Core Insights - The ongoing conflict between Israel and Iran has led to significant increases in shipping costs and a shift in shipping routes, with companies advised to prepare for potential escalations in the situation [1][3][7] Shipping Costs and Insurance - Shipping fees for oil tankers from the Middle East to China surged by 24% to $1.67 per barrel on the day the conflict began, marking the largest single-day increase of the year [3] - Insurance rates for vessels are expected to rise due to perceived risks, although they have remained stable since the conflict began [3][7] - Analysts predict that transportation disruptions and port congestion will lead to further increases in shipping container fees, with carriers potentially imposing "safety surcharges" [3][4] Route Changes and Safety Concerns - Many shipping companies are avoiding the Strait of Hormuz and the Red Sea due to heightened tensions, with reports indicating a significant number of vessels opting for alternative routes [4][5] - The Strait of Hormuz is a critical chokepoint for global oil transport, with an average of 20% of the world's oil passing through it, making any disruption potentially impactful on global energy prices [5][6] - The shipping industry has been cautious in the Red Sea even before the current conflict, with a notable decrease in traffic through the Suez Canal [6][7] Industry Recommendations - Various industry organizations are urging shipping companies to develop contingency plans and reassess routes in light of the escalating conflict [7][8] - Companies are advised to evaluate the affiliations of their vessels, particularly those with past connections to Israel, as they may be at higher risk [7] - The U.S.-led Joint Maritime Information Center has recommended that shipping companies review their routes and prepare emergency response plans [7]