The impact of the Hormuz Strait crisis on the container supply chain in the Middle East is still ongoing, and is further evolving from route security risks into systemic pressure on ports, freight rates, insurance, transit times, and end-user supply chains.

According to the latest report by the UK’s Financial Times, as the Hormuz Strait continues to be severely affected, the cost of container transport from China to the UAE has already risen sharply, with ocean freight for some 40′ containers reaching as high as about USD 10,000/40HC, while before the crisis broke out the price on this route was about USD 1,250/40HC, equivalent to an increase of about 8-fold in a short period. At the same time, transit time from China to the UAE has also increased from about 30 days previously to about 60 days, doubling entirely.

For the Gulf market, which is highly dependent on imported goods, this means that the Hormuz Strait crisis is no longer just a question of whether ships can pass safely, but has begun to directly affect corporate procurement, inventory, sales, and the cost and time for consumers to ultimately obtain goods. The Financial Times pointed out that marine insurance costs have also risen sharply, with insurance fees for some cargoes increasing from about USD 120 per container to about USD 1,000; at the same time, Jebel Ali Port, which originally handled a large share of the Middle East’s container import and export business, is currently almost unable to function normally as a hub port, and cargo is being forced to shift to Oman and other UAE ports.

The decline in shipping activity in the Hormuz Strait is equally astonishing. According to the latest shipping data, the number of container ships passing through the Hormuz Strait has dropped by about 94% compared with before the crisis. Reuters previously reported, citing Kpler data, that on September 17 only 4 commodity vessels passed through the Hormuz Strait, significantly below the average daily level of about 16 vessels over the past 10 days; at the same time, because some vessels have turned off AIS signals in a war-zone environment, there is still some statistical difficulty in assessing actual shipping activity.

For Middle East importers, after the blockage of the Hormuz Strait, alternative transport routes are bearing increasing pressure. Some cargo exported from China to the Gulf region needs to enter regional markets through alternative routes such as the Red Sea, Saudi Arabia, and Oman, and the importance of Jeddah Port, Khor Al Fakkan Port, and Omani ports has risen markedly. However, alternative solutions cannot fully make up for the logistics efficiency losses caused by the closure of the Hormuz Strait, especially in the inland distribution stage in the Gulf, where goods still need to be further transported by land into markets such as the UAE, Saudi Arabia, Qatar, Kuwait, and Bahrain.

Data previously released by Xeneta has shown that spot container freight rates from China to Jeddah Port rose by about 256% compared with before the crisis broke out on February 28, while rates from China to Khor Al Fakkan Port rose by about 479%, reaching about USD 10,626 per FEU. Among these, the increase in freight rates from China to Khor Al Fakkan Port is particularly noteworthy, because this port is taking on more and more cargo that originally entered Dubai and Jebel Ali.

At the same time, shipping companies are also passing on rising fuel, insurance, vessel scheduling, and alternative transport costs to cargo owners. Maersk’s Middle East operation update released on September 17 shows that for cargo to and from Iraq, Kuwait, Saudi Arabia’s Dammam and Jubail, Bahrain, Qatar, the UAE, and some Omani ports, the company began implementing emergency freight rates, including USD 1,800 for 20-foot general purpose containers, USD 3,000 for 40-foot general purpose containers, and USD 3,800 for reefer containers, special containers, and dangerous goods containers. In addition, any vessel passing through the Hormuz Strait will also be charged an additional fee of USD 1,000 per container, mainly to cover additional insurance, crew risk compensation, and other costs.

CMA CGM also announced an increase in its emergency fuel surcharge. On September 18, the company said that due to the renewed escalation of the situation in the Hormuz Strait and the Bab el-Mandeb Strait, with Brent crude oil prices continuing to stay above USD 100 per barrel and global marine fuel prices rising in tandem, it would implement a new Emergency Fuel Surcharge from October 1. Among these, the surcharge for dry containers on headhaul routes is USD 265/TEU, and USD 320/TEU for reefer containers; for backhaul and intra-regional routes, they are USD 75/TEU and USD 90/TEU respectively.

It is worth noting that the Hormuz Strait crisis is forming a superimposed effect with risks in the Red Sea and the Bab el-Mandeb Strait. The latest Reuters report said that while shipping in the Hormuz Strait is severely restricted, Iran-backed Houthi forces have already taken control of Yemen’s Red Sea coast, causing the security situation around the Bab el-Mandeb Strait to deteriorate again. On September 17, the number of commodity vessels passing through the Bab el-Mandeb Strait was 23, below the average level of about 26 over the past 10 days. This means that the Red Sea route, which could originally serve as an alternative channel for Gulf energy and commodity transport, is itself also facing new security risks.

In fact, a very noteworthy structural change is currently emerging in the Middle East container logistics market: on the one hand, the Hormuz Strait can hardly perform its previous normal container transport function, and major Gulf ports have been hit; on the other hand, alternative ports and landbridge transport have begun to carry more cargo, causing capacity, warehousing, and inland transport resources at these nodes to become further strained. For Chinese exporting enterprises, this means that “delivering goods to the Gulf” is changing from a purely ocean shipping issue into one involving coordination across multiple links: ocean shipping, ports, land transport, and warehousing.

At the same time, however, some liner companies are trying to restore Suez Canal routes that they had previously abandoned due to Red Sea security risks. Maersk and Hapag-Lloyd recently announced the further restoration of some Asia-Europe services via the Suez Canal, which can significantly shorten transit time compared with routing around the Cape of Good Hope. However, both companies stressed that subsequent route arrangements will still depend on whether the Middle East situation escalates further.

This also means that global container shipping is currently entering a very unusual stage: some capacity on the Red Sea direction is beginning to return, which in theory helps ease capacity tightness on Asia-Europe routes; but at the same time, the Hormuz Strait crisis is pushing container transport and insurance costs in the Gulf region to new highs. If the two key waterways of the Bab el-Mandeb Strait and the Hormuz Strait are both severely affected at the same time, the global shipping network will have to face more complex route diversions, port transshipment, and landbridge transport arrangements.

Judging from the current situation, the impact of the Hormuz crisis on the Middle East market has clearly gone beyond the scope of “ships taking one fewer route.” For Middle East importers, the most direct change is that goods are more expensive and arrive more slowly; for Chinese exporters, it means that quotations, inventory cycles, delivery commitments, and trade financing costs all need to be reassessed.

What is more noteworthy is that this round of shocks is still not completely over. If the Hormuz Strait continues to be unable to restore normal commercial shipping, and if the security situation in the Bab el-Mandeb Strait further deteriorates, then logistics costs and supply chain uncertainty in the Middle East may still rise further in the future. And for markets such as the UAE, Saudi Arabia, Qatar, and Kuwait that are highly dependent on imports, rising shipping costs may ultimately also gradually pass through to wholesale, retail, and end-consumption sectors.

From USD 1,250 to about USD 10,000, from 30 days to 60 days, the dramatic changes in ocean freight rates and transit times have clearly shown that the Hormuz crisis is gradually evolving from a regional shipping security incident into an important variable affecting Middle East trade and the global supply chain.