Air freight rates soar as Middle East conflict disrupts routes

Air freight rates are surging as the Middle East conflict disrupts global trade routes, forcing companies to divert shipments from sea to air, and driving up transportation costs across the board.

Rates on some cargo routes have jumped by as much as 70% since the war began as airlines reroute flights around closed airspace, deal with fuel surcharges and navigate war-risk insurance costs, Reuters reports.

The disruption has hit shipments from South Asia to Europe particularly hard, including cargo such as generic medicines that are shifting from ocean freight to more expensive air transport.

The surge in costs is adding pressure across industries from electronics to food and pharmaceuticals, the news agency said.

Cargo capacity has also tightened as airlines reduce payloads and alter routes to avoid conflict zones in the Gulf, while operations at major hubs such as Dubai and Doha have been disrupted. The price for shipping goods from South Asia to Europe has climbed to about $4.37 per kilogram from $2.57 on some routes.

More than 100 container ships have been left stranded near the Strait of Hormuz amid maritime disruptions, forcing companies to scramble for alternative logistics channels. 

Saudi Arabia’s state shipping giant Bahri is booking additional tankers to help move crude exports around disrupted Gulf routes, with vessels heading from as far away as Singapore toward the Red Sea port of Yanbu to load Saudi oil, Bloomberg reports.