E-Paper
When trade routes become frontlines
This article is authored by Uddhav Kumar, founder, Lynkit.
Global trade has long been built on a simple assumption: goods will move freely across the world's oceans. Businesses may account for changing demand, fluctuating currencies or commodity prices, but the routes connecting producers to consumers have largely been taken for granted. That assumption is now being challenged. A series of geopolitical crises, from the Red Sea attacks to renewed tensions around the Strait of Hormuz, has demonstrated that the security of trade routes is no longer merely a concern for diplomats or naval strategists. It has become an economic issue that affects businesses, governments and consumers alike.
The Strait of Hormuz is one of the world's most important maritime chokepoints, carrying a significant share of global oil exports and serving as a vital gateway for trade between Asia and the Gulf. Any disruption there immediately reverberates across international markets. Recent tensions have once again highlighted how quickly freight costs, insurance premiums and delivery schedules can spiral when uncertainty takes hold. Even the possibility of prolonged disruption is enough to alter shipping decisions, divert vessels and increase costs throughout global supply chains.
Data from Lynkit's XBL platform shows that exporting a container from Mundra to Ad Dammam, Saudi Arabia, is now costing exporters an average of $3,044 for a single 40ft box, with some contracts hitting as high as $5,000. Before the blockade, the same movement averaged just $1,036, and even the premium contracts topped out around $1,546. In other words, the base cost has roughly tripled. The picture grows more alarming when you look at reliability. Pre-blockade, liners met their schedules almost 80% of the time, with an average transit of 7.7 days. Today, carriers have effectively stopped offering any assurance on timelines, and vessels are arriving in 25 days — sometimes over a month.
Yet the impact extends far beyond countries bordering the Gulf. Modern supply chains are deeply interconnected, meaning a disruption in one region creates ripple effects across continents. When ships avoid high-risk areas, they are forced onto longer routes that consume more fuel, require additional sailing time and reduce the number of annual voyages each vessel can complete. What appears to be a regional security issue therefore becomes a global logistics challenge. The result is a surge in rates even at ports that aren't directly in the strait. Take Mundra to Muscat in Oman: over just the last 90 days, the average rate for a 40ft container has climbed from $1,077 to $2,292 — a jump of roughly 113% — while a handful of customers are paying peak rates as high as $9,123 to move a single box. Salalah has seen high-end rates spike to $9,379 as of July. Lynkit’s AI based freight predictor is now showing that average rates on this lane are going to continue to peak up to $3070 all the way until September. Jeddah, the massive port on Saudi Arabia's west coast. On that lane, the average rate for a 40ft box from Mundra has risen from $2,128 to $3,863, while on-time reliability has kept sliding — from 22% in April to an all-time low of 6.7% as of July 7.
India finds itself particularly exposed to such disruptions. As one of the world's fastest-growing trading economies, it relies heavily on maritime transport for both exports and imports. Rising freight costs directly affect manufacturers sourcing raw materials, exporters serving overseas markets and consumers purchasing imported goods. Businesses are responding by searching for alternative routes and ports, but these solutions often come with their own constraints. Diversions through secondary ports may reduce immediate security risks, yet they frequently involve additional overland transport, customs complexities and capacity limitations. In many cases, avoiding one bottleneck simply creates another. What emerges is not a replacement for established trade corridors but a more expensive and less predictable logistics network.
Technology is increasingly becoming part of the response. Digital freight platforms and predictive analytics are helping businesses anticipate fluctuations in shipping rates and identify more efficient routing options before disruptions intensify. While technology cannot eliminate geopolitical risks, it can provide greater visibility in an environment where uncertainty has become the norm rather than the exception.
The challenges also expose a broader shift in the economics of global shipping. Rates on lanes that never touch Hormuz or the Red Sea are climbing just as sharply. The root cause is that capacity has been vacuumed out of the global pool. Carriers naturally deploy their vessels where returns are highest. During periods of disruption, premium long-haul routes often receive priority, leaving secondary trade corridors with fewer sailings and tighter capacity. As a result, freight costs can increase even on routes that are geographically distant from the original conflict. Over the past 90 days, XBL's data shows shipping from Yantian to Nhava Sheva up almost 68%, Qingdao to Nhava Sheva up 61%, Ningbo to Nhava Sheva up 63%, and Shanghai to Mundra up nearly 60%. Even European routes like Antwerp to Nhava Sheva and Hamburg to Mundra are up almost 30%. This explains why disruptions in West Asia or the Red Sea often translate into higher shipping costs across Asia and even Europe. With the Red Sea still classified as unsafe, ships that once cut through Suez and Bab el-Mandeb now sail the long way around the Cape of Good Hope. That adds roughly 10–14 days per voyage, which means each ship completes fewer round-trips a year. The industry estimate is that this alone removes about 5–7% of effective global container capacity — on the order of 1.3 to 1.8 million TEU.
These developments suggest that the era of optimising supply chains solely for efficiency is giving way to one where resilience commands equal importance. For decades, businesses focused on reducing inventories, minimising costs and relying on just-in-time deliveries. Governments, too, are reassessing their priorities. Investments in port infrastructure, multimodal transport corridors and trade partnerships are increasingly viewed through the lens of economic security rather than merely commercial expansion. Countries are recognising that dependable logistics networks are strategic assets capable of sustaining growth during periods of global uncertainty. Building domestic manufacturing capacity is only part of the equation; ensuring reliable access to international markets is equally essential.
For India, this moment presents both a challenge and an opportunity. Higher logistics costs undoubtedly place pressure on exporters and import-dependent industries, but they also reinforce the importance of strengthening maritime infrastructure, improving port efficiency and expanding connectivity with alternative trade corridors. Initiatives aimed at enhancing logistics competitiveness may prove just as valuable as traditional industrial policies in supporting long-term economic growth.
The broader lesson is clear. In an increasingly interconnected world, economic resilience depends not only on what nations produce but also on how reliably those goods can reach global markets. Trade routes have become strategic assets, vulnerable to conflicts unfolding thousands of kilometres away. As geopolitical tensions continue to shape commercial decisions, the ability to secure, diversify and adapt supply chains will become one of the defining economic challenges of the decade. The future of globalisation may, therefore, depend less on the volume of trade and more on the resilience of the routes that make it possible.
(The views expressed are personal)
This article is authored by Uddhav Kumar, founder, Lynkit.
