News / Strait stalemate: 'trade will find a way', but it will be costlier and take longer

ID 385679477 © Iryna Kushnarova

Container lines have been forced into rapid ‘operational recalibration’ as instability around the Strait of Hormuz reshapes service patterns, costs, and risk calculations, according to Drewry. 

Simon Heaney, senior manager of container research at the consultancy, explained today: “The situation in the Middle East is extremely dynamic and has some very unpredictable main actors.” 

He added that the strait had become “the central flash point of the conflict… basically a no-go zone, unless very expensive tolls were paid”. 

And with no clear resolution timeline, carriers have adopted what Mr Heaney described as a “wait and see” approach, continuing to serve the region in a “patchwork fashion” established in the immediate aftermath of the conflict. 

Drewry characterised liner responses in three phases. The first saw an almost immediate withdrawal, with bookings suspended, services halted, and cargo discharged at safer ports. 

Carriers then moved quickly into a second phase, restoring flows via indirect routings. Multimodal solutions, including feeder services and overland corridors, have reconnected Gulf markets, albeit at higher cost and longer transit times. 

“Bookings are now reopened, but services take far longer… and much more expensive,” Mr Heaney said. 

This has led to the emergence of alternative hub networks outside Hormuz, though these remain exposed and subject to war-risk surcharges.  

And should the disruption spread, further diversions to ports such as Colombo or Nhava Sheva may be required, reinforcing what Drewry described as a “highly dynamic and fragmented operating environment”. 

At the same time, carriers are preparing escalation scenarios, with fuel emerging as a critical concern. 

Global bunker prices have risen sharply, and carriers have shifted bunkering from Gulf hubs to others, “which is why we’re seeing squeezes in places like Singapore”, added Mr Heaney. 

Lines have responded with emergency surcharges, but Drewry warned that they could resort to slow-steaming, blanking sailings or vessel idling if cost pressures intensifed. 

And Mr Heaney cautioned that, for carriers, this crisis differed from previous shocks.  

“Unlike the Covid period… the current conflict carries a meaningful downside risk to demand,” he said, warning that escalation could weigh heavily on global trade and carrier profitability. 

Looking ahead, even a short disruption would likely result in temporary rate spikes and modest volume declines. However, a prolonged closure of the strait could have far more severe consequences, including inflationary pressure, reduced trade growth, and intensified geopolitical competition for supply routes. 

For carriers, the longer-term implication may be structural. The crisis has exposed vulnerabilities in key maritime chokepoints and could accelerate a shift towards more resilient, less-concentrated network designs.  

As Mr Heaney put it: “Trade finds a way,” but increasingly, it may do so along longer, more complex, and costlier routes. 

He said: “Even if the Middle East conflict stabilises and Hormuz reopens within our base case timeline, it has already exposed some structural vulnerabilities in the market, which could lead to lasting changes, not just temporary disruption. 

“Top of this, in my mind, would be a redesign of liner networks that will try as much as possible to avoid choke points. From the end of 2023, we saw networks shift from being cost-optimised to becoming more risk-managed and resilience-focused, and I think this may become a more permanent feature in the future,” he explained.  

“Lines will look to reduce their dependency on any single corridor, whether that be Suez/Hormuz or the Bab al Mandeb, or anywhere they really want to avoid this pinch-point situation. I think the conflict could also accelerate the trend towards more near-shoring strategies.

“If we get to the point where there is much more diversification of routes, it is going to require a greater willingness on the part of customers to accept longer journeys, which will have a knock-on effect in terms of increasing demand for ships.”