Freightos Weekly Update: Iran Conflict Escalates, Driving Up Air Rates and Disrupting Ocean Freight
Recent US-Israel strikes on Iran and subsequent Iranian retaliation targeting multiple countries in the region since the weekend are causing significant logistics disruptions. These disruptions could have broader implications if the conflict continues. Early this week, six tanker vessels in or near the Strait of Hormuz were attacked. While the IRGC officially announced the de facto closure of the waterway on Monday, the attacks effectively shut it down by Sunday. President Trump indicated the US would provide insurance and naval escorts to ensure oil tankers can continue traversing the strait, though experts express doubts about the feasibility and speed of such measures. In container shipping, DP World temporarily suspended operations at the Jebel Ali port in Dubai, the Middle East's largest, following an aerial interception that caused a fire on Saturday night. Operations resumed on Monday. Despite ports remaining largely operational, major container carriers are rerouting vessels, canceling sailings, and halting new bookings due to the closure of the Strait of Hormuz and heightened security risks. Hapag-Lloyd and MSC have suspended bookings from Persian Gulf ports and to these ports from all origins, including Omani and UAE ports on the Gulf of Oman side due to their proximity to the strait. CMA-CGM has ceased accepting all bookings to these affected regions.