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Middle East conflict and its impact in global freight networks
Ongoing instability in the Middle East continues to disrupt global ocean and air freight networks. The key pressure points remain the Strait of Hormuz, Red Sea routing, and restricted Middle East airspace.
Carriers and airlines have now shifted from short-term reaction to sustained network adjustments. This is driving cost increases, longer transit times, and reduced schedule reliability at a global scale.
Current Freight Network Risk Overview
Ocean freight update
Ports with operations ceased or effectively suspended
Ports with operations ceased or effectively suspended
Market position
- Conflict has disrupted a key global energy corridor, not a core container lane but critical to fuel supply.
- Restrictions through the Strait of Hormuz are limiting tanker movements, tightening oil supply and driving price spikes.
- Container shipping is impacted indirectly through fuel cost increases and network disruption, not physical blockage.
Key impacts
Fuel/BAF
- Oil price volatility is feeding directly into bunker costs.
- Carriers are increasing BAF across all tradelanes with immediate effect.
- Expect monthly resets with limited visibility, driven by oil market swings.
Carrier Networks
- Carriers are avoiding high-risk Gulf areas and adjusting rotations.
- Blank sailings increasing as networks are rebalanced.
- Effective capacity tightening as vessels are delayed or redeployed.
Schedule Reliability
- Rerouting and congestion are extending transit times.
- Asian hubs such as Singapore and Port Klang seeing increased volume and pressure.
- Flow-on delays impacting Australia-bound cargo, especially transhipment freight.
Costs
- War risk insurance premiums rising materially.
- Higher fuel and insurance costs being passed through by carriers.
- Base freight rates expected to move up as cost pressure builds and capacity tightens.
Shipping line surcharges
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Carriers are applying EBS to recover sudden fuel cost increases that BAF does not cover.
- Fuel prices spiked quickly due to Middle East disruption.
- Voyages are longer due to rerouting via Cape of Good Hope.
- BAF adjusts too slowly to reflect real costs.
- Contracts lock base rates, so carriers cannot reprice freight.
Global air freight update
Airports and airspace current status
Other affected Middle East airports
Market position
- Middle East airspace disruption impacting a critical global transit corridor.
- Gulf hubs play a central role in Europe–Asia–Australia cargo flows.
- Air freight seeing immediate capacity and routing constraints.
Key Impacts
Capacity
- Reduced uplift as key hubs operate at limited or inconsistent capacity.
- Flight cancellations and frequency cuts across Gulf carriers.
- Belly capacity constrained due to passenger network disruption.
Routing
- Standard Europe–Middle East–Asia lanes disrupted.
- Cargo being rerouted via Asia (Singapore, Hong Kong, Bangkok).
- Longer flight paths increasing transit times and reducing efficiency.
Transit Times
- Delays across Europe → Australia and Middle East-linked lanes.
- Increased dwell times at alternative hubs.
- Greater variability in delivery windows.
Rates
- Spot rates rising across key tradelanes.
- Premiums applied for secured space and priority cargo.
- Volatility expected as capacity remains tight.
Fuel / Surcharges
- Jet fuel prices rising in line with oil markets.
- Fuel surcharges increasing across most airlines.
- Additional operational costs being passed through.
Australian Container Trucking
Fuel Surcharge Update
Fuel surcharges across the Australian transport market have increased materially in recent weeks, driven by the sharp rise in global oil and diesel prices.
Following the escalation in the Middle East, diesel costs have risen quickly, with the Australian Institute of Petroleum (AIP) reporting increases of close to 30% across major cities in early March. This has led to immediate adjustments in fuel levies by transport providers.
Current Position
- Fuel surcharges are now typically sitting between 30% and 45%+ of base cartage rates
- Some operators have already implemented increases to ~30%+ effective mid-March
- Review cycles are shortening, with some carriers moving to weekly updates
Actions
If you already ship with Explorate, your representative will already be monitoring shipments for potential disruption.
- Book shipments as early as possible where flexibility exists.
- For customers shipping more than 1,000 TEU annually, engage Explorate with your requirements for the upcoming year to secure coverage and pricing.
We will continue monitoring the situation and send further updates as they arise.
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Experienced Business Development Manager with a demonstrated history of working in the logistics and supply chain industry. Skilled in Import/Export, Freight Transportation, Freight, Warehouse Operations, and Overseas Networking.
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