The escalating conflict in the Middle East has left shipments of fresh produce, pharmaceuticals, electronics, and even airplane parts stranded, as airspace closures and flight suspensions severely squeeze global air cargo capacity and drive up freight rates.
Air Cargo Capacity Plunges
The US and Israeli military actions against Iran have grounded passenger and freighter flights throughout the region, including at major cargo hubs in Doha and Dubai. This has resulted in a 22% drop in global air cargo capacity, according to data from aviation and logistics consulting firm Aevean.
An executive from a Florida-based aircraft parts and repair company described the situation as an absolute halt in supply chains to the Middle East.
Air cargo handles about one-third of global trade by value, according to the International Air Transport Association. It moves high-value and time-sensitive goods such as Apple products, temperature-controlled medicines, fresh fruit, and automotive components, either in the bellies of passenger aircraft or on dedicated freighters.
Freight Rates Rise Sharply
Freight booking platform Freightos reports that rates from Southeast Asia to Europe have increased more than 6% since last Friday, while rates from South Asia to the United States are up 5%.
An analyst from Alton Aviation Consultancy noted that shippers could face higher spot rates on the Asia-Europe corridor if the disruption continues and capacity remains tight.
Middle East-based carriers provide around 13% of global air cargo capacity, with Qatar Airways ranking as the world’s second-largest freight carrier after FedEx, per IATA data.
Regional Impacts and Alternatives
The Asia to Middle East to Europe corridor has seen a 39% decline in air cargo capacity since the conflict began, while direct China-Europe flows have risen 26%, Aevean reported.
Chinese airlines stand to gain, as they can utilise Russian airspace to save time and costs, unlike many Western carriers restricted by sanctions related to Ukraine.
Europe and the Asia-Pacific region, which depend heavily on Middle Eastern hubs, face greater effects, according to the chief commercial officer of SEKO Logistics. He advised that companies in the United States should monitor developments, though the impact there is less immediate than in Europe, Asia, or Australia.
The world’s largest freight forwarder, Kuehne+Nagel, has already warned of impending backlogs in Southeast Asia and China for shipments bound to Europe and the United States.
Dual Sea-Air Bottlenecks
The crisis complicates matters further because both sea and air transport are affected, given the Gulf’s role as an integrated logistics hub. Air cargo had served as an alternative during two years of Red Sea shipping attacks, but the current conflict has closed off that option for many goods.
In times of crisis, time-sensitive or high-margin cargo often shifts to air, but current conditions make movement more unpredictable, according to a chief analyst at Danish freight analytics firm Xeneta.
This could increase working capital needs for many companies and strain cash flow. Even with efforts since the pandemic and Red Sea issues to build buffers in just-in-time manufacturing—such as automakers holding more inventory—delays in critical assembly-line parts remain likely.
The aviation sector itself faces part shortages, which could slow recovery. A senior vice president at a US-based company stocking parts for Gulf carriers explained that aircraft must remain airworthy even when grounded, and urgent requests for parts are common. Delays mean planes stay in hangars longer, creating a domino effect.
