Ocean freight interruptions poised to continue

A military conflict described on Thursday, March 5, as “broadening” by the Associated Press is poised to cause continued ocean freight logistics challenges for global traders of recyclable materials.

A combat zone consisting of missiles, bombs and drones now includes Iran and most of its neighboring countries in the Persian Gulf region.

Pertinent to ocean freight, Iran has vowed to close most commercial shipping in the Strait of Hormuz, with an exception declared for ships bound for the People’s Republic of China. That narrow body of water connects ships leaving Europe, Turkey and the Middle East with the Indian subcontinent and much of the rest of Asia.

As the first week in March comes to a close, shipping companies, freight industry analysts and recycling organizations alike are reinforcing they consider some Middle Eastern ports inaccessible as one of several disruptions facing shippers.

Denmark-based global shipping firm Maersk says as of March 5, it has suspended shipments on several types of vessels to the United Arab Emirates (UAE), Oman, Iraq, Kuwait, Jordan, Qatar, Bahrain and Saudi Arabia.

“Escalating conflict in the Middle East is creating immediate uncertainty for supply chains, with vessel movements changing by the hour and shippers left managing cargo that may no longer reach its intended ports,” states Norway-based shipping consulting firm Xeneta, which has posted presentations on the topic on its website.

In the recycling sector, shipments of recyclable ferrous and nonferrous metals, paper and paperboard from Europe and scrap-surplus nations in the Middle East typically sent through the Suez Canal and Strait of Hormuz to the Indian subcontinent and Southeast Asia will continue to face a circuitous route.

Recycled-content steel and other materials made in Turkey, Southern Europe or the Middle East likewise will face a barrier to common trade routes.

The Brussels-based Bureau of International Recycling (BIR) says it intends to maintain open lines of communication with member companies around the world.

“The escalating disruptions to key maritime routes are creating serious and immediate challenges for many of you,” writes BIR to its members in a March 5 update. “As your global association, BIR’s priority is to represent your interests and ensure that the realities you are facing in your day-to-day operations are clearly conveyed to relevant stakeholders and decision makers.”

Continues BIR, “The situation is already disrupting shipments, delaying contract fulfilment and creating uncertainty around delivery timelines. Some members are confronting non-shipment or non-delivery scenarios with contractual and financial consequences.”

Beyond shipping schedules, the association adds, “Reports indicate that war risk insurance coverage has been withdrawn or restricted on certain routes, while shipping lines have introduced wartime surcharges, which might further increase. Pressure on container bookings and vessel schedules is adding to the strain on margins across the recycling value chain.”

Adds BIR, “Given the global nature of our industry, these disruptions may slow the movement of recycled materials across continents, particularly from and through the affected region.”