Dear Valued Customer,
Following our previous advisories, we are providing an updated and consolidated view of the ongoing geopolitical situation in the Middle East and its continued impact on global air and ocean supply chains.
While a ceasefire remains in place, it is fragile and subject to change at short notice. A second round of U.S.–Iran negotiations is currently on hold, and the naval blockade in the Strait of Hormuz continues. Overall, the situation on the ground can be characterized as tense but currently stable, with no indication of immediate normalization. What began as a regional disruption continues to drive broad and uneven impacts across global supply chains and network recovery.
Security Developments and Operating Environment
Recent vessel-related incidents and continued military posturing confirm that elevated security risks persist across the region. Control, rules of engagement, and enforcement remain inconsistent, sustaining uncertainty for commercial operations.
Key considerations:
- Neutral ownership, flag, or cargo type does not eliminate operational risk
- Carriers continue to operate under heightened security and insurance constraints
- Routing decisions remain conservative pending sustained and verifiable stability
Strait of Hormuz – Transit Conditions
Transit through the Strait of Hormuz remains technically possible but highly restricted and conditional:
- Navigation remains limited to narrow corridors, materially increasing operational and insurance risk
- No formal easing of war-risk or navigational restrictions has been communicated by authorities, carriers, or insurers
- Industry and security sources continue to caution that normalization may take months, even under de-escalation scenarios
Carriers therefore maintain a heightened risk posture, with conservative routing strategies still in effect.
Trade Flows and Routing Adjustments
Cargo continues to move into the Middle East via alternative and indirect routings:
- Jebel Ali–bound cargo
- ~70% routed via Khor Fakkan
- ~30% routed via Sohar
- Saudi Arabia (Dammam and Riyadh)
- Routed primarily via Jeddah Islamic Port and King Abdullah Port
- Upper Gulf cargo
- Increasingly routed via Jeddah and King Abdullah Port, particularly for shipments from Europe and the United States
These routings remain operationally viable but continue to add complexity, transit time, and cost.
Market Situation – Middle East
- Estimated recovery levels
- UAE: ~70%
- Saudi Arabia: ~60%
- Weekly vessel capacity currently
- ~18,000–20,000 TEU across the region
- Compared with pre-crisis levels of ~100,000 TEU
- Feeder capacity constraints
- End-of-voyage requirements and transshipment dependencies continue to place significant pressure on feeder networks
- Notable congestion persists on Indian export corridors, particularly from Mundra and Nhava Sheva into the Middle East
Hinterland and Port Operations
Congestion and operational constraints persist across key alternative gateways:
- Khor Fakkan
- Sustained high utilization
- Potential delays of 7–10 days
- Export and empty container restrictions in effect
- Emergency Operational Recovery Surcharges applied
- Inland ICD redirections (e.g., Sajaa, Mleiha) used to ease truck congestion
- Sohar and Salalah (Oman)
- Ongoing yard congestion and multi-day waiting times
- Jebel Ali
- No material congestion, but significantly reduced throughput
- Backlog management supported via rail and transloading through Khor Fakkan
- Restrictions remain on reefer and dangerous goods cargo
- Jeddah and King Abdullah Port
- Congested, absorbing diverted Upper Gulf volumes
As a result of these conditions, export shipments are becoming increasingly challenging, particularly where feeder and inland coordination is required. No new acute global congestion hotspots related to the Middle East have been reported in the past 24 hours; however, diversion-driven pressure continues at alternative gateways.
Emergency Bunker Adjustment Factors (EBAF) and Cost Environment
Two carriers have recently implemented additional increases to their Emergency Bunker Adjustment Factors (EBAF). Fuel cost pressure remains elevated. While a modest softening in oil prices has been observed, fuel-related volatility is expected to persist. Emergency bunker, fuel, security, congestion, and operational surcharges therefore remain in place and may continue to evolve.
Air Freight – Capacity and Cost Update
No material adverse developments have been reported on the air freight side.
- Middle Eastern carriers continue to progressively restore schedules, additional carriers commenced services into UAE and Qatar.
- Bahrain, Kuwait and Iraq airports now operational with limited services
- Regional connectivity continues to improve, supporting gradual capacity recovery
Despite these positive developments:
- Fuel costs remain elevated
- Emergency and fuel-related surcharges persist
- Cost normalization is expected to lag capacity recovery
What This Means for Your Shipments
Customers should continue to plan for:
- Delays, diversions, and revised routings
- Schedule volatility driven by backlog clearance and vessel repositioning
- Additional surcharges, including inland-related adjustments
- Ongoing network imbalance and elevated cost levels during recovery
Pentagon Mitigation Measures and Customer Guidance
Pentagon remains fully mobilized globally to:
- Monitor developments in real time through direct carrier engagement
- Secure capacity for critical and time-sensitive shipments
- Deploy alternative and multimodal routing solutions where viable
- Support backlog management and recovery planning
We recommend that customers:
- Share updated forecasts regularly
- Confirm bookings as early as possible
- Review insurance coverage, including war-risk terms
- Maintain flexibility in routing and transit expectations
- Plan for continued variability in lead times and costs
We strongly encourage close coordination with your Pentagon/JAS account representative to assess shipment-specific risks, routing alternatives, and cost implications. While some gradual progress is visible, the situation remains highly dynamic, security-driven, and operationally constrained. Network recovery will take time as conditions stabilize and systems rebalance.
Pentagon will continue to monitor developments closely and provide further updates.
Your supply chain continuity—and the safety of our people—remain our top priorities.
Yours Sincerely,
Pentagon Middle East & India Management Team