Did You Know That…

 

…Middle East Port update of 29th of April is available as per attached document.

 

…1) Why war can increase logistics profits. Modern logistics firms (freight forwarders, shipping coordinators, air cargo operators) don’t profit from war itself—they profit from disruption.

• Conflicts like the current Iran-related tensions are disrupting major trade routes (e.g., Red Sea, Strait of Hormuz).

• Ships are rerouted (e.g., around Africa), making journeys longer, more complex, and more expensive.

• Companies scramble for alternatives, often switching from sea to faster but pricier air freight.

All of that raises prices—and logistics firms take a cut. In simple terms:More chaos = more coordination needed = higher fees and margins

2) Evidence it’s happening now. Recent data and news reports support the claim:

• European logistics firms are expected to report stronger profits due to war-driven shipping chaos.

• Companies like DHL have already beaten profit forecasts, helped by managing disrupted supply chains.

• Firms such as Kuehne+Nagel are outperforming expectations, partly because they handle disruption well.

At the same time, freight rates and air cargo demand are rising—key revenue drivers.

3) How they actually make the extra money. It’s not just “charging more”—there are specific mechanisms:

• Higher freight rates (due to limited capacity and longer routes)

• Fuel surcharges passed on to customers

• Premium services (faster delivery, rerouting expertise)

• Capacity scarcity (companies pay more to secure space)

Even when costs rise (fuel, insurance), firms often pass them along—protecting margins.

4) But it’s not a free ride. The “quiet profit boost” has limits:

• Higher fuel costs can hurt demand and squeeze margins (as seen with UPS).

• Some segments (like sea freight) can still see profit declines despite disruption.

• Long-term economic damage from war can reduce global trade volumes

So profits may rise in the short term—but not uniformly.

5) The bigger picture: disruption economy

This fits a broader pattern sometimes linked to “war profiteering”—where companies benefit from scarcity and instability.

But logistics is a bit different:

• They’re not creating demand (like arms companies)

• They’re adapting to chaos and charging for it

Bottom line: Yes, war can quietly boost logistics profits .

• The driver is supply chain disruption, not the conflict itself

• The gains are real but uneven and likely temporary

…As usual, here’s the report on China to Europe trade, received from our friend Steven Yuan from FS international in Shanghai: Currently, shipping lines are actively reducing rates in late April to secure cargo volumes. Some carriers have already filled their vessel capacity for the end of the month and have begun building rollover inventories. Rates are expected to see a modest increase in the first half of May.

Additionally, four blank sailings are scheduled during Week 19 (coinciding with the May holiday), including the FP2 and FE4 services of the PA, as well as the FAL3 and AEU7 services of the OA Alliance. Given that PA’s adjusted FE3/FE4 services will have staggered blank sailings in early May, the likelihood of low rates during this period remains relatively low. As cargo volumes gradually enter the peak season cycle, rates are expected to maintain an upward trend from May through July.

Major carriers including Maersk (MSK), Hapag-Lloyd (HPL), and CMA CGM (CMA) have officially announced rate increases on Europe and Mediterranean routes effective 15 May, with EUR rates rising to USD 3,500 per 40HQ.

It is worth noting that CMA CGM has launched a new OCR service from South China to Europe, with calls at Hamburg and Rotterdam. The first sailing in early May offers a market rate of USD 2,150 per 40HQ. According to the official routing map, this service transits via the Red Sea / Suez Canal, with a transit time of approximately 27 days from Yantian to Hamburg — a significant reduction in voyage duration. The deployed vessel capacity averages 10,000 TEU, and CMA CGM operates this service on a standalone basis, without slot-sharing with alliance carriers.

 

…Hormuz crisis drives up Panama Canal delays and auction prices.

·Wait time for ships without reservations has risen significantly in April; some ships have been in the queue for two weeks

·Average auction prices at the panamax locks in the latest week were the highest recorded by Argus; one individual panamax locks slot went for

• A neopanamax slot went for $4m at auction this month, on par with the record set in November 2023 during Panama’s drought

The Hormuz crisis has taken a lot of cargo volume out of the market, but it has also spawned inefficiencies that partially offset lost cargo. One such inefficiency: growing congestion at the Panama Canal.

…Houthis have discussed implementing Red Sea tolls, says UK security firm

·Mechanisms have been discussed at senior leadership levels indicating Houthi ambition to control, and not merely disrupt, maritime traffic

·Conversations have been supported by Iranian involvement. But the militia is looking to act on its own terms

·Increasingly advanced weaponry of the group indicates that it will get harder for military intervention to combat further escalations in the region

·A multi-front approach could be on the cards as the Houthis look to exert control in the region.

As freedom of navigation erodes across the Middle East, intelligence warnings point to Houthi plans to formalise control over Red Sea shipping, including potential tolls, echoing Iran’s recent precedent and threatening a region already rattled by fresh crises.

…Indonesia walks back proposal of Malacca Strait toll

·Indonesia’s finance minister quickly shot down his proposal to levy fees on Malacca transits after briefly floating the idea

·Malaysia and Singapore pointed to a co-operative framework for Malacca

·Closure of Malacca will disproportionately disrupt global trade and energy supply.

As fears grow over the spillover of Iran’s closure of Hormuz, the global spotlight has shifted toward the Strait of Malacca.

…The UAE’s departure from OPEC may not break the cartel. But it will deepen the country’s feud with Saudi Arabia. The uae, opec’s third-largest exporter, thanked the cartel’s members for “five decades of co-operation”. But these emollient words belie the tension between the uae and Saudi Arabia, the bloc’s biggest producer and its de facto enforcer. The uae’s decision will deepen their rivalry. It had been possible to imagine Iran’s attacks on the Gulf states bringing the region’s two biggest powers closer together. Instead it appears to be widening their division.

 

…A gunman stormed Donald Trump’s dinner with the press. The incident revives questions about the competence of the Secret Service. Speeches had yet to start when the sound of gunfire rang out from outside the ballroom where Mr Trump, the First Lady, cabinet secretaries and hundreds of reporters sat with their burrata salads. The president, unharmed, was whisked off the dais. Police tackled the gunman as he ran past a security checkpoint and before he could enter the ballroom. 

…For safety reasons most airlines don't allow the pilot and co-pilot to eat the same meal.

…Crocodiles can gallop.

 

 

Wishing you all a very good rest of the week !

 

…This DYKT news bulletin will be published on the website as well, go to www.eaanetwork.com.