Promo companies are becoming increasingly familiar with the disruptive impact of conflicts half a world away.

That’s the case with the war involving Iran. Beyond rising prices for petroleum-based products such as plastic and polyester, and consumer shock from high gas prices, there’s another impact: sourcing disruption.

In response to the attacks on its country, the Iranian government closed the Strait of Hormuz – a major waterway located between Iran to the north and Oman and the United Arab Emirates to the south, and one responsible for routing nearly 25% of the world’s oil supply. The closure is jamming shipping waterways, spiking transportation prices, reducing capacity and delaying deliveries and final production of overseas goods.

Even with a temporary ceasefire intended to reopen the strait – which Iran later reversed following additional attacks – ongoing uncertainty is pressuring suppliers.

“This is going to have a great impact on the global economy, crippling shipments moving around the world,” says Eric Rubin, CEO of Counselor Top 40 supplier Blue Generation (asi/40653). “Shipping routes will have to dramatically change, resulting in longer transit time, and a short supply of containers since vessels will get stuck in transit.”

“This is going to have a great impact on the global economy, crippling shipments moving around the world.”Eric Rubin, Blue Generation (asi/40653)

Closing & Reopening the Strait of Hormuz 

Over the last week, President Trump repeatedly called for a ceasefire with Iran to reopen the Strait of Hormuz, with a Tuesday night 8 p.m. ET deadline. Iran initially didn’t budge but agreed to a two-week ceasefire with the U.S. just before the deadline.

After the agreement, Iran’s Foreign Minister Abbas Araghchi said that ships would be permitted to pass through the Strait of Hormuz over the next two weeks temporarily “via coordination with Iran’s armed forces and with due consideration of technical limitations.” However, within hours of the agreement, Iran closed the strait again after Israel attacked Lebanon, an act Iran says put the U.S. in violation of the ceasefire. The White House denied reports that the strait was closed again. “We have seen an uptick in traffic in the strait today,” White House Press Secretary Karoline Leavitt said.

Prior to the war, 130 ships per day passed through the waterway safely. By comparison, only 120 ships have completed that same passage since the war began, Jennifer Parker, a former naval officer now at the University of Western Australia’s Defense and Security Institute, told The New York Times. Now, with another closure and a backlog of ships trying to pass through a region that is still susceptible to increased security threats and military activity, traffic flowing through the strait is unlikely to return to pre-war numbers – at least not yet.

The promo industry is no stranger to shipping delays and costly reroutes driven by geopolitical conflict. Just look back to 2023 – and about 1,500 miles west of the Strait of Hormuz – when Yemen’s Houthi forces (reportedly acting in solidarity with Palestinians during the war in Gaza) began attacking commercial vessels transiting the Suez Canal. This 193-kilometer waterway linking the Red Sea and the Mediterranean handles roughly 12%-15% of global trade and about 30% of container traffic, according to the Atlantic Council. As security risks escalated and disruptions stretched on for nearly two years, most vessels were diverted to longer, more expensive routes around Africa.

“As security risks increased [near the Suez Canal], we saw transit times go from 12 to 40 days rerouting around the southern tip of Africa,” explains Rubin, whose goods are primarily manufactured in Egypt. He adds that many suppliers could begin to see something similar happen now if the conflict in Iran continues.

Rubin acknowledges Blue Generation might not be hit as hard as some other suppliers in the industry because its production facilities are in Egypt, a nation with direct access to oil and gas. The supplier also operates vertically, meaning it’s not as dependent on imported materials to get products out the door. “We produce the majority of our fabrics and trims in-house, so we are not as dependent on outside sourcing as most suppliers,” he explains. “In situations like this, being a vertical operation is a tremendous benefit.”

Significant Shipping Ripple Effects

U.S. suppliers who source from the Middle East, and European suppliers who source from Asia, are likely to bear the brunt of the impact given their reliance on the Strait of Hormuz and nearby regional waterways to transport materials. Suppliers like Randy Chen, president of Impex International, hasn’t seen much of an impact as far as shipping delays or routing changes are concerned.

“We’ve been able to avoid any delays thus far because our vessels travel from Asia to the West Coast of the U.S.,” he says.

But even if suppliers haven’t been directly impacted by rerouting delays or cargo shortages, most aren’t immune to the ripple effects of the current situation, says Josh Steinitz, chief strategy officer at Auctane, the parent company of shipping and logistics brands including ShipStation and Stamps.com. That’s especially true with the Houthis now entering the conflict, he says. Steinitz has been tracking the global supply chain closely over the last several years.

“You now have container ships that are reluctant to traverse the Red Sea and the Suez Canal, which forces ships to go around Africa to reach Europe,” he says. “Those rates propagate throughout the global industry. It can certainly extend lead times.”

“When you’re a small- or medium-size merchant, you really have to start to think about logistics as a real strategic choice as opposed to just the cost of doing business.”Josh Steinitz, Auctane

Rubin compares the shipping network to a series of bus stops to explain how rerouted vessels impact the entire shipping ecosystem – not just the goods that rely on choke points like the Strait of Hormuz.

“If you think of each country or port as a bus stop, a vessel might go to several countries like China, Vietnam, India and Egypt,” he says. “That means that if the normal path is disrupted, it could delay transit time to other destinations.”

Clive Goldberg, president of Counselor Top 40 supplier Logomark (asi/67866) and a member of Counselor’s Power 50 list, agrees. With so many vessels rerouted, “there is potential for congestion at some of the Asian ports,” he says. 

