Port of Long Beach CEO Warns of Mounting Supply Chain Pressure From Mideast Conflict

LONG BEACH, Calif. — The chief executive of the Port of Long Beach warned in a mid-March briefing that “pressures are indeed mounting” on global supply chains from the conflict in the Middle East, signaling that rising fuel costs and shipping disruptions are poised to impact U.S. businesses and consumers. The warning came even as the port announced it was the nation’s busiest for the first quarter of 2026. For many U.S. businesses, these kinds of geopolitical shocks are becoming a recurring operational risk rather than a rare crisis. The era of predictable, low-cost global shipping has been replaced by a new normal of volatility, where conflicts thousands of miles away can directly impact inventory costs and delivery timelines for a company in the American heartland. During a virtual news conference, Port of Long Beach CEO Noel Hacegaba detailed cargo volumes that, while leading the nation, showed signs of strain. The port handled nearly 775,000 twenty-foot equivalent units (TEUs) in March, a 5.2% decrease from the same month last year, a dip he attributed primarily to tariffs. For the first quarter of 2026, the port processed nearly 2.5 million TEUs, making it the busiest gateway in North America but still representing an 8.6% decline from the first quarter of 2025. Hacegaba directly linked the challenging environment to the ongoing war. “These levels of cargo are due to the (Iran) war and the disruption that it brings,” he stated. While March’s local figures were not significantly affected, he cautioned that the turmoil’s full impact is beginning to ripple outward. The central point of disruption is the Strait of Hormuz, a critical maritime chokepoint that has been effectively closed to most commercial traffic since mid-March. According to Hacegaba, 20% of the world’s oil supply passes through the strait. The International Energy Agency has called the situation the “largest supply disruption in the history of the global oil market.” “The disruption at the Strait of Hormuz has already triggered a rapid rise in oil prices,” Hacegaba explained. “When the price of oil goes up, the cost of shipping increases and consumers pay more at the gas pump and for many everyday goods.” In our experience, these sudden escalations in fuel surcharges and unpredictable shipping delays can severely damage the cash flow and inventory planning of small and mid-sized businesses. This is no longer just a logistics problem; it is a core financial challenge that requires sophisticated modeling to understand potential impacts on margins and working capital. Proactive scenario planning is essential for survival. Major ocean carriers, including MSC, CMA CGM, Ocean Network Express, and Maersk, are already implementing fuel surcharges and raising rates across key trade lanes. In response, shippers are altering how they move cargo to manage costs and avoid potential congestion. The U.S. Energy Secretary, Chris Wright, acknowledged the gravity of the situation, stating in a recent interview that the U.S. is “simply not ready” to escort oil tankers through the strait, though he anticipated such operations could begin toward the end of the month. Hacegaba emphasized that the effects are widespread, even for companies that do not directly import goods from the Middle East. “The supply chain is global, and disruptions anywhere along it can have ripple effects, whether it is rerouting of vessels, equipment out of position, higher fuel cost for shippers, or rising gas prices that … leave less money in consumers’ pockets,” he said. He described global trade as a “tightrope” stretched across “geopolitical fault lines.” Despite the global turmoil, Hacegaba confirmed that there are currently no direct impacts to operations in San Pedro Bay. All terminals at the Port of Long Beach remain open and are functioning normally. He noted that the port is also closely monitoring the impact of a recent Supreme Court ruling on the International Emergency Economic Powers Act (IEEPA), which deemed a significant portion of tariffs imposed last year unconstitutional, adding another layer of uncertainty to trade dynamics. Moving from a reactive to a proactive financial posture is the only way to manage this level of sustained uncertainty. Waiting for a supply chain disruption to decimate a quarter’s profits is a failing strategy. Businesses need a durable financial and operational plan to absorb these shocks. Through our outsourced CFO services, we help clients build that resilience. For companies navigating these volatile conditions, developing a clear strategy is critical, and the team at C&S Finance Group LLC at csfinancegroup.com is equipped to guide that process. Looking ahead, shippers and businesses will be closely watching the duration of the Mideast conflict and its effect on global energy prices. The potential for U.S. naval escorts in the Strait of Hormuz and the subsequent impact on shipping insurance and freight rates will be key developments. The true financial consequences for U.S. companies are expected to become more apparent in second-quarter earnings reports and upcoming consumer inflation data.