Dear Clients,

As you may know, the TPM 2026 Conference in Long Beach just concluded.  While the initial focus of the event was on the post-Chinese New Year (CNY) market, the sudden escalation in the Middle East has fundamentally shifted the global logistics landscape.

Below is a summary of the key takeaways and how they may impact your supply chain in the coming weeks:

1. Ocean Freight: Structural Disruption

• Strait of Hormuz Closure: Following recent military strikes, the Strait is effectively closed to commercial traffic. Major carriers (Maersk, MSC, Hapag-Lloyd) have suspended all bookings for the Arabian Gulf.

• Cape of Good Hope Rerouting: Vessels are reverting to the Africa route, adding 10–14 days to transit times. This “soaks up” global vessel capacity, leading to an immediate tightening of space on all major lanes, including the Trans-Pacific.

• Emergency Hikes: Carriers have filed and may implement Emergency Freight Increases (EFI) and War Risk surcharges. We are hearing of projected hikes between $1,800 to $3,800 per container, effective for the second half of March or the beginning of April.

2. Air Freight: The Dubai & Doha “Hub Shock”

• Hub Operations Suspended: A major theme at TPM was the paralysis of the world’s two largest air cargo hubs. Dubai (DXB) and Doha (DOH) have faced severe operational suspensions and airspace closures.

• Capacity Loss: Global air cargo capacity dropped by approximately 18% this week almost instantly. With Middle Eastern carriers (Emirates, Qatar Airways) heavily restricted, “belly” capacity for Asia-Europe and Asia-US cargo has vanished.

• Rate Surges: As shippers pivot from ocean to air to bypass the sea blockades, air freight spot rates are climbing sharply. Expect significant backlogs and premium pricing for any cargo normally transshipping through the Gulf.

3. Strategic Outlook

• From “Soft” to “Red Hot”: The post-CNY lull has ended. The consensus at TPM is that we have entered a “Friction Economy” where equipment availability and space guarantees are more important than the lowest price.

• Force Majeure: Carriers are beginning to declare Force Majeure, which may affect existing contract terms and transit commitments.

Our Recommendation: Given the volatility in both ocean and air modes, we recommend securing your April and May allocations immediately. Prioritizing service stability and equipment guarantees will be critical as the new “Gemini” and “Premier” alliance networks are stress-tested by this crisis.

Earth Cargo and Earth Customs are monitoring these developments hourly. We are currently working on alternative “Sea-Air” and “Direct-Air” routings to bypass the affected hubs. Please reach out to your representative to review your upcoming bookings.