UPDATE 1-Egypt to run ports 24 hours to cut costly delays

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CAIRO, April 18 (Reuters) - Egypt will keep ports running for 24 hours a day, up from 16 currently, to cut “long waiting times” for shipments, Transportation Minister Hesham Arafat said on Wednesday as the country tackles an issue that has cost it millions of dollars.

Grain traders over the last year have added hefty premiums on shipments headed to Egypt, the world’s largest wheat buyer, partly as a result of soaring demurrage fees - costs borne by suppliers if they fail to unload their ships on time.

Traders say the high demurrage fees have resulted from congestion at Egypt’s ports and what they describe as a tedious inspection process stalling their vessels, prompting them to add risk premiums of up to $500,000 on individual cargoes.

Egypt’s state grain buyer GASC set new tender terms in February to cap demurrage fees after major suppliers shunned state wheat tenders.

Arafat said the extended port hours would come at no added cost to shippers. He did not specify when the new hours would take effect or how long the new policy would remain in place.

Traders said under the current system, shippers could pay for additional time at the port beyond the regular 16 hours.

One Cairo-based trader called the new hours a “good move” to avoid extra costs, but said much of the current problem was also tied to a lack of storage space at Egypt’s crowded ports, something the new policy would not correct.

“Some of the storage areas inside the port don’t have enough space to discharge the whole quantities,” he said. (Reporting by Momen Saeed Atallah and Eric Knecht Writing by Eric Knecht; Editing by Dale Hudson and Toby Chopra)