Ocean container shipping sees “massive” uncertainty from Iran War

Container carriers and freight forwarders are swiftly searching for safer routes through the Middle East as the U.S. and Israel war against Iran enters its fourth week, according to a report from Xeneta. “The impact of conflict in the Middle East on ocean container shipping is a rapidly evolving situation and uncertainty remains massive,” Peter Sand, Xeneta Chief Analyst, said in a release. “We are seeing exactly what we anticipated when the conflict escalated – port congestion, deteriorating schedule reliability, longer transit times, and surcharges being pushed out across the board.” In response to that disruptive business climate, shippers and carriers are avoiding ports near the bombing campaign, and seeking new routes to move freight. Oslo-based Xeneta is tracking those impacts on a dedicated web page, which displays variables like port congestion across the region. “Shippers are exploring every available solution to keep supply chains moving without calling at Gulf ports, whether through land bridges, rerouting or alternative networks now being offered by carriers and freight forwarders,” Sand said. “Around 800 000 containers per month used to travel into the region affected by this crisis. Those goods still need to reach customers and the industry is finding different ways to make that happen.” The Iran War is also causing wider changes to trade routes far from the actual violence, due to ripple effects in global trade flows, the report found. “The escalation in conflict has also brought back a de facto closure of the Red Sea for major container shipping,” Sand said. “The trade lane most directly impacted by the complete closure of the Red Sea – Far East to Mediterranean – is seeing sharp spot rate increases, up 26% over the past month to $4,211 per [forty-foot equivalent container] (FEU). Far East to North Europe has jumped 22% to $2,705 per FEU.” “Port congestion continues to spread across ocean supply chains, reaching beyond the epicenter of conflict in the Middle East, particularly at major Asia transshipment hubs. This has clear implications for shippers using services calling at these transshipment hubs, even if their cargo would never touch a Middle East port.”