Car carriers stuck in Strait of Hormuz impacting Chinese imports to Middle East

A total of 15 car carriers have been held up due to the ongoing conflict, representing about 3% of the total global fleet, according to Robert Willmington, markets editor at Lloyd’s List Intelligence. The vessels typically carry between 6,000 to 8,000 cars, most originated from the Far East.

“Most of these ships originate from the Far East, with one from Europe,” Willmington said, “and this is having a big impact on car imports into the Middle East because the chief import market for the Middle East is increasingly China, and Japan and South Korea.”

Iran war continues to impact automotive supply chain: Strait of Hormuz access and energy price volatility remain key concerns

As the conflict in the Middle East continues, with the Strait of Hormuz blocked and energy prices in flux, the automotive supply chain impact could be severe.

Asian car imports to the Middle East exceed 1 million units annually, according to the maritime intelligence firm.

He said that the car carriers are offloading the vehicles into nearby ports while the ships remain stuck.

“We understand these are chiefly into ports in East Africa and India, and some of the Chinese ships are still able to trade through the Bab el-Mandeb Strait into Jeddah,” he added. “Some of those Chinese vessels are now heading towards Jeddah rather than going into the Middle East Gulf to discharge, where we presume the vehicles will then by transported by road.”

Most ports in the region remain operational, but with mixed activity levels. In the UAE, operations have partially resumed, with warnings remaining of GPS jamming. In Qatar, ports are open but activities are below pre-conflict levels. Kuwait’s ports are operating normally, but entry permits are required for some vessels, while Saudia Arabia and Jordan’s ports are functioning as usual.

The attacks on vessels have been “indiscriminate”, with 23 attacks since 28th February, and few attacked vessels with links to the US or Israel. According to Lloyd’s List, some are even owned by nations considered to be friendly to Iran. The vessel types hit include container ships as well as bulk carriers, gas carriers and tankers. Crew members have been killed on several ships, and some ships have been sunk.

The ongoing uncertainty around the conflict and the full reopening of the strait is as damaging as the disruption itself, leaving the shipping industry, and in turn automotive logistics, planning around an open-ended conflict.