Global air freight markets are experiencing severe disruption as the US-Israeli conflict with Iran forces the effective closure of the Strait of Hormuz. Air cargo rates have surged up to 70% on key lanes, with jet fuel costs nearly doubling and capacity collapsing by as much as 50% in Middle East and South Asia regions.
Strait of Hormuz Closure Triggers Immediate Crisis
On March 2, 2026, Iranian forces attacked commercial vessels attempting transit through the Strait of Hormuz. Within 48 hours, at least 150 tankers and container ships dropped anchor in surrounding waters. By Sunday, the waterway that handles one-fifth of global oil supply was effectively closed to commercial traffic.
Five of the world’s largest marine insurers cancelled war risk coverage for Gulf operations. War risk insurance premiums jumped from approximately 0.2% to 1% of vessel value. Iran’s Revolutionary Guards issued warnings that any vessel attempting Hormuz transit risks being fired upon.
Hapag-Lloyd and MSC suspended bookings out of Persian Gulf ports and from all origins to these ports, including Oman and UAE locations. COSCO Shipping followed with suspension of new bookings to and from Middle East routes. Around 100 container vessels are now stranded in the Persian Gulf, representing up to 10% of effective global capacity.
Gulf Air Hubs Hit Hard by Airport Closures
The IRGC targeted airports in Abu Dhabi, Bahrain, Kuwait and Dubai, with airports and airspace closed across the region. Commercial flight operations in Dubai were suspended on March 7 after a drone strike, though subsequently restored at reduced scope.
DP World suspended operations at Jebel Ali port in Dubai after an aerial interception caused a fire Saturday night. The facility reopened Monday, but Expeditors reported temporary operational suspensions at several Middle East ports.
Only UAE-based carriers are currently permitted to operate flights to and from the United Arab Emirates. Qatar Airways Cargo suspended services from Doha for three weeks before announcing plans to resume selected operations on March 19.
Capacity Collapse Drives Rate Surge
Global air cargo capacity declined by approximately 18% due to airspace closures and carrier suspensions. The impact on specific regions was even more severe:
- MESA origin tonnage: down 36% week-on-week
- MESA capacity: collapsed 50% in week 10, then recovered 35% in week 11
- Gulf area outbound volume: down 62% week-on-week
- Gulf area capacity: down 70%
- Dubai to US volumes: plunged 82% week-on-week
- Dubai to Europe volumes: fell 38% week-on-week
Average global full-market air cargo rates rose 10% week-on-week in week 11 to $2.67 per kilo including surcharges. Worldwide spot rates jumped 12% week-on-week to $3.19 per kilo, up 22% compared with last year.
Middle East Routes See Steepest Increases
Middle East & South Asia spot rates spiked 22% week-on-week to $4.37 per kilo, up 58% year-on-year. Specific lanes saw even more dramatic movements:
- UAE to Europe: up 77% week-on-week, 89% year-on-year
- Sri Lanka to Europe: up 93% week-on-week
- India to Europe: up 50% week-on-week
- Bangladesh to Europe: up 41% week-on-week
- UAE to US: up 59% week-on-week
- Dubai to US: up 56% week-on-week to $8.46 per kilo
Asia Pacific Markets Feel Spillover Impact
The disruption extends well beyond the Middle East. Routes from South East Asia to Europe climbed more than 6% to $3.82 per kilo. China to US prices jumped 15% to $6.90 per kilo.
Carriers responded by adding capacity on direct routes. Capacity on direct routes from Asia Pacific to Europe increased 20%, while South Asia to Europe saw a 13% capacity boost. Despite these additions, Asia Pacific to Europe spot rates rose 13% week-on-week after a 12% increase the previous week.
Kuehne + Nagel reports that forwarders are chartering direct Far East-West flights to compensate for missing capacity. The company expects backlogs of Europe and US-bound cargo in Asia to stack up by week’s end.
Jet Fuel Costs Add Pressure
Jet fuel prices jumped 58% week-on-week initially, then rose another 11% to reach 94% above pre-war levels due to the effective blockade of the Strait of Hormuz. West Texas Intermediate oil surged 40% in one week, surpassing $100 per barrel.
US gasoline prices rose 14% in one week to $3.41 per gallon nationally, while diesel prices increased 28%. These fuel cost increases are propagating directly into carrier surcharges and base rate adjustments.
Supply Chain Impact Beyond Freight Rates
Prashant Yadav of the Council on Foreign Relations noted that many inexpensive generic drugs from India are being transferred from ocean freight to air. Air freight handles approximately one-third of global trade by value, making these disruptions particularly impactful for high-value and time-sensitive goods.
CMA CGM introduced a $3,000 per FEU emergency surcharge for containers heading to the Gulf. Freightos Terminal container rates for Shanghai to Jebel Ali spiked from $1,800 per 40-foot container on Saturday to more than $4,000 per FEU by Tuesday.
Alternative Routing Adds Cost and Time
The alternative Cape of Good Hope route adds 7,000 to 10,000 nautical miles and 10 to 14 transit days to voyages. Panama Canal Administrator Ricaurte Vásquez stated that the interoceanic waterway might see increased traffic as global shipping routes shift, potentially cutting travel time by 3 to 15 days compared to the Cape route.
Market Outlook Remains Volatile
Global airfreight traffic contracted 4% from the previous week and was 12% lower than a year ago in the week ending March 8, 2026. Global volumes in week 11 were 7% down year-on-year despite a 4% week-on-week increase.
The Houthis have threatened to resume strikes on Red Sea vessels after pausing attacks since October. Over 667,000 people have been displaced in Lebanon, with over 140 US troops injured and seven killed. Iranian casualties exceed 1,230.
What This Means for Freight Forwarders
The Strait of Hormuz disruption shows how quickly capacity shocks translate into pricing pressure across global trade lanes. Forwarders with access to multiple carriers, flexible routing options and real-time rate visibility will be best positioned to protect margins and maintain service reliability.
Those dependent on single corridors or static pricing models face the greatest exposure as volatility increases.
In this environment, speed becomes a competitive differentiator. The ability to compare capacity, reroute cargo and respond to market changes in hours instead of days will determine which forwarders retain client trust.
As disruption becomes the new operating environment, resilience will come from network access, pricing visibility and operational flexibility.
Quote faster. Route smarter. Stay competitive.
