By Sean P. Gazitúa, President & CEO, WTDC
Global travel retail depends on movement. Products must reach airports, cruise ships, border stores, and tourism destinations before passengers arrive. Today, developments at the Strait of Hormuz and the Panama Canal show how quickly that movement can become less predictable.
The current situation in the Strait of Hormuz is affecting far more than the energy market. The waterway is a critical outlet for crude oil, refined petroleum products, liquefied natural gas, and liquefied petroleum gas produced throughout the Persian Gulf. Restricted and uneven traffic through the Strait can therefore increase the cost of marine fuel, aviation fuel, trucking, electricity, manufacturing, and ocean transportation.
The U.S. Energy Information Administration reported earlier this year that limited flows through Hormuz forced major regional producers to reduce crude-oil production. It estimated combined production shut-ins of 7.5 million barrels per day in March, increasing to 9.1 million barrels per day in April. The agency also reported that reduced LNG movements tightened global supply and widened the price difference between U.S., European, and Asian natural-gas markets. Its forecast emphasized that restoring normal flows would take time, even after traffic began to recover.
For Duty Free and Travel Retail, the effects move through the supply chain in several ways. Higher energy prices raise the cost of producing glass bottles, aluminum packaging, plastics, cosmetics, fragrances, confectionery, and other consumer products. They also increase the expense of transporting those goods by vessel, aircraft, and truck. Retailers and suppliers serving Gulf airports and other destinations within the region may face longer lead times, limited carrier capacity, changing sailing schedules, and higher insurance or transportation costs.
The impact is also felt outside the Middle East. Fuel represents a major operating cost for airlines and cruise lines. When those costs rise, carriers may adjust routes, schedules, capacity, or pricing. Changes in passenger traffic can then affect product demand at airports, onboard aircraft, aboard cruise ships, and in destination stores. A disruption involving energy commodities can therefore reach the travel-retail counter even when the merchandise itself never passes through Hormuz.
On the other side of the world, the Panama Canal is facing a different challenge. Reduced precipitation in the Canal watershed has required the Panama Canal Authority to make temporary capacity and booking adjustments. Effective September 3, 2026, the Authority set daily availability at nine Neopanamax slots and 25 Panamax slots. Panamax availability was scheduled to decline to 23 daily slots beginning September 15. The Authority has warned that vessels arriving without reservations may experience longer waiting times and that a confirmed reservation is the only way to guarantee a transit date.
At the same time, the Canal is providing customers with additional booking flexibility. Beginning with booking dates on September 13, Neopanamax customers may obtain more than one reservation for the same date and secure slots on consecutive dates. The revised system will offer 63 Neopanamax reservation slots each week. It also establishes minimum allocations for container ships, LNG and LPG vessels, vehicle carriers, bulkers, and other market segments.
These measures are designed to distribute capacity more equitably while conserving water. For travel-retail suppliers, however, reduced daily transits can still affect inventory planning between Asia, the Americas, and the Caribbean. Spirits, fragrances, cosmetics, tobacco, confectionery, electronics, and luxury merchandise may experience longer or less predictable transit times. Carriers could also give greater attention to vessel utilization, advance reservations, and alternative routes.
The uncertainty extends beyond maritime shipping. Conditions in the Middle East and the continuing war involving Ukraine have changed international air travel as well. Airlines must regularly reassess airspace, alter flight paths, and avoid areas considered unsafe. Longer routes require more fuel and may affect schedules, connections, aircraft availability, and belly-cargo capacity. These changes influence not only how travelers move, but also how urgently needed travel-retail products reach airport stores and regional distribution centers.
The Strait of Hormuz and the Panama Canal do not operate in isolation. Energy availability affects transportation costs. Canal capacity affects vessel schedules. Airspace restrictions affect passenger flows and air cargo. Together, these developments reinforce the need for the Duty Free and Travel Retail industry to maintain additional lead time, monitor inventory more closely, and develop alternative transportation and distribution plans.
The companies best positioned to manage this uncertainty will be those that can delay final market decisions and redirect inventory as conditions change. Foreign Trade Zones, bonded warehouses, and strategically located distribution centers can provide that flexibility. In a global market shaped by changing routes, weather, energy supplies, and passenger patterns, resilient logistics is no longer simply a support function. It is an essential part of serving the traveler.
