Air cargo rates surge as Middle East disruption tightens capacity
Air cargo rates surge as Middle East disruption tightens capacity
Air cargo rates rose sharply again in week 11 as disruption to Gulf capacity continued following the conflict in the Middle East, according to WorldACD Market Data. Although operations have partially recovered, the market remains highly volatile, with limited capacity, alternative routings, and higher fuel costs still affecting conditions.
Based on more than 500,000 weekly transactions, average global full-market air cargo rates increased by +10% week on week (WoW) to $2.67 per kilo, including surcharges, after rising +8% the previous week. The increase reflects market responses to disrupted networks, limited capacity, demand backlogs, uncertainty, and higher jet fuel prices.
Global air cargo volumes rose by +4% WoW, supported by post-Lunar New Year recovery in Asia Pacific (+5%) and a rebound in Middle East & South Asia (MESA) origins (+30%). However, overall global tonnages remained -7% lower year on year, while conditions in the Middle East continue to change rapidly.
Average worldwide spot rates increased by +12% WoW to $3.19 per kilo, placing them +22% above the same week last year. The sharpest increases were recorded from MESA origins, where spot rates rose by +22% WoW to $4.37 per kilo, up +58% year on year. Although capacity and traffic improved compared to the previous week due to partial reopening of airports and airspace and the use of alternative routes, services remain constrained, particularly within Gulf countries, and are still subject to disruptions and delays.
The recovery in MESA volumes followed a sharp decline the previous week, when capacity dropped significantly. Volumes from the region rose by +30% WoW after falling -33% in week 10, while capacity increased by +35% WoW following a -50% drop earlier. Tonnages from Gulf countries surged by +74% WoW after a -65% fall the previous week, but remain around -50% below pre-war levels. Spot rates from Gulf origins also rose by +22% WoW to $3.77 per kilo, about +56% above pre-war levels.
South Asia origins also recorded a partial recovery, with volumes increasing by +24% WoW, although still -20% below pre-war levels. Spot rates from the region rose by +24% WoW to $3.54 per kilo, marking an increase of more than +60% over two weeks.
On key trade lanes, MESA to Europe volumes increased by +27% WoW but remain below both pre-war levels (-20%) and last year’s levels (-9%). Shipments from Dubai rose sharply by +67% WoW after a -39% decline the previous week, although they are still -30% below pre-war levels. Spot rates on this corridor rose by +21% WoW, following a +60% increase the previous week, taking them to around +70% above last year and nearly double pre-war levels. Rates from Dubai rose by +9% WoW to $3.93 per kilo after a sharp increase the week before.
Similarly, volumes from MESA to the US rose by +22% WoW, though still -20% below pre-war levels and -2% lower than last year. Spot rates increased by +25% WoW after a +30% rise the previous week, placing them +50% above last year and more than +65% higher than pre-war levels. Rates from Dubai to the US rose by +56% WoW to $8.46 per kilo, reaching around 2.5 times last year’s levels.
The market remains highly volatile, with further operational challenges emerging. New restrictions have been introduced in the United Arab Emirates, where only UAE-based carriers are currently allowed to operate flights following a drone strike that affected jet fuel availability. At the same time, Qatar Airways Cargo announced on 19 March that it would resume selected freighter operations to and from Doha after a three-week suspension, while continuing limited operations outside the hub.
Jet fuel availability and pricing have become a key factor, with an effective blockade of the Strait of Hormuz pushing jet fuel prices up by +11% WoW to nearly double their pre-war levels. This has led carriers to introduce additional fuel surcharges and, in some cases, war-risk surcharges, further driving up overall air cargo rates.
In Asia Pacific, cargo volumes continued to recover after the Lunar New Year slowdown. Tonnages rose by +5% WoW, taking levels around +30% higher than at the start of the holiday period, although still -12% below pre-holiday levels. Spot rates increased by +9% WoW to $3.94 per kilo, up +12% year on year.
Asia Pacific to US volumes rose slightly by +3% WoW following a +17% increase the previous week, driven by recovery in key markets such as China and Hong Kong. Volumes are now only -4% below last year’s levels. Spot rates on this route rose by +8% WoW, with increases across most major origin markets except Japan.
Volumes from Asia Pacific to Europe increased by +5% WoW after rising +17% the previous week, although they remain -12% below last year’s levels. Spot rates on this corridor rose by +13% WoW following a +12% increase the previous week, with most origin markets recording gains, while increases from Singapore and South Korea were more moderate.
