The reopening of the Strait of Hormuz following the US-Iran peace deal has been welcomed by UAE shipping and logistics executives, but industry leaders warn that freight rates remain sharply elevated and supply chains will take months to fully recover.
Freight costs have surged dramatically since March, with some executives citing container prices rising more than sixfold.
Anis Sajan, vice-chairman of Danube Group, said the cost of shipping a single container climbed from around $1,500 before the US-Israel-Iran war on February 28 to nearly $10,000 at its peak.
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Haris Shaikh, CEO of Gallop Shipping in Dubai, put the total landed cost even higher, noting that ocean freight alone had risen to approximately $5,200 per container, with additional local charges pushing the total to around $10,573, compared to a pre-crisis norm of $2,100 to $2,250.
“A significant reduction is unlikely in the immediate future,” Shaikh said, adding that exceptional surcharges such as drop-off fees and internal shifting costs would ease only gradually as conditions stabilise.
Slow recovery
According to Nizar Zouhairi, vice president of global freight operations at Aramex, the shipping and logistics sectors recovery will be phases.
“In short term, you will see a rebound in sea volumes, fast movement of a lot of commodities that were not easily moved by road, a repositioning of a lot of empty containers, and a flow on energy products which will lead to a reduction in sea freight container charges,” he said.
Zouhairi also sees shipping rates will fall faster than marine insurance rates.
“If the Strait of Hormuz re-opens, tankers will move out, supply will flow, prices will come down within 3–6 months assuming capacity is fully restored. The insurance market, however, will respond more cautiously. Insurers will likely take longer to assess the evolving situation, closely monitoring the conflict risks, the condition of vessels and cargo, and how Iran responds in terms of security measures or potential fees,” he addded.
Thomas Gregory, CEO and Co-Founder of Fusion Dubai, called the development “a welcome and much-awaited” milestone for the industry, but cautioned that logistics performance and consumer-level savings would not arrive simultaneously.
While delivery schedules and cargo movement could improve relatively quickly, he said price benefits for consumers were more likely to materialise over six to eight weeks – provided the ceasefire held and shipping confidence returned.
“Freight-cost reductions usually pass through procurement cycles, shipping contracts, landed-cost calculations and retail pricing only after a few weeks,” Gregory said.
Anis Sajan echoed that timeline, saying it could take three to four months for the cargo backlog to clear before freight costs begin to come down meaningfully.
Route restoration
For manufacturers, the stakes go beyond shipping costs.
Bharat Bhatia, Founder and CEO of Conares, the Gulf’s second-largest private steel manufacturer, said the UAE steel industry was heavily dependent on imported raw materials including metallics, billets, and hot rolled coils, making the normalisation of trade routes critical.
“Supply chains do not recover overnight,” Bhatia said, estimating that it would take three to four months for the logistics backlog to be fully addressed.
He added that Conares was already expecting to resume exports to North America, which had been disrupted since February 28 this year.
On the broader outlook, Bhatia said markets respond quickly to greater certainty.
“Once trade routes become more predictable, businesses are able to plan procurement, production, and project execution with much greater confidence. We are already seeing signs of improved sentiment among manufacturers, traders, and project developers,” he added.
Supply chain resilience
Yahyah Pandor, vice-president and general manager for MENAT at Blue Yonder, urged logistics leaders not to treat the current stability as a reason to ease up.
He said backlogs, inventory imbalances, elevated insurance premiums, and rerouting decisions remained live variables even as the Strait reopened.
“The current semblance of stability should not be treated as permission to relax, but rather as an opportunity to build stronger visibility, planning discipline, and decision-making muscle before the next disruption forces their hand,” Pandor said.
