Ocean Carriers Adapt to Hormuz Shutdown With Overland Routes
The Strait of Hormuz shutdown has focused the world's attention on the flow of commodities out of the Arabian Gulf, including 20 percent of the world's oil and 30 percent of its fertilizer. But just as importantly, cargo shipments are not getting in, and the region is dependent upon imports for most of its food.
Most of the world's leading container lines have suspended cargo bookings into the Gulf market because they cannot get past the Strait. Alternatives exist overland through Saudi Arabia and the UAE, but capacity is limited and costs are high. On Wednesday, Maersk chairman Robert Maersk Uggla said that there was a "pressing need" for food imports into the Gulf market, including cold chain deliveries. "As the Strait of Hormuz is closed for now we try to find other ways to bring the cargo into the Gulf," he told Reuters.
China Cosco, the world's number-four container line, announced Wednesday that it would resume accepting bookings into the United Arab Emirates, Saudi Arabia, Bahrain, Qatar, Kuwait, and Iraq - all of the nations (save Iran) affected by the shutdown.
Though widely reported as an announcement of resumption of transits through Hormuz, it appears that Cosco does not intend to dispatch ships to service Gulf destinations. An accompanying Chinese-language map for Cosco's announcement suggests that containers would be discharged at Fujairah and moved overland, a development confirmed by multiple Chinese freight commentators. The service mirrors arrangements made previously by CMA CGM to move cargo overland through neighboring ports on the Gulf of Oman, Arabian Sea and Red Sea.
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Cosco said that the service remained subject to change based on future developments in a "volatile" security situation.
These alternative routes into the Gulf may include one maritime component as part of an intermodal chain. Gulftainer has reached an agreement with Mawani, the Saudi port authority, to set up a feeder service connecting Khor Fakkan to Sharjah, then onwards by sea to Dammam. The connection simulates most of an all-water voyage from the Indian Ocean to the key Saudi seaport, but substitutes a short land bridge across the UAE to bypass the Strait of Hormuz.