The era of cheap, predictable global freight is over. War risk premiums have crossed the threshold of insurability. Over 600 vessels remain trapped in the Gulf. Carriers are rewriting summer schedules based on total closure of the Strait — not a reopening.
Let me be direct about what has happened to the global freight market in the past eight weeks. Because most logistics planning functions are still working from assumptions that expired in February.
The era of cheap, predictable global freight is over. Not paused. Over.
War risk insurance for Strait transits is running at 3–8% of hull value. That is 12 to 32 times the peacetime rate. For a VLCC, that is millions of dollars per voyage in insurance alone — before you account for the Cape of Good Hope reroute, which adds 10–14 days and approximately $1.2 million in additional steaming costs per vessel. Over 600 vessels remain trapped in the Persian Gulf. The US Navy is turning back ships in the Indian Ocean that are headed for Iranian ports. Iran is seizing vessels that don't have explicit permission. And carriers are rewriting their summer schedules based on a closed Strait — not an open one.
Here is what that means for each mode:
Ocean: Your Q3 ocean freight budget is obsolete. Reroute everything via the Cape of Good Hope now. Every additional week of delay compounds costs. Lock in war risk insurance early — rates will only rise as the backlog grows.
Air: Asia-Middle East air cargo capacity is down 40–60%. Rates on South Asia to Europe lanes are up 62%. European airlines have cancelled thousands of flights. Jet fuel surcharges are becoming a permanent structural cost, not a temporary adjustment. Build in 40–60% higher air logistics costs for the rest of 2026.
Rail: Trans-Caspian China-Europe rail routes are at capacity. Lead times have stretched from 18 to 25+ days. Rail absorbs volume at the margin — it cannot replace the Strait.
Trucking: Diesel is up 41% since March. US retail diesel hit $5.64 per gallon — the highest in real terms in two years. Consolidate shipments, pre-negotiate fuel surcharge formulas, and build diesel scenarios up to $6.50 per gallon into your contracts.
I have been advising clients for 20 years on how to build supply chains that withstand disruption. The companies that will come through this are the ones that are making hard decisions now — not the ones waiting for the Strait to reopen.
The Strait is not reopening this month. Plan accordingly.
Predictive Intelligence. Human Insight. — Lars P.S. The IEA's 32 member countries have now released 400 million barrels from strategic reserves in an attempt to stabilise prices. That's a one-time intervention. It doesn't replenish itself. And it doesn't move one barrel through the Strait.
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