One of the hardest hit industries as a result of the West Asia war has been the shipping and logistics sector. Freight rates jumped as much as 130 percent to 270 percent on certain key routes and transit times and routes also witnessed massive disruption. The shipping and logistics sector witnessed the highest operatonal disruption as a result of the West Asia conflict. Therefore the announcement of the US-Iran peace deal comes as a huge relief for the sector, as easing of the situation through the Strait of Hormuz will help bring down freight and insurance costs significantly.
Speaking exclusively to Timesnownews.com, Dushyant Mulani, the Immediate Past Chairman of the Federation of Freight Forwarders Associations in India said, “With the announcement of US-Iran conflict coming to an end, it will be a booster shot for the logistics industry. The movement of export-import cargo is likely to much faster with shorter vessel schedules and more frequency. The cost of freight which had escalated will also be rationalised in next few days and we expect that normalcy in schedules and freight rates could be achieved in next 10-15 days. This will also help lot of containers which were stuck in the transit.”
Heightened geopolitical tensions led to the entire freight and logistics industry witnessing significant disruptions during the West Asia war in particular via key shipping routes such as the Strait of Hormuz and the Red Sea. Higher fuel costs and operational costs further hurt the industry which witnessed war-risk insurance premiums spike and freight rates spike amid uncertainty. Global trade flows saw a near collapse due to the delays at ports and supply chain issues, especially as far as energy and chemical cargos were concerned. Industry experts are cheering this peace deal and hopeful that the gains will go beyond the easing of supply disruptions and also ease inflationary pressures in the economy going forward.