Supply Chain Disruptions Following Closure of the Strait of Hormuz and Regional Airspace (16-Mar)

Dear Valued Customer,

Following our Customer Advisory dated 9 March 2026, we are issuing this updated and consolidated communication to provide additional clarity on the rapidly evolving geopolitical situation in the Middle East and its ongoing global ripple effects across air and ocean supply chains. What began as a regional disruption has now clearly developed 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.

Global Energy Impact and Carrier Surcharges

A sharp increase in oil and gas prices has materialized, and market observations continue to confirm this trend. As a result, airlines and ocean carriers have announced—or are expected to announce—multiple cost recovery measures, including:

• 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 limited to routes to, from, or via the Gulf region and are impacting carriers’ entire global networks, affecting shipments worldwide.

Shipping Lane Closures and Global Maritime Impact

Heightened security risks across critical maritime corridors—including the Strait of Hormuz, Red Sea, Bab el‑Mandeb Strait, and the Suez Canal corridor—have materially disrupted vessel operations. Multiple ocean carriers have suspended or limited transits through these areas and are rerouting services via alternative routes, including the Cape of Good Hope, resulting in:

• Extended transit times
• Reduced effective vessel and equipment capacity
• Significant additional operational and fuel costs

As a direct consequence, 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. In addition to this the UAE Customs have created a “Green Corridor” between Oman Ports and UAE that allow transit of inbound and outbound containers via bonded corridors. 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.

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.

What This Means for Your Ocean Shipments

• Until further notice, ocean shipments to the Middle East and Gulf region require explicit, updated carrier booking confirmations, which remain limited.
• To mitigate exposure to storage, demurrage, or detention charges, Pentagon can—where appropriate and in coordination with you—collect and temporarily store cargo until departures resume.
• Containers already loaded or positioned for export will be handled case by case, in close consultation with you, with a focus on minimizing unnecessary cost exposure.
• For cargo already at sea, Pentagon is coordinating directly with carriers to determine discharge options, alternative ports, or continued transit.
• In certain instances, some carriers have begun to issue “End of Voyage Declarations” Additional costs, surcharges, and discharge-related expenses, including but not limited to handling, storage, and any ancillary charges, may apply in these instances. You will be responsible for payment of the additional costs in accordance with the Bill of Lading Terms and Conditions.

Ocean Freight – War Risk and Emergency BAF

All major ocean carriers have announced Emergency BAFs globally, reflecting increased fuel, security, and operational costs. These Emergency BAFs are global in nature and not limited solely to Middle East routes.

Airspace Restrictions and 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 creating volatility in pricing and service reliability. While limited operations have resumed through select Gulf hubs, these remain constrained and focused primarily on essential cargo and backlog clearance. As a result:

• Effective capacity remains limited
• Payload restrictions and longer routings persist
• Rates continue to rise as demand shifts to alternative gateways
• The loss of Gulf transit capacity—particularly on Asia–Europe and Asia–Americas flows—continues to generate global knock‑on effects.

Middle East Airport Updates:

Air Freight – Fuel Surcharge Increases

On the airfreight side, all major airlines have announced Fuel Surcharge (FSC) increases, driven by the sharp rise in oil prices and broader operating cost escalation linked to the conflict. These FSC increases are being applied globally, impacting air cargo flows well beyond the Middle East.

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 is ready to operate bonded air‑to‑road solutions into Dubai, providing customers with practical alternatives while direct air capacity remains constrained.

Available gateways include:

• Muscat (Oman) – air cargo with bonded trucking into Dubai
• Dammam (Saudi Arabia) – air cargo with bonded trucking into Dubai
• Riyadh (Saudi Arabia) – air cargo with bonded trucking into Dubai

These solutions are fully prepared for deployment, subject to shipment confirmation and operational feasibility. Transit times, availability, and costs will be assessed case by case, please contact your Pentagon representative to find out more about these solutions.

Alternative Ocean Freight Contingency Routing

In addition to the above, Pentagon has built and activated effective contingency routing solutions for Ocean Freight, including:

• Alternative port options outside the most affected corridors
• Multimodal routing solutions, where operationally viable, to support continuity of supply

These solutions are being deployed case by case and will continue to evolve as carrier networks and port conditions change, please contact your Pentagon representative to find out more about these solutions.

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.

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.

Your supply-chain continuity remains our top priority.

Yours Sincerely,

Pentagon Middle East & India Management Team