Executive Summary

Recent U.S.-Iran conflicts have significantly impacted the cold storage and cold chain industry through three primary channels: disrupted maritime logistics, soaring operational costs, and supply chain breakdowns.

Supply Chain Disruption: Suspension of Middle East Orders

The threat of a blockade at the Strait of Hormuz has prompted major global shipping lines (e.g., Maersk, MSC) to suspend or reroute services. This has not only cut off logistics channels but also paralyzed commercial activities in the region.

• Business Interruption: For instance, at the Tokyo International Food Exhibition in March 2026, scheduled Middle Eastern buyers canceled all visits due to security concerns. This led to the postponement or cancellation of substantial export orders for frozen foods, ice cream, and other temperature-sensitive products that were already prepared.

• Reduced Export Production: Due to shipment obstacles and order cancellations, China's export production of air conditioning units (which also rely on cold chain logistics) to the Middle East has been significantly scaled back. In March alone, production cuts exceeded 500,000 units. Foreign trade orders for key chemicals like refrigerants have also experienced similar downturns.

Cost Surge: The Double Squeeze of Freight and Raw Materials

Even for orders that remain active, skyrocketing logistics and raw material costs are placing immense pressure on businesses:

• Soaring Freight Costs: Ships are being rerouted around the Cape of Good Hope, adding 7–14 days to typical voyage times. Direct consequences include:

  • A 35.4% month-on-month increase in freight rates for the Persian Gulf route per standard container.

  • War risk surcharges of US$2,000–4,000 per container.

  • A staggering 300%–500% increase in war risk insurance premiums.

• Combined Cost Pressure: Extended transit times are devastating for perishable goods (e.g., chilled meat with a shelf life of only 15–25 days). New Zealand's chilled meat exports to Gulf countries are already facing spoilage risks. Concurrently, rising oil prices have pushed up the cost of raw materials (such as plastics) used in refrigeration equipment manufacturing. Overall production costs for home appliance exporters have risen by 20%–24%, causing many to refrain from accepting new export orders.

Direct Challenges for the Cold Storage Industry

Summarizing the above, the cold storage and broader cold chain sector faces the following specific difficulties:

• Declining Export Orders: Weakening import demand from the Middle East has directly hit Chinese exports of refrigeration equipment (e.g., air conditioners) and refrigerants.

• Soaring Operating Costs: Export freight, insurance, and production material costs have all increased, severely squeezing profit margins.

• Exacerbated Specific Risks:

  • Increased risk of cargo spoilage due to extended shipping times.

  • Acute shortages of refrigerated containers (reefers) . Reports indicate that shipping lines have begun to impose stricter booking restrictions on reefer units.

• Inventory Buildup Risk: Some Japanese food companies have reported that their products (e.g., ice cream) are stuck in warehouses, facing double pressure from mounting storage costs and approaching expiration dates.

Recommended Industry Response Strategies

In light of these challenges, affected companies may consider the following countermeasures:

• Optimize Supply Chain Layouts: Establish bonded forward-stocking warehouses at key Middle Eastern hubs (e.g., Jebel Ali Port in the UAE) to convert the "uncertainty of maritime shipping" into the "advantage of localized spot inventory."

• Lock in Long-Term Contracts: Adopt more long-term freight contracts to stabilize costs and reduce reliance on volatile spot freight rates.

• Maintain Emergency Contingency Plans: Develop flexible route planning and maintain regional cold-chain warehousing reserves to prepare for potential interruptions at critical chokepoints like the Strait of Hormuz.