Dear Valued Customers,

I hope this message finds you well.

My name is Kitazawa from Dragon Logistics.
Although it is a little late, please allow me to wish you a Happy New Year. We sincerely appreciate your continued support and look forward to working with you throughout 2026.

Here in Vietnam, about one month has passed since the Lunar New Year (Tet). I hope you were able to enjoy a relaxing holiday.
As for myself, I had the opportunity to travel around six cities in Malaysia during the break.

It has been a while since our last newsletter, but this year we will make an effort to increase the frequency of updates and provide you with useful logistics information on a regular basis.

Impact of the Middle East Situation on International Logistics

As widely reported in the news, tensions in the Middle East have continued to escalate, and the impact on international logistics is becoming increasingly significant.

Below is a summary of the current situation from a logistics perspective for your reference.

Key Points

• Major maritime routes are effectively disrupted → Severe limitations on ocean freight

• Cargo shifting to air transport as an alternative → Air capacity is also approaching its limit

• Rising crude oil prices → Affecting transportation costs across all modes

1) Impact on Ocean Freight

The Strait of Hormuz, a key route for global energy transportation, is currently considered practically non-navigable.

In addition, the Suez Canal remains under significant tension, and the Cape of Good Hope route has effectively become the standard alternative.
A situation in which both the Strait of Hormuz and the Red Sea routes are simultaneously unavailable is unprecedented, and the resulting increase in transit time and decline in container turnaround efficiency are raising concerns about a global shortage of shipping space.

Potential developments include:

• Difficulty or inability to secure bookings

• Significant lead time extensions (due to loading delays and congestion at transshipment hubs)

• Rapid increases in ocean freight rates
  (Rates may begin accelerating in the latter half of March, and validity periods may become shorter—from two weeks to possibly one week or less.)

2) Shift from Ocean to Air Transport

When ocean transport becomes constrained, cargo generally shifts to air freight.

Even if restrictions on Middle Eastern airspace are lifted, air cargo capacity may still become extremely tight if the disruption to ocean shipping continues.

Possible impacts include:

• Difficulty or inability to secure bookings

• Longer lead times due to waiting for available capacity or transshipment delays

• Rapid increases in air freight rates
  (Rates have already begun rising, and quotations may only remain valid for a very short period—sometimes same-day to within three days.)

3) Rising Fuel Prices and Transportation Costs

The closure of the Strait of Hormuz is directly impacting the global energy market.

In Vietnam as well, crude oil prices have surged, and some gasoline stations have begun imposing refueling limits.

Since fuel costs directly affect transportation expenses, all modes of transport are impacted:

• Ocean freight: BAF (Bunker Adjustment Factor)

• Air freight: FSC (Fuel Surcharge)

• Land transport: Drayage and trucking costs

What Can Be Done Now / Our Recommendations

• Although it may sound obvious, we strongly recommend allowing sufficient lead time by advancing production and shipping schedules where possible.

• Our UPS courier service can be a strong alternative during times like these. Since UPS operates its own aircraft fleet, it has strong capacity control and can be a reliable option when standard air freight space is unavailable. Please feel free to contact us if needed.
  →NEW UPS TARIFF

• For shipments to neighboring countries, having inventory in Vietnam may open additional options via cross-border trucking.
  For example, even when shipping from Japan to Thailand, it may be relatively easier if inventory is positioned in Vietnam.
  For customers based in Japan, utilizing non-resident inventory in Vietnam may be worth considering.
  →Bondded warehouse non-resident scheme

• Procurement may also be affected by the current situation. Some companies are increasing import volumes in advance before the situation worsens. If you require warehouse space for raw material storage, please feel free to consult with us.
  →AMATA3 General Warehouse

Lastly, we regret to inform you that due to the significant rise in fuel costs, we may be required to revise certain transportation charges.

We sincerely appreciate your understanding.

As we approach March 11, this date reminds us once again of how precious—and how complex—the global supply chain truly is.
The ability for goods to arrive “as expected” is something we often take for granted.

As a logistics provider, we believe our mission is clear:

To ensure that our customers’ businesses never stop, regardless of global circumstances.

At Dragon Logistics, we remain committed to providing flexible logistics solutions by combining ocean freight, air freight, courier services, and land transportation to ensure reliable delivery even under unstable global conditions.

Should you encounter any logistics challenges, please do not hesitate to contact us.

We sincerely appreciate your continued support and look forward to working with you.

Best regards,
Kitazawa
Dragon Logistics

Even if you just want to ask some, feel free to contact us!

✉️ Email: business.development@draco.com.vn (VN/JP/EN available)

For inquiry（Vietnamese, Japanese, English）：marketing@draco.com.vn

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