Shipping giant Maersk is suspending cargo booking acceptance across much of the Persian Gulf region, citing the rapidly escalating Iran war and growing risks to shipping and logistics operations.

In an operational update issued Tuesday, the Danish container shipping company said it is temporarily suspending cargo bookings in and out of the United Arab Emirates, Oman, Iraq, Kuwait, Qatar, Bahrain and parts of Saudi Arabia until further notice, while continuing limited operations in some ports and allowing exceptions for critical food, medicine and other essential goods.

“We are taking operational measures to ensure the safety of our personnel, safeguard your cargo and maintain service stability,” the company said, adding that the situation remains “highly volatile.”

The moves come as the widening conflict in the Middle East begins to ripple across the global supply chain, affecting everything from pharmaceuticals to electronics and fertilizers.

The war has already halted oil tanker movement through the Strait of Hormuz, a crucial maritime corridor through which about 20% of the world’s crude oil supply passes.

But the disruption extends far beyond oil.

Pharmaceuticals from India, semiconductors from Asia, and petrochemical products such as fertilizer and plastics produced in the Middle East all rely on shipping routes that pass through the region.

Cargo ships are now either stuck inside the Persian Gulf or rerouting thousands of miles around Africa, dramatically extending delivery times.

“This is really causing some major impacts within the global supply chain,” said Patrick Penfield, a supply chain expert at Syracuse University. “As this conflict keeps progressing, you’ll start to see some shortages and some major price increases.”

3,700 SHIPS STRANDED

Shipping data firm Clarksons Research estimates about 3,200 vessels — roughly 4% of global shipping tonnage — are currently idle inside the Persian Gulf.

Another 500 ships are waiting outside the Gulf near ports off the coast of the United Arab Emirates and Oman.

Even relatively small disruptions can cascade through global logistics networks.

“The supply chain is kind of like a long train with many cars,” said Michael Goldman, North America general manager of CARU Containers. “If one car gets derailed, it can very often have a domino effect to many others.”

Maersk said it is also rerouting some cargo already in transit to temporary storage locations within or near the region to prevent bottlenecks at major ports. For shipments already booked but not yet loaded, the company is urging customers to explore alternative ports or routes outside the affected zones.

Air freight networks are also under pressure.

Several countries in the region — including the UAE, Qatar, Bahrain, Kuwait, Iraq and Iran — have closed their airspace, forcing airlines to cancel or reroute flights.

Major Middle Eastern carriers such as Emirates, Qatar Airways and Etihad normally transport large volumes of cargo in the belly holds of passenger planes.

Although air freight represents less than 1% of global cargo by volume, it accounts for about 35% of global trade value, according to Boeing estimates, because high-value goods such as pharmaceuticals, electronics and perishables rely on fast delivery.

HIGHER COSTS

The reduced flight capacity is already pushing up costs.

Maersk warned in its update that air freight rates are expected to rise due to limited capacity, adding that airlines may introduce “war risk” surcharges for shipments routed through or near the conflict zone.

Longer routes and higher costs

Shipping companies are increasingly avoiding the Middle East altogether.

Maersk and other carriers are rerouting vessels around the Cape of Good Hope in southern Africa, a detour that can add 10 to 14 days to shipping times and roughly $1 million in additional fuel costs per voyage, according to Penfield.

With higher fuel costs, longer routes and increased insurance risks, shipping companies have begun adding “war risk” and emergency surcharges, raising transportation costs that will likely filter down to consumers.

Despite the upheaval, logistics experts say the industry has become more resilient after years of disruptions from the COVID-19 pandemic and other geopolitical conflicts.

“The specific situation that’s happening is pretty unprecedented,” Goldman said. “But the industry has been dealing with disruption for years now. In many ways, it’s become part of how the system operates.”