Iran-Israel Conflict: Shipping & Moving Industry at Risk

July 2, 2025
Moving Industry, Shipping & Transportation
3 min read
Global shipping routes affected by the Iran-Israel conflict, including Strait of Hormuz and Red Sea zones

Introduction

As the Iran-Israel conflict intensifies, the ripple effects are being felt far beyond military borders threatening global supply chains, shipping routes, and the moving industry. The escalation has brought key maritime chokepoints under threat, stirred volatility in global freight indexes, and exposed companies to higher costs and logistical uncertainty.

This blog unpacks:

  • How the Iran-Israel conflict is disrupting maritime trade
    The implications for container shipping and relocation logistics
  • Strategic steps businesses can take to protect their supply chains

Strait of Hormuz and Red Sea: High-Risk Zones for Global Trade

The Strait of Hormuz in the Crosshairs

Over the weekend, the Strait of Hormuz, a key maritime artery that handles over 20% of global oil flows, came under threat after a U.S. strike on Iranian nuclear facilities. In retaliation, Iran’s parliament proposed closing the vital trade lane. Although not enacted yet, even the suggestion caused some shipping vessels to reroute or turn around, highlighting the real-time risk.

Red Sea Instability Rising

In addition, the Iran-Israel conflict is fueling unrest in the Red Sea, where Houthi rebels backed by Iran are disrupting shipping lanes. As Israel intensifies military actions, regional proxies may respond with force, increasing the risk of vessel attacks near the Suez Canal—another global trade artery

Economic Shockwaves: Volatility Hits the Shipping Industry

Freight Index Declines Signal Industry Alarm

The Baltic Dry Index (BDI), a benchmark for dry bulk shipping rates, dropped 3.5% on Friday, reaching its lowest point since June 10. It has now declined by 13.5% from its recent peak. This sharp drop reflects weakening demand and growing uncertainty in global freight markets, especially in light of escalating geopolitical tensions.

Rising Oil Prices and Fuel Surcharges

In addition, even the threat of a Strait closure is enough to drive up global oil prices. Carriers are already bracing for increased bunker fuel costs and planning to apply war-risk surcharges on vessels operating in conflict-affected regions.

Core Risks to Global Shipping & Logistics

1.  Strategic Maritime Bottlenecks Under Threat

  • Strait of Hormuz: A critical energy corridor. Closure or disruption would stall crude and LNG flows, severely delaying global shipments.
  • Red Sea/Suez Canal: Attacks or route avoidance pushes vessels toward the Cape of Good Hope, adding 7–13 days and up to $1 million in fuel costs per voyage.

2. Commercial Shipping Disruptions

Though not currently direct targets, commercial vessels in the region face indirect risks:

  • Soaring insurance premiums (up to 3x increase)
  • Route diversions causing scheduling chaos
    Reduced vessel availability due to safety concerns

3. Energy Supply Chain Vulnerability

Instability in the Middle East could impact oil and gas production and exports, causing:

  • Spikes in energy and transport costs
    Downstream price increases across industries
  • Greater volatility for fuel-dependent shipping companies

How the Moving Industry Is Affected

The relocation and moving sector, tightly linked to international freight networks, faces several challenges:

1. Delays in Household and Corporate Relocations

With containers rerouted or held back due to port congestion, moving companies are seeing delays in household shipments and global corporate moves.

2. Surging Costs Passed to Customers

Rising freight charges, fuel costs, and insurance premiums mean moving packages are becoming more expensive, straining customer budgets.

3. Inventory and Logistics Planning Stress

Warehousing needs are rising as companies stockpile goods in anticipation of shipping delays or rerouting.

Strategic Actions for Logistics and Supply Chain Leaders

1. Reroute Wisely

Avoid chokepoints like the Strait of Hormuz or Red Sea when possible. Use alternative ports and pair sea legs with bonded inland transport.

2. Build Inventory Buffers

Prepare for material shortages and delays by holding more stock closer to consumer hubs or using flexible warehousing solutions.

3. Monitor Maritime Security Real-Time

Use bulletins like UKMTO and IMB advisories to track active threats, piracy incidents, and vessel advisories in real-time.

4. Use Dynamic ETAs and Forecasting

Adjust expected arrival times and reroute forecasts daily to keep customers informed and operations agile.

5. Lock in Insurance and Hedging Early

Secure early-binding war-risk insurance and consider fuel hedging to shield against market volatility.

Final Thoughts

Ultimately, the Iran-Israel conflict is not just a regional crisis—it’s a stress test for global supply chains. From threatened sea lanes and rising fuel costs to insurance premiums and rerouting delays, the impacts on the shipping and moving industries are both immediate and far-reaching.

As tensions grow, the companies that succeed will be those that can act fast, reroute smartly, and communicate clearly.

What Businesses Can Do Now:

  • Identify high-risk corridors
  • Work with partners offering real-time risk monitoring
    Expand buffer stock
  • Optimize multimodal logistics
  • Lock-in freight insurance before crisis surcharges spike

But there’s one more step: consolidate smarter.

At MOVD, we help movers and logistics teams adapt to uncertainty through intelligent shipment consolidation, partner collaboration, and proactive risk management all from one powerful platform.

If your freight strategy feels fragile, now is the time to move with confidence. Move with MOVD.