Jaguar Freight | The Supply Chain Impact of War

In this week’s Roar: The impact of the Iranian attacks, insurance guarantees for ships, rising energy costs in Europe, backlogs and reduced capacity for air cargo, and importers fighting to get tariff costs back.

Like the geopolitics at play, the supply chain impacts of the current Middle East conflict are complex and widespread. With almost no notice, shippers began facing longer lead times, reduced supply availability, route instability, rising transportation and energy costs, and broader uncertainty. To minimize risk from the new disruptions, many companies are already turning to recent lessons learned from similar challenges that demanded agility and resilience. Industry experts recommend tight coordination with suppliers, exploring alternative shipping routes, scenario planning, and proactive customer communication. Companies with real-time visibility and risk-management tools can prioritize their shipments and adjust quickly, helping to maintain required service levels.

In an effort to stabilize oil markets after Iran’s retaliation, President Trump has announced that the U.S. will provide insurance guarantees and naval escorts for ships through the Strait of Hormuz. The U.S. Development Finance Corporation will offer affordable insurance, while the Navy will protect tankers if necessary. This has reassured some traders and slightly eased oil prices, but experts warn that restoring normal energy flows could take weeks since logistical and military challenges remain unresolved.

Europe is facing rising energy prices and inflation as the Iran conflict disrupts oil and gas flows through the Strait of Hormuz, which is a vital supply route. Shipping costs and freight rates are climbing, which is clouding economic growth forecasts and delaying potential rate cuts by the ECB and the Bank of England. But if the current disruptions are short-lived, economists expect that the impact should only be moderate.

Air cargo is having a tough time with severe backlogs and reduced capacity after the Middle East airspace was closed, and route suspensions persist following US-Israeli strikes on Iran and regional retaliation. Major airlines like Emirates and Qatar Airways have limited or suspended flights and are prioritizing clearing up existing backlogs. Forwarders are warning customers to expect delays, rising costs, and risks to time-sensitive goods. Global capacity is reportedly down by as much as 26%, and down by up to 75% in the region.

Since the Supreme Court’s ruling on the President’s tariffs, more than 2,000 lawsuits have been filed at the U.S. Court of International Trade in Manhattan as importers try to claw back their share of over $130 billion spent on tariffs. In 2024, there were 252 new cases filed, but that’s up to about 300,000 importers who are affected by illegal tariffs on 34 million shipments. In late news Friday, the CBP indicated it is currently unable to comply with the order, although it suggested refunds could begin to be issued starting in April. In related news, several states have filed suit challenging the legality of President Trump’s newly announced Section 122 tariffs intended to replace the IEEPA tariffs.

For the rest of the week’s top shipping news, check out the article highlights here.

Compliments of Jaguar Freight – a member of the EACCNY