Today, logistics is heavily dependent on maritime transport and shipping to move freight around the world. Maritime transport moves over 80% of global trade by volume and about 70% by value. When it comes to global trade, no maritime corridors are as strategically important to international trade as the Strait of Hormuz and Suez Canal. When operating well, they make quick commerce possible between Eastern and Western regions. These two major chokepoints are more than just transit points, they are the nervous system of the global freight system, allowing for the flow of goods, fuel and materials from continent to continent. For the freight forwarding industry, they also represent the opportunity and vulnerability of maritime.
Drawing on Sharp Blue’s extensive logistics expertise, this blog explores why these waterways are indispensable to global freight logistics, examines the current scenario, and discusses its impact on the logistics industry.
Why Waterways Matter in Global Freight
Maritime logistics is the backbone of international trade, allowing low-cost shipping of huge volumes of goods. But not all sea routes are equal. Waterways like the Suez Canal and Strait of Hormuz:
- Reduce transit times by thousands of nautical miles.
- Lower fuel consumption and operational costs.
- Enable predictable routing for time-sensitive cargo.
- Connect major production and consumption hubs (Asia, Europe, Africa, the Gulf, and the Americas).
Their importance is further amplified by their location in geopolitically sensitive regions. Freight transportation through these waterways involves conflict, piracy, political circumstance, and environmental safety issues, which all need to be taken into account when freight forwarding procedures are involved.
Why Middle East Waterways Are Lifeline of Global Freight
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Strategic Connectors of the World’s Busiest Trade Corridors
The Strait of Hormuz and the Suez Canal form the backbone of global maritime trade, linking the world’s most vital economic regions. The Strait of Hormuz is a narrow passageway between the Persian Gulf and the Gulf of Oman that accounts for nearly 20% of the world’s oil and Liquefied Natural Gas (LNG) exports, demonstrating its importance to global energy security.
Meanwhile, the Suez Canal, connecting the Red Sea to the Mediterranean Sea, serves as the shortest and most efficient maritime passage between Asia and Europe, facilitating rapid movement of goods between the world’s largest manufacturing hubs and consumer markets.Collectively, these waterways provide coordinated connectivity back to necessary supply chains, supporting the movement of raw materials, intermediate goods, and finished goods that sustain economies throughout Asia and Europe, Africa, and the world.
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Massive Volumes and Critical Cargo Throughput
The statistics from 2023–24 were eye-opening. Each day, more than 20.9 million barrels of oil flowed through the Strait of Hormuz—that’s more than 1 in every 5 barrels consumed around the world. Likewise, before the Red Sea disruptions, the Suez Canal was a vital trade route—carrying over 12% of global goods and 22% of container shipments, with more than 70 ships passing through each day.
Even in 2024, during periods of conflict and instability, 8–9% of global seaborne trade still moved through the Suez. This only highlight how vital these routes remain. These waterways are not just alternate routes—they are critical links in the global supply chain.
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Middle East Is the Crossroads of Global Supply Chains
Geographically and economically, the Middle East sits at the intersection of three major trade blocs:
1. Asia (home to the world’s top manufacturing hubs),
2. Europe (one of the largest importers of Asian goods),
3. and Africa (a fast-growing trade destination).Shipping routes from Asia to Europe and Africa predominantly rely on the Suez Canal, offering the most direct maritime path. The alternative—a detour around Africa’s Cape of Good Hope—increases transit distance by over 7,000 kilometers and extends delivery times by 10 to 14 days, inflating freight costs and disrupting supply chains. Consequently, approximately 90% of Asia-Europe maritime trade typically passes through the Suez Canal, demonstrating its strategic importance in maintaining global trade efficiency.
