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War Disruption Ripples Beyond Energy; Trading Partners Bristle at New Tariffs; FedEx Passes UPS By Mark R. Long | WSJ Logistics Report
War in the Middle East is rippling beyond the energy industry, upending the complex global supply chains
that underpin world trade, the WSJ's Stephen Wilmot, Rebecca Feng and Costas Paris write.
Ports around the Indian Ocean are filling up with redirected cargoes. Rates to ship goods from Asia to anywhere near the Middle East have rocketed higher. Shipping hubs in Asia are running low on fuel. More than 100 ships are stuck in the Gulf. Much of the shipping industry's pain- like that for oil -can be traced back to the effective closure of the Strait of Hormuz.
The disruption is adding to costs and delays for businesses around the world. It comes as a blow to the shipping industry , which was beginning to send cargo between Europe and Asia via the Red Sea after largely steering clear to avoid Houthi attacks.
So far, the Pacific Ocean routes that serve much of the U.S. market remain largely unaffected, but shipping companies are watching the situation nervously. Trouble could spread to the Pacific through the availability and cost of fuel, analysts say.
President Trump has vowed to reopen the Strait of Hormuz, but it won't be easy. Despite pledges to escort oil tankers and other vessels, the U.S. is holding off on sending warships into the narrow strait. Navy officers say Iranian drones and antiship missiles could turn the area into a "kill box" for American sailors. The Journal's Jared Malsin explains what it would take for the U.S. to open the vital artery .
The U.S. military bombed military targets on Kharg Island , a tiny spot of land in the northern Persian Gulf that is the launch point for 90% of Iran's oil exports. (WSJ) In a series of White House meetings, the CEOs of Exxon Mobil, Chevron and ConocoPhillips warned the war's disruption to energy flows could have further devastating ramifications for energy
markets. (WSJ) Germany's chemical industry is experiencing early signs of supply-chain disruptions
from the Mideast war, with risks spreading beyond oil and natural gas to other raw materials. (WSJ) The U.S. said it would temporarily allow countries to purchase Russian oil
already at sea. (WSJ) For some U.S. states, higher oil prices bring a windfall
that will help close budget deficits, fund education and improve roads. (WSJ) U.S. exporters are racing to find containers they shipped to the Mideast but were dropped off at unknown ports
after carriers halted services because of the Iran war. (Journal of Commerce)
The outbreak of war in the Middle East has led to tens of thousands of evacuations, including some of the world's most valuable horses , that were in Qatar for a top show-jumping competition, the WSJ's Georgi Kantchev writes. The logistical obstacle course included soothing jumpy horses, scrambling for last-minute cargo flights and navigating Belgian bureaucracy.
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Number of the Day Global Trade
U.S. trading partners are pushing President Trump to stick to previously agreed tariff levels after his administration kicked off probes aimed at replacing the levies struck down by the Supreme Court. Most countries targeted by Trump are resigned to tariffs. But these nations are also challenging the economic arguments the U.S. used
to justify the latest move, previewing a likely legal battle.
After February's Supreme Court ruling, Trump quickly imposed a global 10% tariff using a different authority, but that expires after 150 days. This past week, U.S. Trade Representative Jamieson Greer said the U.S. was starting investigations under Section 301 of the Trade Act of 1974, citing what he called unfair practices such as running trade surpluses and building up too much industrial capacity.
Foreign officials bristled at the discussion of excess capacity in the administration's notice opening the Section 301 probes, the Journal's Kim Mackrael, Jason Douglas and Hannah Miao write. China's Commerce Ministry said the U.S. had no right to unilaterally determine whether a trading partner had overcapacity.
U.S. Customs and Border Protection set up a four-step process
to deliver refunds to importers for the Ieepa tariffs struck down by the Supreme Court last month. (SupplyChainDive) Washington and Tokyo agreed to set up a framework to deal with supply disruptions of rare earths
and other critical resources. (Nikkei Asia) Quotable Delivery Rivals
FedEx eclipsed United Parcel Service for the first time ever last week in market capitalization. The WSJ's Esther Fung writes that this is a sign of how much Wall Street is rewarding the delivery giant that can shrink the fastest to boost profits .
FedEx shares have climbed nearly 40% in the past two years, while UPS shares have dropped by about the same amount. The longtime rivals have been slashing thousands of jobs and shrinking their operations after adding capacity to their networks during the pandemic. UPS shares have tumbled since the company signed a new contract with the Teamsters union in 2023 that locked in pay raises.
Meanwhile, FedEx is building out an army of AI agents to work alongside its human workforce, the Journal's Belle Lin reports. By 2028, FedEx expects to have AI integrated into more than half of its core operational workflows . The Memphis company is currently focused on setting up the underlying data and management foundation to oversee its AI bots-a multiyear process to safely scale the technology.
In Other News The Commerce Department said GDP grew at just a 0.7% annual rate
in the fourth quarter, well short of the 1.4% pace it reported in its advance report last month. (WSJ) The personal-consumption expenditures price index, the Fed's preferred inflation measure , was 2.8% in January, a slight decline from December but above the central bank's target. (WSJ) Consumer sentiment declined to 55.5 in March , according to a preliminary University of Michigan survey, as the Iran war began. (WSJ) Canadian manufacturing sales fell 3% in January to an eight-month low , due to extended winter shutdowns at several auto plants. (WSJ) Canada's employers shed a net 83,900 jobs last month, the most since January 2009 outside of the height of the pandemic, with the jobless rate rising to 6.7% . (WSJ) Eurozone industrial output unexpectedly fell 1.5% in January , the second decline in a row after a 0.6% fall in December. (WSJ) The U.K. economy stalled unexpectedly in January , with a sustained return to modest growth likely to be hindered further by the rise in energy prices and war-fueled uncertainty. (WSJ) Executives of carriers such as Delta, American and Southwest are urging Congress to restore DHS funding
and pass bills guaranteeing pay during government shutdowns for air-traffic controllers and security officers. (WSJ) Amazon Web Services plans to deploy processors in its data centers
designed by Cerebras, which specializes in chips that power AI models. (WSJ) Nearly 30 Panamanian-flagged vessels were detained at Chinese ports last week , amid a dispute over Panama canceling the concession for Hong Kong's CK Hutchison to operate two Panama Canal ports. (Lloyd's List) Denmark's Orsted said the Revolution Wind project off the coast of Rhode Island began sending power
to New England's electric grid. (Associated Press) The Trump administration approved BP's Kaskida project in the Gulf of Mexico . (Reuters) Died: David Bassett, 77, founder of air-cargo carrier
Amerijet International Airlines. (Air Cargo News) About Us
Mark R. Long is editor of WSJ Logistics Report. Reach him at [mark.long@wsj.com]. Follow the WSJ Logistics Report team on LinkedIn: Mark R. Long , Liz Young and Paul Berger .
This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
March 16, 2026 07:04 ET (11:04 GMT)
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