May 8, 2026

Supply Chain & Logistics Update – May 2026

Middle East Conflict Disrupts Renewable Energy Supply Chains

The Middle East conflict is no longer only affecting oil and gas markets. It is now creating direct pressure on renewable energy supply chains by disrupting the movement of critical materials through the Strait of Hormuz. The blockage has limited shipments of key clean-energy inputs such as aluminum, copper, helium and sulfuric acid, all of which are essential for solar panels, wind turbines, battery storage systems, and wider power infrastructure.

Aluminum and Copper Supply Pressure

Aluminum supply is under pressure due to its heavy use in renewable energy systems. The GCC produced 8.3% of global aluminum in 2025, with up to 5 million metric tons at risk after smelter damage in Abu Dhabi and Bahrain, pushing prices up 17.9%. Copper faces similar strain, while tariffs on Chinese aluminum increase risks for US and European buyers.

Battery and Petrochemical Risks

Battery supply chains are increasingly vulnerable due to disruptions in critical inputs. Sulfuric acid affects the processing of copper, nickel, and lithium, while materials like ethylene, polypropylene, and PVDF are essential for electrolytes, binders, and separators. Growing shortages could slow or halt battery production as demand rises across power, transport, and industrial sectors.

Helium and Semiconductor Concerns

Qatar supplies around one-third of global helium, but output is expected to drop 14% after damage to the Ras Laffan facility. Helium is critical for semiconductor production used in renewables, battery storage, EVs, and AI systems. Reduced supply could tighten chip availability and delay equipment manufacturing.

Planning Ahead

While impacts may not be immediate, rising costs could delay projects and extend timelines. Higher energy prices may boost solar competitiveness. Companies should monitor material supply, assess supplier risks, explore alternatives, and consider substitutes like steel frames to reduce exposure.

May 2026 Ocean Freight Market Outlook

Key
++	Strong Increase
+	Moderate Increase
=	No Change
–	Moderate Decline
—	Strong Decline

Outbound

Middle East – Asia

Middle East conflict and restricted Persian Gulf conditions are reducing routing flexibility, delaying vessels, and sidelining capacity. Costs are rising due to longer routings, fuel-related surcharges, and war-risk charges.

Capacity – (-)
Rate – (+)

Middle East – Europe

European ocean operations face disruption from Middle East tensions, Rotterdam vessel delays, weather impacts, high yard density, and Western Mediterranean congestion caused by severe weather and terminal closures. Customers are being asked to collect import units quickly after discharge to prevent further yard congestion.

Capacity – (-)
Rate – (+)

Middle East – Latin America

Ocean operations across Latin America remain mostly stable, although some port delays continue. Paranagua and Itapoa are facing 4 to 7 day delays, while Santos BTP and Buenos Aires are seeing 1 to 3 day vessel delays.

Capacity – (=)
Rate – (=)

Inbound

Asia – Middle East

Asia outbound lanes are affected by Suez rerouting via the Cape of Good Hope, adding 10 to 14 days to Asia-Europe and Asia-USEC transit times. This is absorbing vessel capacity, extending equipment cycles, and making space less predictable. Rates are facing upward pressure from fuel-related surcharges, GRIs, and cost variability.

Capacity – (-)
Rate – (+)

Europe – Middle East

For outbound Europe ocean, the market mainly highlights wider service disruption rather than a specific Middle East lane impact. Western Mediterranean congestion has led carriers to implement contingency port omissions on some services to restore schedule reliability. Easter holidays may also limit terminal labor, especially in Germany.

Capacity – (-)
Rate – (+)

Latin America – Middle East

ECSA to Intra-Americas has service updates, including TANGO seasonal Montevideo calls and ECSA Shuttle bi-weekly calls in Paranagua and Santos. No clear capacity increase or rate change is stated, so overall market conditions remain stable.

Capacity – (=)
Rate – (=)

May 2026 Air Freight Update

Demand: Demand remains moderate and steady, with market pressure driven more by operational disruption than by a major demand surge. Some short-term shipment pull-forward occurred because of tariff changes and may rate increases, but overall demand remains measured.

Capacity: Capacity is tightening and becoming less predictable. While space is still available, blank sailings, service changes, Middle East rerouting, longer transit times, and equipment cycle delays are making uplift less consistent. Around 15% of major East-West sailings were blanked from early February to early March, with similar levels continuing into April.

