Hormuz satellite

Middle East conflict is reshaping global shipping once again

Jul 22, 2026 | , , , , , , , , , , , , ,

Commercial shipping in the Strait of Hormuz and Red Sea is facing renewed disruption with 14 Iranian attacks on vessels since June 25th, the breakdown of the US-Iran ceasefire and a Houthi threat to target Saudi-linked shipping in the Bab al-Mandab.

The tanker Kavomaleas, initially reported on fire in the Strait of Hormuz, has since been confirmed as the target of an attack on Monday. Its crew abandoned the vessel, which remained adrift and on fire. UK Maritime Trade Operations also reported that another tanker in the Strait’s southern transit corridor had been attacked and set alight, with its crew also abandoning ship.

These incidents have further weakened confidence in the safety of the Strait, which has historically carried around one fifth of the world’s crude oil and liquefied natural gas.

Traffic has fallen sharply during the latest period of escalation, with only six vessels crossing the Strait in a day, the lowest level in five weeks, while hundreds remained at anchor outside the waterway.

For shippers, the concern extends well beyond regional security. Rising fuel costs, higher insurance premiums, longer voyage times and reduced network capacity all have the potential to increase transport costs and reduce schedule reliability across global supply chains.

Hormuz remains the world's most important energy chokepoint

The attacks on Kavomaleas and a second tanker follows earlier incidents in July involving three vessels, including a Qatari-flagged LNG carrier.

Iran subsequently accused vessels of transiting without its permission, using its interpretation of the MoU agreement to assert control over passage through the Strait.

While the United States insists the waterway remains open to commercial traffic and has deployed a naval blockade, Iran's Islamic Revolutionary Guard Corps (IRGC) threat to execute attacks on unauthorised vessels cannot be ignored.

The impact extends far beyond the Gulf itself. Because such a significant proportion of the world's crude oil and LNG exports move through Hormuz, even relatively limited disruption can trigger sharp movements in energy markets as traders price in the risk of prolonged restrictions.

Brent crude briefly climbed above US$90 per barrel following the latest escalation, increasing expectations of higher bunker costs and transport surcharges across both ocean and air freight markets.

Red Sea uncertainty threatens container shipping

While Hormuz is primarily an energy concern, the Red Sea remains critical to global container shipping.

Recent threats to Saudi-linked shipping in the Bab al-Mandab Strait have renewed concerns that carriers may once again reduce Red Sea transits or suspend recently restored Suez services.

Maersk recently returned its Gemini AE15 service to the Suez route and planned to add Jeddah from August. Its MECL service also calls at the port.

CMA CGM operates several Asia-Europe services through Suez. Recent schedules show some Jeddah calls omitted on the MEX and BEX2 services, although not all calls have been removed.

Should security risks increase again, those services could once more be rerouted around southern Africa.

Such diversions add thousands of nautical miles to Asia-Europe voyages, increasing fuel consumption, extending transit times and reducing the effective capacity of the global container fleet. Even though no vessels are removed from service, longer round voyages mean fewer sailings can be completed each year, tightening capacity and placing upward pressure on freight rates.

Marine insurance remains available for vessels transiting the Gulf, but at substantially higher prices.

War risk hull premiums reportedly stood at a fraction of 1% of insured vessel value before the crisis began in February. They have since risen to between 3% and 10%.

For a tanker valued at US$100 million, this could increase the premium for a single transit from around US$250,000 to as much as US$10 million.

The Lloyd’s Market Association has stated that the decline in traffic is not primarily the result of insurance being unavailable. It said owners are choosing not to transit because of safety concerns.

These costs ultimately feed through to supply chains via emergency surcharges, bunker adjustment factors and higher freight rates.

Although neither the Strait of Hormuz nor the Red Sea is theoretically closed, commercial conditions remain highly fluid.

Container carriers continue to review sailing schedules, tanker operators are assessing voyage risks on a daily basis and insurance markets remain volatile. Further attacks or additional security measures could quickly alter routing decisions across both regions.

Visibility turns uncertainty into control

Geopolitical events cannot be prevented, but their impact can be managed with real-time visibility and timely data.

Metro combines global freight expertise with advanced digital visibility through our MVT platform, providing customers with real-time shipment tracking down to SKU level across all transport modes. Metro helps businesses identify disruption early, make informed decisions and keep products flowing through increasingly complex global supply chains.

To learn how Metro can strengthen the resilience and visibility of your international supply chain, EMAIL Managing Director Andrew Smith today.

