Regional QHSE & Compliance Manager – Americas

Dear Valued Customer,

We are issuing this Customer Advisory to provide an updated and consolidated view of the rapidly evolving geopolitical situation in the Middle East and its immediate and near-term ripple effects on global supply chains across all major trade lanes.

What began as a regional disruption has now expanded into a global supply-chain event, impacting capacity, congestion, transit times, service reliability, and logistics costs well beyond the Middle East. The situation remains highly dynamic and continues to intensify worldwide.

Locally in Middle East our focus is on the safety and security of our teams, contractors and partners. In line with local guidelines, we continue to operate services as required at our warehouse and yard facilities in United Arab Emirates and Qatar, and we are fully operational at our facilities in Oman.

Global Energy Impact and Carrier Surcharges:

A sharp short-term increase in oil and gas prices is expected, and initial market observations confirm this trend. As a result, airlines and shipping lines have begun announcing, or are expected to announce shortly:

• Emergency Fuel and Emergency Bunker Surcharges
• War Risk, Congestion, and Peak-Season-type surcharges
• General rate increases across air and ocean networks

These surcharges are not expected to be limited to routes to/from/via the Gulf region and will likely affect carriers’ entire route networks, impacting shipments globally.

Shipping Lane Closures – Global Maritime Impact:

The Strait of Hormuz, one of the world’s most critical maritime corridors for energy and commercial cargo, has been declared closed to vessel traffic following escalating military activity in the region. In parallel, heightened security risks have materially impacted the Red Sea, Bab el-Mandeb Strait, and Suez Canal corridor. Multiple ocean carriers have suspended or limited transit through these waterways and are rerouting affected services via the Cape of Good Hope.

These actions are:

• Extending transit times
• Reducing effective vessel and equipment capacity
• Triggering significant additional operational costs

As a direct result, major ocean carriers have suspended or rerouted vessels, feeder services into the Gulf are being reduced, and further ripple effects across non-Gulf trade lanes are expected. For the UAE the ports of Khor Fakkan and Fujairah are being used as alternate gateways and both Dubai Ports World and Abu Dhabi Ports have announced arrangements for transfer of cargo from these ports to Jebel Ali and Khalifa Port in Abu Dhabi for final clearances. Transfer will be by truck and rail, and costs will be borne by consignee. There are now limited feeder services available between Jebel Ali and Sharjah Ports to upper gulf – Dammam, Bahrain, Kuwait and Umm Qassr , but space is limited and rates are fluctuating.

What This Means for Your Ocean Shipments:

• Until further notice, sea freight shipments to the Middle East and the Gulf region can only be collected with explicit, updated booking confirmations from the shipping lines. Currently, this is generally not possible.
• To avoid costly storage, demurrage, or detention charges, Pentagon can—if required and in coordination with you—collect and temporarily store cargo and load containers once departures resume.
• Containers already loaded and designated for export will be handled in close consultation with you. Where operationally feasible, we strongly recommend stopping cargo outside ports and transferring goods to storage facilities to minimize cost exposure.
• For cargo already at sea, Pentagon is coordinating directly with carriers. Depending on voyage stage, carriers will determine whether cargo can be discharged at alternative ports or must remain on board. We will advise accordingly on a case-by-case basis.

Port Congestion – Immediate and Near-Future Ripple Effects:

Near-term congestion is expected at Gulf ports. In addition, increased transshipment pressure is anticipated at Asian hubs such as Singapore, Tanjung Pelepas, and Port Klang. As uncertainty around final delivery grows, carriers may temporarily cease loading Gulf-destined cargo, creating bottlenecks with global knock-on effects.

Pentagon Mitigation Measures & Customer Guidance

Pentagon remains fully mobilized globally to:

• Monitor carrier, port, airspace, and regulatory developments in real time
• Secure and prioritize available capacity for critical cargo
• Identify and deploy alternative routings where operationally viable
• Enhance shipment visibility and support customer contingency planning

We strongly recommend remaining in close and regular contact with your Pentagon account representative to review shipment-specific risks, mitigation strategies, and available options. This situation remains fluid. Pentagon will continue to monitor developments closely and provide updates as conditions evolve.

Airspace Restrictions – Global Airfreight Consequences:

Widespread airspace restrictions across parts of the Middle East continue to severely impact global airfreight flows, reducing capacity, increasing transit times, and adding volatility to pricing and service reliability. A limited number of Gulf-based airlines have reintroduced highly controlled freighter and passenger operations via hubs such as Dubai and Abu Dhabi, including selective acceptance of transit cargo from certain Asian origins. These operations remain primarily focused on backlog clearance and essential commodities.

Looking ahead:

• Additional freighter capacity may be phased in during March, subject to regulatory approvals and operational feasibility.
• Payload restrictions, longer routings, and operational volatility continue to limit effective capacity.
• Rates are rising as demand is displaced to alternative routings and block-space commitments are adjusted.

The loss of Gulf transit capacity—particularly for Asia–Europe and Asia–Americas flows—is creating global knock-on effects, with space shortages and pricing pressure extending well beyond the region.

Middle East Airport Updates:

What This Means for Your Air Shipments:

• Air freight shipments already in airline custody, including transit cargo via the Gulf, are currently stopped and temporarily stored at airports. Airport storage charges will apply and are significant.
• Customers may continue to register air shipments with Pentagon. Where appropriate, we can collect and store cargo more cost-effectively than at airports and dispatch on a first-come, first-served basis as capacity resumes.

