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Breakbulk, Project Cargo, Maritime & Project Logistics
May 2026 — Current Assessment
Executive Summary
The global maritime, breakbulk, and project logistics sector is navigating the most complex risk environment in modern history. For the first time, both of the Middle East’s critical maritime corridors — the Strait of Hormuz and the Red Sea/Bab el-Mandeb — are simultaneously disrupted. The Iran war that began on 28 February 2026 has triggered a cascading series of chokepoint closures, insurance withdrawals, and route diversions that are fundamentally reshaping global trade flows. Layered on top are ongoing disruptions from the Russia-Ukraine conflict in the Black Sea, escalating US-China trade tensions with maritime port fees, and rising military posturing in the South China Sea and Taiwan Strait. For breakbulk and project cargo shippers — who rely on specialized tonnage, longer planning horizons, and port-specific infrastructure — the operational consequences are acute and the margin for error is razor-thin.
Global geopolitical risk barometer for breakbulk, project cargo, and maritime logistics as of May 2026, showing risk levels across seven categories from moderate to extreme.
Global risk barometer — May 2026
Breakbulk, project cargo, maritime & project logistics
Overall risk index
7.1 / 10
Chokepoints disrupted
3 of 5
Avg. rate premium
+25–40%
Dark fleet vessels
2,108
1. Strait of Hormuz — CRITICAL RISK
Risk Level: Extreme (10/10)
The Strait of Hormuz crisis represents the most severe disruption to global maritime trade in decades. Following US-Israeli strikes on Iran on 28 February 2026, which killed Supreme Leader Ali Khamenei, Iran’s Islamic Revolutionary Guard Corps (IRGC) effectively shut down the strait. Tanker traffic plummeted by approximately 97%, from an average of roughly 120 daily transits to just 3.6. By April, only 191 vessels crossed in the entire month — approximately 5% of the pre-war average of 3,000 per month.
The IRGC deployed a multi-layered denial strategy: physical attacks from boats, missiles, and drones; naval mine deployment; GNSS/GPS jamming (with 98% of all incidents concentrated in the Middle East Gulf); and satellite spoofing. On 13 April, the US launched a counter-blockade targeting all ships seeking to reach Iranian ports, creating a dual blockade scenario without modern precedent.
Impact on Breakbulk & Project Cargo:
- QatarEnergy declared force majeure on all LNG shipments on 4 March 2026, removing 20% of global LNG supply overnight
- War risk insurance premiums surged from 0.125% to between 0.2% and 0.4% of hull value per transit, with Protection & Indemnity insurance effectively cancelled from 5 March
- All major carriers — Maersk, MSC, CMA CGM, Hapag-Lloyd — suspended Hormuz transits
- Over 20,000 mariners and 2,000 ships were stranded in the Persian Gulf as of late April
- Mine clearance operations could take six months or longer, even after hostilities cease
- Oil and gas project cargo destined for Gulf states faces indefinite delays
- Energy infrastructure repair work in the region — identified by Baker Hughes, Halliburton, and SLB as a major post-war opportunity — remains inaccessible
2. Red Sea / Bab el-Mandeb — SEVERE RISK
Risk Level: Extreme (9/10)
The Red Sea crisis, which began in November 2023 with Houthi attacks on commercial shipping, had seen a fragile period of relative calm from approximately November 2025 following a Gaza ceasefire. Some carriers, including Maersk and CMA CGM, cautiously restarted Red Sea services in January 2026. However, the Iran war shattered this pause. On 28 February 2026, the Houthis announced they would resume maritime attacks in solidarity with Iran. In late March, they launched ballistic missiles at Israel, joining the broader conflict.
The Red Sea and Bab el-Mandeb Strait carry approximately 12–15% of global seaborne trade, including 30% of container shipping traffic between Asia and Europe. The simultaneous closure of both the Red Sea and Hormuz corridors is historically unprecedented.
