The Gulf cargo trade that vanished

{"text":[[{"start":9.08,"text":"David, a businessman from the UK, set up his healthcare company in Dubai more than five years ago because the city “was perfectly positioned between Europe and Asia”."}],[{"start":18.64,"text":"But almost seven months into the conflict triggered by the US and Israeli attacks on Iran, conditions for his company — which imports medical examination gloves from China and south-east Asia and sells them in the Gulf and the UK — have changed sharply."}],[{"start":34.28,"text":"For most of this year, his business has been paying up to $10,000 to ship a 40ft container to the United Arab Emirates from China, up from $1,250 before Iran largely closed off the vital Strait of Hormuz. Marine insurance costs have shot up from $120 per container to $1,000."}],[{"start":53.72,"text":"Typical transit times from China to the UAE have doubled to 60 days. The businessman, who asked that his full name not be used, said loads were often stuck halfway, awaiting transhipment at India’s Mundra port or Colombo in Sri Lanka."}],[{"start":67.84,"text":"“Business is good, if only I can get products into port,” David said. “It’s a nightmare to get containers into the UAE just now.”"}],[{"start":76.28,"text":"For more than a month, President Donald Trump has been boasting that the strait is open, its mines cleared, and the US is in “control” of the waterway — despite ongoing tit-for-tat strikes with Iran."}],[{"start":87.52,"text":"His administration has repeatedly said the US has been escorting tankers loaded with millions of barrels of crude oil through the chokepoint."}],[{"start":95.08,"text":"Yet while Trump focuses on oil, the strait remains shuttered to other commodities. Businesses have for months been incurring huge costs to circumvent what has become the main battleground in the US’s war with Iran."}],[{"start":107.26,"text":"As well as supplying much of the world’s oil, the Gulf is also a key supplier of liquefied natural gas, refined fuels, petrochemicals, feedstock for fertilisers and helium. Qatar, the world’s second-largest producer of LNG, has exported negligible amounts of gas since the war began."}],[{"start":124.6,"text":"While some oil tankers have been shuttling in and out of the strait under US air cover, other shipping traffic has fallen to minimal levels, in part because the rates those vessels can earn — compared with much higher rates for tankers — make it not worth the risk."}],[{"start":139.94,"text":"Supertankers are in some cases earning record rates for Middle East trades of $1mn per day, while bulk cargo ships are still only earning in the tens of thousands."}],[{"start":null,"text":"

"}],[{"start":149.92,"text":"Container ships are among the most risk-averse. The number that travelled through to the Gulf between March 1 and September 7 this year was down to 240, some 94 per cent down from 4,198 vessels a year earlier, according to maritime analyst Xeneta."}],[{"start":167.16,"text":"Before the crisis, 99 container services operated in or transited into the Gulf, amounting to 10 per cent of the global container fleet. Only 11 remain active, 10 of which are shuttling between ports within the Gulf, while one is a dedicated Iran-China service."}],[{"start":184.28,"text":"Exports of critical commodities have fallen away. In January, 2.93mn tonnes of limestone travelled through the strait, along with 1.45mn tonnes of sulphur, 1.1mn tonnes of nitrogen fertiliser and 1.74mn tonnes of corn, according to commodities platform Kpler."}],[{"start":202.66,"text":"In August, those numbers fell to zero for limestone, 120,000 tonnes of sulphur, 340,000 tonnes of nitrogen fertiliser and 310,000 tonnes of corn. These include dry-bulk cargo ships travelling to and from Iran."}],[{"start":217.78,"text":"In the Gulf itself, there have not been serious shortages, but some brands have disappeared from shops’ shelves. A sports shop said it had run out of children’s cycling helmets; car dealers have been unable to bring in new models; bars have run out of specific drinks. And costs for businesses and consumers have risen."}],[{"start":235.7,"text":"“What the Americans are doing now is not viable long term . . . it’s only focused on getting oil and gas out, it’s not focused on getting cargo and commodities in,” said a Gulf official. “Eventually there’s a limit to this."}],[{"start":246.02,"text":"“We’re paying three times the price of rice [before the war] because we’re doing it overland. It’s OK for now, but not long term — not for the Gulf and not for the Americans.”"}],[{"start":256.82,"text":"Jason Tuvey, Middle East economist at Capital Economics, said the pressure on supplies would strain Gulf countries’ national budgets. They have “certainly been providing fiscal support to alleviate supply disruptions and most, with the exception of the UAE, have kept local fuel prices steady,” he said."}],[{"start":274.66,"text":"“That all comes at a fiscal cost, and at a time when the likes of Qatar, Kuwait and Bahrain are suffering a big blow to their revenues.” Saudi Arabia would likely need to keep cutting back spending, he said."}],[{"start":287.02,"text":"Shipping companies face more disruption after Yemen’s Iran-backed Houthi rebels this month tightened their control over the Bab al-Mandeb Strait, another strategic waterway."