What the Strait of Hormuz crisis means for your supply chain

Last Wednesday, a cargo ship carrying six containers of rice – about 240,000 pounds, roughly two million servings – was struck by an Iranian drone in the Strait of Hormuz. The rice was headed to the Daily Bread Food Bank in Toronto. The ship didn’t sink, but the food bank’s CEO still doesn’t know whether the containers survived.

That’s a supply chain story. And it’s the kind that’s about to hit a lot of small and mid-sized businesses that aren’t expecting it.

Since February 28, the Strait of Hormuz – the narrow waterway between Iran and Oman that carries roughly 20% of the world’s traded oil, a fifth of global LNG, a third of the world’s fertilizer exports, and 85% of Middle Eastern polyethylene – has been effectively closed to commercial shipping. Tanker traffic dropped to near zero within 48 hours. All major container carriers – Maersk, CMA CGM, MSC, Hapag-Lloyd, COSCO – suspended transits. Insurance was pulled. And the Houthis resumed attacks in the Red Sea at the same time, shutting down the alternative Suez Canal route that many carriers had only just returned to.

For the first time in modern history, both of the Middle East’s major maritime corridors are simultaneously blocked.

If you sell physical products, this matters, even if you don’t source from the Middle East or ship through Hormuz.

How the Strait of Hormuz closure is pushing up costs across global supply chains

The obvious impact is energy. Brent crude has swung between $80 and $120 per barrel since the strikes began, versus around $70 before the conflict. US gas prices have jumped from $2.94 to $3.60 per gallon. European natural gas futures briefly doubled. Goldman Sachs estimates that if oil stays at current levels for several months, US consumer price inflation could rise from 2.4% to 3%, which means the Federal Reserve is less likely to cut rates this year.

But oil is only the first domino.

Higher oil prices feed directly into freight rates, manufacturing costs, and the price of every product that contains plastic, rubber, or petrochemical-derived inputs. Container shipping surcharges are already stacking up: CMA CGM has imposed a $4,000 emergency surcharge per 40-foot container. Hapag-Lloyd added a $1,500 per TEU war risk surcharge. Air cargo capacity has dropped roughly 18% as airlines suspend flights through Gulf airspace, and air freight rates for time-sensitive goods have spiked by as much as 400% in some corridors.

Then there are the second-order effects most people haven’t thought about. Around a third of global fertilizer trade transits the Strait of Hormuz. Urea prices at the New Orleans hub have already risen from $475 to $680 per metric ton – right at the start of the Midwest planting season for soy and corn. If those shipments stay blocked, food inflation follows. Anyone whose product uses plastic packaging, anyone importing aluminum (18% of global iron ore pellet exports flow through Hormuz), anyone relying on petrochemical feedstocks – they’re all exposed.

And here’s the part that catches people off guard: the disruption doesn’t arrive all at once. Logistics experts say the initial ocean impact takes 10–14 days to appear, but the real pressure hits within 2–5 weeks as diverted containers arrive in clusters, terminal congestion rises, and empty container availability tightens across other markets – and that pressure is still building.

Supply chain purchasing data: how businesses are responding to the Hormuz crisis

Katana processes tens of thousands of purchase orders every week across our customer base. Our Kaizen Benchmark tracks this purchasing activity by industry in real time. And the data right now tells a story that should make some industries uncomfortable.

We compared average daily purchase orders created by industry in the weeks before the conflict (January 6 through February 27) versus the first two weeks after (March 1–15). Excluding weekends, this gives us a clean view of how purchasing behavior has shifted since the crisis began.

Some industries are clearly front-loading orders. Others are flat. And a few are actually declining – even though their supply chain exposure argues they shouldn’t be.

Purchase orders created: Average daily volume by industry

Source: Katana purchasing data. Business days only. Pre-conflict: Jan 6 – Feb 27, 2026. Post-conflict: Mar 1–15, 2026.

