The Iran Conflict and Container Shipping: Why the Industry's Biggest Problem Might Not Be What You Think
The chaos in the Strait of Hormuz is real — 470,000 TEU trapped, traffic at zero, surcharges already climbing. But the full picture for container shipping is considerably more nuanced.
The military strikes on Iran on 28 February 2026 sent immediate shockwaves through global shipping markets. Headlines have focused on the chaos — and the chaos is real. But for container shipping specifically, the full picture is considerably more nuanced than the coverage suggests.
The Strait of Hormuz: A Chokepoint Under Pressure
Before the conflict, more than 100 ships transited the Strait of Hormuz daily. Since hostilities began, just 21 tankers have made the crossing — a collapse of over 95%. On 14 March, commercial vessel traffic fell to zero for the first time, with no AIS-confirmed crossings recorded in either direction. Around 400 vessels have been observed holding position in the Gulf of Oman, waiting for conditions to improve rather than committing to long diversions.
For container shipping specifically, the picture is severe.
The Hormuz Disruption — Key Numbers
Among the worst-affected carriers, MSC had 15 vessels stranded inside the Gulf and CMA CGM had 14. Maersk found itself split, with some vessels already diverted and others trapped inside unable to exit. The human cost is equally significant — an estimated 40,000 seafarers are stranded on vessels on either side of the strait.
Fuel Costs and the Surcharge Spiral
Conflict and oil disruption are inseparable. The Persian Gulf accounts for roughly 20% of global oil and gas supply, and with tanker traffic through the strait severely curtailed, crude prices spiked. Container lines feel that pressure directly at the bunker pump.
Carriers have already begun passing costs on. Hapag-Lloyd levied a War Risk Surcharge of $1,500 per TEU for standard cargo out of the Upper Gulf; CMA CGM introduced an Emergency Conflict Surcharge of $2,000 per TEU. These sit on top of the Bunker Adjustment Factor mechanism through which lines routinely pass elevated fuel costs to shippers. BAF levels are expected to climb further as higher crude prices flow through to bunker pricing.
For shippers, this means landed costs are moving upward just as many had been expecting some rate relief.
The Red Sea Reversal Nobody Wanted
After more than two years of avoiding the Red Sea and Suez Canal due to Houthi attacks on commercial shipping, the world’s major container lines had begun, cautiously, to return. Asia-Europe services were gradually filtering back through the canal — a development the industry had been watching closely. The Suez route shortens the Asia-Europe voyage by roughly 10–14 days compared to sailing south of Africa via the Cape of Good Hope.
The Iran conflict has ended that. Houthi forces in Yemen announced the resumption of attacks on commercial shipping in the Red Sea, and the carriers reversed course. As Xeneta’s Chief Analyst Peter Sand put it on 28 February: plans for a large-scale return to Suez Canal transits in 2026 are now firmly shelved.
The Silver Lining Nobody Is Talking About
Here is where the picture becomes more complex. The Cape of Good Hope diversion does not just add distance — it absorbs capacity.
Sailing around Africa rather than through Suez requires more vessels to maintain the same service frequency. The result is that the diversion effectively soaks up an estimated 2.5 million TEU of global container fleet capacity that would otherwise be sitting idle in an already oversupplied market.
Suez vs Cape of Good Hope — The Capacity Impact
The container shipping market had been heading towards a significant oversupply problem. A wave of new mega-vessel deliveries had been flooding the market, and the gradual return to Suez was threatening to make that overcapacity situation dramatically worse, pushing freight rates sharply lower as a consequence. Had the Suez route become fully viable again in 2026, the downward pressure on rates would likely have been severe.
The conflict has, in effect, deferred that reckoning. As Xeneta’s Sand noted: freight rates on major global trades “will continue to soften, but will not fall as hard as previously expected.”
Putting It in Perspective
Nobody in shipping welcomes geopolitical instability. But for the global container shipping industry, the Iran conflict may not be the unambiguous disaster it appears at first glance.
The Gulf trades represent a relatively contained portion of global container volumes. What matters far more, structurally, is the Asia-Europe trade — and on that lane, the continuation of the Cape diversion is, paradoxically, a stabilising force for freight rates and carrier economics.
The industry’s real challenges have not gone away. Overcapacity is still coming. Rate volatility remains structural. Energy transition costs continue to build. They have simply been masked, once again, by geography and geopolitics.
The uncomfortable reality is this: the conflict is disruptive operationally and costly in the short term. But structurally, it is doing what market forces alone were about to do far more aggressively. The oversupply problem has not disappeared — it has been deferred. Whether the industry uses that time to address its underlying structural issues, or simply waits for the next disruption to delay the reckoning again, remains to be seen.
