Estimated reading time: 4 minutes
Global shipping lines and air freight operators are scrambling to reroute cargo and suspend services after military strikes on Iran triggered immediate disruptions across the Strait of Hormuz and the Red Sea, threatening to remove millions of TEUs of capacity from the market.
The fallout follows coordinated military action by the United States and Israel on Saturday, which has destabilized one of the world’s most critical trade arteries. While energy markets initially focused on oil tankers, the escalation is now forcing container lines to abandon key transit points, driving up costs and delaying shipments of consumer goods, electronics, and auto parts. Peter Sand, chief analyst at freight rate analytics platform Xeneta, noted that while ocean services had previously weathered military buildups, the direct strikes have forced ships to avoid the area for the immediate future.
Shipping Lines Halt Bookings and Reroute Around Africa
Major carriers have moved swiftly to mitigate risk, resulting in a cascade of booking suspensions and significant capacity losses.
On Sunday, MSC, the world’s largest container line by capacity, suspended all bookings for cargo destined for the Middle East until further notice. Maersk followed suit, pausing all Red Sea and Suez Canal transits. The Danish giant is now diverting vessels around the Cape of Good Hope at the southern tip of Africa, a longer journey that absorbs roughly 2.5 million twenty foot container units of global capacity, according to Xeneta data.
CMA CGM announced Monday that it will implement an Emergency Conflict Surcharge effective immediately. The French shipping group cited rising security risks as the catalyst for adding between $2,000 and $4,000 per container on shipments moving to and from Gulf and Red Sea nations. The carrier had previously ordered vessels bound for the Gulf to seek shelter and suspended Suez transits in favor of the African detour.
German carrier Hapag Lloyd introduced a war risk surcharge of $1,500 per standard container and suspended transits through the Strait of Hormuz. Cosco Shipping Lines instructed vessels currently in the Gulf to anchor in safe waters while the Chinese company evaluates contingency plans, potentially discharging cargo at alternative hubs. Ocean Network Express (ONE) also suspended new bookings for the Persian Gulf region on Sunday.
Air Freight Capacity Contracts Amid Airspace Closures
The disruption has spilled over into the air cargo sector, where airspace closures are tightening capacity and threatening rate hikes.
Several Middle Eastern airspaces have been closed or restricted, fracturing key Asia to Europe trade lanes. FedEx has suspended flights to and from Bahrain, Israel, Qatar, Saudi Arabia, Kuwait, and the UAE. The logistics giant also halted pickup and delivery services in several Gulf nations. Qatar Airways Cargo temporarily suspended operations following the closure of Qatari airspace.
DSV, a Danish logistics provider, warned clients that carriers are suspending services or diverting flights to avoid conflict zones. The longer routings reduce available cargo space, a shift likely to push air freight rates higher and force airlines to adjust schedules on short notice. Ryan Petersen, CEO of the logistics platform Flexport, stated on social media that the conflict has removed 18 percent of global air freight capacity from the market.
Insurance Cover Withdrawn and Long Term Risks Loom
The financial and insurance sectors are reacting to the heightened risk profile in the region.
Several marine insurers, including the London P and I Club and the American Club, have stated they will cancel war risk cover for ships operating in Iranian waters and the broader Gulf area starting Thursday. The withdrawal of insurance cover adds another layer of complexity for shipowners attempting to maintain services in the region.
The current escalation compounds a crisis that has gripped the Red Sea for over two years due to attacks by Iran backed Houthi rebels. Sand of Xeneta warned that the weaponization of trade routes makes a large scale return of container shipping to the Red Sea in 2026 increasingly unlikely. With vessels forced to omit Gulf port calls, shippers face the prospect of discharging goods at alternative hubs and trucking them onward, adding time and cost to supply chains already stretched thin.
