As instability in the Middle East persists—with renewed tensions in the Strait of Hormuz following the U.S.-Iran military clash and the Houthi rebels' declaration of a Red Sea blockade—KOTRA is making all-out efforts to secure sea routes for Korean exporters.
According to KOTRA on the 26th, conditions at alternative ports have been changing rapidly this month due to the breakdown of the ceasefire and attacks on oil tankers. As of the 24th, Khorfakkan Port in the United Arab Emirates (UAE), the closest to the Strait of Hormuz, continues to face navigation risks such as suspensions and restrictions on special cargo transport due to fears of attack. War-risk insurance premiums are being raised again, and shipping companies are also signaling freight rate increases.
The shipping industry expects the recovery of export logistics to be further delayed from the originally anticipated mid-September, considering that transit through Hormuz will remain limited and sporadic for the time being. Alternative ports such as Sohar and Salalah are absorbing Khorfakkan Port's demand as well, resulting in waiting times of two to three weeks. KOTRA said, "Even after Hormuz normalizes, it will take more than six months to clear the accumulated backlog and return to normal," adding, "If tensions expand in the Red Sea area, additional disruptions will be unavoidable."
Before the Middle East war, there were three main sea routes from Korea to the Middle East: entering eastern Arabian Peninsula ports (ports in Dubai, Qatar, and Bahrain) via the Arabian Sea and the Strait of Hormuz; entering western Arabian Peninsula ports (such as Jeddah) via the Arabian Sea and the Bab el-Mandeb Strait (limited due to Houthi rebel activity); and passing through the Cape of Good Hope, the Mediterranean Sea, and the Suez Canal.
KOTRA is expanding alternative port information available to exporters and export logistics support programs for each detour route. Using its 13 trade offices, it monitors the operation of 24 Middle East ports and alternative logistics route conditions, distributing daily updates on the "Normal Operation Status of Major GCC (Gulf Cooperation Council) Ports" and "Logistics Routes by Alternative Port" through its website and the "Middle East War Emergency Response Consultation Desk."
KOTRA is also providing support through an overseas joint logistics center program for firms affected by the Middle East war, funded by a supplementary budget. The overseas joint logistics center program supports local logistics costs incurred after arrival at local ports, such as warehouse storage fees, customs clearance costs, and inland transport costs. In particular, the scope of inland transport support has been expanded from movement within a single country's borders to cross-border land transport among the six GCC nations, and applications are now being accepted on a continuous basis.
Firms already using export vouchers can also receive concurrent support from the joint logistics center. International shipping costs from departure in Korea to arrival at the destination can be supported through emergency support vouchers (up to 60 million won including return costs), while inland transport costs incurred after arrival at local ports (up to 24 million won) can be supported through the joint logistics center. In addition, firms can receive discount and quotation services, on-site logistics optimization consulting, and problem resolution by utilizing the export logistics collaboration network operated by KOTRA (EMS, DHL, Samsung SDS, Taewoong Logistics, and others).
Of the 1,088 consultation cases received at the Middle East War Emergency Response Consultation Desk from March 3 to July 21, 215 cases (20%) were confirmed to be logistics-related concerns. These include surging inland transport costs from the use of waiting ports and detour routes, unexpected logistics costs from cargo returns or prolonged local delays, and difficulties in handling cargo due to a lack of local logistics information.
KOTRA President Kang Kyung-sung emphasized, "Amid the rapidly changing Middle East situation, logistics is a matter directly tied to whether exports are possible and to costs for exporting firms," adding, "We will utilize our Middle East trade offices to flexibly expand local export logistics information and support programs, and do our utmost to ensure that companies can receive support and optimization benefits in terms of both cost and time."