Industry	Pre-conflict	Post-conflict	Change	Signal
Furniture / Home / Garden	43.4	59.4	+37%	Front-loading
Plastics / Rubber & Packaging	9.7	12.5	+29%	Front-loading
Timber / Processed Wood	14.3	18.4	+29%	Front-loading
Apparel / Textiles	99.2	122.0	+23%	Front-loading
Construction Materials	79.0	97.0	+23%	Front-loading
Sporting / Toys / Office	42.8	50.4	+18%	Reacting
Chemicals / Fertilizers	23.2	26.6	+15%	Reacting
Computers / Electronics	83.6	91.5	+9%	Sluggish
Machinery / Vehicles	292.4	314.9	+8%	Sluggish
Cosmetics / Pharma / CBD	85.6	88.2	+3%	Not moving
Food / Beverage / Tobacco	180.5	183.5	+2%	Not moving
Sheet / Fabricated Metal	22.1	20.3	−8%	Declining
Paper / Printing	30.5	23.3	−24%	Declining

Which industries are front-loading – and which ones aren’t moving

Furniture and home goods businesses are the biggest movers – up 37% in daily PO volume since the conflict started. This makes sense when you think about what goes into furniture: imported hardwoods, metal hardware, fabric upholstery, foam cushioning (petrochemical-derived), adhesives, coatings. These businesses know their supply chains run deep into Asia and they’re acting on it.

Apparel and textiles are up 23% – confirming what we’d already seen in our platform data. These businesses are used to thinking in seasons and sourcing from China, Vietnam, the Philippines, and Bangladesh. Their raw materials – fabrics, dyes, threads, buttons, zippers – come from precisely the regions where shipping is now rerouted around the Cape of Good Hope, adding 10–15 days and significant cost. They saw it coming and they moved.

Plastics and packaging is up 29%, which is telling. These are businesses that understand their direct exposure to petrochemical feedstocks from the Middle East. Roughly 85% of polyethylene exports from the Gulf flow through Hormuz. They’re stocking up because they know prices are about to get worse.

Food and beverage is essentially flat – up just 2%. This is the industry where a ship carrying rice for a Toronto food bank was literally struck by a drone last week. Over 400,000 metric tons of Indian basmati rice are stuck at ports right now because of the conflict. A third of global fertilizer trade – which directly affects food production costs – transits through Hormuz. And yet food businesses on our platform are purchasing at almost exactly the same rate as before the crisis. That’s a gap between exposure and action.

Cosmetics and pharma is barely moving – up 3%. If you make skincare, supplements, or personal care products, your packaging is almost certainly petrochemical-derived. Many active ingredients in cosmetics – emollients, surfactants, preservatives – have petroleum-based origins. Shipping costs for anything coming from Asia are spiking. Yet purchasing behavior hasn’t changed.

Sheet and fabricated metal is actually down 8%. This one is hard to explain. Aluminum prices are already rising because 18% of global iron ore pellet exports and nearly 10% of global primary aluminum production flow through the Strait of Hormuz. Fabricated metal businesses should be locking in supply, not pulling back.

Paper and printing is down 24% – the sharpest decline of any industry. Paper production is energy-intensive and many specialty inputs are imported. With energy costs surging and shipping routes disrupted, a decline in purchasing is either strategic caution or a sign that these businesses haven’t connected the dots yet.

The tariff playbook worked. The Hormuz playbook hasn’t kicked in yet.

When US tariffs escalated in 2025, most product businesses reacted. It was obvious and direct: your costs were about to go up by a known percentage on imports from specific countries. The threat was legible. Businesses pulled orders forward, diversified suppliers, re-priced.

The Hormuz crisis is different because the causal chain is longer and less obvious. A military conflict in the Persian Gulf doesn’t feel like it should affect a skincare brand in Austin or a food manufacturer in Ohio. But it does.

The businesses that moved on tariffs were responding to a clear signal: a policy change with a date and a percentage. The Hormuz crisis doesn’t have a date. It doesn’t have a percentage. Analysts are modeling scenarios ranging from weeks to years. Supply chain planning, if you want to be responsible about it, should assume the disruption persists for at least 3–6 months and treat any earlier resolution as a positive surprise.

The furniture companies and apparel brands on our platform aren’t smarter than everyone else. They just have muscle memory from decades of navigating supply chain shocks. The question is whether cosmetics, food and beverage, and fabricated metal businesses develop that muscle before costs peak.

What product businesses should be doing right now

I’m not going to pretend this is simple. But after watching how our customers are responding – the ones who are ahead of this and the ones who aren’t – a few things stand out.

First: know where your stuff is. This sounds basic, but it’s the thing that separates businesses that react fast from businesses that find out too late. If you have a real-time view of your inventory across every location – what’s on hand, what’s in transit, what’s committed to orders – you can make decisions. If you’re running on spreadsheets and best guesses, you’re flying blind into a storm.

The value proposition in a crisis like this isn’t sophisticated forecasting. It’s visibility. It’s knowing that you have 14 weeks of packaging material at your warehouse in Pennsylvania but only 3 weeks at your fulfillment center in Texas. It’s seeing that your top supplier in Vietnam has three open POs that are now going to be late. It’s having the information to apply your best judgment to your decisions, because nobody – not you, not your supplier, not any software – can predict exactly what happens next.

