Happy International Women's Day to everyone reading this, and especially to the women in supply chain who've been told it's a 'niche interest.' It's not. Thanks for reading.
— Maddie
The Invisible Siege
One week after US-Israeli strikes killed Supreme Leader Khamenei and triggered Iranian retaliation across the Gulf, Hormuz shipping traffic has dropped 94% from pre-crisis levels. The first blow was financial: on March 1, five major P&I clubs canceled war risk coverage, leaving vessels unable to legally sail. The second was physical: at least eight vessels have been damaged, two crew members are dead, and the IRGC has promised to set any ship that attempts passage "ablaze."
The US moved to cover the insurance gap. On Tuesday, Trump ordered the DFC to provide political risk insurance to all shipping lines and said the Navy would escort tankers if necessary. By Friday, it was a $20 billion reinsurance program. Private underwriters are also still quoting, at roughly 1% of hull value, five times last week's rate. But as Kpler's freight analyst put it plainly: tankers aren't avoiding Hormuz because of insurance. They're avoiding it because they might get hit.
The operational picture five days in: on March 4, five vessels crossed the corridor where 70 to 80 typically transit daily. Only Iran-linked tankers are moving through. Everyone else is clustered outside, waiting.
Markets responded with force. Brent crude settled at $92.69 on Friday. US crude posted its largest weekly gain in the history of futures trading, dating back to 1983. US gasoline jumped 14% to $3.41 per gallon, wiping out more than a year of price declines.
The carrier response was unanimous. MSC suspended all cargo bookings to the Middle East. Maersk paused trans-Suez sailings and rerouted via the Cape of Good Hope. Gulf-bound cargo bookings fell 81% across the industry.
The insurance is back. The navy escorts are coming. The ships still aren't moving. Coverage doesn't stop a drone.
What Else is Moving
📦 $1,958, up 3%, ending a seven-week slide. Drewry's World Container Index reversed course for the first time since January. Shanghai-to-Los Angeles rates jumped 10% to $2,402. The Intra-Asia index surged 18% in a single week. Cape rerouting is pulling ships off other trades, giving carriers the capacity absorption that 136 blank sailings couldn't deliver.
⚖️ 24 state attorneys general filed suit to block Section 122 tariffs. Led by Oregon, Arizona, California, and New York, the coalition argues Section 122 has never been invoked by any president and doesn't authorize what the White House is doing with it. Their strongest legal argument: by exempting USMCA-compliant goods, the tariffs fail Section 122's requirement for "broad and uniform" application. The 150-day clock is still ticking toward July 24. The replacement tariff may expire before the courts even rule on whether it's legal.
✈️ Global air cargo capacity down 18% in one week. FedEx suspended flights to 11 Middle East countries. Airlines are introducing war risk surcharges on shipments routed through or near the conflict zone. China-to-US airfreight rates jumped 15% to $6.90 per kilogram. Air cargo accounts for less than 1% of global freight by volume but roughly 35% by value: pharmaceuticals, electronics, produce. The stuff that can't sit on a ship for three extra weeks.
💻 500 of 2,000 planned job cuts already completed. WiseTech Global, which announced its 30% workforce reduction two weeks ago, is moving fast. Ninety-five percent of CargoWise customers have already transitioned to the new transaction-based pricing model, and WiseTech is promising clients 50% labor cost cuts through AI automation over the next two years. Revenue guidance: reaffirmed.
By The Numbers
Average daily charter rate for a Very Large Crude Carrier (VLCC) on the Middle East Gulf-to-China route this week, an all-time record. One week ago, these ships were charging roughly $100,000 per day. That was already unusually strong.
That's roughly the price of a house in many cities around the world. Per day. Per ship. Tanker owners who locked in one-year charters at $90,000-$105,000/day just weeks ago were celebrating record fixtures. They're now watching spot rates quadruple past them.
Water Cooler Ammo
🇦🇪 When Smoke Means "Don't Worry". Plumes of smoke rose from Dubai's Jebel Ali Port on Sunday morning during Iran's retaliatory strikes. Officials called it debris from a successfully intercepted drone, not a direct hit. Operations resumed the same evening. The message traveled further than the fragments.
🚢 Hands on the Trigger, Finger on Pause: Houthi leader al-Houthi declared his group stands with Iran and has its "hands on the trigger." One week in, no confirmed attacks. Internal debate over breaking the US ceasefire deal is reportedly the holdup. Carriers already rerouting around the Cape aren't waiting to find out.
❄️ Drones in the Deep Freeze. Kroger deployed autonomous drones that scan inventory in freezer warehouses at minus 20 degrees Fahrenheit. No WiFi, no human operator, no infrastructure modifications required. Finally, a cold chain job nobody's fighting to keep.
The Last Mile
Monday morning, every rate sheet in the industry will look different than it did last Monday. Some weeks move the needle. This one moved the map.
What does your Monday morning look like? Hit reply. Best responses might make next week's edition.