28.4.2026 | Tax

The impact of the Iran conflict is already being felt across ports and freight. Here, Andrew Diver, Head of Tax at Beatons Group, looks at why the businesses that come through strongest will be the ones that act early – not react late.

Most businesses in the port and freight sector are already feeling the effects of the conflict in Iran.

Fuel costs are rising, routes are under pressure, and uncertainty is starting to filter through supply chains. But for most operators, the challenge is no longer understanding the situation – it is deciding what to do next.

In our experience, periods like this don’t just test profitability. They tend to expose the underlying strength – or weakness – of a business’s financial position. Cash flow, pricing discipline and visibility over the numbers quickly come into focus.

The businesses that navigate these periods best are rarely the ones that react fastest to headlines. They are the ones who take a step back early, make clear decisions, and stay close to the fundamentals.

Cash flow

In stable markets, profit is often the headline number. In volatile markets, cash might be what matters.

Rising costs tend to hit immediately, while revenues lag. At the same time, customers can take longer to pay, creating a squeeze that builds quietly but quickly.

This is where tighter credit control, closer monitoring of debtor days and a more cautious approach to spending become essential. It is also worth asking a simple but revealing question: if volumes dropped by 10–15 per cent, how would the business cope?

Pricing needs to reflect reality

Freight businesses are often reluctant to pass on cost increases, particularly in competitive markets where relationships matter.

But consistently absorbing higher fuel and operating costs is rarely sustainable over the long term.

We are seeing more operators revisit their pricing structures – introducing or strengthening fuel surcharges, shortening pricing windows, and building flexibility into contracts. The key here is not just the decision itself, but how it is communicated. Most customers understand the pressures; what they need is clarity and consistency.

Does margin matter more than volume?

In uncertain conditions, chasing turnover can be a trap.

Work that looks valuable on the surface can quickly erode margin once rising costs are factored in. This makes it a good time to step back and review which customers and contracts are genuinely contributing to profitability.

In some cases, a slightly smaller workload with stronger margins can put the business in a far more resilient position than higher volumes that deliver limited returns.

Don’t overlook the tax position

Tax is not always the first lever businesses consider under pressure, but it can have a meaningful impact on cash flow.

Ensuring that tax payments reflect current trading conditions – whether by adjusting instalment payments, making use of available reliefs, or reviewing VAT arrangements – can release cash when it is most needed.

Check your headroom before you need it

Periods of disruption tend to expose businesses that are operating with little financial flexibility.

Now is the time to review funding arrangements, banking covenants and overall headroom. Even if no immediate action is required, understanding where you stand and what options are available is far preferable to having those conversations under pressure.

Plan for more than one outcome

The biggest unknown at the moment is how long the disruption will last.

A short-term spike in costs is one thing. A prolonged period of instability is another entirely.

Modelling a small number of realistic scenarios – for example, three to six months of disruption versus a year or more of sustained pressure – can help inform decisions now, rather than forcing reactive changes later.

Stay close to the numbers

Finally, visibility is critical.

Up-to-date management information, regular cash flow forecasts, and a clear understanding of working capital movements allow businesses to act quickly and confidently. Without that visibility, decisions are often made too late.

Businesses that act early, maintain control of their numbers and are prepared to make commercially driven decisions tend to come through periods like this in a stronger position.

beatons.co.uk