Global supply chains strain ahead of Easter

With our a strong position in global freight and logistics, the U-Freight Group notes that with Easter fast approaching, global supply chains are facing mounting disruption, driven by escalating geopolitical tensions and rising shipping costs. At the centre of the turmoil is the Strait of Hormuz, a critical artery for global energy shipments. Its partial closure has sent shock waves through international markets, with approximately 20% of the world’s crude oil supply passing through the corridor.

The immediate impact has been sharply rising fuel costs. Bunker fuel prices have surged to nearly double their late-February levels. However, analysts warn that the issue is no longer just about price, but availability. Constrained supply risks disrupting shipping schedules and triggering wider knock-on effects across global trade.

Further complicating the situation are reports that Iran may introduce transit fees for vessels using the strait, alongside renewed threats from Houthi forces targeting key shipping lanes. Together, these factors are increasing the likelihood of prolonged instability.

Freight rates climb as pressure mounts

The disruption is already feeding into container shipping markets. Freight rates have risen for four consecutive weeks, with the widely watched Drewry Composite World Container Index recording a further 5% increase.

Carriers facing higher operating costs are moving to pass these on to customers, but not without resistance. On March 23, the US Federal Maritime Commission rejected requests from major shipping lines, including CMA CGM, Hapag-Lloyd, Maersk, and ZIM, which had sought permission to bypass the standard 30-day notice period required in the USA before introducing new surcharges linked to the Middle East crisis. The regulator’s decision forces them to delay any increases until early April, offering temporary relief to shippers.

However, industry concerns persist. Many cargo owners have warned of potential “double dipping,” where carriers raise base freight rates in line with index-linked contracts, while also applying additional emergency surcharges, further increasing costs.

Wider logistics network under pressure

The strain is not limited to ocean freight. Across the broader logistics sector, signs of stress are emerging.

Most airfreight forwarders are facing operational disruption and rising costs due to the Middle East conflict. 

This week, the US Airforwarders Association highlighted widespread capacity constraints, rate volatility, flight cancellations, and longer transit times as the most common issues, alongside growing customer service pressures and space embargoes.

Meanwhile, rail freight between China and Europe has surged by 25% in the first two months of the year, as companies look for alternatives to sea routes.

While these alternatives offer some flexibility, they come with trade-offs. Rail and air freight are typically more expensive and have limited capacity, making them imperfect substitutes for large-scale ocean transport.

Meanwhile, a recent report said that air cargo operators are reporting a rise in safety incidents involving lithium-ion batteries, adding operational complexity and risk.

What comes next?

Looking ahead, businesses are being urged to closely monitor two key factors: geopolitical developments in the Middle East and ongoing freight rate movements.

Any further escalation could tighten supply and push costs even higher, while a de-escalation may help stabilise markets. For consumers, the impact is likely to emerge gradually, with potential price increases and delivery delays becoming more noticeable in the weeks ahead.

As the holiday period approaches, uncertainty continues to dominate the global trade landscape; as well as the supply chain that underpin it.

For more information about the U-Freight Group’s global freight forwarding and logistics services, or our e-commerce logistics operations, please visit the relevant pages of this website or contact your local office, details of which can be seen here: https://ufreight.com/locations