Dear Valued Customer,
We are issuing this Customer Advisory to update you on 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 regional disruption is already extending beyond the Middle East and is intensifying globally, impacting capacity, congestion, transit times, and logistics costs worldwide. As a result, a sharp short-term increase in oil and gas prices is expected, and initial market observations confirm this assessment. Consequently, increases in carrier surcharges (air & sea) for bunker and fuel are expected within the next few days, or the introduction of emergency fuel or emergency bunker surcharges. These surcharges are not expected to be limited to routes to/from/via the Gulf region but will likely affect the carriers’ entire route networks.
Locally in Middle East our focus is on the safety and security of our teams, contractors and partners. In line with local guidelines we are operating 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.
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 with Persian Gulf disruptions, heightened security risks associated with the conflict 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, and triggering additional operational costs.
As a direct result, major ocean carriers have suspended or rerouted vessels, and feeder services into the Gulf are being reduced. These developments are expected to create further ripple effects across non-Gulf trade lanes.
What This Means for Your Shipments
- Until further notice, we can only collect sea freight shipments to the Middle East and the Gulf region if we receive explicit updated booking confirmations from the shipping lines. Currently, this is not possible to all Middle East Locations, but is possible with limited carriers to Oman Ports, Khor Fakkan and Fujairah in UAE, Jeddah and King Abdullah Ports in Saudi Arabia.
- Containers already loaded and designated for export to the affected regions will be handled in consultation with you. To minimize costs, we strongly recommend—where operationally still feasible—that goods should be stopped outside the ports and that containers be unloaded and the goods transferred to storage facilities instead. In the event of a multi-week disruption of transport routes, very high storage or detention costs can otherwise be expected. We will clarify on a case-by-case basis whether cargo already delivered to export ports can be retrieved.
- For cargo already loaded and at sea, we are in contact with the shipping lines. Depending on the stage of the voyage, carriers will determine the appropriate course of action for each vessel and decide whether goods can be discharged at alternative ports or must remain on board for the time being. We will inform you as soon as possible.
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.
Airspace Restrictions – Global Airfreight Consequences
Widespread airspace restrictions across parts of the Middle East are severely impacting global airfreight flows, reducing capacity, increasing transit times, and adding volatility to pricing and service reliability.
Air Freight – Airspace Status
Airspace restrictions remain in place across multiple countries:
- Iran, Iraq and Israel – Closed
- Jordan, Kuwait, Bahrain, Qatar and the United Arab Emirates – Partially to fully restricted
Major Airport Disruptions
- Dubai (DXB &DWC) –Widespread cancellations, limited services resumed for both PAX and Cargo flights
- Abu Dhabi (AUH) – Widespread cancellations, but limited services resumed
- Sharjah (SHJ) – Widespread cancellations, but limited services resumed
- Doha (DOH) – Flights largely suspended, limited services resumed as of today
- Oman (MCT) – Open but current carriers limited to Oman Air
- Saudi Arabia (RUH JED) – Open with limited carrier options
- Saudi Arabia (DMM) has seen temporary closures
- Kuwait International (KWI) no operations
- Bahrain (BAH) no operations
- Iraq (BGW EBL BSR) no operations
What This Means for Your Shipments
- Air freight shipments to and from the affected region that are already in custody of the airlines are stopped and temporarily stored at the airports. This also applies to shipments booked for transit flights via the Gulf region. Storage charges will be incurred for warehousing at the airlines and will be charged to your goods. Airport storage rates are significant; please take this into account in your calculations. We are in close contact with the airlines regarding the modalities for onward transportation of your shipments and will inform you as soon as possible.
- Due to the immense cargo capacity usually offered by the major Gulf-region airlines (including transit traffic, especially to and from Asia), available space on alternative routes is rapidly becoming scarce, and rates are already rising. You may continue to register your air freight shipments and have them collected by Pentagon.
Cross Border Trucking
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. At present truck availability is not an issue , but again we anticipate that there will be increase demand in the coming days that will affect availability and likely increase cross border trucking rates.
Increased Rates & Surcharges
Airlines and Shipping lines have begun announcing conflict-related rate increases and surcharges due to the high intensity Military Conflict and Combat Operations in the Middle East, including war risk and congestion surcharges (e.g., in the form of Peak Season Surcharges or War Risk Surcharges). Furthermore, due to the rise in oil prices, the short-term introduction of (Emergency) Bunker Surcharges and (Emergency) Fuel Surcharges must be expected. This will foreseeably also apply to your shipments to regions other than the Middle East/Persian Gulf, as the increase in oil prices affects overall fuel costs, regardless of the trade lane.
Pentagon Mitigation Measures
Pentagon is coordinating closely with carriers, identifying alternative routings, monitoring congestion risks, enhancing shipment visibility, and prioritizing critical cargo. We strongly recommend remaining in close and regular contact with your Pentagon account representative to review shipment-specific risks, mitigation strategies, and contingency options. This situation remains fluid. Pentagon will continue to monitor developments closely and provide updates as conditions evolve. Your supply chain continuity remains our top priority.
Yours Sincerely,
Pentagon Middle East & India Management Team.
