Freight Costs Surge in UAE and GCC Amidst Hormuz Disruptions
Freight costs across the UAE and the broader Gulf region have skyrocketed, with some rates climbing tenfold since the closure of the Strait of Hormuz following the outbreak of the US-Israel-Iran conflict. Industry experts warn that the situation remains precarious, as persistent container shortages and disrupted supply chains are expected to drive prices up by another 25 percent in the coming months. Transit times that previously averaged 25 days have ballooned to as long as 90 days, forcing businesses to absorb significant "war surcharges" while navigating a highly volatile logistics landscape.
Despite these mounting logistical hurdles, many regional companies are demonstrating notable resilience by diversifying their export markets and expanding into new territories, including various African nations and Georgia. While developers and manufacturers are burdened by the inflated cost of raw materials and shipping, firms like the Danube Group and Casa Milano continue to report growth. However, experts like Masna Haseen of tradeX Link caution that elevated rates will likely persist through the fourth quarter, advising importers to plan carefully around upcoming holiday closures in China to avoid further delays in year-end deliveries.