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Strait of Hormuz: Energy Dependency Translates to Freight Dependency
The Strait of Hormuz is far more than an energy transit route. It anchors major Gulf ports such as Jebel Ali (Dubai), Hamad Port (Qatar), and King Abdullah Port (Saudi Arabia), which are pivotal transshipment and logistics hubs for container ships, Roll-on/Roll-off (Ro-Ro) vessels, and bulk carriers. These ports serve markets across the Middle East, South Asia, and East Africa.
If Hormuz were blocked:
1. Over 35% of Middle East’s container port capacity would be isolated.
2. LNG supplies to Europe and Asia would slow, raising global energy costs, impacting factories, and delaying entire freight chains.
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Middle East Ports: The Global Transshipment Powerhouses
The Middle East’s key position has transformed its ports into essential centers for worldwide shipping serving as main redistribution spots in the hub-and-spoke logistics setup. Big ships from Asia and Europe drop off cargo at deep-water ports such as Jebel Ali (UAE) and Salalah (Oman). From there smaller ships take goods to regional spots—ranging from Mumbai to Mombasa.
This has a positive impact on costs, has an influence on delivery speed, and leads to fleet optimization. For example:
Jebel Ali, the 9th busiest port worldwide, processes millions of containers linking Asia, Europe and Africa through the key sea route of the Persian Gulf → Strait of Hormuz → Arabian Sea → Indian Ocean.
Salalah’s deep natural harbor enables swift turnarounds making it a crucial entry point for Indian Ocean commerce via the essential routes of Arabian Sea → Gulf of Aden → Bab el-Mandeb Strait → Red Sea → Suez Canal to Europe, or Arabian Sea → Indian Ocean to East Africa, Asia and South Asia.
Duqm (Oman), a new option, provides a safer path outside the Strait of Hormuz linking through the Arabian Sea → Indian Ocean.
These hubs cut down on crowding at ports where goods end up and allow for on-demand shipping, which keeps global supply chains flexible.
Current Situation in 2025: Middle East Tensions and Their Impact on Global Logistics
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Ripple Effects in the Logistics and Freight Industry
The Israeli–Iran War • June 2025: Escalation has put global maritime logistics on edge. Iran’s parliament voted on June 22 to close the Strait of Hormuz in retaliation for recent Israeli strikes, though final approval still awaits the Supreme National Security Council’s decision. Since the renewed hostilities erupted, the Strait of Hormuz has seen an increase in military activity, drone interceptions, and naval standoffs, heightening the risk for commercial vessels navigating the narrow passage .The strait is vital — carrying about 20% of global oil and LNG, if actualized, could halt nearly 20% of the world’s oil trade and disrupt LNG shipments from Qatar, the world’s second-largest LNG exporter.
Simultaneously, the Suez Canal, a critical shortcut between Asia and Europe, has been strained by attacks on merchant vessels in the Red Sea and Bab el-Mandeb Strait, often attributed to regional proxies and militant groups. Even though the Suez Canal itself remains open, these adjacent waters have become dangerous, pushing carriers to reroute via the Cape of Good Hope, adding weeks to journey times.
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Surging Insurance Costs and Charter Rates
The effects of this instability show up right away and can be measured. Maritime risk analysts report that war risk insurance rates for ships going through the Persian Gulf have gone up to 0.5% from about 0.2-0.3%. Insurance companies now label both Hormuz and the southern Red Sea as “ high-risk zones,” which makes costs go way up for shipping businesses.
Meanwhile, charter rates for large oil and container carriers have skyrocketed. Between 11 June and 23 June 2025, benchmark (Very Large Crude Carrier) VLCC earnings on the Persian Gulf–China run exploded from roughly $21 000 to $76 000 per day, with isolated spot fixtures topping $100 000. That’s a jump of around 260 % on the index—and over *300 % if you take the highest one-off fixtures. This surge isn’t just affecting oil transport—it is driving up freight costs across sectors, squeezing margins for importers, exporters, and freight forwarders alike.
