Landed costs on Indian trade lanes are climbing 35% to 50% — and in extreme cases more than 200% — as freight rates and war-risk charges spike after renewed unrest near the Strait of Hormuz, according to The Economic Times Digital. The increase is no longer just a transportation cost issue: because a growing share of shipping contracts allows carriers to pass on exceptional logistics costs, a substantial part of the burden is now flowing through to end consumers.
Freight shock on Gulf and Europe lanes
The escalation near the Strait of Hormuz has pushed freight rates on some Gulf routes to $3,400-$4,000, up from $300-$400 before the latest disruption, Jitendra Srivastava, CEO of Triton Logistics & Maritime, told The Economic Times Digital. Emergency and war-related surcharges are being added on top of base freight rates.
“Maximum burden is going to [fall on] customers. Landed cost is continuously increasing. Depending on the destination, the increase in landed costs could range from 35% to 50%, and in some cases, it could be more than 200%.” — Jitendra Srivastava, CEO, Triton Logistics & Maritime
Srivastava and Sharma provided the following comparative freight-rate figures to The Economic Times Digital:
| Route / container type | Freight rate before disruption | Freight rate after disruption | Increase |
|---|---|---|---|
| Gulf routes (some lanes) | $300–$400 | $3,400–$4,000 | ~10x |
| Europe routes (several shipments) | $700–$800 | $4,500–$6,500 | ~6–9x |
| 40-ft reefer containers | $2,000–$3,000 | $7,000–$10,000 | ~3–5x |
Sharma estimates that logistics costs, which typically account for 13-15% of cargo value, have risen to 25-30% or more in several cases. Because freight is determined by container type and route rather than the value of goods inside, the landed-cost impact can differ sharply between low-value and high-value cargo. Srivastava noted that a single percentage increase is difficult to state when freight itself has moved from around $400 to $4,000.
Second-layer cost shock: energy and petrochemicals
The pressure extends beyond shipping. Disruption to crude oil, LNG and petrochemical feedstocks is constraining CNG and PNG availability across Indian industrial value chains, according to Chandrachur Datta, Partner at Vector Consulting Group. Datta said force majeure declarations by Gulf producers have disrupted around 47.4 mmscmd (million metric standard cubic meters per day), equivalent to about 25% of India’s total gas supply.
The effect is cascading into energy-intensive industries:
- Fertiliser plants have been receiving around 70% of their contracted gas supply.
- Production costs in glass, paper and pulp have increased 20-30%, forcing some companies to curtail operations.
- Gas-dependent steel and metal processors have been able to meet only 50-70% of customer demand, affecting availability of alloy and special-grade steel used in automotive components.
On the petrochemical side, The Economic Times Digital reported that domestic petrochemical output has declined 21% year-on-year, attributing the fall to supply disruption linked to the ongoing US-Iran war.
What this means for procurement and supply chain teams
The figures reported by The Economic Times Digital give sourcing and logistics planners a concrete basis for re-risking cost models. On affected lanes, logistics costs moving from the typical 13–15% of cargo value to 25–30% or more changes total-landed-cost calculations well beyond the freight line item. For low-value, high-volume goods, the proportional impact is heavier because the absolute freight and surcharge burden is spread across a smaller base.
Procurement teams should also factor in the contractual pass-through mechanism: The Economic Times Digital reported that companies are increasingly including clauses that allow them to pass on exceptional logistics costs, and that a growing share of the burden has begun to trickle down to end consumers. On the supply side, the gas constraints reported by Datta mean alloy and special-grade steel availability is already under pressure, with processors meeting only 50–70% of demand.
Given the reported scope — landed-cost increases of 35–50% on some lanes, over 200% in extreme cases, and a 25% supply-side hit to India’s gas supply — procurement directors should treat Hormuz-related surcharges and input shortages as a baseline for the coming planning cycle, not a temporary spike. The Economic Times Digital reported that the impact varies by destination, cargo value and shipping route, meaning individual lane-level modelling is required.
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