Full Closure of The Strait of Hormuz Delivers A Severe Blow To The Cross-border Shipping System for Large Pile Foundation Components

Iran officially announced the complete closure of the Strait of Hormuz, prohibiting all vessels from passing through and targeting non compliant vessels, completely cutting off the Persian Gulf's main shipping channel to the outside world. As the core throat of cross-border shipping between Asia, Europe, and Central Africa, the comprehensive closure of the strait directly disrupts the global order of large-scale logistics, and has a strong impact on the ocean transportation, cost control, delivery timeliness, and route layout of non dismantling and high-value over limit pile foundation equipment such as rotary drilling rigs and pile drivers.

The main air routes are completely paralyzed, and the delivery cycle of large equipment is significantly delayed

The Strait of Hormuz is a necessary passage for the export of domestically produced pile foundation equipment to the Middle East, Africa, and southern Europe. After the comprehensive closure of the strait, all heavy lift ships and semi submersible ships cannot pass through normally. Logistics companies were forced to abandon the plan of direct ocean flights and instead detour around the Cape of Good Hope in Africa, resulting in an overall increase of nearly 40% in the distance and an extension of 10 to 14 days for one-way transportation. Rotary drilling rigs and pile drivers are mostly transported as complete machines by ship, which cannot be quickly separated and diverted. The originally stable monthly delivery rhythm has been completely disrupted, and the arrival of pile foundation equipment for overseas infrastructure projects lags behind, directly leading to work stoppages and delays in overseas construction sites, and a significant increase in cross-border performance risks.

Shipping costs have skyrocketed across the board, and the profit margin of equipment foreign trade continues to shrink

The closure of the strait and the high-risk geopolitical situation in the Middle East have led to multiple surges in shipping costs. On the one hand, the voyage caused by the detour has been prolonged, which has greatly increased the cost of fuel, labor and shipping schedule for large ships; On the other hand, the risk of regional wars has skyrocketed, with shipping war insurance rates for large equipment skyrocketing from conventional levels, and insurance costs for high-value pile foundation equipment skyrocketing. Under the superposition of multiple costs, the cross-border sea freight unit price of rotary drilling rigs and pile drivers has significantly increased. Foreign trade enterprises of construction machinery are unable to quickly transfer costs, and the terminal profit space is continuously squeezed. The operating pressure on small and medium-sized export enterprises has sharply increased.

Gulf ports are experiencing comprehensive congestion, leading to a sharp decline in the turnover efficiency of heavy lifting operations

Before the closure of the Strait of Hormuz, a large number of ships carrying engineering equipment were stranded in the Persian Gulf waters, causing severe congestion and operational stagnation in ports along the Gulf. Rotary drilling rigs and pile drivers are oversized and have complex lifting processes, requiring far more space and equipment resources for berthing, loading and unloading, and storage than ordinary goods. They are prioritized for delay and detention after port congestion. During the period of equipment detention in port, high storage fees, demurrage fees, and security costs are incurred. At the same time, long-term detention can easily cause wear and tear on the equipment paint surface, damage to precision components due to moisture, and increase the cost of equipment maintenance and the risk of cargo damage.

The restructuring of airline routes and the acceleration of large-scale logistics towards diversified risk avoidance channels

The paralysis of a single shipping channel has forced the industry to restructure its large-scale logistics layout and completely break away from its dependence on the Middle East throat waterway. For rotary drilling rigs and pile drivers exported to Europe and Central Asia, the company has fully switched to land multimodal transport channels such as the China Europe freight train and the Trans Caspian International Corridor, and avoided maritime risks through modular transportation of equipment. At the same time, logistics companies should prioritize locking in alternative transit ports in Southeast Asia and North Africa, adjust the layout of ocean routes, and use a multi-channel diversion mode to hedge the supply chain crisis caused by the strait blockade, ensuring the basic stability of cross-border transportation of pile foundation equipment.