LHR terminal 5

Air freight markets under pressure as capacity struggles to recover

Jul 22, 2026 | , , , , , , , , , , , ,

Global air freight markets continue to outperform expectations, but the balance between supply and demand remains fragile. 

What began as a short-term disruption following renewed conflict in the Middle East has evolved into a more structural capacity challenge, keeping rates elevated and limiting available space on key trade lanes.

Although airlines have adapted their networks and capacity is gradually returning, the market has yet to recover the capacity lost earlier this year. At the same time, resilient demand, particularly from the technology sector, continues to absorb available space, leaving shippers facing higher transport costs and reduced flexibility. 

Middle East disruption continues to shape the market

The collapse of the ceasefire between the United States and Iran has extended disruption across international air cargo networks well beyond initial expectations.

Several major international airlines have postponed the planned resumption of passenger and freighter services to the Gulf until at least late October, delaying the return of valuable belly-hold and freighter capacity that traditionally supports Asia-Europe cargo flows.

Before the conflict, around one-third of Asia-Europe air freight transited through Middle Eastern hubs. The loss of those services removed approximately 12% of global air cargo capacity almost overnight, forcing airlines to reroute shipments through alternative gateways and deploy additional direct freighter services wherever possible.

Despite these adjustments, capacity growth has lagged behind demand throughout 2026. Global air cargo demand increased by around 4% during the first half of the year, while available capacity expanded by only around 1%, creating the imbalance that continues to support elevated freight rates.

As a result, industry forecasts have changed significantly. Expectations that freight rates would fall during 2026 have been replaced by forecasts of annual increases up to 15%, reflecting the ongoing supply constraints affecting the market.

Demand remains resilient as market dynamics evolve

While geopolitical disruption has constrained capacity, changing demand patterns are also reshaping global air freight.

The rapid growth of artificial intelligence infrastructure is generating exceptional demand for semiconductor and data centre equipment, particularly on Transpacific services. Global semiconductor sales more than doubled year on year during the spring, creating sustained demand for premium air freight capacity.

Although AI-related shipments still represent a relatively small proportion of total air cargo volumes, they are highly concentrated on key trade lanes and typically require fast, reliable transport, placing additional pressure on available freighter capacity.

By contrast, the extraordinary growth in cross-border e-commerce that has supported air freight markets in recent years is beginning to moderate.

Changes to low-value import rules in both the United States and the European Union have reduced demand for some e-commerce shipments, with exports of low-value goods from China continuing to decline. While this has eased pressure on certain trade lanes, the reduction has been more than offset by continued strength in industrial manufacturing, technology exports and higher-value cargo.

Airlines continue to compete for scarce freighter capacity

The industry's ability to respond to changing demand remains constrained by a shortage of dedicated freighter aircraft.

Delays to new passenger aircraft deliveries continue to limit passenger-to-freighter conversion programmes, restricting the supply of additional cargo aircraft entering the market. As a result, airlines are increasingly competing not only for freight but also for access to aircraft.

Rather than expanding fleets rapidly, many operators are pursuing partnerships, aircraft acquisitions and strategic investments to secure long-term capacity. Others are repositioning aircraft between markets as demand changes, with freighter deployment shifting rapidly between Asia, Europe and the Americas in response to geopolitical events, humanitarian operations and changing trade flows.

This lack of spare capacity means the market remains particularly vulnerable to further disruption. Any significant geopolitical event, weather-related disruption or operational shock has the potential to tighten capacity quickly and place renewed upward pressure on rates.

Planning ahead remains the best strategy

Although capacity is expected to improve gradually during the second half of the year, market conditions remain unpredictable.

For shippers moving time-critical or high-value cargo, securing capacity early, maintaining flexible transport options and working closely with dependable logistics partners will remain essential. Businesses that rely on just-in-time supply chains or seasonal inventory should continue to allow additional planning time while airlines rebuild network resilience.

The market has demonstrated remarkable resilience throughout 2026, but it also highlights how quickly global air freight can be reshaped by geopolitical events, changing technology demand and structural capacity constraints.

Keeping your supply chain moving

When capacity is tight, reliability, experience, network strength and proactive planning make the difference.

Metro works with leading airlines and global carrier partners to secure stable air freight capacity across key international trade lanes. Our experienced teams provide tailored routing solutions, customs expertise and end-to-end shipment management, helping customers minimise disruption and keep critical cargo moving, even in challenging market conditions.

To discuss how Metro can strengthen your global air freight strategy and support your international supply chain, EMAIL Managing Director Andrew Smith today.

