Amidst ongoing conflict in the Middle East, ADM Global are closely monitoring the situation as it develops.
The impacts on Air Cargo and Containerised Trade have resulted in severe global disruption with flow-on effects to Australian supply chains.
Key developments include:
- The Strait of Hormuz: This area is a strategic choke point and corridor for the global fuel supplies, fertilisers and helium. With 20% of the global supply of fuels transiting through this area there has been onflow effects to costs, supply and demand. Blockades are in effect within the chokepoint, as we enter the 7th week of conflict.
- Emergency Fuel/Bunker Surcharges: Carriers have reacted to the global destabilisation of fuel supply and costs. As a result, carriers have introduced EFS (Emergency Fuel Surcharge) / (Emergency Bunker Surcharge) / (Floating Fuel). This is an additional charge to general rates.
- Fuel Supply Vulnerability for Australia and New Zealand: Australia and New Zealand source the majority of refined fuel from Asian-based refineries — these nations themselves rely heavily on crude flowing through the Strait. With Asia reducing refined oil output by an estimated 50–70% and Australia holding limited domestic fuel reserves, it results in increasing costs.
- Air Cargo: As the conflict ensued, global aviation services have been heavily impacted with closed airspace over the region disrupting major air corridors, grounding flights and delaying time critical cargo, ultimately tightening capacity as demand shifts adding extra pressure to complex and fragile supply chains. Congestion upon arrival into major Australian airports has occurred and terminals are working towards rectification.
- Containerised Cargo: The Shipping Lines focus remains on safety of crew, vessels and cargo amid the ongoing developments with precautionary measures been taken to safeguard operations, resulting in disruptions. Shipping Lines have diverted vessels, suspending bookings and re-routed services away from high-risk corridors.
What Shippers Should Expect
- Service suspensions, booking cancellations and routing changes.
- Increasing transportation, fuel and surcharge costs.
- Tightening space and schedule instability.
- Heavy delays and flow-on congestion at major transhipment hubs.
We encourage all customers to forward plan and book shipments two weeks in advance and build flexibility into your supply chain, to help manage delays. Forecasting is a necessity to maintain a robust supply chain to navigate through these challenges.
For further assistance, please contact your dedicated support representative.
Yours sincerely,
ADM Global Pty Ltd
📞 +61 3 8336 0800 | 🌐 www.admglobal.com.au
