The chief executive of Kuehne+Nagel, the world’s largest freight forwarder, has cautioned that land-based transport routes into the Gulf are not a sustainable replacement for shipments passing through the Strait of Hormuz due to higher costs and logistical constraints. Stefan Paul made the remarks amid ongoing concerns about potential future closures of the strategic waterway by Iran.
Following heightened tensions and military actions involving the United States and Israel against Iran in late February, the Strait of Hormuz was temporarily closed after Iran attacked commercial vessels. This disruption forced shipping companies and logistics firms to rely heavily on overland routes extending as far as Turkey and Jordan, causing congestion at ports outside the Gulf region. However, trucks are limited to carrying two 20-foot containers each, while the largest container ships transport more than 20,000 containers, illustrating the scale disparity between sea and road freight.
Paul emphasized that trucking solutions are inherently limited by capacity and cost, noting that truck hire rates have surged to nearly $8,000 per month, a 25 percent increase since the outbreak of hostilities. Border delays, especially at crossings like Oman to the United Arab Emirates, have contributed to slowdowns and further inefficiencies. He indicated that once the Strait of Hormuz reopens fully, demand for the overland “land bridge” will diminish significantly.
The logistics sector remains divided on whether land routes will play a lasting role in Gulf trade. CMA-CGM, a French container shipping company, recently announced an agreement with Oman’s Asyad Group to jointly develop a $400 million logistics facility in Sohar, a port that gained prominence during the disruption period. Rodolphe Saadé, CEO of CMA-CGM, said the partnership aims to enhance regional connectivity and secure dependable inland access to key trade corridors.
Meanwhile, freight analysts have highlighted alternative infrastructure projects, such as a railway currently under construction in Saudi Arabia, which will link the Red Sea port of Jeddah to Gulf ports. Peter Sand, chief analyst at Xenata, suggested that future shipping routes will likely adopt a multi-modal approach, incorporating different transport methods to build resilience against similar disruptions in the future, even if these options increase transit times.
Other industry observers, including Lars Jensen of Vespucci Maritime, contend that the higher costs associated with trucking mean that maritime routes via the Strait of Hormuz will remain preferable whenever possible. Paul echoed this assessment, projecting that future cargo flows will rely on both the Saudi rail network and passage through the strait.
Paul also provided updates on the container backlog resulting from the conflict, estimating that around 30,000 shipping containers were stranded in the Gulf at the conflict’s onset. Ships remain stationed within the strait—about 84 at the time of his comments—and approximately 350,000 containers are displaced globally, including in Asian, African, and Gulf ports. This displacement has affected container availability in Asia, where demand has recently surged amid impending U.S. tariff measures.
Despite a partial resumption of vessel traffic through the Strait of Hormuz and progress in U.S.-Iran diplomatic talks towards a potential ceasefire, shipping bookings for the Gulf remain approximately 50 percent below pre-conflict levels, underscoring continuing caution among logistics operators.