The recent escalation of conflict involving Iran has created significant disruption in global shipping. With the effective closure of the Strait of Hormuz and ongoing security risks in the Red Sea, shipping lines are rapidly adjusting their operations—and their pricing structures.
For importers, this means a growing list of surcharges appearing on freight invoices. These additional costs can have a real impact on the landed cost of imported goods, so it is important to understand what they are and why they are being applied.
Why costs are rising
The Strait of Hormuz is one of the world’s most critical maritime corridors, normally handling about 20% of global oil and liquefied natural gas shipments. Since the outbreak of hostilities, vessel traffic through the strait has collapsed and many ships are avoiding the region altogether.
At the same time, attacks in the Red Sea have already been forcing ships to avoid the Suez Canal route. As a result, many vessels are now sailing around the Cape of Good Hope at the southern tip of Africa. This detour can add 10 to 14 days to a typical voyage between Asia and Europe.
Longer routes mean higher fuel consumption, increased insurance costs and reduced vessel availability. These factors are the main drivers behind the new surcharges being introduced by carriers such as Maersk, MSC, Hapag-Lloyd, CMA CGM and Ocean Network Express.
Importers are now seeing several different add-ons appearing on freight quotations and invoices:
Emergency Bunker Surcharge (EBS)
Fuel costs have surged dramatically since the conflict began, with global bunker fuel prices rising by more than 30%. Shipping lines are passing this cost on through Emergency Bunker Surcharges.
For example, some carriers have announced EBS charges of around US$200 for a 20-foot container and US$400 for a 40-foot container on major trade routes, though the exact figure varies by carrier and route.
War Risk or Emergency Conflict Surcharge (ECS)
War risk surcharges are being applied because vessels operating near conflict zones face much higher insurance premiums and security risks.
Some examples currently in the market include:
– Up to about US$2,000 per 20-foot container for cargo affected by Middle East disruptions.
– Up to US$4,000 for refrigerated containers in certain trades.
– Around US$1,500 per TEU or more for some specialised container types.
In some cases, these charges are even being applied to cargo already at sea when the new risk conditions arise.
Peak Season Surcharge (PSS)
Peak Season Surcharges are normally used when demand for shipping capacity exceeds available space. With vessels taking longer routes and port congestion building in certain areas, carriers are again applying PSS in several trades. These can range from a few hundred dollars per container to well over US$1,000 – depending on the route and the carrier.
Rising base freight rates
In addition to surcharges, shipping lines are also increasing their base freight rates.
For example, some Far East to Europe container rates have recently risen by more than US$1,700 per 40-foot container within a matter of weeks. Similar increases are appearing across several other trade lanes as capacity tightens.
At the same time, global oil prices have surged, pushing bunker fuel prices to record levels. Since fuel is one of the largest operating costs for container shipping, this increase feeds directly into freight pricing.
What you should watch for
For businesses importing goods, these developments mean that freight quotes may now include several separate cost components beyond the basic ocean freight rate.
Importers should carefully review quotations to understand which surcharges apply, whether they are temporary or ongoing, and how they affect the final landed cost of their goods. Because the situation in the Middle East is evolving rapidly, these charges can change quickly and may vary between shipping lines, routes and sailing dates.
At Colless Young, we are closely monitoring developments across the global shipping market and work with our clients to minimise surprises in freight costs.
If you would like to discuss how these surcharges may affect your current or upcoming shipments, please contact Andrew at Colless Young on +61 7 3890 0800 or email enq@collessyoung.com.au for the latest advice tailored to your cargo.
