Conflict will severely disrupt Middle East logistics

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The simmering tensions in the eastern Mediterranean have spilled over into a full-scale regional conflagration as Israeli forces moved into southern Lebanon this week.

In response Iran launched nearly 200 missiles at Israel, prompting prospects of further retaliation and escalation.

The air cargo sector has been the hardest hit. European airlines have suspended services to and from Israel, providing shippers in the region with a major headache. 

The European Union Aviation Safety Agency has taken the step of advising all European airlines to avoid Israeli airspace, guidance backed up by the European Commission.

The advice also covers Lebanon, a decision which, although understandable, may delay the delivery of essential materials for reconstruction and humanitarian aid. 

As most freight to the country is flown in the holds of passenger planes, this is likely to lead to exports backing up at the major airports, Tel Aviv in Israel and Beirut in Lebanon.  

Many airlines have been forced to suspend flights to Iraq, Iran and Jordan

Turkish Airlines, the third-largest air cargo carrier in the world, has also extended a moratorium on flights to Israel for a further six months.

Express parcels carrier FedEx issued a service advisory, telling customers, “As a result [of the EASA guidance], as of today [September 30], all FedEx and TNT services to and from Israel are temporarily suspended. Shipments currently in transit to Israel will be safely held at our facilities until services resume.”

Although Israel’s national flag carrier El Al is still flying and has added more flights from airports in Greece and Cyprus to allow Israeli nationals to return home, this will have limited impact on air cargo movements.

​The problems of transporting air cargo are apparent throughout the region. Many airlines have been forced to suspend flights to Iraq, Iran and Jordan because of airspace closures and this disruption could become a fact of life for shippers as long as the geopolitical conflagration continues.

In terms of shipping, the major implications involve continued disruption to the Red Sea and Suez Canal.

Days after the Houthis launched a drone and missile attack targeting Tel Aviv, the Israeli Air Force conducted airstrikes against power plants and ports in Houthi-controlled western Yemen. 

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Western-owned container shipping lines have been diverting around the Cape of Good Hope for many months as a result of Houthi attacks and the new stage in the conflict will mean that re-routing will continue on a long-term basis.

This is already impacting the Saudi Red Sea ports of Jeddah and King Abdullah, which have much to lose from the ongoing conflict. 

Moreover, Egypt has already lost $6 billion in Suez Canal tolls, depleting a critical source of national revenue.

The disruption to air and sea trade lanes from earlier attacks prompted many shippers in the region to look at overland alternatives.

In particular, cargo destined for Israel or transiting cargo from Asia has been off-loaded at GCC ports, loaded onto Jordanian trucks and moved across Saudi Arabia and Jordan to the King Hussein border crossing.

This seems to be the most robust logistics system still operating at the moment, although it will depend on the continued cooperation of GCC governments.

John Manners-Bell is CEO of Transport Intelligence Insight and founder of Foundation for Future Supply Chain