How Global Supply Chains Work
Modern supply chains are global and interconnected:
- A typical product might have raw materials from 5+ countries
- Components are assembled in factories thousands of miles from the end customer
- Just-in-time manufacturing means companies keep minimal inventory
- Any disruption ripples through the entire chain
What the Iran War Disrupts
Ocean shipping: Vessels avoiding the Strait of Hormuz reroute around Africa, adding 7-14 days to Asia-Europe routes and increasing fuel costs significantly.
Air freight: Middle East airspace closures and hub shutdowns have reduced global air cargo capacity by 18%. Air freight rates have spiked.
Insurance: Maritime insurance costs in the Gulf region have become prohibitive, effectively adding a “war tax” to all goods.
Energy costs: Higher oil prices increase the cost of every mode of transportation.
How Long Until It Affects You
- Week 1-2: Items already in warehouses unaffected
- Week 3-6: New shipments start arriving at higher costs
- Month 2-3: Broader price increases as inventory turns over
- Month 3+: Full impact felt across most product categories
Sources: Freightos, FreightWaves, Lloyd’s List, Reuters