New turbulence resulting from the closure of the Strait of Hormuz
The gradual normalisation in the Red Sea was abruptly brought to a halt on 28 February 2026 with the outbreak of attacks on Iran.
It is clear that the shipping lines had not anticipated an escalation between the United States and Iran.
In the two months prior to the outbreak of the conflict, we had in fact seen a growing number of services being shifted from the route around Africa back to the Suez transit through the Red Sea. Shipping lines would not have taken that step if they had regarded a war between Iran and the United States as the most likely scenario.
The closure of the Strait of Hormuz is fundamentally reshaping the route network
Following the outbreak of the war, Mærsk, Hapag-Lloyd and CMA CGM announced that they would once again reroute their Suez services around the Cape of Good Hope.
For Mærsk and Hapag-Lloyd, this means reversing a relatively recent strategic shift. For CMA CGM, it amounts to suspending an operational approach the company had maintained across several services for well over a year. In practical terms, the situation in the Red Sea has effectively been pushed back to where it stood more than a year ago.
Smaller niche carriers are, for the time being, continuing to sail through the Red Sea as usual.
The closure of the Strait of Hormuz is significantly more severe than what we have seen in the Red Sea over the past two years. So far, 14 merchant vessels, including two container ships, have been attacked by drones and missiles from Iran. Several crew members have been killed in these incidents.
At present, no container ships are transiting the Strait of Hormuz.
In response to the situation, shipping lines have declared an ‘End of Voyage’ for cargo to and from ports in the Persian Gulf. The practical implementation varies somewhat between carriers.
Some carriers are simply discharging containers bound for the Gulf region at the next port of call, regardless of which port that may be. Others are giving shippers the option to nominate an alternative discharge port.
Whichever approach is adopted, it inevitably entails additional costs for the shipper. Moreover, the shipper will be required to take delivery of the cargo at the new port and assume full responsibility there regardless of which port that ultimately turns out to be.
Consequences for global supply chains
The longer the crisis continues, the more domino effects we are likely to see.
The first impacts will be felt in the form of increasing congestion at ports in the Middle East and Asia, where cargo originally destined for the Gulf region is being discharged out of necessity. This, in turn, may cause delays to other services calling at the same ports even if they have no direct link to the Middle East.
As long as the Strait of Hormuz remains closed, cargo bound for ports in the Persian Gulf can only be transported overland from ports on the southern coast of Oman and from Saudi ports on the Red Sea.
Regional niche carriers can ship cargo directly from the Far East to the Red Sea. The major global carriers, by contrast, are compelled to take the longer route around the Cape of Good Hope.
Mærsk and Hapag-Lloyd have since launched a new service sailing directly from China around South Africa, through the Mediterranean to Suez and onwards to the Saudi ports on the Red Sea, before returning via the same route.
It remains to be seen how much volume the major carriers will ultimately route via the longer detour. If we assume this amounts to around 20,000 TEU per week, it will increase global demand, measured in TEU-miles, by approximately 1%. For the Asia–Europe trade lane, the impact would be significantly greater, with demand rising by around 5%.
In practical terms, this means that a semi-permanent closure of the Strait of Hormuz would be relatively manageable at a global level. The impact would also be considerably less severe than during the Red Sea crisis or the pandemic period.
Looking at developments in container shipping, there are essentially two major consequences to consider. First, there is the short-term effect: cargo is discharged at the ‘wrong’ ports and must then be forwarded from there. Second, there is the direct regional impact on the Gulf states themselves.
Rising oil prices and new surcharges
On top of this comes the rising oil prices. The closure of the Strait of Hormuz has led to significant volatility in oil markets, resulting in marked increases in marine fuel costs. Container shipping lines have now introduced Emergency Fuel Surcharges to offset these sudden cost increases. In addition, we are seeing a range of new surcharges and general rate increases imposed as a direct consequence of the crisis.
In the short term, freight rates will therefore come under upward pressure. However, if the situation remains as it is, it can be expected that part of these increases will gradually ease as the market adjusts to a route network without transit through the Strait of Hormuz. This would be in line with the pattern observed during the early phase of the Red Sea crisis.
The situation is highly unpredictable and can change rapidly. This increases the risk of port congestion, vessel delays and sudden shortages of empty containers at a local level.
The impact is spreading through the market like an oil slick. All shippers, not only those moving cargo to and from the Gulf region, would be well advised to monitor developments closely and be prepared for delays and the sudden introduction of new surcharges.
This is a rapidly evolving situation. The information in this article is updated as of 11 March at 09:00 (CET).
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