Middle East disruption adds long-tail risk to auto supply chains

As Iran crisis impacts mount, prepare for the long tail

As the Middle East conflict continues, the supply of critical resources for the automotive industry will see more volatility. The longer the crisis lasts, the more the impacts will cascade along automotive supply chains—even after the war itself comes to an end.

The state of play as of early April

• Deliveries through the Strait of Hormuz have been disrupted for both finished vehicles as well as critical supply components such as plastics, coatings, battery materials, tyres and semiconductors.
• Helium is a critical gas for semiconductor manufacturing and nearly 1/3 of the global supply of helium is from Qatar-based suppliers. As experienced during the Covid period, semiconductors are an important input to automotive production.
• While no major manufacturer has yet reported significant production downtime, future contingency planning will become increasingly important.
• As of late March, approximately 150 vessels carrying an estimated 450,000 twenty-feet equivalent units (TEUs) were delayed or unable to transit the region. This does not include the thousands of ships that were diverted or rerouted due to the conflict, which is estimated to have created operational disruptions for 8‒10% of global container capacity.
• Congestion is spreading beyond the Persian Gulf and the Strait of Hormuz to surrounding ports, like India’s Jawaharal Nehru Port.

What automotive companies need to do

• Prepare for sustained cost and service variability, even if near‑term production impacts remain limited. Knock-on effects tend to last significantly longer than the initial shock.
• Accelerate contingency planning and diversify sourcing to reduce reliance on single trade corridors or suppliers.
• Work closely with your logistics partner on scenario planning and rapid rerouting as conditions evolve.
• Build flexibility into routeing, port selection and inventory positioning to manage cascading disruptions beyond the Persian Gulf.
• Increase real‑time supply chain visibility to identify delays quickly and prioritise critical components.

Auto market forecast drops amid inflation and high prices

Against the backdrop of the Iran conflict, car sales and market expectations are slumping. Declining consumer confidence, higher fuel costs and inflation are all contributing to a lower forecast for new vehicle sales. Actual March sales were down double-digits, bringing Q1 sales approximately 6% lower than last year. Remarkably, the Middle East crisis is not (yet) driving this.

• Affordability remains the primary consideration for purchase—or not—as the average new vehicle price remains above $50K.
• The Iran conflict has had a minimal impact on the demand for new vehicles.
• Rising oil prices are driving increased consumer research into electric vehicles (EVs), but not yet translating into a significant sales increase.
• New EV sales are down 28% year over year, although used EV sales were up 12%.

The logistics takeaway

Softening demand for new vehicles is easing near‑term outbound pressure, but volatility remains elevated. Automotive supply chains should plan for weaker new‑vehicle volumes offset by continued movement of parts, aftermarket goods and used vehicles. Shippers should prioritise flexibility, shorter planning cycles and tight inventory control.

Automakers diversifying towards batteries and robots

Several auto manufacturers are diversifying into product lines such as batteries and humanoid robots to utilise available plant capacity due to recent shifts in EV production models.

• Partnering with LG Energy Solutions, GM and Tesla plan to produce batteries for energy storage systems (BES) at two U.S. plants which had been inactive.
• Tesla plans to shift their Optimus Humanoid robot from its current demo state to a major manufacturing push, with a one-million-unit annual production target.
• In addition to a new plant in Texas, Tesla will use the production lines from its discontinued Model S and Model X.

What it means for freight

As automakers repurpose excess capacity, freight flows are becoming less vehicle‑centric and more component and project‑driven. Shippers should expect new inbound material mixes, different outbound profiles and uneven volumes. Logistics strategies should adapt to support shorter product ramps, nontraditional freight and rapid production pivots.

Insights from the C.H. Robinson Automotive Summit

On 18 March, 2026, C.H. Robinson hosted our 3rd annual Automotive Summit in Detroit in collaboration with Michigan State University. With presentations by Michigan State professor Jason Miller and our C.H. Robinson market and governmental affairs teams, the event saw automotive original equipment manufacturers (OEMs), suppliers, aftermarket, students and CH Robinson automotive experts discussing the latest supply chain trends and solutions.

For more about the key insights learnt from the summit, read our blog: 4 Lessons from Automotive Supply Chains Every Shipper Should Pay attention To.

Tariff updates

On 2 April, 2026, the White House issued a new proclamation adjusting the tariffs on the imports of aluminium, steel and copper into the United States effective 6 April 2026. The action raises tariff rates, expands the duty base and tightens enforcement, with immediate implications for importers of metal products and metal-containing derivatives.

Additionally, Section 232 tariffs now apply to the entire customs value of covered aluminium, steel and copper articles and their derivative products, regardless of actual metal content, eliminating prior valuation approaches that applied duties only to the metal portion of the article. For more information and details, see our Client Advisory on the topic. 

For other developments about potential IEEPA tariff refunds, Section 122 application and the process for Section 301 investigations, go to the Trade Policy & Customs section of this report.

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