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Supply Chain Delays and Global Rerouting
Many shipping lines have begun rerouting vessels to avoid conflict zones. This has caused:
1. Transit delays of up to 14–18 days for Asia–Europe shipments.2. Port congestion in southern African ports like Durban and Cape Town due to higher traffic.
3. Increased demand for air freight alternatives, especially for time-sensitive cargo, leading to higher air rates and capacity constraints.
Stores across Europe and North America are seeing delays in getting new stock. Factories don’t have enough raw materials and parts, which leads to temporary closures and production holdups. This is true for industries that rely on quick delivery systems, like car and electronics makers.
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Tighter Freight Capacity and Booking Uncertainty
Freight forwarders and logistics companies are under immense pressure to secure space, manage rerouting, and communicate real-time updates to clients. Booking lead times have stretched, with some forwarders unable to confirm sailing dates for weeks in advance. Carriers are prioritizing premium clients, and container availability has become inconsistent due to vessel imbalances.
Freight forwarders and logistics companies face huge pressure to find space, handle rerouting, and give clients real-time updates. Booking times have gotten longer, with some forwarders unable to confirm sailing dates for weeks ahead. Carriers give priority to their premium clients, and finding containers has become hit-or-miss because of uneven vessel distribution.
What’s more, spot freight rates for key routes like Asia–Europe and Asia–Middle East have jumped by over 60%. At the same time, some shippers say they’ve been turned away because of too many bookings.
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Regional Exporters and Importers Bear the Brunt
Countries in the Gulf region—especially the UAE, Saudi Arabia, Oman, and Bahrain—are seeing increased freight premiums, delays in inbound shipments, and uncertainty in outbound cargo planning. Australian and Asian businesses importing machinery, petroleum products, or chemicals from this region are being forced to adjust inventory cycles, diversify supplier networks, and explore alternate ports to ensure continuity.
Similarly, exporters shipping goods via the Red Sea—such as Indian textile and electronics manufacturers targeting European markets—face unpredictable transit schedules, container shortages, and rising operational costs.
Future Outlook: Can the World Rely Less on These Routes?
After months of disruptions in the Red Sea and ongoing tensions around the Strait of Hormuz, global supply chain stakeholders are asking a crucial question:
Can the world realistically reduce its reliance on these vital Middle East waterways?
Not in the near future — and here’s why.
The Suez Canal and Strait of Hormuz carry ≈30 % of global container traffic and ≈20 % of world oil trade, making them essential trade arteries.
Using the Suez avoids a 7,000 km detour around the Cape of Good Hope, saving 10–12 sailing days and US $0.6–1 million in fuel per voyage .The Strait of Hormuz moves ≈17 million barrels of oil per day—about one-fifth of global demand—so any disruption instantly drives up oil prices and insurance costs.
From a logistics standpoint, the alternatives are limited and less viable:
- Overland routes like China’s Belt and Road rail connections to Europe only handle 1% of total Asia-Europe trade — constrained by capacity, cost, and geopolitical reliability.
- Trans-Arctic shipping routes remain experimental and seasonal, not yet scalable or safe for high-volume trade.
- Air freight, while faster, is 4–5 times more expensive than ocean shipping and cannot support bulk cargo or high-volume containerized trade.
Until there are significant investments in alternative infrastructure or disruptive shifts in manufacturing geography, Middle East waterways will continue to be the lifeline of global freight — despite their vulnerabilities.
Conclusion
Middle East waterways, led by the Strait of Hormuz and the Suez Canal, are irreplaceable pillars of the global freight network. Their strategic location, enormous cargo volumes, and role in connecting continents make them essential to the stability and efficiency of international trade. Ensuring their uninterrupted operation through diplomatic, security, and infrastructure measures is paramount to safeguarding the flow of goods and energy that underpin the modern global economy.
For importers, exporters, and freight forwarders, understanding the role of Hormuz and Suez isn’t optional—it’s critical. They’re not just places on a map. They are the beating heart of global trade.