Dilip Bhavnani, chief operating officer at Counselor Top 40 supplier Sunscope (asi/90075), has begun to witness these headwinds as well. He says it’s a foreshadowing for some of the larger, more significant challenges to come.

“The early indicators are already here: rising insurance premiums, fuel surcharges and inconsistent scheduling reliability,” he says. “What’s happening right now is less about immediate disruption and more about a systemic change of global shipping lanes.”

Bhavnani adds that carriers are proactively avoiding high-risk corridors, which is forcing cargo into longer, less efficient routes. “That has a cascading effect, [because] capacity tightens, transit times extend and costs become more volatile across both ocean and air freight.”

Rubin and his team, for one, have begun to rely heavily on air freight. While more expensive, it’s often the only way to guarantee on-time delivery given what’s happening overseas, he says: “Because of the cargo shortages, vessels will often skip a port, but air can bring goods over in six to seven days.”

Daily vessel crossings in the Strait of Hormuz have collapsed by more than 95% - with no visible signs of recovery. Oil tankers, which made up the bulk of pre-war traffic, have been virtually absent since early March.

One Iraq-linked oil tanker has reportedly transited the… pic.twitter.com/Wxe8mLsxUc

— The National (@TheNationalNews) April 6, 2026

However, air freight is significantly more expensive than sea, Steinitz notes, and now with the rising cost of crude oil due to the conflict in Iran, the cost of jet fuel will drive those prices even higher.

“It’s hard enough to deal with that when you’re a Walmart or an Amazon,” Steinitz says, “but when you’re a small- or medium-size merchant, you really have to start to think about logistics as a real strategic choice and a way to differentiate as opposed to just the cost of doing business.”

And with so many carriers turning to air freight, suppliers like Bhavnani are starting to witness restricted airspace. “That forces rerouting, which reduces available lift and drives rate pressure,” he adds.

Cost Pressures

It’s not just delayed timelines that suppliers are worried about when it comes to the Iran war’s impact on sourcing; there are financial and economic implications, too. “Freight rates on vessels are skyrocketing,” says Rubin. And suppliers are already starting to see price increases on raw materials that rely on petroleum or helium (for instance, polyester in clothing, plastic-based products and semiconductor chips used in medical devices and consumer electronics).

“I’ve seen a 5% increase on plastic goods like stress balls and polyethylene bags,” says Chen. “That’s just the cost of doing business now.”

Meanwhile, Steinitz of Auctane has witnessed carrier rates increase by as much as 20%-30% in recent days.

Eddie Blau, CEO of Counselor Top 40 supplier Innovation Line (asi/62660), says that rising fuel prices and the strengthening of Chinese currency have together fueled a perfect storm of price volatility.

“Oil is a primary manufacturing input for many Chinese goods and, of course, container ships and trucks don’t move without it,” he explains. “The currency issue has been percolating since the beginning of the year as the Chinese yuan continues to gain strength against the U.S. dollar. Taken together, our cost of goods is increasing.”

Planning for Future Challenges

One of the biggest challenges of the situation in the Middle East, says Rubin, is the uncertainty of it all.

While many suppliers moved production from heavily tariffed countries when President Trump imposed levies on goods from most foreign countries last year, this sort of transition can take up to a year, according to Rubin. Instead, he expects many suppliers to sit tight while they wait to see how the situation evolves.

“Nobody knows how long this is going to last,” he says. “Transit time is now based on a war that may end in three days or six months.” 

3.5%-10%
Current levels of maritime insurance premiums of a vessel’s total value per voyage, up from roughly 0.25% pre-conflict(McGill and Partners)

The conflict in Iran and everything that’s happening as a result, he says, underscores the importance of planning.

“Adjust your manufacturing timetable,” he advises. “If you’re used to a 30-day lead time, now make that 75.”

Shipping delays and cargo shortages might seem like supplier-specific challenges. But distributors also have an important role to play in ensuring products are delivered to customers on time.

“Distributors need to make buying decisions more quickly,” Rubin adds. “Given that things could take longer now, don’t waste time because time is of the essence.”

Steinitz notes that even once the Strait of Hormuz reopens, the challenges caused by the blockage are likely to persist. Maritime insurance premiums have increased to 3.5% to 10% of a vessel’s total value per voyage, up from roughly 0.25% pre-conflict. “Insurance rates may continue to go up even if some carriers are willing to risk traveling through the region,” he explains.

“We saw similar dynamics during [the COVID-19 pandemic] and the Red Sea disruptions: dislocation first, then congestion, then cost escalation and finally availability constraints.”Dilip Bhavnani, Sunscope (asi/90075)

One way to prioritize speed and accuracy as these shipping and logistics crises progress, says Steinitz, is to ensure they have visibility into different carrier options. That’s especially true for small- and medium-size companies that don’t otherwise have the time or resources to manually monitor changes in shipping and freight activity – especially at the speed at which it changes.

Bhavnani adds that some of these challenges may feel familiar, and that’s because many suppliers have seen them before. “We saw similar dynamics during [the COVID-19 pandemic] and the Red Sea disruptions: dislocation first, then congestion, then cost escalation and finally availability constraints,” he explains. “We believe we are in the early to middle phase of that cycle now.”

But the difference, Bhavnani believes, is that companies are better prepared than they were then.

“The companies that will navigate this best are the ones planning earlier, locking in capacity sooner and designing programs with built-in flexibility,” he says. “The environment we’re entering is one where supply chain agility becomes a competitive advantage, not just an operational function.”