The ongoing geopolitical tensions in the Middle East are casting a long shadow over global supply chains, with China’s logistics sector also feeling the impact. Factory shutdowns, paused orders, and soaring freight rates are among the ripple effects emerging as the conflict continues.
Airlines Raise Rates as Air Cargo Market Enters a “High-Pressure Zone”
Recent instability in the Middle East has directly disrupted the global air cargo market. On one hand, international oil prices have surged, rapidly increasing jet fuel costs. Industry experts note that fuel expenses typically account for over 30% of an airline’s total operating costs, and price volatility has sharply amplified this pressure.
To hedge against these risks, airlines worldwide have raised fuel surcharges, pushing overall air freight rates higher.
More importantly, capacity has been severely constrained. Flight cancellations and route adjustments are widespread due to airspace restrictions and safety concerns, drastically reducing available cargo capacity. Extended flight paths and reduced load factors further limit effective capacity, sustaining upward pressure on rates.
Market data shows that spot rates from South Asia to Europe have jumped roughly 70% compared to pre-conflict levels, South Asia to North America by nearly 60%, and Europe to the Middle East by over 50%. Domestic freight forwarders report that some European air freight rates have nearly doubled—from around RMB 20 per kilogram to close to RMB 40—showing little sign of short-term relief.
“It’s Not Expensive, It’s Flights That Don’t Exist”: The Capacity Crisis Worsens
Beyond rising costs, the more critical challenge is “no available space.” Many industry insiders indicate that the Middle East air cargo market has shifted from a pricing issue to a capacity issue, with frequent flight cancellations and highly unstable schedules becoming the norm.
Key Middle East hubs such as Dubai and Doha are experiencing operational restrictions, affecting over 10% of global air cargo capacity. Airlines are increasingly choosing to reroute flights to avoid risk, adding 1–3 hours of flight time, which not only increases fuel consumption but also reduces cargo load efficiency.
Under these conditions, shippers face almost complete loss of logistical control. Some freight forwarders report that Middle East routes are essentially “semi-halted,” with most shippers adopting a wait-and-see approach until the situation stabilizes.
Orders Paused, Supply Chain Ripple Effects
The dual impact of skyrocketing rates and limited capacity is quickly transmitted downstream in the supply chain.
Middle East cross-border sellers are among the first affected. High transport costs and unpredictable transit times have led many businesses to pause shipments, coordinating with local clients to monitor the situation. Market feedback indicates that Middle East buyers are prioritizing safety and are largely aligned with the slowdown in trade activities.
For some high-value or time-sensitive products—such as pharmaceuticals, electronics, and perishable goods—supply chain pressures are already emerging. Businesses reliant on air transport are considering alternative modes, but high costs are being passed along, creating an inflationary effect. Experts note that air cargo accounts for roughly one-third of global trade value, and sustained high rates will inevitably impact end consumers.
High Rates Expected in the Short Term; the Industry Awaits a Turnaround
Given current supply-demand dynamics, the air freight market is likely to remain volatile at elevated levels in the short term. The uncertainty in the Middle East makes capacity recovery unpredictable, while robust Chinese cross-border e-commerce demand provides long-term support for air freight.
In response, the market is exploring alternative routes, including rail transport and non-Middle East transit options. However, these alternatives are unlikely to fully offset the capacity gap in the near term.
Overall, this “air freight storm” triggered by geopolitical conflict is no longer a regional issue; it is reshaping global logistics patterns. For cross-border sellers and logistics providers, the key challenge ahead will be building resilient supply chains amidst ongoing uncertainty.
