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Ocean Freight Impacts: Hormuz Status Update and Analysis

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Is the Strait open or closed?

The US and Iran signed a Memorandum of Understanding in mid-June through which they agreed in principle to reopen the Strait of Hormuz. The US ended its blockade soon after and Iran committed to allowing vessels to pass – toll free – during the 60-day period set to negotiate a final peace agreement.

So the strait has technically been reopened since June. But even if there were complete calm in the waterway – which has not been the case – estimations are that it will take weeks to months for traffic to rebound to pre-war levels. The recovery will take time because Iranian mines, which could take months to remove and demining may not start until a final deal is reached, have made the main central passage unpassable.

As such, passing vessels are limited to two narrow lanes, one in the north of the strait along the Iranian coast and one in the south along Oman. Towards the end of June the UN’s International Maritime Organization began implementing an organized evacuation plan aimed at orchestrating vessel exits out of the Persian Gulf along the southern route.

Iran vying for long term control

The UN’s Convention on the Law of the Sea (UNCLOS) considers the Strait of Hormuz an international strait, and therefore requires neighboring countries to allow vessels to pass unimpeded. Iran however never ratified the UNCLOS, and argues that under international law it has the right to control traffic under some circumstances (though probably not for neutral merchant vessels).

Authorized route being promoted by Iran’s Persian Gulf Authority. Source: Persian Gulf Authority

In any case, Iran has advised all vessels in the region to transit only via the northern lane and in coordination with the Strait Authority it has set up. Periodic Iranian attacks on vessels using other lanes, as well as on neighboring countries, probably aimed at forcing traffic through its channel – followed by US retaliations – have further limited the speed of traffic recovery through multiple stops and starts. The IMO officially paused its evacuation effort just days after it started, in response to Iranian threats.

Nonetheless, traffic through the Strait overall has increased compared to before the ceasefire, but has fluctuated and is still well below pre-war levels.

Impact on freight markets

Freight operations

Operationally, the strait’s closure did not disrupt the overall container market, but did significantly impede container traffic in and out of the Gulf states.

The renewed traffic comprises mostly tankers, though some container vessels have exited the Gulf since the ceasefire began while very few have entered. For now, shippers trying to get containers into (or out of) the Gulf states continue to rely on alternative, still accessible ports in the UAE, Oman and Saudi Arabia and then, sometimes very lengthy, road transport.

Shipments via these alternatives have faced long delays and steep pricetags, and the fact that volumes haven’t dropped on these lanes show that for Gulf container traffic there has not been much of a recovery yet. Even once the situation is more stable, container carriers are likely to activate mostly feeder services instead of long haul port calls to the Gulf until confidence returns to the lane.

Freight rates

Though the broader container market was spared operational disruptions, the Strait of Hormuz closure did have a significant impact on the overall market by way of rising fuel costs.

Emergency Fuel Surcharges led to transpacific container rates climbing $1,000/FEU and 50% over the first two months of the war. Sharp Bunker Adjustment Factor hikes set for July 1st, as well as Q3 manufacturer price increases, are probably key factors to the early surge of peak season demand for both transpacific and Asia – Europe lanes, which have pushed container rates up by $3,000 – $4,000/FEU on these trades since the end of May.

Oil prices have already eased back to pre-war levels, with the speed of the crude rebound is taking many experts by surprise and even leading to concerns of oversupply. Bunker fuel prices have eased significantly as well, but still remain about 30% higher than pre-war levels. Refined petroleum products are likely to take a little longer to normalize, as they depend on a crude recovery first, but oil market behavior makes it likely that bunker prices are on their way back to normal.

The bottom line

That oil prices are stabilizing even before Strait of Hormuz traffic has returned to normal is a good sign that freight rates – once peak season demand subsides – will also face downward pressure from normalizing bunker prices, and could return closer to pre-war levels before the end of the year.

A recovery to normal container flows (and freight rates) for the Gulf states will likely take much longer, and there are reports that countries in the region are planning on investing in better infrastructure for those alternative routes as they look to the future.

The post Ocean Freight Impacts: Hormuz Status Update and Analysis appeared first on Freightos.

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The New Economics of Logistics Visibility

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Knowing that a shipment will arrive six hours late is information. Knowing it early enough to reschedule labor, protect a customer commitment, avoid detention, or change an inventory decision is economic value.

