Industry Update – Middle East Conflict

Attention: Shipping Manager

 

Middle East Conflict Update

We have received updates from Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) on the rapidly escalating conflict in the Middle East following major military action over the weekend.
The situation has already resulted in severe disruption to global aviation and air cargo networks, alongside significant impacts on containerised shipping, with flow-on consequences for Australian supply chains.

• Aviation & Air Cargo Disruption

The Middle East is a critical global aviation hub connecting Asia, Europe, Africa and Oceania.

Widespread airspace and airport closures and restrictions, as well as flight cancellations, are now having global ripple effects, including on air cargo capacity and schedule reliability.

Major carriers have suspended flights to and from major hubs such as Abu Dhabi, Dubai and Doha due to multiple regional airspace closures, announcing that operations will resume only with confirmation of safe operating conditions permitting the reopening of airspace.

The Gulf is a major global air cargo interchange, and the shutdown of these major airports has significantly reduced availability and reliability.
Once airspace reopens, experts expect recovery to be staged due to aircraft and crew dislocation.

 

• Sea Freight Disruption

The conflict has escalated security risks to maritime traffic across key Middle East chokepoints, particularly the Strait of Hormuz and Red Sea.

A number of carriers have implemented emergency security and operational measures, including:

• Directing vessels operating in the Gulf region, as well as those en route, to proceed immediately to designated safe shelter areas
• Suspending passage through the Suez Canal, with vessels rerouted via the Cape of Good Hope
• Suspending vessel transits through the Strait of Hormuz
• Suspending bookings to the Middle East region
• Introducing temporary war risk or emergency conflict surcharges

 

• Impacts

Experts say that the impacts of disruption are expected to be felt all across the supply chain.
For air freight, global capacity and network disruption are expected to affect air cargo into and out of Australia, particularly for time-critical and high-value goods.
For sea freight, extended routings, port congestion and equipment imbalances may affect transit times, routings and schedule reliability.
Experts warn that rising fuel and operating costs, longer routings, war risk surcharges and emergency conflict surcharges may place temporary upward pressure on freight rates.

If you have any concerns relating to a shipment, please contact your customer service representative.

 

We will keep you updated once further information becomes available.

 

Regards,