In DHL’s latest Middle East ‘navigating disruption’ webinar with customers, Tobias Maier, DHL Global Forwarding’s (DGF) CEO for the region (which includes Africa) and his senior team, provided an update on the impact of the conflict on air, ocean and overland freight and on critical supply chains.

Today’s briefing, the 15th to be held since the hostilities began, came just several hours after a provisional two-week ceasefire was announced between the US and the Islamic Republic of Iran.

However, Maier began by highlighting that on day 40 of the crisis and on day one of the truce, there were reports of attacks on Bahrain, Saudi Arabia, Kuwait and the UAE earlier today.

Nevertheless, if, subsequently, the ceasefire was to really come into effect and be respected, by all parties, DHL was “cautiously optimistic that the overall situation will improve and we might be entering into the period of pretty dynamic days and weeks to come,” he said.

Strait of Hormuz: Return to Normal Could be Months Away

As for the agreement reached overnight on the re-opening of the Strait of Hormuz to shipping, Maier revealed that initial feedback pointed to ocean carriers taking a relatively cautious approach.

“We are in the very, very early stages. The immediate focus will be on evacuating the trapped vessels, which have been stuck in the Arabian Gulf for the last 40 days. Certainly, at this point, we don't expect to see massive capacity becoming available for services into the Arabian Gulf and into Dubai, Jebel Ali, and Abu Dhabi.

He underlined that the way the situation evolves will really depend on the stability of the ceasefire, insurance coverage, the confidence of shipping lines in sending crews through the Strait in a secure way, and also in getting vessels out.

“We need to see what the market mood is over the next few days. For now, nothing has dramatically changed versus yesterday or the day before yesterday. Reaching a stage where the Strait can open reliably and safely and we can see vessels coming back to the big ports in the Arabian Gulf, will for sure take months.”

He continued: “A rough guideline in the industry has always been ‘one week of disruption will take one month to absorb.’ So, based on where we stand today, almost six weeks into the crisis, we are probably somewhere in the range of four to six months before a return to normal. The message to customers and everybody involved should be for disruption, chaos, and delays, changes in schedule, and extra costs to continue for a lengthy period. We still have a lot of containers in the wrong place. There’s still a lot of imbalances.”

Air Freight: Improving Picture

Turning to air freight, since the beginning of the crisis, it has not been possible for DHL to operate from its main air hub in the Gulf in Bahrain. A backup plan sees it flying regularly to Riyadh, in Saudi Arabia, and to Muscat, in Oman, which currently serve as its two entry points for distributing cargo across the Arabian Peninsula.

It now has daily flights from Europe going into both Riyadh and Muscat, and also daily flights from Hong Kong into Muscat and then connecting into Riyadh. DHL is also serving Israel with three flights a week from Brussels.

Last week, DHL launched a thrice-weekly B747F service between Liège and Jeddah, in Saudi Arabia, offering 100 tonne+ capacity and dedicated to pharma and life science cargo, with onward distribution across the GCC.

Addressing the webinar, DGF’s vice-president and head of Air Freight, Middle East & Africa, Ben Lambert, said capacity was now on a stable footing to and from the region.

“Some of the Gulf airlines, like Emirates and even Etihad, have come out and said they will be at 100% capacity going forward for the next few weeks. I think there are still questions about whether this means 100% of their flights will be operating, or they will be serving 100% of their lanes. But either way, it is a positive message that these carriers are projecting.”

He said another positive sign was the reopening earlier today of Iraq’s airspace. “The airport is still not functional, so even if we wanted to position a charter there, it would not be possible at the airport, but again, good news.”

Asked about when DHL expects to be flying into its Bahrain hub again and also to Kuwait, Lambert replied: “That’s the question we're all asking ourselves. There are talks with the authorities in Bahrain about getting the airlines back online.

“Our staff has left Bahrain (as a result of the crisis), and we will not position our aircraft back there right now and assess the situation a bit later. But it is encouraging that the discussions are happening about maybe the Gulf airlines returning sooner rather than later. But I’m unable to give a fixed date for DHL returning to Bahrain. Unfortunately, just this morning, Bahrain was under attack. As for Kuwait, its airspace remains closed, and there haven’t been any discussions yet about the airport re-opening.”

Ocean: Growing Congestion at Ports

Turning to ocean freight, addressing the webinar, DGF’s head of FCL and Trade Management, Middle East & Africa, Huinan Khan, highlighted growing congestion at Gulf ports that remain open, such as Khor Fakkan in the UAE, and Sohar in Oman.

“This to the extent that we are seeing a number of cases where vessels are ‘cutting and running’ because they are unable to discharge all their cargo and are then expected to bring the containers back to ports in India or Sri Lanka or even all the way back to the point of origin, depending, of course, on the carrier's decision. So, the congestion situation remains a serious concern.”

A shortage of trucking capacity to transport containers from ports to destinations across the Gulf region is also an issue.