That distinction is becoming central to the logistics visibility market. The earlier argument that exceptions are becoming the real unit of work explains why visibility economics depend less on event volume than on whether the organization can convert important events into timely resolution.

The first era of visibility was largely about answering a basic question: Where is my shipment? The next era is about a harder question: What should I do because its state has changed?

Visibility Is Not the Outcome

Location and status data can be valuable, but they are intermediate products. A business does not earn a return because a dot moved across a map more accurately. The return appears when information changes an operational decision. A useful way to think about visibility is as a chain: signal -> interpretation -> decision -> intervention -> economic outcome. If any link is missing, much of the potential value disappears.

A Signal Has to Arrive Inside the Decision Window

Timing matters.

A delay discovered after the customer has already missed production is history. The same delay identified early enough to expedite an alternate shipment may be actionable. An ETA update received after warehouse labor has reported for a shift may have less value than the same update received while the schedule can still be changed.

This means visibility quality is not only about accuracy. It is about whether the signal arrives with enough lead time to support an intervention.

Not Every Exception Deserves Attention

As visibility improves, organizations often discover a new problem: too many exceptions. A network with thousands of shipments will always contain delays, deviations, missed scans, changing ETAs, and incomplete data. If every deviation creates an alert, planners become the bottleneck. The more important capability is prioritization.

Which late shipment threatens a high-value order? Which delay creates a stockout? Which container risks demurrage? Which arrival change will disrupt a dock schedule? Which event is likely to self-correct without intervention?

Visibility becomes intelligence when the system can distinguish operational consequence from mere deviation.

ETA Is a Decision Input

Estimated time of arrival is a good example of how the economics are changing. ETA was once primarily a customer-service or tracking metric. Increasingly it can influence warehouse scheduling, yard planning, labor, inventory, customer promises, and downstream transportation. That makes ETA a shared operating variable.

The value increases when the prediction is connected to the systems that can respond. A changing ETA that remains trapped in a visibility dashboard creates less value than one that can trigger a workflow or decision elsewhere.

Dwell, Detention, and Demurrage Make the Economics Visible

Some visibility use cases have direct financial consequences. Better awareness of arrival, dwell, free-time windows, and container status can help organizations manage detention and demurrage exposure. Yard visibility can reduce unnecessary trailer search and moves. Earlier exception detection can protect delivery appointments and reduce costly service recovery. These cases make an important point: visibility value is often realized outside the visibility platform itself.

More Visibility Can Increase Work

This is the uncomfortable side of digital transparency. If a company exposes ten times as many events but does not improve prioritization or workflow, it may create ten times as many things for people to inspect. The result can be an expensive monitoring layer sitting on top of the same manual decision process.

That is why visibility and autonomous exception management are converging. The system must increasingly help decide which events require action, assemble context, recommend a response, and automate routine resolution where appropriate.

Measure Intervention, Not Just Coverage

Visibility programs are often measured by tracking coverage, data completeness, ETA accuracy, or number of connected carriers. Those are necessary operating metrics, but they do not fully describe business value.

Organizations should also ask: How many material exceptions were identified early enough to act? How quickly were they resolved? How often did intervention protect service or avoid cost? How many alerts required no useful action? How much planner time was consumed per exception?

Those measures connect visibility to economics.

The Market Is Moving Toward Action

This shift has strategic implications for technology providers. Pure visibility is becoming less differentiated as location and event data become more widely available. The higher-value layer is interpretation and action: understanding what an event means to a specific operation and helping execute the appropriate response.

That pushes visibility platforms toward orchestration, workflow, decision intelligence, and AI. It also pushes TMS, WMS, and other execution systems toward richer external event awareness.

The Bottleneck Moves

For years, logistics organizations complained that they could not make better decisions because they could not see what was happening. Increasingly, they can see more.

The bottleneck is moving.

When a network can identify exceptions continuously, the constraint becomes the speed and quality with which the organization can interpret and resolve them. That is precisely the environment in which AI agents become interesting—not because logistics needs another conversational interface, but because it needs more capacity to do operational work.

Related Logistics Viewpoints research

The New Architecture of Logistics
Systems Engineering in Logistics
2026 Autonomous Exception Management Market Map
The Economics of Decision Latency
Previous in this series: Transportation Is Becoming Computational

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The post The New Economics of Logistics Visibility appeared first on Logistics Viewpoints.