Second: talk to your suppliers now, not when things get worse. If your supplier is routing shipments from Asia through the Strait of Hormuz or the Red Sea, those routes are closed. That means longer lead times via the Cape of Good Hope, or significantly more expensive air freight. Lock in what you can. Understand the new timelines. The businesses on our platform that are creating purchase orders right now are making a deliberate choice: they’d rather hold slightly more inventory than get caught short.

Third: look at your bill of materials for hidden exposure. You might not import directly from the Middle East, but your suppliers might. Petrochemical inputs are in everything: packaging, adhesives, synthetic fabrics, coatings. Ask your suppliers where their raw materials come from. Trace the chain at least one level deeper than you normally would.

Fourth: re-examine your lead times. Whatever lead times you’ve been using for the past year, they’re probably wrong now. Rerouting around the Cape of Good Hope adds 10–15 days to Asia-Europe voyages. Port congestion from diverted vessels adds more. And if you’re ordering from a region where energy costs have spiked, your supplier may be slower too.

Where this is heading: the case for an AI-powered supply chain brain

There’s a bigger idea here that I want to plant, even though it’s not something most SMBs can act on today.

Right now, when a crisis like Hormuz hits, the best thing a business owner can do is look at their data and apply judgment. That’s what our furniture and apparel customers are doing. They see the signal, they understand their exposure, and they move.

But what about the food and beverage businesses that haven’t connected the Strait of Hormuz to their ingredient costs? Or the cosmetics brands that don’t realize their packaging supplier’s feedstock comes from the Gulf? Or the metal fabricators who haven’t adjusted their lead times because they didn’t know their containers were being rerouted around Africa?

This is where AI replenishment will eventually become transformative for SMBs. Running reorder point calculations or forecasting seasonal demand is already the baseline – the bigger opportunity is connecting external signals to internal decisions. Imagine a system that says: “I see the Strait of Hormuz is blocked. Your top three suppliers ship from India and Vietnam via routes that transit through it. Based on current rerouting, your lead times should increase by approximately 15 days. I recommend increasing your safety stock for these 12 SKUs and placing your Q3 orders two weeks earlier than planned.”

That’s not science fiction. The data exists. The shipping data, the geopolitical signals, the commodity price feeds, the individual business’s supplier and inventory data – all of it is available. What’s been missing is a layer that stitches it together and translates it into specific, actionable recommendations for a business that doesn’t have a professional supply chain team.

One of the things an Amazon AI specialist highlighted when I showed him our thinking on this was exactly this point: the ability to pull external data into replenishment models in real time. Most SMB owners use lead times and reorder points, but they don’t think about the root cause of those lead times. They don’t have a supply chain manager who reads the shipping news every morning and adjusts parameters. AI can be that layer – the thinking part, not just the calculating part.

We’re not there yet. But this is where Katana is heading. And crises like Hormuz don’t just make the case for AI replenishment – they make the case for inventory visibility as the foundation everything else is built on. You can’t act on intelligence you don’t have. Step one is seeing everything. Step two is the brain that helps you decide.

The compounding problem: tariffs plus Hormuz plus uncertainty

I want to close with a point about timing, because it matters.

This crisis isn’t landing on a stable global economy. It’s landing on one that was already absorbing the impact of US tariffs, post-pandemic supply chain restructuring, and inflation that central banks in Europe and Asia had only recently begun to bring under control. The ING economics team called it “the mother of all bad timings.” They’re not wrong.

For SMBs specifically, this means cost pressures are stacking. Tariffs raised input costs. Now energy prices are raising shipping and manufacturing costs on top of that. If interest rates stay elevated because inflation re-accelerates, borrowing costs stay high too. This is a squeeze from multiple directions at once.

Our data shows that about a third of the industries on our platform are actively front-loading purchase orders. Another third is barely reacting. And the rest – including some with significant exposure – are actually pulling back. If you’re in that last group, this is your signal to take a hard look at your supply chain and ask whether you’re seeing what you need to see.

The businesses that will come through this best are the ones that can see clearly – that know exactly what they have, where it is, what it costs, and how long it takes to get more. Not because they have better predictions, but because they have better information to act on when things change.

And right now, things are changing fast.

Katana gives thousands of product businesses a real-time view of their inventory, purchasing, and production – so they can move fast when the world changes. Start free today.