Impact on Breakbulk & Project Cargo:
- Suez Canal transits, which had begun recovering toward pre-crisis levels, collapsed again — the share of east-to-west shipments via Suez remains at approximately 18.7%, well below the pre-disruption level of roughly 80%
- Cape of Good Hope diversions add 3,000–3,500 nautical miles and 10–14 days to Asia-Europe voyages
- Asia-Europe freight rates are 25–40% above pre-crisis levels; Asia-US East Coast rates are 15–25% higher
- Multipurpose vessel (MPV) schedules have been disrupted, with conference attendees warning that conditions will likely worsen further as the shock propagates through the system
- Breakbulk and project cargo requiring specialised tonnage face compounding delays, as fewer vessels are available on longer rotations
- Industry consensus expects diversions to continue through at least 2027
3. Black Sea / Russia-Ukraine Conflict — HIGH RISK
Risk Level: High (7/10)
The Russia-Ukraine war continues to impose significant disruption on Black Sea maritime trade. Despite a US-Russia maritime deal reached in Riyadh in March 2025 — intended to restore safe passage for grain and civilian cargo — operational conditions remain fraught. Tit-for-tat strikes have intensified, with Russian strikes hitting grain facilities and power infrastructure in Odesa as recently as March 2026.
Ukrainian grain exports through its maritime corridor were approximately 50% lower year-on-year in January 2026, reflecting elevated operational friction and risk-related costs. War risk insurance premiums have tightened further, with shorter review periods creating cost uncertainty for Black Sea voyages. Russia’s “dark fleet” continues to operate and grow, reaching 2,108 tracked vessels in Q1 2026, nearly half of which are under sanctions.
Impact on Breakbulk & Project Cargo:
- Irregular loading schedules and reduced forward visibility for vessel bookings
- Higher war risk insurance premiums discouraging participation by compliant tonnage
- Navigational hazards from sea mines deployed by both sides remain unresolved
- Breakbulk carriers serving the region face selective vessel participation and contractual complexity around war risk, deviation rights, and force majeure
- Reconstruction-related project cargo for Ukraine remains logistically constrained
4. South China Sea & Taiwan Strait — ELEVATED RISK
Risk Level: Elevated (6/10)
While the South China Sea has not seen the kinetic disruption affecting the Middle East, the strategic temperature is rising steadily. China has expanded its military footprint with the construction of a large airbase on Antelope Reef in the Paracel Islands and continues to militarise disputed features in the Spratly Islands. Beijing recently imposed airspace restrictions for up to 40 days around the East China Sea and northern Taiwan Strait — far longer than typical exercise windows — signalling a shift from short-duration drills to sustained readiness postures.
The Taiwan Strait handles approximately $2.45 trillion in goods annually, representing over 20% of world seaborne trade. A Chinese carrier transited the Taiwan Strait in April 2026 for the first time this year. Taiwan’s legislature approved a special defence budget of $25 billion USD, and the US is reportedly considering a $14 billion arms package. Think tanks have warned that a Taiwan blockade could trigger a 5% drop in global GDP — larger than the 2008 financial crisis.
Impact on Breakbulk & Project Cargo:
- Rising insurance risk pricing for Taiwan Strait and South China Sea transits
- Semiconductor supply chain exposure creates cascading risks for energy, manufacturing, and infrastructure project timelines
- Grey-zone activities — fishing vessel formations, airspace restrictions, coast guard harassment — create navigational uncertainty for commercial shipping
- Japan-China tensions over Senkaku Islands add further complexity to Northeast Asian shipping lanes
5. US-China Maritime Trade War — ELEVATED RISK
Risk Level: Elevated (6/10)
The US Section 301 port fees on Chinese-built and Chinese-operated vessels, finalised on 17 April 2025, represent a structural shift in the economics of global shipping. Under the phased plan, Chinese vessel operators face fees of $50 per net ton per US voyage (rising to $140 by 2028), while Chinese-built vessels face $18 per net ton (rising to $33 by 2028), or alternatively $120–$250 per container discharged. COSCO and OOCL face fees of up to $8.4 million per call for their largest ships. China retaliated with mirror fees on US-owned vessels docking in Chinese ports.
