Impacts on PortMiami of Iran attacks slow to assess

Nearly one month after the United States and Israel launched strikes on Iran, South Florida has experienced minimal impacts on trade and operations have not been disrupted, according to PortMiami. The chief strategy officer of a third-party logistics company says otherwise.

The conflict began Feb. 28, when Israel and the U.S. targeted multiple sites and cities across Iran in a coordinated operation that included strikes that killed Supreme Leader Ali Khamenei. These attacks have contributed to rising gas and oil prices, meaning prices for transport fuels have also been affected. In addition, industries tied to petrochemicals, such as plastics and fertilizers, are being impacted.

“It’s actually really having some repercussions on trade,” said Gary Goldfarb, the chief strategy officer of Interport Logistics. “Cargo ships are rerouting Far East cargo, not only the Gulf, you know, Arabian Gulf or the Strait of Hormuz, it’s everywhere… Trade has to avoid that whole area, but also, I just heard, like half an hour ago, some of the steamship companies are having a difficult time getting bunker fuel for their vessels to come into the United States. Once they’re here, they can get it, but to come here, they’re not getting fuel; it’s going to make it really complicated.”

Mr. Goldfarb added that the delays and the increased costs that result from them are “very disruptive.”

“Well, the rerouting of ships causes delays, so if you were planning on having something here for April and now it’s coming late April, it may be a problem, right?” he said. “The airlines are full because since cargo isn’t moving as predictable anymore – ocean freight is very predictable, so if you look at ocean freight, it’s very predictable… they can almost go out an entire year and hit it with about 95% accuracy until something like this happens, and then everything gets fractured. So delays on delivery, delays on arrivals, and then airlines, cargo airlines, start to pick up the slack, which is what’s happening now, but in picking up the slack, it also raises the costs, so it’s very disruptive. That’s not an opinion as to whether it’s necessary or not, but it’s very disruptive.”

The Interport Logistics team announced in an email to its partners that general rate increases are expected to take place starting next month. The email says that these adjustments are being driven by rising fuel costs, geopolitical developments affecting vessel routing and transit times along with current market conditions and carrier capacity management.

Additionally, shippers may begin to see fuel-related surcharges added to freight quotations, rate adjustments on existing bookings depending on carrier policies, increased volatility in freight pricing across global trade lanes, and potential routing adjustments if carriers modify services in response to regional risks, the announcement said.

“I think we need to all be patient in letting this blow over, and yes, we are going to have missed shipments,” Mr. Goldfarb said. “We are going to have cargo that didn’t show up at PortMiami. PortMiami’s budget for April may not be met because the ships didn’t show up… It’s a temporary necessity, but we’re going to have difficulty the next five, 10 days.”

However, PortMiami Director and CEO Hydi Webb said the port has “not felt much of an impact with that trade pattern” at this point and no services have been canceled.

“There’s been no disruption to our operations because of what’s going on, and we do have one service that did change its route due to not being able to go through the Strait,” she said. “So instead of going to the Suez Canal, it’s being rerouted through the Cape of Good Hope around Africa, but the service is still coming, and we, fortunately, haven’t seen a large impact as of yet.”

She added that Miami’s diversified trade pattern has helped cushion the blow, but whether the situation worsens over time “remains to be seen for all of us.”

“By all means we are not immune to any geopolitical situation,” Ms. Webb said, “but we can help weather the storm somewhat a little bit better with [a] diversified trade pattern.”

Mr. Goldfarb anticipates global shipping and trading conditions will improve with time.

“Once this is over, and I think one or two more weeks of this, and then this is over – for South Florida, trade with the Middle East is going to explode,” he said. “We are the trading partner for a lot of companies in Dubai and the UAE and in Doha and Qatar and the different places. And then once the water is calm, we’re going to be pivotal. [The] South Florida logistics community is going to be pivotal in pretty much all the new trade that’s going to come because of peace and because of open markets, but, yeah, it’s going to get worse before it gets better.”

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