}],[{"start":296.46,"text":"A key problem is that Jebel Ali port on Dubai’s northern coast, by far the region’s biggest shipping hub, has in effect been cut off from the sea by the shuttering of the Strait of Hormuz."}],[{"start":null,"text":""}],[{"start":307.08,"text":"Before the war, it handled about 40,000 20-foot equivalent units (TEU) a day, according to Lloyd’s List, making Jebel Ali the ninth-busiest port in the world."}],[{"start":317.18,"text":"Goods shipped to and from the east and west would dock there. Those destined for the UAE’s neighbours would be transferred on to smaller vessels for their onward journey."}],[{"start":326.54,"text":"But now the main UAE port for transit cargo outside the Strait of Hormuz is Khor Fakkan, which is far smaller. Khor Fakkan has six berths and 18 quay cranes, compared with Jebel Ali’s 27 berths and 120 cranes."}],[{"start":341.3,"text":"Khor Fakkan is now struggling with the volumes being thrust its way."}],[{"start":344.78,"text":"“I’ve had a couple of containers dumped in Mundra and then I have to wait and hope for confirmation that they are going to be put on the next ship,” David said. “It just depends on available capacity.”"}],[{"start":355.86,"text":"Others are trucking in goods over land from Omani ports, from Jeddah or from Saudi Arabia’s Red Sea coast. Gulf governments are flying in items considered a priority."}],[{"start":null,"text":""}],[{"start":365.62,"text":"As a result, Oman has enjoyed a boom at its ports, which lie outside the strait, with cargo volume soaring 69 per cent this year. Transit truck traffic has increased nearly threefold to 116,088 so far in 2026 from a year earlier, according to official Omani data."}],[{"start":385.98,"text":"Businesses operating in Qatar, Bahrain and Kuwait have little choice but to truck or fly goods in, as those states’ ports lie inside the Gulf on the wrong side of the cul-de-sac that is Hormuz."}],[{"start":397.3,"text":"“You have countries like Qatar: basically the way that we serve them today is bring the cargo to Jeddah, truck it to Dammam and then take it on the ship to Qatar. That’s the quickest way to get it there,” said Vincent Clerc, chief executive of Danish shipping line Maersk."}],[{"start":413.02,"text":"Hapag-Lloyd, the German shipping line, said the so-called “land bridge” added around seven to 10 days of extra time and “significant additional infrastructure and co-ordination”. The company said the Gulf crisis had left it incurring additional costs of $50mn per week."}],[{"start":428.74,"text":"It is a huge challenge for trucks and planes to match the volumes that container vessels can transport."}],[{"start":null,"text":""}],[{"start":435.06,"text":"Tobias Maier, chief executive for the Middle East and Africa at DHL Global Forwarding, said it takes 10,000 trucks to ferry the equivalent of one ship carrying 20,000 20ft containers. A Boeing 777 jet, meanwhile, could typically handle 100 tonnes of cargo, similar to just five 20ft containers, he added."}],[{"start":454.74,"text":"“So to replace one ship of 20,000 20ft containers you need 4,000 flights,” he said. “It’s just the mathematics.”"}],[{"start":463.5,"text":"The slower journeys also bring problems."}],[{"start":466.5,"text":"Clients of Europastry, a producer of frozen bakery goods, have been using ships and trucks to transport the company’s products to the UAE from Europe. Dovile Vilkiene, the group’s general manager for the Middle East, said alternative trade routes had become “newly established”. But the lead times can be challenging."}],[{"start":481.3,"text":"“It takes three or four weeks more than before. We also face issues with the shelf lives of the goods that arrive because of uncontrollable routes and delays at the offloading,” she said. “At the same time, manufacturing and raw material costs are increasing."}],[{"start":497.3,"text":"“The customers here don’t want to absorb price increases,” she said, as they face rising costs across their businesses as a result of the war."}],[{"start":505.64,"text":"Scott Livermore, chief economist at Oxford Economics Middle East, said food was at the centre of the inflationary effects of the crisis. Food prices were “particularly sensitive to trade disruption, with producers already reporting higher input costs. This channel is heavily influenced by shipping traffic,” he said."}],[{"start":525.86,"text":"Dubai’s DP World, which operates Jebel Ali, is planning two new port terminals in Fujairah, one of the UAE’s emirates on the Gulf of Oman coast, in a push by the UAE to reduce economic exposure to the strait. The facilities, with roughly half of Jebel Ali’s general cargo capacity, will take about two years to build."}],[{"start":545.94,"text":"David, the British businessman, said Dubai remained his preferred hub for business, adding that the planned new Fujairah ports should alleviate the UAE’s shipping bottlenecks."}],[{"start":555.86,"text":"But until then, and as long as shipping through the strait is throttled, he said: “We will inevitably do less business here.”"}],[{"start":562.82,"text":"An inaccurate map has been removed from this article after publication"}],[{"start":563.32,"text":"Cartography by Aditi Bhandari and Cleve Jones"}],[{"start":570.3,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1789902282_7552.mp3"}