In March global supply chains and logistics faced one of the strongest shocks and disruptions of the usual operations in recent years. It is hard to predict how long the disruptions will last, but it is already clear that this will have far-reaching consequences not only for the Middle East region, but for the whole world. Disruptions have already affected Asia-linked trade flows and contributed to higher prices for energy and key industrial inputs sourced from the region. While the situation continues to evolve, many of our customers are facing potential risks to input costs, lead times, cash flow, and supply continuity across multiple sectors.
The crisis is already squeezing freight availability, lengthening transit times, and pushing up transport costs in Asia–Europe corridors. Let us review the implications on different transport modes
The crisis is already squeezing freight availability, lengthening transit times, and pushing up transport costs in Asia–Europe corridors. Let us review the implications on different transport modes
Air Freight
Due to the current situation, the airspace over the countries of the region is partially closed. Most foreign airlines have suspended flights to the airports of the United Arab Emirates, and Gulf airlines are recovering from airspace restrictions at the moment. Emirates resumed about 70% of flights, Air Arabia about 60%, Etihad about 55%, and flydubai only 40%. By comparison Qatar Airways has restored less than 30% of flights compared to February. All this disrupts the supply chain not only for the region, but for Europe and South-East Asia, as Dubai is one of the major transit hubs in the world. In addition, due to military risks in the region, increased demand and higher prices for jet fuel, air transportation rates increased significantly in March.
At the same time, the aviation cargo flows were redirected partially to airports distant from the conflict zone (in Saudi Arabia and Oman). Today, due to the opening of the UAE airspace and the restoration of the flight schedule, these options are not so relevant, but they may become redundant in case of further escalation of the conflict.
At the same time, the aviation cargo flows were redirected partially to airports distant from the conflict zone (in Saudi Arabia and Oman). Today, due to the opening of the UAE airspace and the restoration of the flight schedule, these options are not so relevant, but they may become redundant in case of further escalation of the conflict.
Ocean Freight
The situation for Ocean freight today is more deplorable than in the air transportation market. The Strait of Hormuz, being a crucial route for transporting 20% of world oil and 30% of world LPG, is actually blocked. Over the past 2 weeks, only about 30 ships have passed through it, which caused a cluster of ships on the roads on both sides of the strait. According to analysts, about 10% of the world's linear tonnage is directly or indirectly affected by route changes due to the closure of the Strait of Hormuz.
Even though Iran has declared that vessels from friendly countries can pass the strait, it still needs to be confirmed by the country’s officials in manual mode for each vessel. Besides, this does not affect the global shipping lines, that support the mail container flow in the region. So the shipowners have to redirect the vessels heading to Middle East to the Western Indian Ports (Mundra and Nhava-Sheva). The cargo volume exceeds the projected volumes of the ports and resulted in congestions and delays in handling of ships for up to 1,5 months.
A combination of factors – congestion, military risks and route changes – leads to a decrease in the effective capacity of the global fleet. Ships spend more time waiting, go off their schedules, or follow longer routes. Container turnover is slowing down, which creates a shortage of equipment at key points. According to S&P Global forecasts for 2026, an asymmetric picture is forming in the freight market. Base rates are under pressure from weak demand and excess tonnage, but at the same time they are burdened with many surcharges: for port congestion, military risks etc. Cargo owners also incur indirect costs in the form of fees for downtime and storage of containers blocked at terminals due to the inability to deliver them to the ports of the Persian Gulf.
The main harbors of the UAE, Jebel Ali and Port Khalifa have lost up to 65% of transit, the region's feeder networks are operating at their maximum capacity, and cargo flows have been redirected to safer ports on the east coast of the UAE and Oman. The nominal capacity of ports outside the Persian Gulf in these countries is about 20 million TEUs but in reality, the capabilities of this system are more modest. This is due to the limited carrying capacity of highways, the lack of rail links and queues at border crossings between the UAE and Oman.
