LONDON Cargo operations at Egypt's Alexandria and Damietta ports have come to a virtual standstill as widespread unrest keeps key staff from work and throws the economy into turmoil, shipping sources said on Tuesday.
At least a million people rallied across Egypt clamoring for President Hosni Mubarak to give up power, piling pressure on a leader who has towered over Middle East politics for 30 years.
Egypt, the world's biggest wheat importer, told Reuters on Tuesday there were no shipment delays on contracted wheat orders.
But shipping sources said the Mediterranean terminals, which especially handle bulk and container shipments including grains, had been affected by the daily curfew across the country.
"It (Alexandria port) is not closed but there is no work. Customs officials are not there. There is nobody to operate the cranes," said Dan Delany, an Alexandria-based agent for the Lloyd's of London insurance market. "You could say the country has effectively shut down."
South Korea's Hanjin Shipping said on Tuesday it was re-routing some of its container vessels due to the unrest in Egypt which had hampered drydock operations at several ports.
Sources said this week the protests were disrupting the country's grains imports with some shipments from the United States being delayed due to problems related to letters of credit.
Egypt's banks will remain shut for a third day on Wednesday and the central bank said it is still assessing whether they will close again on Thursday.
"Alexandria port is still open but no one is working for the moment," an Egyptian shipping source said. "Their cargo operations are not working properly because of labor problems."
Sources identified similar problems at Damietta port with ship container operations being disrupted at Port Said as well.
A French trader said a ship he had chartered to export an agricultural cargo to Egypt was circling close to the port of Damietta because he was afraid of not being paid by the private Egyptian buyer.
"We're afraid of not being paid, we'd rather have the boat go round and round. And everyone else is doing the same thing. We don't want the ship to dock without being sure we'll be paid," he said.
Danish shipping and oil group A.P. Moller-Maersk said on Monday it has suspended its terminal operations at Port Said.
Movement of traffic through the Suez Canal was unaffected, the Canal Authority said on Tuesday.
Shipping sources said the Egyptian military had increased deployments at the canal and other strategically important sites such as the Sumed oil pipeline which links the Red Sea to the Mediterranean.
"So long as the army remains unified and protesters do not target this infrastructure they are likely to remain safe," said John Drake, a senior risk consultant with security firm AKE Ltd.
"It would take a major deterioration in the security environment for opportunists to target such strategic and well defended interests."
At least 140 people have been killed in eight days of turmoil with protesters demanding a new era of democracy.
Freight players said tanker traffic through the Suez Canal was estimated to make up around only 15 percent of all transits.
"We believe that any disruptions to the Sumed pipeline will have greater consequences for tanker shipping than a closure of the canal," said Sverre Svenning, director of research at broker Fearnleys.
(Additional reporting by Valerie Parent in Paris)
(Editing by Keiron Henderson)