Strait of Hormuz, Surging Costs, and Why Disruption Is Now Permanent
Supply Chain Unchained
A former Hamburg Sud executive breaks down the Gulf conflict, what it means for freight rates and surcharges, and why the smart move right now is to stop panicking and start planning.
The Strait of Hormuz is effectively closed. Bunker adjustment factors are moving fortnightly instead of monthly. Schedule reliability sits at around 30% globally. And the excess vessel capacity that was meant to soften the market in 2025 is now locked up until at least 2027.
In this episode, Greg sits down with Peter Creeden of MPC International, a former Hamburg Sud executive turned strategic advisor and university lecturer, to unpack what is actually happening in the freight market right now, why the current disruption is different from anything since the 1970s oil crisis, and what supply chain managers should be doing about it this week.
What We Cover
- How carriers and importers think about ocean freight differently, and why understanding that gap makes you a better supply chain manager
- Why the first and last 40 kilometres of any shipment are where most supply chain problems actually occur
- What happened at TPM26 when the Gulf conflict escalated, and how the shipping lines shifted from defensive to commercially aggressive overnight
- How bunker adjustment factors work, what an emergency bunker surcharge is, and why MSC has issued a $300 GRI across all trades
- Why annual contract negotiations at TPM collapsed to 3-month terms almost instantly
- The landside impact: diesel heading toward $4.50 per litre, trucking companies under severe margin pressure, and why your domestic transport partners may be the biggest risk in your chain right now
- Why 3 million containers are currently tied up in the Gulf, and what that means for equipment availability and port congestion globally
- The practical playbook for supply chain managers right now: know your contracts, know your partners, add 4 days to every transit time, and think ahead
- Why the consolidation already underway (Hapag-Lloyd and ZIM, DSV and DB Schenker) may accelerate as smaller carriers struggle
- The modern slavery law and scope 3 reporting requirements that now force companies to know seven layers of their supply chain
- The Liner Game, a simulation tool Peter co-created to help supply chain professionals understand how shipping lines actually think and make decisions
Guest
Peter Creeden
Founder, MPC International
Former Hamburg Sud executive (US, Europe, Australia/New Zealand). Lecturer, University of Sydney and Australian Maritime College. Co-creator, The Liner Game (linergame.com)
“The navigator’s rule: you need to know where you are before you know where you’re going. Before you make any decisions about which direction to run, assess your situation, be prepared, then plan the course of action.”
Peter Creeden, Founder, MPC International
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