COSCO Shipping has begun diverting vessels away from the Strait of Hormuz after transit-related costs reportedly surged to as much as $2 million per passage, amid escalating geopolitical tensions in the region.
Industry sources indicate that the sharp rise in costs—linked to heightened security risks, insurance premiums, and additional charges—has made the route increasingly uneconomical for some operators. As a result, COSCO has opted to reroute ships via alternative corridors, despite longer transit times.
The Strait of Hormuz, a critical chokepoint for global energy and container trade, has been under pressure due to ongoing conflict-related disruptions. Any reduction in vessel traffic through the route is likely to have wider implications for global shipping flows and freight markets.
Shipping analysts warn that diversions could lead to increased voyage durations, higher fuel consumption, and tighter vessel availability, potentially pushing up freight rates across key trade lanes.
The move underscores the growing impact of geopolitical instability on maritime logistics, with carriers reassessing routing strategies to balance cost, safety, and service reliability. Market participants are closely monitoring developments, as further escalation could trigger broader disruptions in global supply chains.