Is the "Safe Passage" through the Strait of Hormuz coming? Middle Eastern shipping remains full of uncertainties, and COSCO Shipping is breaking the deadlock with multimodal transportation.

Reporter | Ye Xiaodan Zhang Yun Editor | Wei Wenyi

Since the outbreak of the conflict between the U.S. and Israel, the global energy transportation “lifeline,” the Strait of Hormuz, has been in a state of “functional paralysis,” with a sharp decline in the number of vessels passing through. Market service organizations report that since March of this year, the number of commercial ships passing through the Strait has dropped by 95% compared to before the conflict.

Just when it seemed that the Strait would be completely closed, new developments emerged: According to vessel AIS data, multiple ships have recently passed through a “tacitly approved” safe route, successfully traversing the Strait of Hormuz.

However, according to vessel AIS data, on the morning of March 27 Beijing time, two container ships “Zhonghai Beibingyang” and “Zhonghai Yinduyang” under China COSCO Shipping had turned back toward the Persian Gulf and had not yet passed through the Strait of Hormuz.

On March 25, China COSCO Shipping announced that it would resume booking services for new orders from some countries in the Middle East to the Far East. Specifically, through multimodal transport, China COSCO Shipping resumed booking services for standard containers from the Far East to the UAE, Saudi Arabia, Bahrain, Qatar, Kuwait, Iraq, and Oman.

On March 26, an executive from a listed company revealed to the Daily Economic News reporter (hereinafter referred to as “Daily Economic News reporter”) that after China COSCO Shipping resumed new booking services for some Middle Eastern countries, the company was contacting customers to switch shipping companies. Additionally, some international freight forwarders in Yiwu are still waiting for news from Middle Eastern clients.

As the U.S.-Israel-Iran conflict enters its fourth week, China COSCO Shipping cautiously re-enters the Strait of Hormuz.

On the evening of March 25, China COSCO Shipping released an update on the situation in the Middle East, clearly stating that the resumed booking transportation route does not directly traverse the Strait of Hormuz, but rather uses a bonded land bridge and feeder shipping model for cargo delivery. However, the specific transportation plan will depend on the situation in the Middle East and the availability of space, ultimately determined by the company.

Image source: China COSCO Shipping official website

The Daily Economic News reporter noted that the so-called resumption of booking is actually a path reconstruction, different from traditional transportation modes. Shipping companies are seeking a balance between “resuming services” and “controlling risks,” adjusting the endpoints of main shipping routes to ports on the eastern coast of the UAE outside the Strait, and introducing multimodal transport to complete the final leg within the Persian Gulf.

China COSCO Shipping stated that the company plans to transport goods from upstream Gulf countries via the bonded land bridge through Al-Fujairah or Khor Fakkan to Abu Dhabi CSP, connecting to its own feeder network centered on Abu Dhabi CSP, transporting to Saudi Arabia, Qatar, Bahrain, Kuwait, and Iraq, as well as other areas of the UAE apart from Abu Dhabi and Jebel Ali. Additionally, goods from Oman will be transshipped from the new port in Mumbai, India, to Sohar, Oman.

On March 26, an executive from a listed company with a presence in the Middle East revealed to the Daily Economic News reporter that after China COSCO Shipping resumed new booking services for some Middle Eastern countries, they had started contacting their customers. “Many customers originally used Maersk, and we are persuading them to switch to China COSCO Shipping.”

A seasoned international freight forwarder in Yiwu, Li Yang (pseudonym), revealed that during normal years, Middle Eastern clients would come to Yiwu for procurement after Ramadan. Once the procurement orders are confirmed, the production cycle is around 20 days, and by mid-April, they would enter the peak shipping period.

“However, from the current situation, the demand from the Middle Eastern market is basically postponed.” Li Yang analyzed that the U.S.-Israel-Iran conflict remains uncertain, and many Middle Eastern clients have not yet clarified their procurement plans since round-trip flights have not fully resumed, making it difficult for them to come to Yiwu for on-site procurement.

Therefore, even though China COSCO Shipping announced the resumption of new booking services in some areas of the Middle East, Li Yang found that the booking demand from Middle Eastern clients was not substantial. “We still have to wait for them to return to China to finalize their goods before shipping, so the booking demand is not large.”

A merchant in Yiwu International Trade City also told the Daily Economic News reporter that there are indeed some clients currently booking space with China COSCO Shipping, but clients far away in the Middle East have yet to respond.

Shipping companies employing similar adjustment strategies have already taken action, primarily focusing on receiving goods for dispatch. Meanwhile, there are also a number of shipping companies in a wait-and-see state. On March 25, Yang Ming Marine Transport Corporation issued an operational adjustment notice for the Middle East, stating that vessels originally scheduled to call at or unload in India on the GS2 route now plan to deviate from the original route and wait in nearby waters in the Middle East.

