How Much Will Logistics Costs Rise Due to Iran-Israel War?
The Secretary-General of the Indonesian Logistics and Forwarder Association, Trismawan Sanjaya, estimates that global logistics costs could surge threefold following the closure of the Strait of Hormuz due to the Iran-Israel war. “There may be a rise in sea freight prices in the near future,” he said when contacted on Monday, 9 March 2026.
Trismawan noted that several cargo vessels normally transiting this shipping lane have chosen to cancel their journeys. This is because the security risks are heightened, as the conflict zone between the United States, Israel, and Iran encompasses several Middle Eastern regions, including the Strait of Hormuz.
During the suspension of voyages, Trismawan explained that shipping companies must recalculate three components of logistics costs affected by the war. One component is the fuel adjustment factor (FAF), which accounts for fluctuations in fuel prices. The second component is war risk insurance premiums, and the third is congestion charges stemming from vessel parking and cargo backlog.
Under normal conditions, the FAF for a single container typically costs US$ 100. However, with global oil prices having reached US$ 100 and the uncertainty surrounding the war’s duration, Trismawan estimates that FAF could surge to US$ 300 per container.
Additionally, global logistics costs are rising because vessels must alter their shipping routes, for instance, via South Africa, to avoid the main trading lane which presents risks. The transit time for such voyages will be considerably longer than the Strait of Hormuz route. He estimates that voyage duration could stretch to 45 days, compared to approximately two weeks if passing through the Strait of Hormuz.
The extended voyage duration will increase fuel consumption. There are also congestion charges of approximately US$ 100 per container due to backlogs at ports such as those in South Africa, which lack the capacity of Strait of Hormuz ports.
Trismawan explained that the Iran-versus-Israel-United States conflict will not only drive up global logistics costs but could also trigger increases in domestic logistics costs. Drawing from current events, Trismawan advises importers to purchase larger quantities of goods to ensure adequate supply availability in Indonesia, which remains dependent on foreign procurement.