For other countries in the region, the issue is much worse, notably Qatar, Bahrain and Kuwait that depend on the Gulf and the Strait of Hormuz.
Governments across the Gulf have sought to coordinate to ease the bottlenecks.
During a meeting with his counterparts last month, Saudi Arabia’s Minister of Transport Saleh bin Nasser Al-Jasser announced measures, including allowing empty refrigerated trucks from other Gulf countries to enter the kingdom and create shared storage and redistribution zones at King Abdulaziz Port in Dammam.
Dubai has also activated what it described as a green corridor with Oman, allowing goods diverted to Omani ports to be trucked directly to the UAE with expedited customs clearance and facilitating the export of goods from the UAE to global markets via Omani ports.
The solutions are imperfect, however, and transport executives say flows into Dubai and onward to other Gulf capitals are likely to remain slower and more expensive.
Prices for food items, personal care products and industrial supplies have already risen by 5% to 10% in parts of the region since the end of February, with further increases possible if shipping disruptions persist.
Geodis executive Eric Martin-Neuville said items, including some medicines and food that have to be kept cool, were vulnerable.
“You have only so many plugs for electricity, so you can only accommodate so many containers in the port,” he said.
The uncertainty adds to headaches for businesses that have previously experienced disruption that has endured.
While 45 days to ship white wood from Europe was standard before February, there was a time before the Red Sea Houthi attacks began in 2023 that shipment took only around a month. Even though the attacks have eased, most shippers detour around the Cape of Good Hope.
In Qatar, the building materials supplier said he has enough white wood stock for several months, but must soon place new orders without knowing which routes will be available or at what cost.
($1 = 0.8474 euros)
(Editing by Barbara Lewis)
