Gulf Container Traffic Plunges 94% Amid Hormuz Disruption

Key Points

1. Container operators remain largely absent from Hormuz despite the gradual return of oil tankers.
2. Businesses are diverting freight through Oman, Saudi Arabia and ports outside the strait.
3. Higher costs and longer journeys are pressuring food supply chains, public finances and Dubai’s logistics advantage.

The latest

Nearly seven months into the war triggered by US and Israeli strikes on Iran, Gulf cargo networks are being rerouted as container and bulk operators largely stay away from the Strait of Hormuz. Oil tankers have gradually returned with American escorts, but wider commercial traffic remains sharply reduced, raising freight and insurance bills, doubling some delivery times and shifting cargo towards Oman, Saudi Arabia and the UAE’s east coast.

Details

• Traffic collapse: Only 240 container ships entered the Gulf between March 1 and September 7, down from 4,198 a year earlier. Active container services fell from 99 before the crisis to 11, although US President Donald Trump has repeatedly said the waterway is open and mines have been cleared.
• Cost shock: A Dubai healthcare executive said moving a 40-foot container from China to the UAE rose from about $1,250 to as much as $10,000. Insurance increased from roughly $120 to $1,000 per container, while transit times doubled to around 60 days, with containers stranded in Mundra and Colombo.
• Commodity decline: Between January and August, limestone shipments through Hormuz fell from 2.93 million tonnes to zero. Sulphur dropped from 1.45 million tonnes to 120,000, nitrogen fertiliser from 1.1 million to 340,000, and corn from 1.74 million to 310,000 tonnes.
• Port shift: Jebel Ali, which previously handled about 40,000 twenty-foot equivalent units daily, has been cut off from normal maritime traffic. Khor Fakkan offers six berths and 18 quay cranes, against Jebel Ali’s 27 berths and 120 cranes. Omani port volumes increased 69%, while transit truck traffic nearly tripled beyond 116,000 vehicles.
• Limited alternatives: Land bridges through Saudi Arabia add seven to 10 days. Replacing one vessel carrying 20,000 containers would require about 10,000 trucks or 4,000 Boeing 777 freighter flights. Hapag-Lloyd puts the disruption’s weekly cost at about $50 million, while Europastry says UAE journeys take three to four weeks longer.
• Economic pressure: Retailers have faced gaps in specific products, while car dealers have struggled to receive vehicles. Governments are supporting supply chains while trying to stabilise domestic fuel prices, adding pressure as lower revenues constrain Qatar, Kuwait and Bahrain. Saudi Arabia may also reduce spending if disruption persists.

Background

Qatar, Bahrain and Kuwait are more exposed because their main ports remain inside the Gulf. The UAE has redirected freight to Khor Fakkan and plans two DP World terminals in Fujairah, expected together to provide general cargo capacity equal to roughly half of Jebel Ali’s, although delivery will take years.

What’s next

Weekly Gulf container arrivals and the number of active services will indicate whether cargo operators are returning. Until those measures recover from 240 arrivals between March 1 and September 7 and 11 active services, businesses will keep expanding routes through Oman, the Red Sea and Fujairah.