Blank sailings, service cancellations and routing changes are among the likely impacts on container shipping in the coming months from the Middle East war, shipping executives and analysts said Thursday. Longer-term, potential oil shortages could significantly affect global manufacturing, curtailing container volumes, they said.

The conflict could also spur increased spending on ports and landside infrastructure in the Middle East as investors seek to develop alternative transport solutions to avoid areas, including the Strait of Hormuz, that have been closed or heavily impacted by the hostilities.

The potential consequences of the US and Israel war with Iran were outlined in separate webinars Thursday hosted by ocean carrier Hapag-Lloyd and maritime consultancy Drewry.

To date, the Iran war has had a limited impact on global trade except for escalating oil prices, Hapag-Lloyd CEO Rolf Habben Jansen said during the carrier-backed event. He pointed out the carrier and shippers have come together to agree on alternative transport options, including road transport, for freight in the Gulf so that “92% of cargo that was stuck now has a clear delivery date.”

A month ago, Habben Jansen said the war in the Middle East had raised Hapag-Lloyd’s operating costs by $40 million to $50 million per week, a reality he said was “not something that you can sustain for very long.”

The consequences of a protracted conflict are more severe with higher oil prices and oil shortages curtailing production of fertilizers, foodstuffs, plastics and manufactured goods such as shoes and electronics that use oil derivatives.

Asia and the Indian sub-continent are especially susceptible to oil-related disruptions because of their heavy reliance on Middle East crude imports, shipments that have largely stopped following the closure of the Strait of Hormuz. Asia relies on the Middle East for about 60% of its total crude oil imports, while about 55% of India’s oil comes from the region.

Björn Vang Jensen, an Xeneta executive industry advisor and former logistics manager, said the impact of the disruptions would be felt in the coming months. With the crop sowing season about to start across the Indian sub-continent, Asia fertilizer shortages will result in thinner crop yields and higher food prices, he told the Hapag webinar.

Shortages are already being felt in Australia, where the federal government has recently secured an emergency supply of 250,000 metric tons of urea fertilizer from Indonesia. That came after Australia’s National Farmers Federation warned that fertilizer shortages and surging fuel costs would reduce the acreage planted, leading to higher food prices.

Year will be a ‘mess’

Vang Jensen indicated oil shortages could hit manufacturing, especially in Asia, which would affect exports and container volumes.

“There may be a peak season, but I doubt it. If there is, it’ll be muted,” he said. “There will be service cancellations, blank sailings, [and] routing changes if the conflict drags on ... the whole year is going to be a mess.”

Simon Heaney, Drewry’s senior manager of container research, said the consultancy has now cut its growth forecast for global container port throughput to 1.8%, down from 2.2% in February.

“Any further escalation [in the conflict] could force a bigger downgrade,” Heaney said on Drewry’s webinar. “Port throughput growth could sink to between 0.5% and 1.3%, which comes after two years of very strong growth of 6%.”

With no sign the Middle East war will end quickly and ongoing uncertainty about the security situation, carriers are in no rush to return to the Red Sea/Suez Canal or the Arabian Sea, executives said.

Lars Jensen, an industry analyst and CEO of Vespucci Maritime, told the Hapag-Lloyd webinar that Iran and its allies could easily threaten the Red Sea, especially since it has already closed Hormuz, and on Wednesday seized two container ships belonging to Mediterranean Shipping Co.

Even if Iran was to reopen Hormuz, restoring access to the Persian Gulf and its ports, a quick return by ocean carriers was seen as unlikely.

“Drewry’s view is that direct container ship sailings into Gulf ports will not happen until a substantive deal is reached and the risk of attack is very low,” Heaney told the Journal of Commerce.

On the Drewry webinar, he said the longer-term consequences of the conflict would further entrench carriers to reroute vessels around the Cape of Good Hope in southern Africa. Heaney also thought there would be greater interest in developing ports outside the Strait of Hormuz and upgrading inland infrastructure among the Gulf Cooperation Council, an intergovernmental political and economic union developing the 600-mile Saudi Arabia land bridge railway.