Cosco Shipping Holdings Co. reported a 50% drop in first-quarter profit on weaker freight rates, warning that war in the Middle East has posed “significant challenges” for the industry.

Net income fell to 5.9 billion yuan ($863 million) from 11.7 billion yuan a year earlier, according to a filing on April 29. Revenue dipped 11% to 51.8 billion yuan, with the transpacific route seeing the biggest decline.

“The conflict in the Middle East has posed significant challenges to the safety and stability of global shipping,” China’s biggest container liner said.

First-quarter container freight rates averaged 14% lower than a year earlier, Bloomberg Intelligence analysts led by Kenneth Loh wrote in a note prior to earnings.

Cosco told investors earlier in April that it remained relatively insulated from the Middle East conflict, and that capacity of container shipping routes to the region accounts for a “relatively small proportion” of global total capacity.

The liner also resumed new bookings for general cargo containers for shipments to countries including the United Arab Emirates and Saudi Arabia.