Kuehne+Nagel CEO: Middle East Shipping Faces Ongoing Disruptions
Current State and Ongoing Challenges in Middle East Shipping
By Anastasiia Kozlova and Amir Orusov
Outlook for Shipping Operations
July 23 (Reuters) - A return to normal shipping operations in the Middle East is unlikely in the near term, with little improvement seen in the key trade routes, the CEO of freight forwarder Kuehne+Nagel said on Thursday.
Continued Rerouting and Restrictions
With restrictions in the Strait of Hormuz still in place to a certain degree and carriers continuing to avoid the Suez Canal, vessels will keep being routed around the Cape of Good Hope at the southern tip of Africa, Stefan Paul told Reuters.
"Nothing has changed fundamentally since the last couple of weeks," he said.
Industry Response and Market Impact
Carrier Strategies and Skepticism
The CEO's comments underscore that the industry remains far from a broad return to normal, despite tentative signs of improvement. Earlier in July, container carriers Hapag-Lloyd and Maersk said they planned to resume some voyages through the Suez Canal.
"I have my doubts that this is going to happen," Paul said.
Security Concerns and Supply Chain Effects
Red Sea and Suez Canal Importance
The Middle East security concerns have been reshaping global supply chains for years. The Red Sea is one of the world's busiest shipping corridors, and the Suez Canal normally handles about 12% of global trade, serving as a critical route for container shippers, energy products and industrial supplies.
Impact of Houthi Attacks and Rerouting
However, repeated attacks by Iranian-aligned Houthi militants since late 2023 have prompted most shipping companies to reroute ships around Africa, adding about 10 days to Asia-Europe voyages, increasing costs and tying up shipping capacity.
Cost Increases and Surcharges
The disruptions have led logistics and shipping companies to impose emergency fuel surcharges, with French shipping firm CMA CGM among the latest to do so.
Paul said fuel surcharges for air freight, ocean freight and road transportation, which Kuehne+Nagel introduced weeks and months ago, would remain in place.
Reporting Credits
(Reporting by Anastasiia Kozlova and Amir Orusov, editing by Milla Nissi-Prussak)
