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Disruptions in the Strait of Hormuz escalated this week, spreading beyond vessels transiting the waterway to affect shipping across the Persian Gulf, Gulf of Oman, and key regional ports. Authorities are now allowing a limited number of vessels—mainly flagged to Iran, China, Pakistan, and India—to pass, signaling the launch of a selective verification regime.

US President Donald Trump’s push to mobilize international naval escorts to secure maritime traffic has met widespread skepticism. Experts warn that even if deployed, military coverage would likely extend to less than 10% of normal traffic and focus on oil and LNG tankers rather than container shipments.

For the container sector, operational impacts are concentrated on Gulf-origin or Gulf-bound cargo, but ripple effects are appearing at alternative ports. Major carriers, including CMA CGM and Maersk, which initially suspended Persian Gulf bookings, are now rerouting containers to Oman, the UAE, Saudi Arabia, and India, often leveraging landbridge solutions. Some of these ports, including UAE’s Fujairah, have faced direct security threats, while congestion is mounting at Indian gateways and in Sri Lanka, where Port of Colombo is reportedly limiting Gulf-bound volumes.

Global container rates have so far held steady despite these disruptions. Transpacific rates last week edged up 1% to roughly $2,000/FEU to the US West Coast and 9% to about $3,000/FEU to the East Coast. Asia-Europe rates climbed 10% to $2,900/FEU for Northern Europe and 15% to $4,300/FEU for the Mediterranean. Analysts suggest that carriers’ upcoming global fuel surcharges could push rates higher, though the increases are unlikely to provoke a market-wide shake-up, potentially returning pricing to 2024 levels.

Beyond the Gulf, carriers have rolled out emergency surcharges, peak season surcharges (PSS), and general rate increases (GRI) on major lanes including Asia-Europe and transatlantic routes. Maersk cited rising fuel costs and disrupted supply access as key drivers, though industry observers note that shippers negotiating annual contracts are resisting fees for disruptions that do not directly affect their volumes.

These logistical pressures intersect with wider geopolitical tensions. President Trump postponed his late-March summit with China to focus on the Iran crisis, while US authorities continue trade enforcement under IEEPA and Section 301 investigations targeting excess manufacturing capacity in China, Singapore, and Thailand. Negotiations over tariff adjustments and refunds remain ongoing, adding another layer of uncertainty for global shippers.

Written by: Farid Muzaffar