Years later chaos in the global supply chain, Ryan Petersen, CEO of a logistics company Flexportbelieves that 2026 can provide a modicum of order. The pandemic was firmly in the rearview mirror. Shipping channels in the Red Sea, which had been closed due to the Gaza crisis, have finally been opened. Supreme Court knocked down many of Donald Trump’s tariffs, and some Flexport customers were hoping for a refund. Petersen was finally able to focus on what he considered the company’s most vital step this year – applying the latest artificial intelligence technologies to raise Flexport’s efficiency.
The United States and Israel then went to war with Iran. Chaos has returned and it will cost us everything.
I spoke with Petersen this week to get a sense of just how bad the global supply chain situation is and what it means for Flexport’s business.
While the war in Iran has wreaked havoc on Flexport’s customers, it is also a chance for the company to prove its worth. After all, its business is based on routing and tracking goods using cloud technology, improvising when necessary to get the goods to their destination. These are indispensable skills when the Strait of Hormuz is threatening – several ships they were attacked there this week, and major ports in the Middle East are under fire.
Port countries such as Kuwait, Qatar and the United Arab Emirates are central hubs for goods in transit. One major shipping company told Petersen it would not load containers onto ships passing through some of the Middle East’s major ports. If the cruise is in progress, the container must be dropped off at the next port of call. “Now you, as an importer or cargo transportation company, suddenly have a container in France or Tangier and it’s up to you what to do with it,” says Petersen. The lack of action means that racks of cargo are subject to increasingly higher storage fees. Ultimately, all of these costs will be passed on to consumers.
Petersen told me that only recently have major shipping companies resumed shipping cargo through the Red Sea, which has been deemed a threat due to Houthi attacks. Now the situation has come to a standstill because of the war. The alternative route was a long detour around Africa. “This significantly increases the price because a cruise costs more, but more importantly it reduces supply: ships make fewer trips per year,” says Petersen. “There were many hopes that returning through the Red Sea would increase market capacity and lower prices, but that is now not an option.”
Petersen visualizes the situation for me by running a product called Atlasthat tracks the movement of container ships in real time. Coincidentally, Flexport released the Atlas two days before the war began. Petersen warned me that not all positions are precise, as many companies have turned off the transponders on their ships or even used high-tech methods to spoof locations to avoid attacks. Still, it’s clear that the Middle East movement is moribund. Petersen waves his cursor over a group of ships gathering around the United Arab Emirates’ port of Jebel Ali, which is located near the Strait of Hormuz. It looks like there was a traffic jam at the beginning La La Land. “These ships are stuck in this area,” he says. “Normally you wouldn’t see this many clusters here.”
This is not the worst, he adds. Flexport is not heavily involved in oil trading, but Petersen believes energy shortages will have a bigger negative impact than what’s in the containers stuck in Tangier. “The United States is self-sufficient, but there is not enough oil around the world to distribute it – there will be shortages, and then there will be crazy, parabolic price increases.”