Dear Valued Clients,
The war in the Middle East region is having a significant effect on key international transport corridors which is, in turn, having a global impact on air and ocean freight.
The full impact on global supply chains is difficult to assess. The duration of the conflict and the potential for further escalation in the region remains uncertain.
The current situation and potential implications for your supply chains are detailed below;
Air Freight: Airspace Closures, Flight Diversions, Delays and Temporary Capacity Constraints
Closed airspace – Airspaces in Iran, Iraq, Qatar, Kuwait, the United Arab Emirates, and Bahrain are closed.
Airlines suspending flights – Emirates, SkyCargo and Qatar Airways have suspended their flights until further notice. Several other airlines have temporarily suspended flights to Abu Dhabi and Dubai. Additional destinations, including Tel Aviv, Beirut, Amman, Erbil, Dammam, and Tehran, are also affected.
Ocean Freight: Restrictions, Re-routing, Suspension of Transit through the Strait of Hormuz
The Strait of Hormuz is one of the world’s most critical maritime corridors for global cargo and oil transit. This waterway is currently experiencing significant disruption. Some vessels have been temporarily halted or rerouted. Numerous ships remain positioned in the area causing congestion.
The US Navy is warning against navigation through the strait. Several carriers have suspended transit through the region and are operating via alternative routes, particularly around the Cape of Good Hope. These routing adjustments are extending transit times and tying up additional capacity.
Crude Oil Price Increases
These security-related incidents in the Persian Gulf are contributing to rising crude oil prices. Any sustained increase in oil prices will most likely lead to higher fuel costs, potentially impacting overall transportation costs.
Expected Impact on Shipments Transit
- Alternative routings and schedule adjustments
- Extended transit times
- Congestion and extended waiting times in the Strait of Hormuz and along alternative routes, such as the Cape of Good Hope
- Delays and capacity constraints
- Temporary suspension of individual services
Expected Impacts on Costs
- Potential surcharges related to risk, fuel, or network adjustments
- Increase in costs of insurance, adjustments to or limitations of insurance coverage under war-risk clauses
Our Commitment to You
At XPand Logistics we are constantly monitoring developments in close coordination with our partners and are actively assessing alternative routing options.
We are on hand to answer any individual, shipment-specific questions and concerns you may have.
Our Recommendations
- Book air and sea freight capacity as early as possible
- Evaluate alternative routing options
- Plan transit times with additional buffer
- Be prepared for potential cost adjustments
Please do get in touch with your Xpand Logistics Team contact if you require any further information.
Your XPand Logistics Team
