I find myself checking Middle East news first thing every morning these days. As the Iran-Israel conflict keeps pulling the US deeper in, the forwarding industry jokes—half-serious, half-joking—"Not Hormuz again?"
Honestly, I used to brush off Hormuz headlines with "it'll blow over soon." But after living through several ship seizures and drone attacks in real time since 2024, my clients now call me first. "Will our shipment be okay this time?"
Today I want to walk you through how I answer that question, and what route, cost, and insurance issues actually blow up in the field.
Why the Strait of Hormuz Matters So Much
Let's start with the numbers. The Strait of Hormuz is only about 33 km wide at its narrowest point. Yet roughly 20% of the world's seaborne crude oil and over 20% of LNG pass through this narrow waterway (based on US EIA disclosures 2023–2024).
The problem is it's not just a tanker corridor. Container ships heading to UAE's Jebel Ali, Oman's Sohar, or Saudi Dammam all have to transit this strait.
"Isn't it just an oil issue?" people ask me a lot. But Jebel Ali is the hub for Middle East and Africa transshipment. If it closes, Korean cargo bound for the CIS (Commonwealth of Independent States) and East Africa gets backed up in a chain reaction.
When a Middle East hub port like Jebel Ali gets blocked, cargo from neighboring countries gets delayed in a domino effect.
What Actually Changes on the Ground If It Gets Blocked
Let me list the changes I felt in April 2024 when Iran seized the MSC Aries, using my Busan–Jebel Ali direct FCL route as the benchmark.
- Freight rates: Busan–Jebel Ali 40ft jumped from roughly $2,100 to $2,900 in about a week. There was significant variance by carrier.
- War Risk Surcharge: Retroactive notices came through at $30–50 per TEU on existing shipments.
- Insurance premiums: War Clause rates on cargo insurance jumped 3–5x from peacetime levels. Some insurers refused to underwrite.
- Schedule: When T/S (transshipment) routing changed, lead times added 5–10 days.
Looking at the numbers alone, you might think "that's manageable." But here's the catch: when these charges apply retroactively to already-shipped cargo, things get messy. If the surcharge notice comes after the BL is issued, disputes over who pays—shipper or consignee—blow up immediately.
Case Study — Mid-Size Chemical Company A, Summer 2024
Let me walk through one case I handled last year. A mid-sized Korean chemical company, A Corp, shipping dangerous goods (IMO Class 3) in three 40ft containers to Dammam, Saudi Arabia.
Shipment completed mid-June. But right after departure, Middle East tensions escalated sharply, and the carrier rerouted via Salalah, Oman for transshipment. We waited for the feeder vessel in Salalah for 18 days. The original plan was 5 days.
When the situation changes, the ops team monitors ship positions and alternative routes in real time.
The result:
- Local arrival delayed by roughly 2 weeks → consignee's factory line shutdown compensation claim
- Dangerous goods meant demurrage at ~1.5x the rate of general cargo
- War Risk Surcharge of roughly $45 per container added on
When A Corp's manager called and said, "If you'd just given us a heads-up, we'd have checked other carriers…" honestly, I had no answer. After that incident, our team now shares a twice-weekly geopolitical briefing with Middle East customers.
Are There Alternatives to Hormuz?
Bottom line: there's no complete substitute. But there are three workaround options depending on the situation.
| Route | Pros | Cons |
|---|---|---|
| Saudi west coast (Jeddah) → overland truck | Complete Hormuz bypass | Lead time +10–15 days, overland cost $100s per TEU |
| Turkey Istanbul → Iraq/Iran overland | Access to northern Iran, CIS | Customs risk, political sensitivity |
| Pakistan Karachi → Afghanistan/CIS | South Asia transshipment | Local infrastructure limitations |
As you can see from the table, every option has downsides. So the real challenge for us practitioners isn't "avoid Hormuz completely"—it's "how do we spread the risk?"
flowchart LR
A[Busan Port Departure] --> B{Hormuz Normal?}
B -->|Yes| C[Jebel Ali Direct Call]
B -->|No| D[Salalah/Jeddah Transshipment]
D --> E[Overland/Feeder Reshipment]
C --> F[Final Destination]
E --> F
Insurance — This One You Have to Get Right
The most frustrating case I see in the field is cargo insurance taken out without War Clauses. People often skip it in peacetime to save on premiums, but in a region like Hormuz, without it you get almost no compensation.
Three checkpoints to remember:
- Institute War Clauses (Cargo) included or not
- Strikes Clauses included (covers riots, strikes)
- 7-day rule — War Clauses typically cover only within a certain period after shipment. Extended transshipment delays can cause coverage to lapse
One line difference in war clause wording can completely change compensation in a loss.
Especially that third point—if transshipment runs long, you can end up with an uninsured gap. I always tell customers: "Before shipment, confirm with your insurer whether a Held Covered Clause is available."
Three Things Practitioners Should Check Right Now
Here's the summary:
- Dual-source carriers and routes — For Middle East shipments, get quotes from at least 2 carriers in parallel. If one changes routing, you have a backup.
- Reconfirm INCOTERMS — Under CIF/DAP, clarify in your contract who bears the freight rate increase. Ambiguity = disputes.
- Cargo insurance with War Clauses — Saving a few dollars on premiums isn't worth losing a container.
If you're thinking "we have a lot of Middle East volume—can you take a look at whether our current routing is okay?" reach out to the LIAN GLOBAL LOGIS team. It's not fancy consulting; we'll take your current and pending shipments by BL and give you a one-page route risk simulation. Just from that, you'll know "we need to strengthen insurance on this one" or "we should switch carriers on that one."
I can't predict Middle East politics any better than you can. But there are definitely things we can prepare for in the field, and that preparation protects your delivery schedules and costs. I hope this piece helps anyone handling Middle East shipments.
자주 묻는 질문
Has the Strait of Hormuz ever been completely blocked before?
There's never been a complete blockade. However, during the 1980s Iran-Iraq War's 'Tanker War' and repeatedly since 2019, partial transit disruptions from ship seizures and drone attacks have occurred. A full blockade would have such massive impact on global energy and container logistics that Iran has treated it as a bargaining card rather than something to actually execute.
How much does War Risk Surcharge typically cost on Middle East shipments?
It varies by carrier and timing. In peacetime, it's either zero or single-digit dollars per TEU, but when tensions rise, it can jump to $30–50 per TEU, sometimes exceeding $100. The tricky part is that it often applies retroactively to already-shipped cargo, so you need to clarify in your contract who bears this cost.
Do I really need to buy cargo insurance with War Clauses?
Strongly recommended for any cargo transiting conflict zones like the Middle East, Red Sea, or Black Sea. Standard cargo insurance (ICC A/B/C) excludes losses from war, riots, and terrorism. You need Institute War Clauses and Strikes Clauses to cover seizure, detention, and attack damage.
What's the time and cost difference for Hormuz bypass routes?
Rerouting via Saudi Arabia's west coast (Jeddah) with overland transport typically adds 10–15 days and costs $100s to over $1,000 per TEU depending on destination. The impact varies significantly by shipment and timing, so each case needs its own simulation.
What support can I get from a forwarder on Middle East geopolitical risk?
Dual-carrier sourcing, insurance policy review, INCOTERMS cost-sharing simulation, and regular geopolitical briefings. LIAN GLOBAL LOGIS provides weekly risk reports and per-shipment routing alternatives for Middle East customers.