The ongoing conflict in the Middle East is causing serious disruption for the global shipping industry. Experts are calling the situation chaotic, as trade routes close and insurance costs skyrocket, leaving shippers and insurers scrambling to keep up.
The trouble started when the Strait of Hormuz effectively shut down and attacks by Houthi forces in the Red Sea escalated. These events forced major shipping companies to change their usual routes and halt bookings. The situation worsened with recent strikes on Jebel Ali, the main port in Dubai, which led to a backlog of thousands of vessels stuck in the Gulf. Around 3,200 ships are now trapped in a region that handles about 8% of the world’s seaborne trade.
Because of these disruptions, big shipping firms like MSC, Maersk, CMA CGM, and Hapag-Lloyd have started using an old maritime rule. This rule lets them unload cargo at the closest safe port instead of the destination, which shifts the burden—and cost—onto their customers. Removal companies have already reported containers meant for the Middle East being dumped in ports as far away as India and the UAE.
This has caused headaches for cargo insurers. When goods, especially perishable items like fresh produce, get offloaded unexpectedly, it raises tricky questions about who is responsible. Containers with refrigerated food are being abandoned before reaching their destination, forcing suppliers to rely on expensive land transport and deal with border checks.
Insurance premiums have shot up dramatically, with war risk costs increasing by as much as 1,000% according to industry insiders. These premiums are expected to rise even more. Routes through Oman and the Red Sea have also been labeled risky zones, adding to the challenges. Shipping charges have soared too. For example, moving a 20-foot container from the UK to Jebel Ali used to cost about £1,500; now it costs nearly £6,000. When you add extra fees for storage and land transport, costs can easily reach tens of thousands.
The crisis has even prompted the United States to step in. President Donald Trump recently issued a 60-day waiver of the Jones Act, a 1920 law that normally requires goods moving between US ports to travel on American-flagged ships. This temporary change allows foreign vessels to operate on domestic routes, helping keep critical supplies like oil and natural gas flowing. It also means some insurance risks will shift from American underwriters to international insurers during this period.
With the conflict continuing, the Gulf remains a dangerous and unstable zone for shipping. Ports are congested, costs are sky-high, and many businesses are left dealing with unpredictable delays and increased risks. The global maritime shipping industry is facing one of its toughest challenges yet, with no clear end in sight.