How garment makers can manage the Middle East logistics shock

Bangladesh’s garment exporters are facing a fresh logistics shock as the escalating Iran crisis is now leading to operational restrictions by ocean carriers and airlines. On March 3, Denmark’s shipping and logistics company Maersk confirmed it has suspended all new bookings between the Indian subcontinent, including Bangladesh and the Upper Gulf markets, with immediate effect, citing the “evolving situation” in the Middle East. The suspension covers the UAE, Bahrain, Qatar, Iraq, Kuwait, and Saudi Arabia’s Dammam and Jubail.

This move is one of the clearest signs yet that the crisis is now disrupting commercial cargo flows, not just raising risk premiums. At the same time, shipping and insurance markets are reacting to rising threats around the Strait of Hormuz after Iran issued warnings to vessels and multiple ships reported damage in the wider area. Reuters said at least 150 ships were stranded around the strait till Monday, while major marine insurers moved to cancel war risk cover effective from March 5 in parts of the Gulf. This is sharply pushing logistics costs higher.

For Bangladesh’s exporters, the crisis splits into two problems. The first is the disruption to direct trade to Gulf destinations, including the UAE, which functions as both a consumer market and a regional distribution hub for apparel. The second is a wider network disruption. Even if a shipment is bound for Europe or North America, carrier rerouting, higher fuel costs, reduced schedule reliability, and container equipment imbalances can still feed into longer lead times and higher costs.

I believe Maersk’s wording is important. It is suspending “new bookings” for the corridor, which means exporters may still be moving previously accepted cargo, but with a higher risk of delays and schedule changes as networks adjust. Maersk also separately flagged restrictions on certain cargo types, including “reefer, dangerous or special cargo acceptance” in and out of multiple Gulf countries, which might affect garment accessory supply chains. Exporters selling into the Gulf should assume that even when a carrier continues to “accept cargo,” space may be limited, routing may change at short notice, and surcharges can be introduced with little notice.

However, Bangladesh’s biggest apparel volumes head to Europe and the US, not the Gulf. And the Iran crisis arrives amid an already fragile Red Sea. Container lines had been tentatively assessing a return to the Suez Canal corridor, but new security concerns are pushing carriers back towards longer routings around the Cape of Good Hope. The Wall Street Journal says the Middle East crisis has significantly delayed the return of container shipping to Suez, reinforcing the industry shift back to diversions around Africa. In practice, that means longer and less predictable transits between Asia and Europe.

For Bangladesh, exporters should plan for possible delays, even where the scheduled transit time is unchanged. When ocean schedules become volatile, brands often push urgent top-ups by air or at least move samples and approvals by air. But air is also being hit. Widespread regional airspace disruption is reported, with key hubs including Dubai and Doha affected, and airlines resuming only limited operations, including select cargo and moving flights. Bangladeshi exporters that route urgent cargo through Gulf hubs should not assume air capacity is available at normal notice periods or normal prices. Where air freight is unavoidable, exporters may need to secure uplift earlier, accept longer routings, or use alternative hubs outside the most disrupted air corridors.

The crisis is also feeding directly into shipping costs via insurance and security surcharges. Reports suggest war risk insurance is being withdrawn or repriced rapidly, and we are seeing sharp increases in premiums within days as risk assessments change. There are also concerning reports of major insurers cancelling war risk cover in the Gulf starting March 5, with freight rates on some lanes jumping sharply over the weekend. Separately, rising oil prices are critical for apparel logistics because bunker costs tend to flow through into carrier fuel mechanisms.

The combined effect is that Bangladeshi exporters may face both higher freight bills and a higher probability of “unplanned” cost items appearing after contracts are signed, including emergency surcharges and insurance-related fees. While our garment exporters cannot control geopolitics, they can prepare and communicate. The most practical response is to treat the next few weeks as a lead time management exercise.

Exporters can start with mapping exposure by shipping lane rather than by customer. If they supply the Gulf directly, they should identify which orders are on the Maersk-affected corridor, which are already gated in, and which are still in production. They would also be wise to assume that new bookings to the listed Upper Gulf markets may need alternative carriers, alternative routings, or revised delivery dates.

As for shipping to Europe, buyers will still judge manufacturers on whether orders arrive on time. But right now, the bigger problem is that shipping times are unpredictable. Manufacturers should allow extra time between finishing production and booking the shipment, especially for ranges where a two- to three-week delay would cause real commercial damage. If the schedule is already tight, manufacturers should start producing the most time-critical styles first, so they are ready earlier. Manufacturers should also talk to their forwarder and carrier representative now, even if they are not shipping this week. They should ask which services are being rerouted, which transhipment hubs are under pressure, and where equipment shortages may emerge. Where possible, they should lock space earlier than usual and confirm cut-off times in writing.

They may also need to revisit commercial terms for surcharges. Some exporters will be able to pass certain surcharges through to the buyer under contract terms. Others will not. Either way, they should get clarity early and document what is agreed. If unsure, take legal advice before relying on force majeure or similar clauses. Many problems arise because buyers hear about delays too late. Manufacturers should update buyers early with a clear explanation that this is a fast-moving security and logistics issue, and that carriers are already restricting bookings on certain Middle East corridors.

The shipping industry is reacting in real time. When insurers change cover terms, carriers often respond immediately with new safety rules, booking restrictions, or surcharges. What we are now seeing is how quickly those decisions can hit Bangladesh directly, even when Dhaka is not at the centre of the conflict.

The key point for buyers and manufacturers is that you can’t plan logistics around one “normal” route right now. Both parties should plan for different outcomes instead, and should also expect occasional restrictions, last-minute changes in space and services, and ongoing swings in insurance and fuel costs until the situation calms down.

Mostafiz Uddin is the managing director of Denim Expert Limited. He is also the founder and CEO of Bangladesh Denim Expo and Bangladesh Apparel Exchange (BAE).

Views expressed in this article are the author's own. 

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