Hormuz crisis, container freights doubled and alternative routes congested

Container freight rates almost doubled and alternative routes to Hormuz congested. For industrial logistics, the situation in the Middle East remains critical and far from normal. Launching yet another alarm is Valentina Mellano, CEO of the North West shipping company. Although, at the moment, operational priorities are inevitably absorbed by oil traffic, which requires immediate attention and conditions the overall management of flows in the area, the manager emphasises that 'cargo traffic continues, in fact, to be blocked: to date, no shipowner has resumed transiting the Strait'.

And while the Emirates markets remain interested in inbound flows, 'reaching them is extremely difficult if not impossible. In recent weeks, the system has tried to adapt, through solutions other than Hormuz; but the main alternative routes are now congested or no longer accessible. The ports used as relief valves in the Gulf area, such as Khor Fakkan or Sharjah, are saturated and are generating a funnel effect that slows down the entire supply chain'.

The routes to India or Jeddah, then, says Mellano, 'remain formally unchanged, but are not immune to regional tensions. Land routes, for example via Egypt, initially considered viable options, involve very high costs and are not always sustainable on an industrial scale. In addition, some product categories, from machinery to specific agri-food products, are not readily adaptable to other markets. This is why, in some cases, companies choose to return goods, with a direct impact on revenues and operations

 Cost pressures continue to rise along the entire supply chain. "Since the beginning of the crisis, total freight rates on some routes have doubled, with increases of up to USD 2,500 per container. Road transport has seen increases of around 10%, while the cost of fuel has risen from around EUR 1.6 per litre to levels in excess of EUR 2-2.20, further squeezing companies' margins'.

 To all this, he continues, "we add the risk of further energy-related price increases, with expected impacts also on refrigerated transport, which is particularly sensitive to the dynamics of energy consumption. The arrival of the summer season introduces a further variable: the more intensive use of cold stores for transporting goods will inevitably lead to an increase in operating costs. For the fruit and vegetable sector, the picture is even more delicate, as it is a sector in which regularity of timing, maintenance of the cold chain and predictability of transits are essential elements. Logistics, in short, is absorbing a shock that risks becoming structural. The reactivation of flows will take time, while costs are already consolidating their effects along the entire value chain'.