Forget Oil, Iran War Is Sending Global Shipping Costs Through The Roof
As the war in the Middle East escalates with missile strikes exchanged between Israel and Iran, the closure of the Strait of Hormuz has had an impact on container shipping costs.
Container Spot Price Surges
In a post on X on Sunday, The Kobeissi Letter shared the trends in shipping prices following the Iran war. “The spot rate for a 40-foot container from Asia to the US West Coast jumped +$655, or +20%, over the last week,” the post said.
According to Xeneta data, which is cited by the post, the market average cost of shipping a 40-ft container from the Far East to the U.S. West Coast was $4,047.
Meanwhile, the World Container Index, a benchmark compiled by the UK-based Drewry Shipping Consultants, said that the average price of shipping a 40-ft container from Shanghai to Los Angeles on Thursday was around $4,565, while shipping the same container to New York from Shanghai on average cost $5,505.
“Since the start of the Iran War, Asia-to-US container rates have surged +109%,” the post said, adding that shipping costs to Europe from Asia were up more than 50%.
The post then shared how uncertainty over the Strait of Hormuz was “causing severe congestion at Southeast Asian transshipment hubs, including Singapore and Malaysia.”
Shipping companies have also been levying fuel surcharges, while demand is picking up for ocean shipping, the post said. “Available shipping capacity is set to shrink further as importers rush to replenish inventories in July and August, which could push rates even higher,” the post added.
Nuclear-Powered Cargo Ships?
The U.S. government earlier pushed to develop small modular nuclear reactors for commercial shipping, with Transportation Secretary Sean Duffy and the U.S. Maritime Administration, or MARAD, seeking industry input on how Small Modular Reactors (SMRs) could be integrated into commercial cargo fleets and broader maritime infrastructure.
Peter Schiff On Iran War
As tensions escalate, Economist Peter Schiff argued that President Donald Trump cannot afford to end the war before the U.S. midterm elections, as the war provides his administration with the “perfect scapegoat” to explain the rising costs and inflation in the U.S.
Meanwhile, Iran, Iraq and Syria announced airspace closures following missile strikes exchanged between Iran and Israel, despite Trump signalling optimism about a potential deal with Tehran.
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