Airfreight rates could climb sharply as the crisis in the Middle East disrupts global cargo capacity, according to logistics data provider Xeneta. The company is urging shippers operating on affected routes to delay signing long-term freight agreements until the situation becomes clearer.

Niall van de Wouw, Xeneta’s chief airfreight officer, said the conflict has already forced airlines to ground operations and cancel flights, cutting global airfreight capacity by roughly 16–18%. However, the disruption is uneven across regions, with some markets experiencing far deeper capacity losses.

One of the hardest-hit markets is India, where cargo capacity is heavily reliant on Middle Eastern carriers. With airlines such as Qatar Airways, Emirates, and Etihad unable to operate normally in the region, India’s available airfreight capacity has dropped dramatically.

“That global 16–18% reduction doesn’t tell the full story,” van de Wouw explained. “In some markets the impact is only in the low single digits, but in others it can reach 50%, 60%, or even 70%.”

Even routes that don’t pass directly through the Middle East could feel the effects. Services linking India to Europe via hubs such as Istanbul may also see price increases due to the broader squeeze on available aircraft and cargo space.

“Shippers may not be operationally affected, but they will definitely feel the commercial impact,” he said. “Airlines that can still operate these routes will try to maximize their advantage in the market.”

Van de Wouw compared the situation to the early months of the Covid-19 pandemic, when global flight cancellations triggered massive spikes in airfreight pricing. In some markets, rates doubled, tripled, or even quadrupled.

A similar trend could emerge again if the conflict continues. The disruption is particularly significant because two of the world’s largest air cargo carriers—Qatar Airways and Emirates—have been severely impacted, limiting their ability to operate normally.

“That alone has a dramatic effect on global capacity,” van de Wouw said. “And the biggest challenge right now is uncertainty. No one knows how long this disruption will last.”

Cargo already in the Middle East may face immediate delays. Shipments currently in airline custody could remain stuck until flights resume, though freight forwarders with control of the goods may still find alternative routing options.

Meanwhile, cargo across Asia could also experience delays as the network readjusts. Van de Wouw expects charter flights to increase as companies scramble to secure capacity.

“Freight forwarders will find solutions—this industry has become very resilient over the last decade,” he said. “But those solutions will come at a cost.”

Before the crisis, load factors on routes from Asia to Europe were already around 80%, a level considered the tipping point between a buyer’s and seller’s market. Removing even 10% of capacity from the system could quickly create a shortage of available space.

While charters may provide relief, they come with additional hurdles such as landing rights and operational approvals—factors that can push prices significantly higher than pre-crisis levels.

The disruption also comes at a time when many companies are negotiating annual shipping contracts. For shippers moving cargo on the most affected trade lanes—particularly between Asia, Europe, and the Indian subcontinent—van de Wouw advises postponing those agreements.

“If you’re shipping across the Pacific, the impact will likely be smaller and business can continue more or less as usual,” he said. “But if your routes run through the affected regions, it’s better to wait.”

Signing long-term deals in the current environment carries significant risk. If the conflict ends quickly, rates agreed today could turn out to be far too high. If the crisis drags on, those same rates could prove unsustainably low for carriers.

“Right now, shippers should stay close to their freight forwarders and accept the uncertainty,” van de Wouw said. “Once the situation becomes clearer, that’s the moment to lock in longer-term pricing. A contract signed today may not match the reality of the market for very long.”

Source: aircargonews