Alternative Air & Multimodal Routing – Ready to Operate for Dubai:

In line with our mitigation strategy, Pentagon in conjunction with JAS is ready to operate bonded air-to-road solutions into Dubai, providing customers with a practical alternative while direct air capacity remains constrained.

These solutions are fully prepared for deployment and can operate on a scheduled basis, up to three times per week, subject to shipment confirmation and operational feasibility.

Air Freight Gateways with Bonded Trucking into Dubai:

• Dammam (Saudi Arabia): Air cargo via Dammam International Airport, with bonded trucking into Dubai.
• Riyadh (Saudi Arabia): Air cargo via Riyadh, with bonded trucking into Dubai.

These options are designed to support shipment continuity into Dubai under current conditions. Transit times,

availability, and costs will be assessed case by case.

Cross Border Trucking within Middle East:

To date all land borders within the GCC and Iraq are operational, however with some delays for increased security, we anticipate that there will be some congestion at key border points if this situation extends further. Truck availability is becoming an issue, and we are seeing an increase in rates for local and cross border movements.

Your supply-chain continuity remains our top priority. Geopolitical Disruptions Global Supply Chain Impact

Yours Sincerely,

Pentagon Middle East & India Management Team

We are issuing this urgent advisory to update you on the rapidly evolving geopolitical situation in the Gulf region and its direct impact on global and regional supply chains. Recent developments have resulted in significant disruptions across maritime and air logistics networks. As a temporary measure and in line with local government instructions the majority of our teams in Iraq, Qatar, and UAE will work remotely where possible, there will be limited yard operations where necessary.

Closure of the Strait of Hormuz

The Strait of Hormuz—one of the world’s most critical energy and commercial shipping corridors—has been declared closed to vessel traffic following escalating military exchanges in the region. Multiple authoritative sources report that Iran’s Islamic Revolutionary Guard Corps (IRGC) has warned that no vessels will be permitted to pass and that shipping lines have already suspended navigation through the strait.

As a result:

• Major global carriers, including CMA CGM, Hapag-Lloyd, MSC, ONE Line and others, have suspended transits or rerouted vessels away from the Gulf.
• Feeders Vessels operating from major hubs into Gulf ports have as well suspended operations.
• Vessel traffic has dropped sharply, with tankers instructed to take shelter or reverse course.
• The disruption affects a corridor that typically handles ~20% of the world’s oil and LNG flows, posing significant risks to the
• stability of global supply chains.
• Due to heightened tensions carriers that had previously resumed transit through the Red Sea have also now re routed vessels around Cape of Good Hope.
• MSC has suspended all new bookings into Middle East Ports.
• Other carriers have already applied significant surcharges to imports and exports from Middle East with effect from 2nd March.

Operations Resumed in Jebel Ali Port

Jebel Ali Port has resumed operations after a temporary suspension of operations for precautionary reasons . All other ports in United Arab Emirates remain operational but with heightened security.

Widespread Airspace Closures Across the Middle East

Simultaneous with maritime restrictions, several Middle Eastern countries have enacted full or partial airspace closures due to regional security escalations following U.S. and Israeli military operations in Iran. Countries currently affected include Iran, Qatar, Kuwait, Bahrain, Iraq, the UAE, Israel, and Jordan.

Key impacts:

• Airlines have cancelled or diverted hundreds of flights, with more than 1,800 flights cancelled in a single day, affecting passenger and cargo movement alike.
• Gulf hub operations (Dubai, Doha, Abu Dhabi) have experienced major suspensions, severely limiting connectivity between Asia, Europe, and Africa.
• Qatar Airways, Emirates, Etihad, and other carriers have temporarily suspended operations or halted departures as authorities manage airspace safety.
• Current evidence shows that Saudi Arabia has not closed its airspace, unlike Iran, Iraq, Israel, Qatar, Bahrain, Kuwait, and parts of the UAE and Syria. Instead, Saudi Arabia is functioning as one of the only remaining open east-west aviation corridors, which has caused heavy rerouting through the kingdom’s airspace.
• Saudi Arabia’s airspace remains open, the country is currently serving as one of the only safe, operational regional air corridors. Airlines such as Saudia have suspended multiple routes for safety, but this is not due to Saudi-led airspace closure.
• Expect high congestion, rerouting delays, and significant pressure on Saudi ATC infrastructure as traffic is funnelled around closed neighbouring airspaces. This situation is expected to cause transit delays, diversions, reduced belly-cargo capacity, and interruptions in scheduled supply chain flows.

Expected Impact on Your Supply Chain

Given the dual disruption of sea and air corridors:

• Transit times for ocean freight may extend significantly due to rerouting.
• Airfreight capacity is currently restricted, with possible backlogs once operations resume.
• Logistics costs across modes are likely to rise in the short term.

Our Mitigation Measures

We are undertaking the following actions to minimize customer impact:

• Rerouting cargo via alternative maritime corridors where feasible.
• Close coordination with carriers, port authorities, and aviation regulators to obtain real-time movement updates.

Recommendations for Our Customers

We advise you to:

• Plan for extended lead times for shipments moving through the Middle East.
• Consider alternative sourcing or routing options where possible.
• Update your internal stakeholders and downstream partners regarding likely delays.
• Contact your account manager for individual shipment assessments and contingency options.

We are continuously monitoring the situation through verified governmental, security, and carrier channels and will issue updates
as soon as further clarity is available. Your operations and supply continuity remain our highest priority. If you require case-specific
guidance, mitigation planning, or emergency logistics support, please reach out to your dedicated service representative or reply
directly to this message.

Stay safe and assured of our continued support during this challenging time.

Yours truly,

Pentagon Middle East & India Management Team