The ongoing escalation of geopolitical conflicts in the Middle East is pushing the global air cargo system into a double squeeze of “high costs and low capacity.” As international oil prices soar and jet fuel costs surge—compounded by numerous airlines canceling flights to the Middle East and collectively raising fuel surcharges—air freight rates are climbing rapidly, with some routes seeing increases of up to 70% or even doubling. Amid the extreme instability of “one day flying, one day grounded,” cross-border logistics in the Middle East have nearly ground to a halt. Sellers and buyers have been forced to hit the “pause button,” and a supply chain disruption triggered by geopolitical conflict is rapidly spreading throughout the global trade system.

Collective Price Hikes by Airlines Push Air Freight Market into “High-Pressure Zone”

Recently, ongoing tensions in the Middle East have directly impacted the global air freight market. On one hand, international oil prices have surged, causing aviation fuel costs to rise rapidly. It is widely acknowledged within the industry that aviation fuel typically accounts for over 30% of an airline’s total operating costs; against the backdrop of volatile oil prices, this cost pressure has been rapidly amplified. To hedge against cost risks, numerous airlines worldwide have raised fuel surcharges, driving up overall air freight rates.

On the other hand, and more critically, there has been a sharp contraction in capacity. Due to airspace restrictions and security risks, a large number of cargo flights on Middle Eastern routes have been forced to cancel or reroute, resulting in a significant reduction in available capacity. Compounded by longer flight distances and reduced payloads caused by detours, this has further squeezed effective capacity, driving freight rates higher.

Market data shows that current spot freight rates on routes from South Asia to Europe have risen by approximately 70% compared to pre-conflict levels, while rates from South Asia to North America have increased by nearly 60%, and rates on routes from Europe to the Middle East have also risen by over 50%. Domestic freight forwarders report that air freight rates on some European routes have nearly doubled, rising from over 20 yuan per kilogram to nearly 40 yuan, with no signs of a decline in the short term.

“It’s Not About the Price, It’s About the Lack of Flights” — The Capacity Crisis Intensifies

Compared to rising prices, the market’s more pressing issue lies in the “lack of available space.” Several industry insiders noted that the Middle East air freight market has shifted from a “price issue” to a “capacity issue,” with frequent flight cancellations and highly unstable schedules becoming the norm.

The impact is most pronounced at key Middle Eastern aviation hubs. Operational restrictions at traditional transit centers such as Dubai and Doha have affected more than 10% of global air cargo capacity. Meanwhile, to mitigate risks, airlines are generally opting for detours, adding 1 to 3 hours to flight times. This not only increases fuel consumption but also reduces cargo loading efficiency.

Against this backdrop, businesses have virtually lost control over their logistics. Some freight forwarders have stated outright that Middle Eastern routes are currently in a state of “semi-suspension,” with shippers generally adopting a wait-and-see approach until the situation becomes clearer.

Cross-border Sellers Halt Operations; Supply Chain Disruptions Spill Over

The dual impact of soaring freight rates and capacity shortages is rapidly spreading to the downstream of the supply chain.

Cross-border sellers in the Middle East are the first to be impacted. Due to significantly increased shipping costs and unreliable delivery times, many companies have suspended shipments and are monitoring the situation alongside their local clients. Market feedback indicates that Middle Eastern clients are currently more concerned about safety issues and generally agree with the need to slow down the pace of trade.

Secondly, certain high-value-added or time-sensitive product categories are beginning to face supply chain pressures. For example, pharmaceuticals, electronics, and fresh produce rely heavily on air freight. With sea freight disrupted, some companies are attempting to switch to air freight, but the high costs are further driving up end-consumer prices, creating an inflationary ripple effect.

Industry insiders point out that air freight accounts for about one-third of global trade value. With freight rates remaining at elevated levels, cost pressures will inevitably be passed on to consumers.

Short-Term Highs Unlikely to Change; Industry Awaits a Turning Point

Given the current supply-demand dynamics, the air freight market is expected to remain volatile at elevated levels in the short term. On one hand, the uncertainty surrounding the situation in the Middle East makes it difficult to predict when capacity will recover; on the other hand, strong demand for Chinese cross-border e-commerce exports continues to provide long-term support for air freight.

Against this backdrop, the market is exploring alternative routes, including rail transport and non-Middle East transit routes, but these are unlikely to fully bridge the capacity gap in the short term.

Overall, this “air freight storm” triggered by geopolitical conflict is no longer confined to a regional event; it is reshaping the global logistics landscape. For cross-border sellers and logistics companies, rebuilding supply chain resilience amid uncertainty will be the central challenge in the coming period.

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