Trade handshake

UK trade deals open new opportunities

Jul 22, 2026 | , , , , , , , , , , , , , , , ,

The UK's trade agenda continues to gather momentum, creating new opportunities for businesses trading internationally, while reshaping the way they access global markets. 

The most recent agreements with major trading partners across Asia-Pacific, the Gulf, North America and Europe have expanded market access, reduced tariffs and strengthened supply chain resilience.

For UK businesses, these agreements represent far more than diplomatic milestones. They offer practical commercial advantages, from lower export costs and simplified market access to stronger supply chains and improved regulatory cooperation. While some negotiations remain ongoing, the overall direction is clear: the UK is building an increasingly diverse portfolio of international trading relationships that extends well beyond traditional European markets. 

UK-EU relations continue to evolve

Although the planned UK-EU summit scheduled for July has been postponed following the change in UK political leadership, negotiations have continued behind the scenes.

Officials are progressing work on the mandatory five-year review of the Trade and Cooperation Agreement (TCA), alongside wider discussions aimed at improving the trading relationship.

Several areas could deliver tangible benefits for businesses. Negotiations on sanitary and phytosanitary (SPS) standards are intended to reduce border checks on food and agricultural exports, while discussions continue around linking UK and EU emissions trading systems, cooperation on electricity infrastructure and broader regulatory alignment.

While no major changes have yet been agreed, businesses trading with Europe should continue to monitor developments, as incremental improvements to customs procedures and border processes could reduce friction for many exporters over the coming months.

CPTPP becomes a reality for UK exporters

One of the most significant developments has been Mexico's ratification of the UK's accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on 22 June 2026.

With Canada expected to complete implementation in September, UK businesses will soon benefit from preferential access across all twelve CPTPP member economies, creating one of the world's largest free trade areas spanning Asia-Pacific, North America and Latin America.

Collectively, CPTPP countries account for around 15% of global GDP and more than 500 million consumers. For exporters, the agreement opens new opportunities across manufacturing, consumer goods, food and drink, automotive, technology and professional services, while giving businesses greater flexibility to diversify international supply chains beyond traditional markets.

Gulf agreement strengthens access to a fast-growing region

May’s new Free Trade Agreement with the Gulf Cooperation Council (GCC) represents another important step in expanding Britain's global trading relationships.

Covering Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, the agreement is expected to remove hundreds of millions of pounds in annual tariffs on British exports once fully implemented.

Products including food, beverages and consumer goods are expected to benefit from lower duties, while wider provisions covering digital trade, investment and business mobility should make it easier for UK companies to establish and grow commercial operations throughout the Gulf.

For businesses already trading with the Middle East, the agreement offers greater certainty at a time when the region continues to play an increasingly important role in global logistics and supply chains.

Switzerland opens new opportunities for UK exporters

The UK's latest agreement with Switzerland further expands opportunities for British exporters, particularly across agriculture and food production.

The new Free Trade Agreement removes or reduces tariffs on a wide range of British agricultural exports, including lamb, vegetables, dairy products, beef and sparkling wine, while also strengthening services trade between the two countries.

The agreement, which was finalised on 13 July is expected to increase bilateral trade by more than £7 billion annually, reinforcing Switzerland's importance as one of the UK's highest-value trading partners.

UK-US cooperation goes beyond tariffs

The UK and United States continue to strengthen their trading relationship through pharmaceutical supply chain agreement signed at the end of 2025.

The arrangement protects more than £5 billion of annual UK pharmaceutical exports from tariffs while creating closer cooperation on medicine availability, manufacturing resilience and regulatory alignment.

Beyond the life sciences sector, the agreement demonstrates a growing emphasis on supply chain resilience rather than simply reducing tariffs. Greater cooperation on trusted sourcing, manufacturing capacity and regulatory processes reflects the increasing importance governments are placing on securing critical supply chains in strategically important industries.

Turning opportunity into competitive advantage

Securing a trade agreement is only the first step. Real commercial success depends on understanding customs requirements, managing international logistics and building resilient supply chains capable of supporting long-term growth.

Metro helps businesses take full advantage of emerging global trade opportunities through integrated freight forwarding, customs expertise and end-to-end supply chain management. Whether you're looking at new sourcing options or expanding into Europe, North America, the Gulf or the Asia-Pacific region, our global network and local specialists help simplify international trade while reducing cost, risk and complexity.

To discover how Metro can help your business unlock new international trading opportunities, EMAIL Managing Director Andrew Smith today.

