Overview
- US and Israeli strikes on Iran in February triggered a Gulf shipping crunch that left hundreds of cars stuck at sea and even high-end models bound for Dubai without a clear path.
- One shipment of more than 500 vehicles was offloaded in Sri Lanka’s Hambantota port after a delay of over 10 days, while other vessels paused near Mumbai or discharged cargo in China.
- Shipping lines reacted to port congestion by canceling sailings, proposing diversions to Pakistan or China, and seeking deposits of about $5,000 per car from traders.
- In South Korea, activity at Incheon storage yards slumped as more than 70% of Middle East-bound cars sat in storage and dealers absorbed mounting monthly parking costs.
- Japan and South Korea shipped about $19 billion in used cars last year and the UAE is Japan’s top market, which heightens the risk as peak demand from March to September collides with rising freight rates and route uncertainty.