According to market sources, the ongoing closure of the Strait of Hormuz has forced logistics companies to use land routes for transporting bulk commodities.

The CEO of the world’s second-largest container shipping company, Maersk, revealed to the media that a large number of trucks have already been mobilized, and Saudi Arabia and Iraq have opened corridors for trucks coming from Jordan and Turkey. Major shipping companies, including Mediterranean Shipping Company, Maersk, CMA CGM, and Hapag-Lloyd, have all launched truck transportation routes from Red Sea and Gulf of Oman ports to destinations such as Dammam Port in Saudi Arabia, Basra Port in Iraq, and Jebel Ali Port in the UAE. However, soaring fuel costs and competition for overland transport capacity have driven up freight rates rapidly. Last week, shipping rates from Shanghai to the Gulf and Red Sea routes hit an all-time high, even exceeding the peak during the COVID-19 pandemic. Data shows that the transportation cost for a standard 20-foot container (TEU) on the route rose from $980 before the conflict to $4,131 for the week ending May 15. During the COVID-19 pandemic (2021), the highest TEU freight rate reached $3,960.