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o9 Solutions Uses a Knowledge Graph to Connect Supply Chain Decisions

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Supply chain decision-making is difficult partly because the relevant information is distributed across products, locations, suppliers, orders, capacities, policies, and external events. A system may have access to all of those records and still struggle to understand the relationships among them quickly enough to support a consequential decision.

o9 Solutions addresses that problem through its Digital Brain architecture, including an enterprise knowledge graph and in-memory modeling designed to connect demand, supply, inventory, planning, and operating context. That semantic layer is important because it gives analytics and AI a structured representation of how supply chain entities relate to one another rather than treating the environment as a collection of independent tables and documents.

The company combines this architecture with integrated planning, optimization, scenario modeling, machine learning, and human oversight. The strategic direction is toward a continuous decision environment where changes can be interpreted quickly, alternatives can be modeled, and recommendations can be traced back to the assumptions, events, and constraints that produced them.

As with any broad planning and intelligence platform, the value depends on implementation quality. Knowledge models need strong data governance, entity resolution, process ownership, and clear decision rights. A sophisticated model of the supply chain is useful only if the organization can keep it current and use it consistently in real operating workflows.

o9 Solutions appears in the Logistics Viewpoints Supply Chain Decision Intelligence MarketMap and Autonomous Exception Management MarketMap. The two MarketMaps highlight the relationship between integrated decision intelligence and the faster exception-response capabilities now developing around it.

The post o9 Solutions Uses a Knowledge Graph to Connect Supply Chain Decisions appeared first on Logistics Viewpoints.

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AI Will Not Transform the Supply Chain Until the Architecture Around It Catches Up

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Executive thesis. The model is becoming the least durable layer of the AI stack. Sustainable advantage will come from the operating architecture around AI: authoritative context, governed tools, permissions, observability, and connection to enterprise workflows.

The model is only one component

Supply chain AI discussions often begin with model capability: prediction accuracy, reasoning quality, computer vision performance, or the fluency of a generative system. Those capabilities matter, but operational value depends on everything around the model. The system still needs authoritative context, enterprise tools, permissions, workflow, observability, and a reliable path from recommendation to action.

Different AI patterns solve different problems

Prediction, optimization, generative AI, vision, and agents should not be treated as interchangeable technologies. Forecasting demand, selecting a route, extracting information from a document, interpreting an image, and executing a multi-step workflow require different evidence, control, and performance measures. A mature architecture starts with the decision or task and chooses the AI pattern that fits it.

Context is the operating fuel

An AI system can produce a plausible answer while using stale or incomplete operational context. In logistics, that can be dangerous because the truth may reside across orders, inventory, rates, carrier status, warehouse state, supplier records, and policy documents. Retrieval, master data, identity resolution, and system access therefore become part of the AI architecture, not secondary data-engineering concerns.

Tool access turns intelligence into consequence

The moment an AI system can create a shipment, change an order, contact a carrier, release inventory, or approve an exception, governance becomes an operational requirement. Tool permissions, financial limits, approval gates, idempotency, retries, and rollback are the mechanisms that separate an interesting demonstration from a dependable production workflow.

Measure workflow performance

A fluent response is not the right success metric for operational AI. Supply chain leaders should measure decision latency, manual context gathering, exception closure, override behavior, error recovery, tool failure, and the business outcome being improved. That measurement discipline also creates a rational basis for expanding autonomy as evidence accumulates.

The Logistics Viewpoints AI in Logistics: Use Cases, Architecture, and Implementation Guide separates the major AI patterns and connects them to data, tools, governance, workflow, observability, and ROI—the architecture required to move from model capability to operating value.

Executive implication

AI strategy should separate model selection from control architecture and measure value through workflow performance, decision quality, and operational outcomes.

Go deeper: provides the durable buyer, architecture, and implementation reference for this topic. AI & Advanced Analytics connects this analysis to the broader Logistics Viewpoints research architecture.

Related Logistics Viewpoints research

Download: AI in the Supply Chain — From Architecture to Execution
The New Architecture of Logistics

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Read the full AI in Logistics: Use Cases, Architecture, and Implementation Guide.

Explore the broader AI & Advanced Analytics domain for related Logistics Viewpoints research and analysis.

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