The ongoing Iran war is beginning to significantly impact small businesses across the United States, as disrupted shipping routes, rising costs and constrained consumer spending create fresh challenges for owners already navigating uncertainty.
Small business owners say the severe supply chain disruptions during the pandemic were worse – but they fear that if the war stretches on for months, it might start to come close.
“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,” Brandon Fried, executive director of the Airforwarders Association told news agency AP.
Exports stranded as routes choke
For some exporters, the disruption has caused financial losses.
At Nichols Farms in California, a pistachio grower and processor, shipments worth millions have been left in limbo. The US is the world’s largest exporter of pistachios, and the company sends about half of its produce overseas, including to markets in Europe, China and the Middle East.
With the Strait of Hormuz effectively shut, deliveries to countries such as Saudi Arabia, Iran and the UAE have been severely affected. Around $5 million worth of pistachios were stranded when the conflict escalated, with only a portion successfully rerouted through alternative ports.
“A lot of it has just been in limbo,” said Jared Lorraine, the company’s chief operating officer. “It’s literally been sitting idle for the last three weeks and we’re just saying, OK, what do we do?”
Shipping costs surge for manufacturers
The ripple effects are also being felt by businesses that rely on global supply chains.
Matthew Tran, founder of footwear brand Birchbury, said shipping costs for containers from Vietnam have doubled since the war began—from about $3,500 to $7,000. Delivery timelines have also stretched by several weeks, AP reported.
“It’s kind of like a traffic jam,” he said, explaining how congestion across routes has slowed shipments even on routes not directly linked to the conflict zone.
While he believes the pandemic caused more severe disruption, Tran is wary of how prolonged instability could hurt demand. “They always say the wars are going to be short, but they’re never short,” he said.
With fuel prices rising, he fears customers will cut back on discretionary purchases. “Customers don’t understand, but also their gas prices just went up, too, right?… Buying another new pair of shoes is secondary.”
Fertiliser fears hit local services
The impact is not limited to exporters and manufacturers. Service businesses are also bracing for higher input costs.
Jake Wilson, who runs a lawn care business in Kansas City, said suppliers warned him early on about an impending spike in fertiliser prices. The Middle East accounts for a significant share of global fertiliser exports, making the sector vulnerable to disruptions.
To stay ahead, Wilson is stockpiling supplies far beyond his usual cycle, attempting to lock in prices before further increases.
“It’s kind of on me to try to get out ahead of it… so I could still try to be profitable while keeping prices where I quoted at the beginning of the year,” he said.
With most customers paying upfront for annual services, he is reluctant to pass on additional costs midway through the year.
Rising fuel costs hit deliveries
In Chicago, electronics retailer Abt is grappling with rising fuel bills as it operates a large fleet of delivery vehicles. With diesel and petrol prices climbing, the cost of offering free delivery—a key customer incentive—is under pressure.
“It’s an eye-opening expense,” said co-president Jon Abt, adding that the increase will affect both in-house deliveries and third-party shipping partners.
For now, the company plans to absorb the costs rather than pass them on immediately. “We like delivering things for free, and I think customers expect it,” he said.
While many businesses say disruptions during the COVID-19 pandemic were more severe, there is growing concern that a prolonged conflict could push current challenges to similar levels.