Yang Ming further stated that due to multiple recent incidents of vessels being attacked in the Middle East, the security situation continues to deteriorate, posing serious risks to vessels, crew, and cargo passing through the Strait of Hormuz and its surrounding areas. Given the risks of conflict and other factors, the original voyage or unloading arrangements may likely lead to risks of cargo loss, damage, or personnel casualties.

In light of this, Yang Ming has decided to suspend calls and unloading operations in India while closely monitoring the security conditions at Middle Eastern ports. Once the situation improves and meets safety standards, vessels will immediately proceed to feasible Middle Eastern ports for calls and unloading.

According to Xinhua News Agency on March 24, since the outbreak of the U.S.-Israel-Iran conflict, shipping through the global energy transportation “lifeline,” the Strait of Hormuz, has been severely obstructed. Market service organizations indicate that since March, the number of commercial ships passing through the Strait has dropped by 95% compared to before the conflict.

Data source: Fanwei, ShipView, Clarkson

According to data from the ShipView platform under China COSCO Shipping, from March 1 to 25, the number of commercial cargo ships passing through the Strait of Hormuz was only 153, with most sailing eastward out of the Strait. Currently, the total number of vessels in the Persian Gulf is 2,714, including 101 container ships, 135 crude oil tankers, 229 product tankers, 20 LNG carriers, and 44 LPG carriers.

On the evening of March 22, the Panama-registered container ship “NEWVOYAGER” passed through the Strait of Hormuz, becoming the first vessel under a Chinese shipowner to use Iran’s “safe corridor.” This detour route, referred to as the “Tehran Toll Booth,” navigates between Iran’s Qeshm Island and Larak Island.

Chinese crew members stuck in the Persian Gulf told the Daily Economic News reporter that each vessel must apply to the Iranian Islamic Revolutionary Guard Corps for permission to pass, and after obtaining clearance, they are guided through by Iranian tugboats.

Since March 23, 17 vessels have passed through the Strait of Hormuz, almost all using this route. Additionally, the Daily Economic News reporter observed on the ShipView platform that the VLCC supertankers “Yuan Gui Yang” and “Yuan Hua Hu,” which are under China COSCO Energy, are still anchored in safe waters within the Persian Gulf, waiting.

On March 25, China COSCO Energy stated that the company is still assessing the security situation. COSCO Shipping Holdings indicated that there are currently no vessels stranded in the Persian Gulf, and tanker freight rates on Middle Eastern routes have risen by more than 50% compared to before the U.S.-Israel-Iran conflict.

On March 26, analysts from Dongzheng Futures noted in their shipping weekly report that during the 12th week of this year, the traffic volume through the Strait of Hormuz was 24 vessels, with no significant improvement observed week-on-week. The operational pressure on transit ports around the Strait of Hormuz has increased, while operations at the Red Sea and landline transit ports are normal.

Why has the number of vessels passing through the “safe corridor” remained so low?

According to CCTV International News, on March 25 local time, Iranian Foreign Minister Amir-Abdollahian stated in an interview with Iranian state media that the Strait of Hormuz is not completely closed, but rather closed to the enemy. The region is a war zone, and there is no reason to allow vessels from enemies and their allies to pass through. For friendly countries of Iran, or in situations where Iran decides to provide passage for other reasons, the Strait of Hormuz is safe for passage—vessels from countries such as China, Russia, Pakistan, Iraq, India, and Bangladesh have all safely passed through the Strait of Hormuz.

On March 24, Maersk updated its latest assessment for the Middle East, stating that the current situation remains high-risk, with ongoing strikes in land and port areas of countries affected by the Strait of Hormuz. The company is maintaining a high level of vigilance, working closely with local governments and relevant departments to ensure the safety of all crew members and employees, while also ensuring the safety of vessels, ports, and cargo.

Maersk further stated that logistics operations continue to face disruption risks, and the current situation will impact performance. The unrest in the Middle East and subsequent network adjustments have caused widespread ripple effects across global networks, and the implementation and adjustment of relevant operational plans will take time. Once operations gradually return to normal in the second quarter, vessel reliability is expected to return to historical average levels.

In terms of fuel supply, the ongoing conflict has severely impacted the international market. Maersk stated that due to the obstruction of shipping through the Strait of Hormuz, many refineries in the Middle East have been forced to halt or reduce production, leading to limited export capacity and significant disruptions to the global supply chain. The company has redistributed fuel demand as much as possible to alleviate shortages and has sourced alternative energy from different regions and suppliers. Due to fuel shortages in the Middle East and surrounding areas, some vessels have had to refuel at ports, which may impose additional war zone passage fees, further increasing transportation costs.

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责任编辑：宋雅芳