“When ships are rerouted to avoid conflict zones, it sets off a chain reaction,” said Noel Hacegaba, CEO of the Port of Long Beach. “Cargo has to move differently, routes get longer, costs go up, and ultimately consumers feel it.”
By Julia Pierrepont III
LOS ANGELES, April 18 (Xinhua) — Escalating tariffs and renewed conflict in the Middle East are rippling through the largest U.S. port complex, driving up shipping costs at the Ports of Los Angeles and Long Beach and pushing prices higher across the U.S. economy, port officials have stated.
“What happens in the supply chain doesn’t stay in the supply chain,” Port of Long Beach CEO Noel Hacegaba remarked at a press briefing on Wednesday. “It shows up in the prices people pay every day.”
Executives at the Port of Long Beach warned that disruptions stemming from tensions around the Strait of Hormuz, combined with U.S. President Donald Trump’s tariffs, have rendered global trade routes more costly and less reliable. This impacts port operations and the approximately 3 million U.S. jobs linked to port activity.
Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation (NRF), noted that the combined effect of geopolitical tensions and trade policy is exerting pressure on retailers.
“Just because retailers don’t import a lot of merchandise from the Middle East doesn’t mean the U.S. supply chain isn’t affected by the turmoil there,” Gold explained. “The supply chain is global, and disruptions anywhere along it can have ripple effects.”
The Port of Long Beach experienced a 5.2 percent year-on-year decline in container volumes last month. “The war in the Middle East continues to add uncertainty for global supply chains,” Hacegaba commented.
He elaborated that the U.S.-Iran conflict has significantly disrupted global shipping lanes. The Strait of Hormuz, which accounts for roughly 20 percent of the world’s oil supply, has been effectively shut down or restricted, compelling vessels to reroute and sharply increasing energy prices.
“The price of oil already hit 100 U.S. dollars a barrel for the first time in four years,” Hacegaba stated, adding that prices in Southern California have remained near that level. “We’re seeing gas prices rise to 6 U.S. dollars a gallon. And history tells us prices go up fast, but they come down slowly.”
Energy analysts and federal agencies indicate that this disruption is among the most severe in decades. The U.S. Energy Information Administration has cautioned that constraints in the Strait of Hormuz are a primary driver of escalating oil and gasoline prices, with consequential effects on shipping and manufacturing.
For ports, the impact is immediate. When crucial shipping lanes become hazardous or inaccessible, routes extend, fuel consumption increases, and schedules become less dependable.
“When ships are rerouted to avoid conflict zones, it sets off a chain reaction,” Hacegaba reiterated. “Cargo has to move differently, routes get longer, costs go up, and ultimately consumers feel it.”
Port officials further noted that the fuel shock is exacerbated by renewed tariffs, as importers and retailers struggle to navigate an unpredictable trade policy environment.
Retailers and shippers are already encountering fuel surcharges across ocean, trucking, and parcel markets. Major ocean carriers have raised rates tied to fuel costs, with domestic carriers following suit, Gold confirmed.
He also mentioned that Amazon has implemented a temporary 3.5 percent fuel and logistics surcharge, the U.S. Postal Service plans an 8 percent price hike, and trucking fuel surcharges have surged by as much as 25 percent.
“For a while, shippers absorbed rising costs from fuel spikes to last year’s ‘Liberation Day’ tariffs,” Hacegaba recalled. “That’s no longer the case today. Those costs are being passed along across the board to consumers.”
The NRF’s latest Global Port Tracker forecasts that imports at major U.S. container ports will stay below last year’s levels through at least mid-2026, reflecting cautious inventory strategies and ongoing policy uncertainty.
For the foreseeable future, port leaders caution that as long as tariffs remain unresolved and geopolitical tensions continue to destabilize global energy markets, elevated costs are likely to persist – with consumers ultimately bearing the financial burden.
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