The naval crisis in the Middle East continues to be extremely serious during this week. While there are diplomatic discussions and unstable geopolitical situation, the Strait of Hormuz continues to remain virtually closed.
Weekly Ocean Freight Update – Week of May 8, 2026
The naval crisis in the Middle East continues to be extremely serious during this week. While there are diplomatic discussions and unstable geopolitical situation, the Strait of Hormuz continues to remain virtually closed. According to the UN's International Maritime Organization (IMO), about 1,500 ships and 20,000 sailors are stranded in the Gulf right now. More than 30 attacks have been committed so far, which have led to the death of ten seamen.
Major Security Incidents
The threat to commercial shipping escalated significantly on May 5 when the Maltese-flagged container ship CMA CGM San Antonio was struck by an Iranian drone while transiting the Strait. The attack injured seven seafarers, prompting immediate medical evacuations. Later in the week, military clashes and explosions were reported near Qeshm Island and Bandar Abbas—vital strategic locations flanking the Strait—further destroying any immediate hopes for a safe resumption of maritime traffic.
MSC Launches Dedicated Landbridge Service
Now that the main channel is blocked, leading players are switching from makeshift solutions to established overland routes. In this regard, MSC revealed its latest multimodal offering which would start operations on May 10, connecting Europe to distant Middle Eastern seaports. The service will go through Northern Europe to the Red Sea ports of Saudi Arabia such as Jeddah and King Abdullah. Here, the shipment will be transferred to trucks and moved for 800 miles inland to Dammam, after which feeder ships will ferry the containers to the seaports of Bahrain, Kuwait, Iraq, and UAE seaports including Abu Dhabi and Jebel Ali.
Skyrocketing Operational Costs & Surcharges
Costs incurred by the companies due to such diversions have been astronomical. According to an estimate from Hapag-Lloyd, the company stands to lose $60 million per week on account of the Hormuz problem, mostly on account of bunker fuel and higher insurance costs. War risk insurance for ships in that area has soared from under 1% to anywhere between 3% and 10% based on the cost of cargo. On its part, MSC has revised its Emergency Fuel Surcharge (EFS) for freight from Northern Europe to the Red Sea and Eastern Africa.
Freight Rate Update
The broader Containerized Freight Index traded flat this week but remains up over 42% year-over-year.
• Asia to Middle East/Red Sea: Premium spot rates remain structurally elevated at around USD 7000 due to the reliance on expensive overland trucking legs from Red Sea discharge ports to the Persian Gulf.
• Northern Europe to Red Sea/East Africa: Rates are climbing as carriers implement new EFS fees ranging from $125 to $295 per standard TEU.
• Overland/Road Freight: European road freight is feeling the sting of the Middle East crisis, as disrupted oil supplies pushed diesel prices up 26% in Q1. Spot and contract trucking rates are diverging sharply as fuel costs dictate pricing.
Short-Term Outlook
In terms of logistics, the coming 30 to 60 days ahead will necessitate extreme flexibility and increased budget requirements for supply chain managers. In a move indicative of the fact that shipping lines have made long-term decisions regarding the non-functioning of the Strait of Hormuz, new land bridges for Europe-to-Gulf routes have been established. Although this trucking solution can act as an effective bridge over troubled waters, it is slower, costlier, and environmentally unfriendly. Shippers need to prepare themselves for an extended period wherein rates will be determined solely by factors such as geopolitics, the high price of bunker fuel, and the limited nature of overland transportation capacity. Moreover, once the backlog of some 1,500 stranded ships starts clearing out, it is imperative that European and Asian ports are prepared to face intense congestion. As such, it is advised that supply chain managers make use of alternative land routes via the Red Sea as soon as possible, as trucking capacity will soon touch rock bottom.
