Impact of the Israel-Iran War on Transportation and Logistics:

With an exponentially  interconnected world, regional wars rarely stay confined to borders. The ongoing conflict between Israel and Iran, though concentrated geographically, is having a far-reaching impact on global systems, particularly hitting an impact on transportation and logistics. Started from delayed shipping to rising freight costs, the war is disrupting the very arteries that move the global economy.

As a result it magnified the supply chain crisis that affects everyone—from multinational corporations to local businesses and consumers waiting for everyday essentials.

Strategic Geography and Supply Chain Vulnerability

The Middle East is a strategic corridor for international shipping, air traffic, and energy transit. With Iran bordering the Strait of Hormuz, a maritime chokepoint through which about 21% of global petroleum liquids pass daily (U.S. Energy Information Administration, 2024), any disruption here reverberates through global logistics.

The conflict has already increased regional risk levels, prompting cargo ships, oil tankers, and logistics providers to reroute. According to the International Maritime Organization (IMO), over 375 commercial vessels were delayed, diverted, or temporarily suspended from transiting conflict-prone zones between April and May 2025.

Airspace restrictions have also intensified. Following missile alerts and military escalations, countries such as the UAE, Saudi Arabia, and Iraq have temporarily closed or restricted key air corridors, prompting global air cargo carriers to reroute—adding both time and fuel cost.

Economic Disruption: Freight, Fuel, and Delivery Delays

According to data from Drewry’s Global Freight Rate Index, ocean freight costs between Asia and Europe rose by 23.7% in Q2 2025 compared to Q1, with additional war-risk premiums imposed by insurers.

The International Air Transport Association (IATA) reported that average international cargo route lengths increased by 7.4% due to regional airspace diversions, significantly increasing delivery timelines and fuel expenditure. Meanwhile, ports in Oman, the UAE, and Israel have seen delays and partial closures, causing ripple effects across supply chains from Singapore to Rotterdam.

Rising diesel prices, driven by instability in oil supplies, have further compounded costs. The U.S. Energy Information Administration noted a 14% spike in diesel prices globally between March and May 2025, directly impacting inland freight, trucking, and last-mile delivery.

Affected Sectors and Supply Chain Fragility

The transportation and logistics fallout is affecting multiple sectors worldwide:

• Automotive: Manufacturers in Europe and Japan are reporting delays in sourcing semiconductors and components from Asia, resulting in partial shutdowns of assembly lines.
• Pharmaceuticals: Air freight delays are affecting temperature-sensitive medical supplies, particularly vaccines and biologics. Health ministries in Africa and Southeast Asia have raised concerns about delivery timelines.
• Retail and E-commerce: Platforms across North America and the EU report 3–10 day delays in cross-border shipments. SME exporters in South Asia are particularly vulnerable to rising freight costs and slower turnaround times.
• Agriculture and Food Supply: Delays in fertilizer shipments, much of which depend on natural gas, are now threatening planting cycles in sub-Saharan Africa and South Asia.

According to the United Nations Conference on Trade and Development (UNCTAD), the current maritime disruptions may reduce global trade volumes by 1.6% in Q3 2025 if conditions persist, with disproportionate impact on developing economies.

Who’s Bearing the Brunt?

Logistics workers, too, are under strain. From seafarers navigating high-risk waters to truck drivers facing longer hauls, the human cost of these disruptions is mounting. In port cities such as Aqaba (Jordan) and Bandar Abbas (Iran), container handling volumes dropped by over 18% in April 2025 alone (IMO port statistics).

Policy Responses and Global Preparedness

Governments and alliances are taking action, though gaps remain:

• European Union: The EU Directorate-General for Mobility and Transport (DG MOVE) has activated emergency logistics coordination frameworks, urging member states to diversify supply routes and enhance rail freight corridors.
• United States: The Department of Transportation (DOT), in collaboration with FEMA and DHS, has initiated fast-track customs clearance and inland routing flexibility to minimize domestic disruptions.
• India: The Ministry of Commerce and Industry, through the Logistics Division, has issued operational advisories to exporters, encouraging modal shifts to air freight and regional markets.
• Gulf Cooperation Council (GCC) nations like Saudi Arabia and the UAE have increased investment in AI-enabled logistics and port security to strengthen resilience against potential cyber and physical attacks.

According to UNCTAD, these policy actions may mitigate short-term pain, but rebuilding secure and resilient supply networks will require long-term global cooperation and investment.

Conclusion: Logistics as a Frontline of Modern Warfare

Until stability returns, the transportation and logistics sector will remain a high-stakes casualty of geopolitics, reshaping trade routes, escalating costs, and exposing deep vulnerabilities in global supply chains.

As governments and industry leaders look for long-term solutions, this crisis serves as a wake-up call: efficiency must now be balanced with resilience—because in today’s world, a localized war has truly global consequences.