Major container lines suspend Persian Gulf bookings as conflict disrupts trade

Major container carriers have begun suspending bookings to and from the upper Persian Gulf as escalating conflict in the Middle East continues to disrupt shipping operations across the region.

Germany-based Hapag-Lloyd said, as of March 4, it has implemented a booking stop with immediate effect for all cargo types to and from several Persian Gulf countries due to operational and security constraints.

The suspension applies to shipments involving the UAE, Iraq, Kuwait, Qatar, Bahrain, Oman (Sohar), Saudi Arabia (Dammam and Jubail) and Yemen, the carrier said in a customer advisory.

"Due to the current operational and security constraints in the Upper Gulf region, a decision has been made to maintain cargo safety, ensure secure equipment positioning, and uphold operational standards," the company said.

French major CMA-CGM announced a similar measure March 3, suspending all bookings with immediate effect for ports of loading or discharge across much of the region.

The carrier said the suspension covers Bahrain, Kuwait, Qatar, Iraq's Umm Qasr port and most ports in the UAE and Saudi Arabia, while select ports such as Fujairah, Khor Fakkan, Jeddah and Yanbu remain open.

"The decision has been taken as a precautionary measure to ensure the safeguard of our crew, vessels and customers' cargo under the current circumstances," CMA CGM said.

The booking suspensions follow broader operational disruptions triggered by the conflict, including the halting of vessel transits through the Strait of Hormuz and the suspension of trans-Suez sailings through the Bab el-Mandeb Strait.

Earlier this week, A.P. Moller-Maersk confirmed it had paused transits through both waterways and rerouted services via the Cape of Good Hope due to security risks.

Other carriers, including Mediterranean Shipping Company (MSC) and COSCO, have also instructed ships operating in or approaching the Gulf to proceed to safe waters or await further instructions.

The diversions are expected to add thousands of nautical miles to voyages linking the Middle East, India, the Mediterranean and the US East Coast, tightening effective ship capacity and potentially pushing freight rates higher.

Market participants say freight levels are already beginning to respond to the disruption.

"I expect so, there will be a ripple effect as congestion takes hold," a European forwarder market source said.

"Fuel prices are also spiking, which may drive carriers to take commercial actions," the source added.

Liner companies have also begun introducing war risk surcharges on affected shipments as operating costs increase. Both Maersk and Hapag-Lloyd have implemented additional charges for cargo moving to and from the Upper Gulf.

Hapag-Lloyd said it would introduce a War Risk Surcharge effective March 2 of $1,500/TEU for standard containers and $3,500 per container for reefers and special equipment.

Maersk has also implemented an Emergency Freight Increase across affected Middle East trades, including $1,800 per 20-foot container, $3,000 per 40- and 45-foot containers and $3,800 for reefer and special equipment, citing increased operating costs and disruption following the closure of the Strait of Hormuz.

Platts, part of S&P Global Energy, assessed PCR 33 -- West Coast India to the Middle East -- at $2,775/FEU on March 2, up 909.1% day over day, and TCR 33 -- West Coast India to the Middle East -- at $1,700/TEU, up 750% on March 2. The rates were unchanged on March 3.