Container shipping disrupted: hefty war surcharges and booking freeze due to Iran conflict

Global logistics is on edge as major container shipping companies take drastic measures against the escalating war between the U.S., Israel and Iran. With huge war surcharges and the cessation of bookings, the industry is responding to the unsafe situation in the Persian Gulf and Red Sea.

The French shipping line CMA CGM is immediately implementing an Emergency Conflict Surcharge (ECS) that can reach up to $4,000 per container. This surcharge affects not only shipments to the Persian Gulf but also crucial ports on the Red Sea in Egypt and Djibouti. This brings an abrupt end to the cautious return to the Suez Canal that began late last year.

Booking freeze and blocked ships

Market leader MSC is going a step further and has suspended all bookings to the Middle East worldwide until further notice. Meanwhile, an estimated 60 container ships are stranded as the Strait of Hormuz is effectively impassable. Maritime insurers, meanwhile, are refusing to provide coverage for vessels in the war zone, effectively closing the region to commercial shipping.

Hope drilled into the ground

Analysts at the Xeneta platform state that hopes for a recovery of the Suez Canal route by 2026 have completely vanished. As shipping lines such as Maersk are once again diverting their ships en masse via the Cape of Good Hope, congestion looms at hubs such as Singapore and Colombo. Although the rate hikes could boost shipping lines’ profits, experts warn of a “waterbed effect” that could disrupt global supply chains for months.