Global air cargo markets are experiencing a sharp escalation in rates as ongoing geopolitical tensions in the Middle East continue to constrain capacity, disrupt network flows, and inject volatility into pricing dynamics.
According to the latest data from WorldACD Market Data, average global airfreight rates rose by 10% week on week in the period from 9 to 15 March, reaching US$2.67 per kilogram, including surcharges. This follows an 8% increase the previous week, underscoring the rapid upward trajectory in pricing as stakeholders respond to sustained disruption.
The market turbulence stems from escalating conflict involving United States, Israel, and Iran, which has significantly impacted airspace availability, flight routing, and operational reliability across the Gulf region.
Capacity constraints drive rate escalation
Air cargo operators, freight forwarders, and shippers are contending with reduced capacity, rerouted flights, and mounting backlogs, all of which are contributing to rising rates. Increased jet fuel costs and the introduction of additional surcharges have further compounded pricing pressures.
Spot rates have been particularly affected, climbing 12% week on week to US$3.19 per kilogram—placing them 22% above levels recorded during the same period last year. The most pronounced increases have been observed in the Middle East and South Asia (MESA) region, where spot rates surged by a further 22% to US$4.37 per kilogram, representing a 58% year-on-year increase.
Despite a partial recovery in capacity following the reopening of some airspace and airports, the market remains severely constrained. Services to and from Gulf countries continue to face frequent disruptions, delays, and operational bottlenecks.
Gulf markets show partial recovery but remain below pre-crisis levels
Volumes originating from MESA rebounded by 30% week on week after collapsing by 33% in the previous period, when capacity fell by as much as 50%. A limited return of capacity—up 35% week on week—helped drive a sharp 74% recovery in tonnages from Gulf countries.
However, volumes from the region remain approximately 50% below pre-conflict levels recorded in mid-February. At the same time, spot rates from Gulf origins climbed 22% week on week to US$3.77 per kilogram, now more than 50% above pre-crisis benchmarks.
South Asian markets, which are heavily reliant on Gulf carrier capacity, also saw a partial rebound, with volumes increasing by 24% week on week. Nevertheless, they remain 20% below pre-war levels. Spot rates from the region jumped 24% to US$3.54 per kilogram, reflecting a cumulative increase of over 60% within a two-week period.
Trade lanes to Europe and the US under pressure
On key intercontinental corridors, MESA-origin volumes to Europe rose by 27% week on week but remain significantly below both pre-conflict and year-ago levels. Rates on this lane surged by 21% on top of a 60% increase the previous week, pushing them to nearly double pre-war levels.
Dubai-origin traffic has shown particularly sharp movements, with volumes rebounding 67% after a steep decline, while spot rates climbed to US$3.93 per kilogram—more than double their level a year ago.
A similar pattern is evident on transatlantic routes. Volumes from MESA to the United States increased by 22% week on week but remain below pre-conflict levels. Meanwhile, spot rates surged by an additional 25%, building on a 30% rise the previous week. Rates from Dubai to the US spiked by 56% to US$8.46 per kilogram, reaching levels approximately 2.5 times higher than last year.
Fuel constraints and airspace restrictions add further pressure
Operational challenges are being exacerbated by tightening jet fuel availability and rising costs. Recent restrictions in the United Arab Emirates have limited operations to UAE-based carriers following damage to fuel infrastructure, significantly impacting international capacity.
At the same time, disruptions to shipping routes through the Strait of Hormuz have contributed to an 11% week-on-week increase in jet fuel prices, now nearly double pre-conflict levels. Airlines have responded by introducing or increasing fuel and war-risk surcharges, further driving up total freight costs.
Meanwhile, Qatar Airways Cargo has begun selectively resuming freighter operations to and from Doha after a three-week suspension, signalling a cautious and uneven return of capacity to the market.
Asia Pacific recovery tempered by Middle East spillover
Outside the immediate conflict zone, Asia Pacific markets are continuing their post-Lunar New Year recovery. Regional volumes rose by 5% week on week and are now approximately 30% higher than levels seen at the start of the holiday period, although still below pre-holiday benchmarks.
Trade lanes from Asia Pacific to the US and Europe are also experiencing upward pressure on rates, partly due to spillover effects from Middle East disruptions. Spot rates to Europe rose by 13% week on week, while rates to the US increased by 8%, reflecting tightened global capacity and shifting routing patterns.
Market outlook: sustained volatility expected
Despite signs of partial recovery in volumes and capacity, the air cargo market remains highly unstable. Rapid changes in airspace accessibility, fuel supply constraints, and geopolitical developments continue to create an unpredictable operating environment.
With capacity still constrained and demand backlogs building, upward pressure on rates is expected to persist in the near term. Industry stakeholders are likely to remain focused on agility, cost management, and network flexibility as they navigate one of the most volatile periods in recent air cargo market history.
