TPM26: Middle East conflict to ripple across global trade lanes

At the TPM26 conference in Long Beach, container shipping executives warned that the operational ripple effects of the Middle East conflict will be felt far beyond the region—potentially weeks from now—across major global trade lanes.

As the conflict enters its third day, about 10% of the global container shipping fleet is either stranded inside the Persian Gulf or held up outside the critical waterway, according to Jeremy Nixon, CEO of Ocean Network Express (ONE). Nixon said most carriers, including ONE, have had to stop all bookings to the Middle East, disrupting a trade lane that represents significant volume.

“All of that cargo is going to start backing up into the hubs and into the key locations in Europe and Asia,” Nixon said. He added that vessels carrying Middle East-bound cargo may need to turn around and discharge boxes at hubs such as Colombo, Fujairah and Singapore—moves that will reduce overall network fluidity.

Triene Nielsen, vice president of ocean/global at forwarder Flexport, said when ships fall off their normal schedules, the disruption cascades through the system as carriers scramble to prioritize equipment and manage empty container flows. “Those ripples are not going to come tomorrow,” she said, “but they might come three, four or eight weeks from now.” Even if the conflict is concentrated in the Middle East, she warned that equipment problems will be felt on other trade lanes.

Johan Sigsgaard, executive vice president at Maersk, said that managing containers already on the water would be a major challenge as ships and equipment become effectively suspended. He noted that because global hubs touch multiple trades, the effects can spread well beyond one corridor depending on how long the disruption lasts.

Executives also highlighted the human impact. Nixon said approximately 40,000 seafarers are affected, with around 350 ships trapped inside the Persian Gulf and another 350 held outside.

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