A survey of small businesses in different parts of the United States shows a common pattern: the Iran war’s impact is landing through everyday logistics, not just headline events. Owners described shipments taking longer, routes shifting, and insurers and transport providers charging more, while consumers respond by tightening discretionary spending.
Brandon Fried, executive director of the Airforwarders Association, a trade group representing companies that move cargo through the supply chain, said the timing of the disruptions is especially punishing for smaller operators. “The costs are rising, the routes are changing, and capacity is tightening. It’s all happening at the same time, and that’s a perfect storm for small businesses,” Fried said.
Nichols Farms, a pistachio grower and processor in Hanford, California, said its overseas sales have been hit by bottlenecks affecting the flow of goods through the Strait of Hormuz. Jared Lorraine, the company’s chief operating officer, said pistachio exports are about 50% of the firm’s business and that the company ships to destinations including Europe, China and increasingly the Middle East.
Lorraine said the effective closure of the Strait of Hormuz made deliveries impossible for several clients. He said the company had about $5 million worth of pistachios left stranded in the water when the war started—covering shipments intended for Saudi Arabia, Iran and the United Arab Emirates—and that it has since been able to reroute some but not all of the cargo.
Lorraine said Nichols Farms managed to reroute some shipments by offloading a batch in Jeddah for trucking to the UAE, and by moving two other loads into a port in Oman after reloading into a smaller container in India. He said about $3.5 million still sits on the water, adding that much of the remaining inventory has been “in limbo.” Lorraine said, “It’s literally been sitting idle for the last three weeks and we’re just saying, OK, what do we do?”
Lorraine connected the disruption to broader food-security concerns in the region. He said, “While much of the public attention has been focused on oil, which is significant, really, the destruction of the food system is I think equally as serious,” and he said he believes 70% to 80% of food in the Middle East is imported.
In Los Angeles, barefoot-shoe brand Birchbury described similar pressure coming from container shipping reroutes and rising costs for imported goods. Founder Matthew Tran said his company makes its minimalist footwear in Vietnam and ships it to customers in the United States, the U.K., Australia and Canada, but that the war has changed the economics of moving products.
Tran said that typically he pays about $3,500 per container shipped out of Vietnam, but that cost doubled since the war started to about $7,000 as shippers deal with rerouting and higher insurance costs. He also said lead time has increased by three to four weeks and compared the experience to congestion: “It’s kind of like a traffic jam,” Tran said, adding that “even though it doesn’t seem like it would directly affect me because I’m going from Vietnam to America, it does affect me when there’s more congestion.”
Tran said he saw shipping disruption worsen during COVID and described the latest period as a new layer of strain. He worried the war could last longer than people expect, saying, “They always say the wars are going to be short, but they’re never short,” and he tied that uncertainty to consumer spending as gas prices surged, saying customers may resist discretionary purchases like a new pair of shoes.
In Kansas City, Missouri, lawn-care business Top Class Lawn Care described the war as disrupting another imported input: fertilizer. Jake Wilson, who owns the company and takes care of nearly 400 lawns across the city, said the Middle East supplies close to 30% of global exports of major fertilizers and that the Strait of Hormuz closure has upended fertilizer pricing.
Wilson said two suppliers reached out a day or two after the war started, telling him to expect a spike and suggesting he place orders ahead of price increases. He said rising costs worry him because about 70% of his customers lock in a price for a year of lawn care and prepay at the beginning of the year, making it harder to adjust midstream without renegotiating with customers.
Wilson said he tries to avoid asking clients for more money later in the year and has been changing how far ahead he buys. He said he usually buys fertilizer four times a year, two or three months ahead, but he is attempting to secure enough product through fall and into the end of the year—effectively doubling his normal order. “I don’t want to wait till summer and go to my supplier and they either say, well, we don’t have any product available or what we do have is now 60%, 70% more expensive than what it was quoted in early spring, or first of the year,” Wilson said.
In Chicago, Abt Electronics described the war-era pressure arriving through fuel and delivery costs rather than international freight. Jon Abt, co-president of the retailer, said the business uses diesel and gasoline to operate hundreds of delivery vans and trucks and that with gas prices surging, the company is evaluating whether it can maintain free shipping and free delivery offers.
Abt said the retailer uses on average 25,000 gallons of diesel fuel and 30,000 gallons of gas fuel each month to run more than 650 delivery vans and trucks. He said the free-shipping perk, which applies to orders with a minimum of $35, is an “eye-opening expense” under current conditions, and he said it will affect delivery costs for customers and also hit shipping companies used for out-of-state deliveries.
Abt said he had not yet received the fuel bill for March, and for now he plans to absorb the cost while watching how the market develops and how competitors respond. He added, “We like delivering things for free, and I think customers expect it.”