Air freight costs surge as war disrupts routes

Air freight rates have surged sharply across several global trade corridors as the war involving the United States and Israel against Iran disrupts transport routes, closes large portions of Middle Eastern airspace and forces cargo operators to reroute shipments at significantly higher cost. Industry data show some air cargo routes have experienced price increases of up to 70 percent since the escalation of hostilities, with South Asia–Europe corridors among the most heavily affected.

Logistics companies and freight analysts say the surge reflects a combination of restricted flight paths, rising jet fuel costs and interruptions to maritime shipping lanes around the Strait of Hormuz, one of the world’s most critical energy and trade chokepoints. More than 100 container vessels have been left stranded or delayed near the narrow waterway as tensions intensified, disrupting cargo flows that normally move through the Gulf toward Europe and Asia.

Air cargo markets have absorbed part of that disruption as companies seek alternatives to delayed sea shipments. Pharmaceutical manufacturers, electronics exporters and fast-fashion suppliers in South Asia are increasingly turning to aircraft to move goods quickly to European markets, pushing demand higher and placing pressure on already constrained capacity. Logistics analysts note that while air transport accounts for a relatively small share of global trade by volume, it carries a large portion of high-value goods, making price spikes particularly significant for industries dependent on time-sensitive deliveries.

Capacity constraints have intensified because airlines must reroute flights to avoid conflict zones and closed airspace stretching across parts of the Gulf. Longer routes require additional fuel and reduce the payload airlines can carry, forcing carriers to limit cargo volumes while imposing fuel surcharges and war-risk premiums. These adjustments have pushed spot prices on certain corridors sharply higher, with industry tracking data showing rates from South Asia to Europe climbing above four dollars per kilogram.

Air freight disruptions have been compounded by the closure of airports and transport hubs across the region, a development that has rippled through international logistics networks. Cargo flows through major Gulf hubs have slowed significantly, while airlines and freight forwarders scramble to redesign global schedules and move shipments through alternative routes across Central Asia or the Mediterranean.

The knock-on effects extend well beyond aviation. Maritime shipping companies have halted or diverted vessels because of security risks around the Strait of Hormuz, a corridor responsible for a substantial share of global energy exports and container traffic. Tankers, container ships and liquefied natural gas carriers have faced delays as attacks on vessels and port infrastructure heightened safety concerns for crews and insurers.

Insurance costs for ships transiting the Gulf have also risen steeply as underwriters reassess risk exposure. War-risk premiums for voyages through the strait have climbed severalfold, adding hundreds of thousands of dollars to the cost of each journey for some vessels. The higher insurance burden, combined with fuel surcharges and longer detours around Africa or through other routes, is pushing maritime freight rates upward alongside air cargo costs.

Energy markets are amplifying the disruption. The conflict has pushed up oil prices and jet fuel costs, a critical expense for airlines operating cargo aircraft. Carriers typically pass these increases on to customers through fuel surcharges, contributing to the rapid escalation in freight rates across affected trade lanes. Analysts say the aviation industry faces a complex balance between maintaining cargo capacity and protecting margins as operating costs rise.

Supply chains already strained by geopolitical tensions and trade disputes are now confronting additional bottlenecks. Manufacturers in sectors ranging from pharmaceuticals to electronics rely heavily on predictable logistics networks linking Asia, the Middle East and Europe. When sea shipments slow and air transport becomes more expensive, companies face difficult decisions over whether to absorb higher costs or pass them on to consumers.

Businesses across Europe and Asia are already reporting cost pressures tied to higher transport expenses. Freight specialists warn that price increases in air cargo can quickly translate into broader inflationary effects because many high-value products — including medical supplies, luxury goods and specialised industrial components — depend on rapid delivery by aircraft.

Logistics companies are responding by exploring alternative routes and transport combinations. Some operators are moving goods by air to Central Asian airports before transporting them by road across the region, while others are using multimodal solutions combining sea, rail and trucking to bypass disrupted corridors. Global courier firms have also activated contingency networks to ensure priority shipments continue to move despite the disruptions.

Industry executives caution that the duration of the conflict will play a decisive role in determining how long freight markets remain volatile. Should airspace closures persist and maritime traffic remain constrained, cargo capacity could tighten further and sustain elevated prices across key trade lanes linking Asia and Europe.