This affects not only the region – cargoes that were intended for export to the Middle East are delayed at ports of departure (for example, in China) or in Southeast Asian hubs, which may further lead to a shift in congestion towards Asia. At the same time, if restrictions on the passage of ships through the strait persist for a long time, this will become a growth driver for investments in infrastructure projects both inside and outside the region. The conflict may also strengthen alternative ports in the Eastern Mediterranean and the Horn of Africa to the detriment of the central role of the Gulf States on global routes.
Even though Iran has declared that vessels from friendly countries can pass the strait, it still needs to be confirmed by the country’s officials in manual mode for each vessel. Besides, this does not affect the global shipping lines, that support the mail container flow in the region. So the shipowners have to redirect the vessels heading to Middle East to the Western Indian Ports (Mundra and Nhava-Sheva). The cargo volume exceeds the projected volumes of the ports and resulted in congestions and delays in handling of ships for up to 1,5 months.
A combination of factors – congestion, military risks and route changes – leads to a decrease in the effective capacity of the global fleet. Ships spend more time waiting, go off their schedules, or follow longer routes. Container turnover is slowing down, which creates a shortage of equipment at key points. According to S&P Global forecasts for 2026, an asymmetric picture is forming in the freight market. Base rates are under pressure from weak demand and excess tonnage, but at the same time they are burdened with many surcharges: for port congestion, military risks etc. Cargo owners also incur indirect costs in the form of fees for downtime and storage of containers blocked at terminals due to the inability to deliver them to the ports of the Persian Gulf.
The main harbors of the UAE, Jebel Ali and Port Khalifa have lost up to 65% of transit, the region's feeder networks are operating at their maximum capacity, and cargo flows have been redirected to safer ports on the east coast of the UAE and Oman. The nominal capacity of ports outside the Persian Gulf in these countries is about 20 million TEUs but in reality, the capabilities of this system are more modest. This is due to the limited carrying capacity of highways, the lack of rail links and queues at border crossings between the UAE and Oman.
This affects not only the region – cargoes that were intended for export to the Middle East are delayed at ports of departure (for example, in China) or in Southeast Asian hubs, which may further lead to a shift in congestion towards Asia. At the same time, if restrictions on the passage of ships through the strait persist for a long time, this will become a growth driver for investments in infrastructure projects both inside and outside the region. The conflict may also strengthen alternative ports in the Eastern Mediterranean and the Horn of Africa to the detriment of the central role of the Gulf States on global routes.
Road freight
There have been different options deployed and UAE authorities implemented some regulatory changes to help cargo transit between Saudi and UAE. For the cargo going to Saudi a new trade bridge was introduced between Khor-Fakkan (Sharjah) and Dammam allowing smooth cargo flow on the route.
The cargo flow from Europe is also affected by the blockade of main UAE ports and threat for vessels and crews in the nearby to Strait of Hormuz regional ports. The supply chains are adjusting to the situation and implementing land routes to UAE from Jeddah, Saudi Arabia and Alexandria, Egypt. Besides, there are trucking options available from Turkey to UAE. As there are no guarantees that Strait of Hormuz will be deblocked in a short while, these options may help importers and exporters in the region to stay connected to the global economy.
The cargo flow from Europe is also affected by the blockade of main UAE ports and threat for vessels and crews in the nearby to Strait of Hormuz regional ports. The supply chains are adjusting to the situation and implementing land routes to UAE from Jeddah, Saudi Arabia and Alexandria, Egypt. Besides, there are trucking options available from Turkey to UAE. As there are no guarantees that Strait of Hormuz will be deblocked in a short while, these options may help importers and exporters in the region to stay connected to the global economy.
At this stage many companies need to reassess their exposure, secure the supply of most critical materials, confirming alternative routings and logistics options, and reviewing supplier and site contingency plans.
WELLGO is ready to support your business in the times of turbulence and provide solutions that will help manage tactically and develop strategic partnerships further.
WELLGO is ready to support your business in the times of turbulence and provide solutions that will help manage tactically and develop strategic partnerships further.