The world's largest global shipping companies – among them "MSC", "Maersk", "CMA CGM", and "Hapag-Lloyd" – have begun massively redirecting a portion of their cargo to road transport to bypass the partially blocked Strait of Hormuz. The reason is that freight rates on key routes are already exceeding levels seen at the peak of the COVID-19 pandemic.
From container ships to truck convoys
According to data from "Clarksons Research", cited in the international press, the cost of shipping a standard container on the Shanghai – Persian Gulf and Red Sea route has risen from $980 to $4,131 as of May 15.
In response, carriers are beginning to organize land corridors from ports in the Red Sea and the Gulf of Oman – including Yanbu and "King Abdullah" in Saudi Arabia and Fujairah in the UAE – to inland destinations such as Dammam, Basra in Iraq, and Jebel Ali in the Emirates.
Maersk CEO Vincent Clerc explains that "significant trucking capacity" has been mobilized, with "both the Saudis and the Iraqis opening up for a large number of trucks coming from Iraq, from Jordan, even from Turkey".
The Strait of Hormuz – practically closed
The Strait of Hormuz has been de facto blocked to normal commercial shipping since February 28, when Iran closed the waterway in response to US and Israeli military strikes.
Currently, only about 3.3% of normal traffic passes through the strait – instead of over 60 ships per day, only a few are passing through.
Total trade with the Persian Gulf has decreased by between 60 and 80%, and delivery delays are reaching up to 60 days.
Spot rates for container shipments on the affected routes are three to four times above pre-war levels, further compounded by war risk surcharges of $1,500 to $4,000 per container and sharply increased insurance premiums.
A London shipbroker notes that grain traders are already diverting cargo through Fujairah and Khor Fakkan, and delivery to final destinations in Qatar, Bahrain, and other Gulf states is being carried out by trucks.
Iran accelerates alternative land corridors
In parallel, Iran is increasing the use of land routes to mitigate the impact of the American naval blockade.
Since April 13, the frequency of freight trains from the Chinese city of Xi'an to Tehran has been increased from about once a week to one trip every three to four days.
Freight rates on this rail corridor have risen to approximately $7,000 for a 40-foot container – about 40% above usual levels.
Iraq's new Prime Minister Ali al-Zaidi, according to a directive dated May 16, instructed all Iraqi customs to activate transit and transshipment operations with Iran without restrictions.
On April 25, Pakistan officially opened six land transit corridors to Iran, connecting the ports of Gwadar, Karachi, and Port Qasim with Iranian border crossings.
Trucks and trains cannot replace tankers
Despite the efforts of countries in the region and logistics companies, land transport can compensate for only a small fraction of the lost Hormuz capacity.
One supertanker carries a cargo equal to what between 25 and 35 fully loaded freight trains can handle.
Regional ports are currently prioritizing food and medical supplies, which further limits the possibility of shifting commercial cargo to alternative routes.
The UN World Food Programme has already reported difficulties in delivering humanitarian aid to Yemen, Djibouti, and Sudan, directly linked to the disrupted shipping in the region.
Global logistics faces a new chain of risks
Shifting some cargo from sea to road and rail temporarily eases the most affected trade flows, but increases costs and extends delivery times.
For shipping companies, this means more complex planning chains, increased operational risks, and the need for coordination with multiple national authorities along the route.
As long as there is no sustainable solution for security in the Strait of Hormuz, businesses and consumers around the world will likely continue to feel the effect in the form of more expensive and slower deliveries.