Insurance Costs for Ships and Cargo Tripled Following the Attacks in the Black Sea

The cost of Insurance premiums for ships and cargo have tripled following the attacks in the Black Sea. The maritime industry is warning of a further surge in costs, which could also lead to higher prices for goods. Is there a risk of shipping restrictions, and what would the consequences be for Bulgaria?

Attacks on merchant ships in the Black Sea are already carrying an economic cost. The maritime industry is reporting a dramatic rise in insurance premiums, with concerns that costs will continue to increase.

Captain Todor Georgiev, shipping company owner: “Last week, following the attacks in Bulgaria's exclusive economic zone, insurance premiums tripled. I am talking about cargo insurance and insurance for the vessels themselves. Now, with the attacks taking place close to territorial waters, we expect insurance premiums for passage through territorial waters to rise as well.”

BNT: How much does the risk at sea cost? For some ships, just one week at sea can cost hundreds of thousands of dollars.

Captain Todor Georgiev, shipping company owner: “For our 50,000-tonne vessels, the usual annual war-risk insurance premium is 70,000 dollars. But for a 33,000-tonne vessel, the cost of hiring a ship was around 300,000 dollars for seven days.”

These additional maritime transport costs could directly affect the import and export of goods.

Georgi Ivanov, shipping agency owner: “So far, we have had no cancelled orders, and business is continuing as usual. We will see what happens tomorrow or in the days ahead. Naturally, we are all concerned that any suspension or reduction in shipping would affect businesses and people in general. Transport costs would rise, which would immediately feed through into the prices of products and services in the country.”

Plamen Rusev, Chairman of the Bulgarian Maritime Association: “Shipping has become risky, and there is a significant risk in the Black Sea too. However, this concerns vessels serving Ukrainian and Russian Black Sea ports. There are no logical economic grounds for insurance premiums to rise for our ports.”

As tensions in the Black Sea continue, uncertainty remains the biggest challenge for maritime transport.