Geopolitical unrest in the Middle East, particularly the tensions between the US and Iran, is casting a new shadow over global trade. While the logistics sector had grown accustomed to longer transit times due to rerouting via the Cape of Good Hope, this conflict is sending new shockwaves through the industry. Think of fluctuating oil and fuel prices, capacity issues, and risk surcharges.
Yet, at Shypple, we see blind panic making way for strategic acceptance. With the right mix of real-time data and proactive intervention, it is indeed possible to limit financial and operational damage. We spoke with our experts in operations, procurement, and account management about the harsh reality of the market and the solutions.
If we had to describe the current market in one word, it would be 'chaotic'. While rates on some routes (Asia - Europe) are dropping because shipping lines are slashing prices to fill their new vessels, prices from India and the Middle East are going through the roof.
The real financial hit of this specific conflict, however, lies in fuel and insurance. The escalation impacts the oil price, resulting in acute BAF (Bunker Adjustment Factor) increases and sky-high War Risk Surcharges (WRS).
Our procurement experts note that shipping lines are partly using this chaos to protect their margins. This forces importers to adopt a sharp purchasing strategy.
"Do you opt for the security of a long-term contract, knowing you will still pay emergency surcharges on top of it? Or do you dare to ride the volatile spot market, where rates might drop, but you pay top dollar the moment a new geopolitical escalation occurs? The answer depends on your risk appetite, but above all, it requires up-to-date data to even make an informed choice." Dennis Wietsma, Procurement Analyst
The biggest operational challenge currently isn't even in the ports themselves; the flow of goods in Rotterdam and Antwerp is proceeding reasonably well at the moment. The real bottleneck is the unreliability of information coming from the carriers.
Our Operations department points out that the majority of the initial ETAs (Estimated Time of Arrival) provided by shipping lines are currently simply incorrect. Many systems still theoretically calculate using the old route through the Suez Canal, meaning the delay is 'suddenly' added later.
"In a market where shipping lines offer less control and transparency, independent track & trace is no longer a luxury, but a necessity." Tim de Groot, Operations Manager
Within the Shypple platform, we base ETAs on independent data. If a vessel is delayed, we see it well in advance, allowing us to immediately reschedule the onward transport (trucks or barges) and prevent extra costs like demurrage.
The accumulation of logistics crises (from the COVID-19 pandemic and the Ever Given to the war in Ukraine and now the Middle East) has structurally changed purchasing behavior. Importers are fed up with the disruptions and are moving away en masse from the vulnerable just-in-time principle. We see many general cargo companies (retail, non-food) cutting their losses and currently building safety stocks of up to three months. Higher storage costs are accepted as an insurance policy against out-of-stock risks.
However, this approach isn't viable for everyone. For our 'Fresh' importers (refrigerated goods, such as plants, fruits, and vegetables), a three-month buffer is physically impossible; the merchandise will spoil. For this sector, the crisis requires a different tactic. While the regular market focuses on volume and storage, the Fresh sector relies heavily on ironclad agreements upfront (fixed allocations with shipping lines at the start of the year) and maintaining more stable shipping routes, such as from Central and South America, which are unaffected by the Middle East. Especially for these time-critical shipments, increased certainty and accurate tracking mean the difference between profit and a ruined cargo.
Despite the complex situation, there is a sense of calm among importers and exporters. The explanation is simple: the crisis is tangible. Whereas previous capacity issues were abstract, every importer now sees the high fuel prices firsthand at the gas station. As a result, the acceptance of surcharges is much higher.
Furthermore, our account managers notice that transparent communication eliminates panic. By proactively updating clients on the market situation and providing them with real-time visibility via the Shypple dashboard, the conversation shifts. It's no longer about "Where is my container?", but rather "How do we plan the next booking as smartly as possible?"
"Of course, we can't airlift your container with a helicopter either. But with the platform, you do have real-time information about the exact status. You can't prevent changes from happening, but thanks to the tracking, you can adjust immediately." Lesley van de Water, Account Manager
We have no influence over geopolitical conflicts or the price of oil. What you do have influence over is how your own supply chain is structured. Companies that forecast their purchasing, centralize their data in one platform, and collaborate with a freight forwarder that proactively catches carrier errors, remain agile and stay in control.
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