Gulf freight rates jump as shippers reroute cargo onto trucks

Freight rates across the Gulf jumped this weekend as shipping companies diverted cargo on to trucks, pushing thousands of dollars of extra transport costs on to businesses and widening the economic impact of regional disruption beyond the oil market, the Financial Times reported. The shift is turning up in freight invoices and delivery schedules before it registers in broader economic data.

Road freight is being asked to absorb traffic that normally moves through large container ports and short sea routes. Lorries carry only a fraction of the volume handled by vessels, so the rerouting turns a marine-security problem into a land-capacity problem fast. Once trucking supply tightens, transport rates rise and delivery windows slip. Importers either hold more inventory or risk stock gaps.

Even so, the shipping strain is developing while energy traffic continues to move. Reuters reported that oil tankers have kept transiting the Strait of Hormuz since the start of the Iran war. Freight markets do not need a full closure to reprice. The threat of delay, diversions and longer handling times is enough to raise premiums and alter routing decisions for carriers and their customers.

The pressure shows up most plainly in trucking. TruKKer founder and chief executive Gaurav Biswas told AGBI that “a lot of this has changed permanently” as cargo moves inland, and warned that “suddenly you run out of supply because a lot of short haul has become long haul.” A truck that once completed several short port deliveries in a day can now be tied up on a single extended run. That shrinks the pool of available vehicles for the next shipment and lifts spot prices for everyone else.

Khor Fakkan, on the UAE’s east coast, has annual capacity of about 5 million TEUs, according to AGBI. Jebel Ali and Khalifa together handle more than 25 million TEUs. Before the latest disruption, Khor Fakkan had never processed more than 3 million TEUs in a year. Cargo arriving on the east coast still has to be distributed to inland and west-coast destinations, adding a handoff to supply chains built around different port geometry.

Alongside the price, the time cost is climbing. AGBI reported that a normal port-to-destination run from Jebel Ali typically took one to one-and-a-half hours. From Khor Fakkan, the same trip now stretches to a day and a half. For freight operators, that means more fuel, more driver hours and lower fleet utilisation. For customers, it means higher working-capital needs — goods spend longer in transit and arrival times become less dependable.

Why markets care

Gulf News cited Dubai Customs senior consultant Rashid Darwish Almuhairi as saying there is “a visibility gap” as companies manage delays and higher charges. The same report noted that some freight costs had risen by four to six times as shipping lines diverted away from traditional routes. Absorbing that kind of jump is difficult for businesses running lean inventories, fixed-price contracts or time-sensitive deliveries — particularly in consumer goods, industrial inputs and retail distribution.

A shipping shock can transmit faster than an oil shock. Crude prices are one gauge of regional stress, but freight is where companies feel it in cash: transport surcharges, longer trucking legs, warehouse bottlenecks and missed delivery slots. Tankers may keep sailing, yet the cost of moving non-energy goods can still climb sharply if insurers, carriers and cargo owners start treating the route map as less dependable.

Investors now face a wider set of exposures to monitor. Transport operators and cargo owners are the obvious pressure points. The ripple effects, however, extend to import-heavy retailers, industrial distributors and manufacturers that rely on tight replenishment cycles. Freight is becoming a real-time measure of how geopolitical risk feeds through to business costs.

What comes next

Whether this becomes a temporary workaround or a more lasting reset in Gulf logistics is the next question. Biswas’s view, as reported by AGBI, is that part of the shift may endure if businesses conclude the old mix of sea and port routes is too exposed to future disruption. That would mean more demand for trucks, storage and cross-border coordination around alternative ports, and permanently higher baseline costs for some cargo owners.

For investors, that keeps freight alongside crude and insurance as a live indicator of how regional risk is feeding into company margins. A story that began as a security and shipping problem is now also a supply-chain pricing story. As long as cargo keeps moving off ships and on to trucks, markets will have another cost line to watch.