Although the fees were suspended for one year in October 2025 under a bilateral agreement, the framework remains in place and could be reactivated. Proposed 100% tariffs on Chinese-made ship-to-shore cranes and 20–100% tariffs on containers and chassis are also under discussion.
Impact on Breakbulk & Project Cargo:
- Fleet redeployment is underway as ocean alliances shuffle Chinese-built vessels away from US-bound services
- Potential reduction in port calls at smaller US ports as operators consolidate to mitigate fee exposure
- The policy incentivises US-built vessels with fee exemptions, but US shipyard capacity (roughly 5 vessels per year versus China’s 1,700) makes this a long-term structural shift
- Breakbulk shippers face higher per-voyage costs and potential capacity reshuffling on trans-Pacific routes
- Proposed tariffs on cranes and containers could increase terminal operating costs at US ports handling project cargo
6. Sanctions, Dark Fleet & Regulatory Complexity — HIGH RISK
Risk Level: High (7/10)
The proliferation of sanctions regimes and the expansion of the “dark fleet” create pervasive compliance risks for breakbulk and project logistics operators. Windward’s Q1 2026 data tracked 2,108 dark fleet vessels operating outside the international rules-based order, with 48% under sanctions. Thirteen ships were boarded and detained in Q1 2026 alone — half of all 26 interdictions recorded across 2025–2026. Regulators made 851 new vessel designations in Q1, with 94% being tankers.
Flag hopping, AIS deactivation, false registries, and covert ship-to-ship transfers remain widespread. The convergence of sanctions on Russia, Iran, Venezuela, and Syria creates an increasingly complex web of compliance obligations for vessel operators, charterers, cargo owners, and financiers.
Impact on Breakbulk & Project Cargo:
- Enhanced due diligence requirements for vessel chartering and sub-chartering
- Risk of inadvertent sanctions violations through opaque vessel ownership chains
- Higher insurance costs as underwriters demand more thorough compliance documentation
- Project forwarders must navigate multiple overlapping sanctions jurisdictions when sourcing tonnage for complex, multi-leg shipments
7. Climate, Regulation & Infrastructure — MODERATE RISK
Risk Level: Moderate (5/10)
The EU’s FuelEU Maritime regulations and the IMO’s tightening Carbon Intensity Indicator (CII) requirements continue to reshape fleet economics. Older MPV tonnage with poor fuel performance faces growing regulatory cost penalties, which are particularly relevant for the aging breakbulk fleet. Port congestion, weather-related disruptions, and labour shortages add further operational friction.
Europe’s defence spending surge is creating dual-use infrastructure improvements — roads, rail, ports, and terminals are being modernised for military mobility — that could also benefit civilian heavy cargo flows. However, data centre construction freezes in some US jurisdictions threaten an important source of breakbulk and project cargo volumes.
Sector Outlook: Breakbulk & Project Cargo
Despite the extraordinary risk environment, the underlying demand picture for breakbulk and project cargo has strengthened. After a stagnant 2025, during which many shippers deferred decisions while scrambling to adapt sourcing strategies, projects are reaching final investment decisions again. Oil and gas, power generation, energy storage, and mining are all trending positively. Infrastructure repair in the Middle East — once hostilities cease — is expected to generate a heavy book of post-war project cargo work.
However, the near-term outlook is heavily dependent on how quickly the Middle East conflicts are resolved. A prolonged war risks shifting from supply-constraint disruption to outright demand destruction, particularly for energy-related project cargo. The multipurpose vessel fleet is under strain from longer voyages, and the heavy-lift air cargo market remains critically constrained — with only four active Antonov AN-124 freighters serving the Western market.
The industry’s mantra for 2026: be agile, diversify, and plan for sustained uncertainty.
Report compiled May 2026. Sources include Windward Maritime AI, S&P Global Market Intelligence, UNCTAD, Baker Institute, Breakbulk/Journal of Commerce, Congressional Research Service, Lloyd’s List Intelligence, and multiple maritime intelligence providers.
