The International Air Transport Association (IATA) has released its March data for global air cargo markets, showing a 4.8% decline in cargo demand compared to the previous year. IATA attributed the decline primarily to severe disruptions at major Gulf hubs due to the ongoing conflict in the Middle East.
Rates spiked, then began to stabilize
International airfreight rates increased substantially between March and April, driven by:
- Reduced cargo capacity across affected trade lanes
- Higher fuel prices linked to hostilities in the region
- Rerouting around restricted airspace, which extended flight times and operating costs
More recent data, however, indicates that global airfreight rate increases have largely eased as the market adjusts to a new operating environment following the U.S. and Israeli strikes on Iran at the end of February.
The wider impact extends well beyond aviation
With approximately a fifth of global oil supplies transiting through the Strait of Hormuz, prolonged uncertainty over when the conflict or diplomatic impasse will be resolved will keep energy prices elevated and ripple across supply chains worldwide.
International air cargo will be one of the many sectors affected by this crisis should hostilities continue over an extended period.
Every mode of transport, every manufacturer reliant on petroleum-based inputs, and every consumer-facing business with fuel-driven cost exposure will feel the impact.
Air cargo networks are adapting
Despite these challenges, air cargo networks continue to demonstrate the flexibility needed to support global supply chains as they adapt to overlapping geopolitical, tariff, and operational pressures. Carriers have responded by:
- Rerouting around restricted airspace
- Adjusting hub strategies in the Gulf region
- Reallocating capacity to maintain service on key trade lanes
That resilience has helped keep goods moving, even as transit times and costs have shifted.
What to watch — and what to do
All eyes remain on fuel supply and price, which are expected to test the industry’s resilience in the months ahead. Importers and exporters with airfreight in their supply chains should:
- Plan for continued rate volatility
- Build flexibility into freight budgets and lead times
- Work closely with their freight forwarder to identify the most cost-effective routing options as conditions evolve
How Universal Logistics can help
Universal Logistics continues to monitor developments in the Middle East and their impact on global air cargo markets. We are working closely with our airline partners and overseas agents to mitigate disruption and protect our clients’ supply chains.
For more information, contact David Lychek, Director – Ocean & Air Services.
