The impact of escalating conflict in the Middle East on the shipping market and key advice for importers
The past week has witnessed unprecedented volatility in global trade routes. The escalating military conflict between the US/Israel forces and Iran since February 28th has fundamentally altered the operating environment in the Middle East. Given the still rapidly evolving situation, Senghor Logistics provides an overview of the current impact on shipping and offers recommendations to secure your supply chain.
Current Impact of Middle East Tensions on Shipping Markets
1. Strait of Hormuz Risk
The Strait of Hormuz is effectively blocked due to Iranian military warnings, resulting in a sharp drop in shipping volume of over 70%. Leading shipping companies such as MSC, Maersk, and CMA CGM have completely suspended passage through the strait and new bookings in the Persian Gulf.
2. Shipping Companies are Detouring around the Cape of Good Hope
Maersk, MSC, and CMA CGM are requiring vessels heading to the Gulf to find safe anchorages. In addition, the Houthi rebels have resumed military operations. The Suez Canal route is suspended, and all routes are detouring around the Cape of Good Hope. Voyages to and from Europe/Mediterranean and the Eastern United States are expected to be extended by 10 to 14 days.
3. Skyrocketing Freight Rates and Surge in Additional Fees
Geopolitical tensions have triggered a sharp rise in freight rates, especially for routes related to the Middle East and Europe.
Hapag-Lloyd announced it will impose a War Risk Surcharge (WRS) on cargo to and from the Gulf region, the Arabian Gulf, and the Persian Gulf; CMA CGM announced it will impose an Emergency Conflict Surcharge (ECS) in response to changes in the situation in Iran and the Arabian Peninsula; Maersk announced it will impose an Emergency Conflict Surcharge (ECS) on multiple routes; MSC announced new freight rates from Far East ports to Northern Europe, the Mediterranean, North Africa, and the Black Sea ports.
Currently, with rising shipping risks in the Middle East, the marine insurance market is also showing significant changes. Several marine insurance companies have announced the cancellation of war risk insurance coverage for Iranian waters and parts of the Gulf region.
So, is shipping still possible?
Regarding ports, key hubs such as Jebel Ali Port in the UAE and all ports in Bahrain are temporarily shut down, while Jeddah Port in Saudi Arabia, and Sohar Port in Oman are maintaining limited operations, becoming crucial for regional transshipment and risk aversion.
Direct shipping routes in the Persian Gulf (UAE, Iran, Kuwait, etc.) are not recommended in the short term. Shipping companies are generally suspending new orders, and vessels already in port need to remain in safe zones. Even if services resume later, they will face war surcharges and unpredictable delays. Such goods can be diverted to the "Far East - Sohar Port / Jeddah Port" for transshipment, and then enter the Persian Gulf via land transport or domestic sea transport, which will extend the transit time by 5-8 days, but can avoid the risks of strait passage.
The Far East - Europe / US East Coast route is entirely feasible, with the key adjustment being a rerouting to the Cape of Good Hope. Although the journey takes 10-15 days longer than the Suez Canal route (from 30 to 40 days in the Far East to Northwest Europe, this increases to 45 to 55 days), major shipping companies have already implemented fixed rerouting plans, ensuring available space. It should be noted that the rerouting will increase fuel and labor costs; freight rates on the European route have already risen, so it is recommended to book space 1-2 weeks in advance.
Flexible switching of transport methods is possible. European customers with high-value, urgent shipments can opt for international air freight (avoiding Middle Eastern airspace), while large, low-value shipments can choose a combination of "sea freight + China-Europe Railway Express" to balance cost and time.
Advice for Importers
(1) Monitor the Situation Closely
- Closely monitor news and official announcements from the government, shipping companies, and insurance companies.
- Communicate with freight forwarders to stay informed about the latest information regarding route changes, port conditions, and cost impacts.
(2) Assume "Business as Usual" Is Suspended Indefinitely for the Middle East
Do not expect a quick reopening of the Strait of Hormuz. Even if a ceasefire occurs, the distrust and security inspections will take weeks to normalize. If your cargo is destined for Iraq, Kuwait, UAE, Qatar, Bahrain, or Oman, expect extreme delays. We are already seeing cases where carriers are discharging cargo at alternative ports like Sohar (Oman) or even rerouting it to Saudi Arabia for potential trucking—if trucking is even viable.
(3) Communicate Effectively with All Stakeholders
Maintain close communication with suppliers, freight forwarders, and your customers. Communicate with suppliers to understand the latest shipping restrictions and allow them to adjust loading and delivery plans. Work with your freight forwarder to track cargo movements in real time and resolve any issues promptly, such as vessel diversions or port congestion. Proactively communicate with customers about potential delays and cost increases, and negotiate adjustments to delivery times.
The Iran-Israel conflict has brought unprecedented challenges to the global shipping market, with route disruptions, rising costs, and increased risks becoming the new normal in the short term. For importers, the key to coping with this crisis lies in being proactive, flexible, and well-prepared. By closely monitoring market dynamics, optimizing shipping plans, strengthening risk management, and collaborating with professional partners, importers can effectively mitigate the impact of the conflict, ensure supply chain stability, and minimize potential losses.
Post time: Mar-06-2026