FXT at dawn

Strong demand and constrained capacity are reshaping container shipping

Jul 22, 2026 | , , , , , , , , , ,

For much of the recent past, freight markets have lurched from one disruption to another. Pandemic recovery, conflict in the Red Sea, tariff uncertainty and conflict in the Middle East have each triggered periods of higher freight rates before conditions gradually eased.

This time, however, the market appears to be changing for different reasons.

While geopolitical events continue to influence global shipping, they are no longer the only force keeping container capacity tight. Strong international trade, sustained investment in new industries and persistent congestion across global transport networks are all helping to support freight rates, suggesting the market may remain firmer than many shippers anticipated.

Global trade continues to absorb available capacity

One of the strongest indicators is that cargo volumes continue to grow despite higher transport costs.

Global container traffic has increased by around 4% year on year, with Asia-Europe volumes rising approximately 12% and Asia-North America around 11%, with indexed rates rising 150% over two quarters.

Growth is also becoming more geographically diverse. Alongside resilient demand from Europe and North America, expanding trade with Africa and Latin America is absorbing additional vessel capacity that might previously have been available elsewhere.

At the same time, the mix of cargo moving through global supply chains is changing.

Rather than retailers replenishing inventories and other traditional sources of demand, increasing volumes are being generated by long-term investment in artificial intelligence infrastructure, data centres, batteries, electric vehicles and renewable energy technologies. These emerging industries will require sustained manufacturing and international transport over many years, creating a more durable source of freight demand than short-term consumer buying cycles.

More ships do not necessarily mean more capacity

Although shipping lines have ordered record numbers of new vessels, effective shipping capacity remains far tighter than headline fleet statistics suggest.

Only around 2% of the global container fleet is currently idle, while demand for charter vessels (particularly ships above 3,000 TEU) continues to strengthen. Carrier profitability also recovered sharply during the second quarter, reflecting healthier trading conditions after a difficult start to the year.

Meanwhile, operational constraints continue to reduce available capacity.

Most container services remain diverted around the Cape of Good Hope instead of using the Red Sea, significantly extending voyage times. Transit through the Strait of Hormuz remains uncertain following renewed regional tensions, while congestion at several major ports continues to delay vessel turnaround times.

Together, these factors mean carriers are deploying almost every available ship simply to maintain existing service networks.

Air freight points to the same underlying trend

Container shipping is not the only transport mode experiencing stronger market conditions.

Air freight demand has also continued to strengthen since the second quarter, despite improving airline capacity and fewer operational disruptions, driving indexed rates up by a quarter in under six months.

When both ocean and air freight markets strengthen simultaneously, it indicates that demand for international transport is expanding across global supply chains rather than being driven solely by disruption affecting one particular trade route.

For cargo owners, that provides further evidence that today's freight market reflects broader structural demand rather than temporary geopolitical events alone.

Peak season is likely to remain challenging

Looking ahead, while some softening is probably inevitable, there is little indication that market conditions will change significantly before the end of the year.

Strong demand, limited spare shipping capacity, continuing port congestion and ongoing geopolitical uncertainty are all expected to support freight rates throughout the traditional peak season.

While some carriers have begun limited returns through the Suez Canal, these remain selective and do not yet represent a wider restoration of normal operating patterns.

As a result, businesses should continue planning for constrained capacity, longer booking lead times and freight costs remaining above historical averages.

Relief is coming, but not immediately

The substantial order-book of new container ships scheduled for delivery during 2027 and 2028 should eventually restore greater balance between supply and demand.

Until then, however, the combination of resilient trade growth and restricted effective capacity is likely to keep freight markets tighter than many expected earlier this year.

Rather than waiting for rates to fall, businesses should continue reviewing freight budgets, securing capacity early and building flexibility into their supply chain planning to reduce exposure to market volatility.

Metro can help you stay ahead of changing market conditions

Freight markets are evolving rapidly, making forward planning more important than ever. Whether you're reviewing sourcing strategies, managing peak season demand or looking to reduce transport costs through smarter routing and capacity planning, Metro's ocean freight specialists can help.

With global carrier relationships, flexible routing options and tailored supply chain solutions, we work alongside customers to secure reliable capacity and build resilient logistics strategies that keep cargo moving, whatever the market conditions. 

EMAIL Metro’s Managing Director, Andrew Smith to discuss how we can support your international supply chain.

Category: Foodstuffs

4PL | Automotive | Chemical | Exports | Foodstuffs | General | International Trade | Middle East | News | Project | Publishing | Retail | Sea | Supply Chain

Latest News in this category