News: Middle East disruption continues to affect air freight networks by limiting routing flexibility across Asia, Europe, and Indian Subcontinent lanes. Longer flight paths are increasing fuel use, operating costs, and effective capacity pressure, while alternative gateways and multimodal options are becoming more important.

The Middle East and Air Carriers

Middle East airspace restrictions are reducing routing flexibility across Asia, Europe, and Indian Subcontinent lanes. Flights are being diverted through longer routes, adding 1 to 3 hours to some journeys. This is increasing fuel consumption and operating costs while reducing effective capacity across key air freight corridors.

Asia

Asia-origin demand has normalized after Lunar New Year, but late-March quarter-end spillover tightened space in early April. Some lanes may see 5 to 7 day lead times as operations adjust to schedule changes and rerouting. Asia-Europe rates rose in the high teens to mid-20% range, mainly due to higher fuel costs and operational inefficiencies linked to longer routing.

America

Trans-Atlantic Europe to North America air freight remains balanced, supported by passenger belly capacity and softer European manufacturing demand. Base rates are relatively stable, but rising fuel surcharges are increasing total transportation costs.

In Latin America, supply chains are becoming more digital and data-driven. Companies are using ERP, WMS, TMS, automation, digital twins, and AI to improve visibility, planning, routing, and disruption response. This is supporting faster and more resilient freight operations, including air freight.

Europe

Asia-Europe air freight remains under pressure as Middle East disruption restricts key transit corridors. Around one-third of normal Asia-Europe air capacity usually routes through the Middle East, so available uplift has reduced and operations have become less predictable. Carriers are offering alternative air and multimodal routes through non-Gulf gateways, including Muscat, Salalah, Colombo, Oman, and Gulf land bridge options.

May 2026 Shipping Insights for the UAE

Terminal handling charges for Southern Africa, effective 1st June 2026, with specific OHC and DHC rates. Read more

Weight Discrepancy Fee timeline update, effective 7th May 2026, with pre-notification alerts before billing. Read more

Dry Port Surcharge for India exports via Bengaluru, effective April-May 2026, with specific DPS rates. Read More

Emergency Contingency Surcharge for Indian Subcontinent to West Coast Latin America, effective 10th May and 23rd May 2026, with ECS rates from USD 1,000 to 1,400. Read More

Peak Season Surcharge for Japan and South Korea to Kenya, effective 1st May 2026, with USD 300 rates for 40’ dry, 45’ dry, and 40’ reefer non-SPOT bookings. Read More

Inland Charges and Peak Season Surcharge updates for Kenya, Tanzania, Indian Subcontinent, and Middle East trades, effective April 2026, with revised rates and price-date rules. Read more

PAI surcharge introduced for Sohar Free Zone imports, and RHI surcharge added for Senegal imports, effective May 2026, with latest rate updates available by region. Read more

Global Factory Output – Overview

United States of America (USA)

US manufacturing jump was driven less by genuine demand and more by firms rushing to buy and build stocks before further price rises and supply shortages. Larger companies led to the boost in shipments, orders, and production. However, jobs fell, costs rose, selling prices increased, and the improvement may fade once stockpiling slows.

United Kingdom (UK)

May UK manufacturing growth recovered, with PMI near a four-year high as output, new orders, and hiring improved. However, Strait of Hormuz disruptions caused major delivery delays, shortages, and sharp cost inflation. Growth may weaken later as early buying fades.

China

China’s manufacturing PMI rose to 52.2 in April, its highest since 2021, showing clear expansion. Production, new orders, exports, prices, and inventories improved, but employment fell back into contraction. The recovery remains supply-led, with weak household balance sheets and lagging consumption limiting broader growth.

United Arab Emirates (UAE)

The UAE non-oil private sector slowed in March due to Middle East war impacts, especially in tourism, retail, logistics, Dubai supply chains. Orders and output stayed resilient, but sharp input costs drove the fastest selling-price rise in over 11 years. Uncertainty rose, though backlogs, tech demand, and fiscal plans support future sales.

Deep Dive into Road Transportation within UAE and Across GCC

Byadmin June 4, 2026 Article

Road Transportation in UAE plays a major role in moving goods efficiently across cities, ports, borders, and GCC countries. Road freight refers to the movement of cargo through trucks and commercial...