As we enter March 2026, the geopolitical landscape in the Middle East has taken a dramatic turn, profoundly affecting the logistics industry. Recent joint US-Israeli military strikes on Iran killed Supreme Leader Ayatollah Ali Khamenei, prompting Iran to launch retaliatory missile strikes targeting Israel and US bases in the region. This escalation has led to widespread disruptions in sea and air shipping, with knock-on effects felt across global supply chains.
At E2G Logistics, we are closely monitoring these developments to help our clients mitigate risks and maintain operational continuity. Drawing from recent reports as of 3 March 2026, we focus particularly on the impacts to sea and air freight, with special attention to the vital China-Europe shipping lane—a corridor essential for many of our clients' operations. Escalating Tensions: A Quick Overview
Escalating Tensions: A Quick Overview
The conflict intensified over the weekend of 27-28 February, with Iran's counterattacks causing immediate halts in regional transport. Key chokepoints like the Strait of Hormuz—through which one-fifth of the world's oil and liquefied natural gas typically passes—have been effectively paralysed, leading to maritime alerts from the US and UK navies. Satellite navigation interference and risks to neutral vessels have compounded the chaos. Additionally, debris from intercepted missiles caused a fire at Dubai's Jebel Ali Port, one of the world's busiest container hubs, forcing temporary halts in operations.
Broader economic ripples include a surge in European natural gas prices by over 20% and interruptions to Amazon Web Services (AWS) data centres in Bahrain and the UAE due to power and network issues. Oil prices are volatile, with analysts warning they could exceed $100 per barrel if disruptions persist.
Impact on Sea Shipping
Sea freight has borne the brunt of the crisis, with the Strait of Hormuz designated a "high-risk area" by the International Transport Workers' Federation (ITF), representing 16.5 million transport workers globally. This classification mandates enhanced crew protections, risk assessments, and the right for seafarers to refuse entry into the zone.
● Route Disruptions and Diversions: Most tankers and container vessels have ceased transits through the Strait, leading to clustering of ships in safer waters outside the Gulf. Major carriers have suspended all crossings: A.P. Moller-Maersk has rerouted vessels away from the Suez Canal towards the Cape of Good Hope; Hapag-Lloyd has paused Hormuz and Suez transits; CMA CGM has ordered ships to seek shelter and imposed emergency surcharges starting at $2,000 per 20-foot container; and Mediterranean Shipping Co. has halted all Middle East cargo bookings. COSCO Shipping is evaluating alternative discharge ports for in-transit cargo, with vessels already in the Gulf instructed to anchor in safe areas.
● Cost Escalations: Insurance providers are cancelling or hiking premiums, with rates potentially multiplying several times for vessels linked to US or Israeli interests. War risk surcharges are now commonplace—Hapag-Lloyd's stands at $1,500 per 20-foot equivalent unit (TEU) for Gulf shipments. Fuel costs are rising due to longer routes and oil price fluctuations, exacerbating overall transport expenses.
● Broader Supply Chain Effects: Congestion at transhipment hubs, equipment shortages, and irregular schedules are anticipated. If prolonged, this could indirectly tighten reefer container availability globally.
These changes have dashed hopes for a return to Red Sea and Suez Canal routes in 2026, following earlier Houthi disruptions since 2023.
Impact on Air Shipping
Air transport has ground to a near halt in the region, with airspace closures forcing widespread cancellations and rerouting. Special Focus:
● Flight Suspensions: A host of airlines have paused all Middle East-bound services, including Air France, British Airways, Lufthansa, Qatar Airways, Turkish Airlines, and others such as Air India, Japan Airlines, and Virgin Atlantic. This has led to thousands of flight cancellations, affecting key global connectors.
● Capacity and Transit Challenges: Reduced global capacity due to aircraft redeployments and route extensions is tightening availability, particularly on Asia-Europe corridors. Transit times to Europe, the US, and Canada are extending by 10-18 days in some cases, with volatility in pricing and scheduling. Dubai's major airports are resuming limited operations for stranded passengers, but travellers are advised to confirm with carriers.
● Rate Increases: Forwarders warn of rate hikes and disruptions beyond the Middle East, impacting Far East-Europe trade lanes.
China-Europe Shipping Lane
The China-Europe route, a cornerstone of global trade, is particularly vulnerable. With renewed Houthi attacks in the Red Sea and the Hormuz closure creating a "dual-blockade" scenario, carriers are fully diverting to the Cape of Good Hope, adding 15-20 days to transit times and absorbing up to 2.5 million TEU of global capacity. Spot rates from China to the UAE have risen 5% to $1,572 per 40-foot equivalent unit (FEU), driven by security concerns.
For air freight, capacity constraints on Far East-Europe lanes are intensifying, with potential shifts to consolidated shipments from EU hubs. Exporters anticipate higher logistics and insurance costs, urging clients to plan for delays. At E2G, we recommend exploring multimodal options, such as rail via the Belt and Road route, to bypass some maritime bottlenecks.
Looking Ahead: Strategies for Resilience
The situation remains fluid, with potential for further escalation. At E2G Logistics, we are committed to providing real-time updates, alternative routing advice, and risk assessments to safeguard your supply chains. If you're facing disruptions on the China-Europe lane or elsewhere, reach out to our team for tailored solutions.
