Air Freight Rates Surge as Middle East Conflict Disrupts Trade Routes

Airspace closures and security issues drive up costs, forcing some companies to shift from ocean to air cargo

Mar. 13, 2026 at 4:09am

Got story updates? Submit your updates here. ›

Air freight rates have risen by as much as 70% on some routes since the start of the U.S.-Israeli war on Iran, as the conflict limits flights, blocks some ocean shipments, and pushes up jet fuel costs. The shift to air cargo is significant because air freight handles about one-third of global trade by value, making rate spikes a potential inflationary pressure on goods ranging from medicines to electronics. Customers are shifting freight from ocean to air, but it is extremely expensive - typically 5x to 10x higher - and those costs are climbing as capacity tightens.

Why it matters

The Middle East conflict has severely disrupted major air cargo hubs like Dubai and Doha, leading to a dramatic reduction in capacity and driving up rates on key trade routes. This is putting pressure on companies that rely on efficient global supply chains, especially for time-sensitive and high-value goods like pharmaceuticals and electronics.

The details

Air freight rates have risen by as much as 70% on routes between South Asia and Europe due to Middle Eastern airspace closures and security issues. More than 100 container ships have been stranded around the critical Strait of Hormuz oil export corridor, disrupting ocean freight. Companies are shifting some generic medicine shipments from ocean to air cargo, which is 5-10 times more expensive. The jet fuel price has doubled since the start of the conflict, and shipping companies are applying fuel surcharges and war risk levies.

  • The U.S.-Israeli war on Iran began in early 2026.

The players

Prashant Yadav

A senior fellow at the Council on Foreign Relations and pharmaceutical supply chain expert.

Steve Blough

The chief supply chain strategist at logistics software firm Infios.

Niall van de Wouw

The chief air freight officer at transportation pricing platform Xeneta.

Ronald Lam

The CEO of Hong Kong's Cathay Pacific Airways.

Judah Levine

The head of research at freight booking and payments platform Freightos.

Got photos? Submit your photos here. ›

What they’re saying

“The main shift I've heard about involves companies moving generic medicines from ocean freight to air cargo.”

— Prashant Yadav, Senior fellow, Council on Foreign Relations

“Customers are shifting freight from ocean to air, however it is extremely expensive - typically 5x to 10x higher - and those costs are climbing as capacity tightens.”

— Steve Blough, Chief supply chain strategist, Infios

“But because of the situation in Dubai, we're now skipping that stopover and we are flying direct from Hong Kong to Europe with some payload restriction, because we couldn't uplift fuel in between.”

— Ronald Lam, CEO, Cathay Pacific Airways (Earnings call)

“These trends may reflect Asian and European carriers adding capacity to these long-haul lanes to make up for the missing Gulf capacity, and they may also reflect some of the Gulf carriers - most importantly Emirates - having restarted operations and increasing the number of flights that are now leaving and arriving at these important Gulf hubs.”

— Judah Levine, Head of research, Freightos

What’s next

As the conflict continues, industry experts will be closely monitoring whether airlines and shipping companies can add enough capacity on alternative routes to offset the disruptions at key Middle East hubs.

The takeaway

The Middle East conflict has severely disrupted global supply chains, forcing companies to shift from ocean to more expensive air freight and driving up costs for a wide range of consumer goods. This highlights the vulnerability of just-in-time logistics to geopolitical shocks and the need for more resilient and diversified supply chain strategies.