The war launched by the United States and Israel against Iran on Saturday is already disrupting air cargo traffic in the Middle East, a key freight corridor between Asia and Europe where two of the world’s largest cargo airlines are based, and raising the potential for a rise in air freight rates.
Airlines are suspending flights, rerouting traffic around the conflict zone and unable to use key transload hubs in Dubai, Abu Dhabi and Qatar because of retaliatory missile attacks by Iran. More scheduling changes are anticipated in the days ahead.
Longer routes require more fuel, reducing the amount of cargo aircraft can carry so as not to exceed weight limits. Some airlines are expected to add refueling stops.
“We are expecting some potentially significant move in rates, especially Asia-Europe, if the situation continues with large-scale flight cancellations,” said Neil Wilson, editor of global price reporting agency TAC Index, said in an email exchange.
FedEx (NYSE: FDX) has suspended flights to and from Bahrain, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, United Arab Emirates and Saudi Arabia.
“The safety and well-being of our team members is our highest priority. As a result, pickup and delivery services in Bahrain, Kuwait, Iraq, Qatar and United Arab Emirates have been temporarily suspended until further notice. Shipments to and from other markets throughout the region may experience extended transit times,” the company said in a service alert. “We are closely monitoring the situation and will resume services as soon as it is safe to do so.”
Qatar Airways, which operates 29 Boeing 777 freighter aircraft and carries huge volumes of cargo on widebody passenger planes, has temporarily halted flights to, and from, Doha due to the closure of Qatari’s airspace. Qatar Airways Cargo offers shippers 13 tons of capacity per day.The airline warned customers to expect flight delays once the airspace re-opens and it resumes operations there. In the meantime, tendered cargo is being held at its hub and other stations around the world.
Emirates Skycargo, the fourth-largest cargo airline by traffic, has similarly suspended flights through Dubai. It operates nearly a dozen Boeing 777 freighters and leases several crewed Boeing 747-400s from third-party carriers. The United Arab Emirates has closed its airspace and Dubai International Airport sustained minor damage to a passenger concourse from an Iranian attack, according to news accounts from the region.
Bahrain’s international airport also suffered minor damage from a drone attack.
Etihad Airlines, which operates five Boeing 777 freighter aircraft in addition to a large fleet of widebody passenger aircraft, has suspended all flights through Abu Dhabi until Monday at 2 a.m. Airlines are monitoring the situation and could choose to extend any flight suspensions.
The cargo arm of Oman Air said it is experiencing limited disruption to some services within the region. Oman Air is a smaller carrier, with nine Boeing 787, 10 Airbus 330, and 32 Boeing 737-800/MAX8 passenger jets, plus one 737-800 converted freighter, according to Flightradar24 data. Services to Europe and the Asia Pacific continue to operate as scheduled, with rerouting implemented and some minor delays. As a precautionary measure, the carriage of perishable cargo has been temporarily restricted, while general cargo operations continue as normal.
Data from Netherlands-based consultancy Rotate shows global air cargo capacity is down 18% from last week due to flight suspensions by Middle East carriers and other carriers opting not to serve the Middle East. Freighter operators in Asia that aren’t subject to sanctions or Russian airspace closures due to the war in Ukraine are pivoting from the Middle East and flying over Russia to reach European destinations, according to Rotate.
Air India has suspended all flights to destinations in the Middle East, as well as many flights to Europe and New York.
United Airlines has cancelled all departures to and from Tel Aviv, Israel through March 6. The airline has also canceled flights through Dubai through March 4. SWISS suspended flights to Dubai through March 4 and to Tel Aviv through March 8. “Until and including 8 March, we will continue to avoid the airspace of Israel, Lebanon, Jordan, Iraq, Iran, Kuwait and Bahrain,” the passenger airline said in a notice.
Freightos, an international cargo marketplace and freight data provider, said air cargo rates in and out of the Middle East have remained stable so far.
Impact on ocean shipping
Meanwhile, on the ocean front, container shipping lines Maersk, Hapag-Lloyd, MSC and CMA CGM are ceasing services to and diverting vessels away from the Strait of Hormuz and the region, with CMA CGM introducing a $4,000 emergency surcharge per forty-foot container for services to the region. Hapag Lloyd announced a war risk surcharge of $1,500 per 20-foot equivalent unit for cargo transiting the Arabian/Persian Gulf, effective March 2. Reefer and special containers will be charged at $3,500 per TEU.
Marsk also cautioned customers about possible service disruptions in the UAE, Oman and Qatar.
Iranian Revolutionary Guards attacked two oil tankers on Sunday. Four seafarers on the MT Skylight were injured and transferred ashore for medical treatment after their vessel was attacked in the Strait of Hormuz, according to officials in Oman and the Palau Ship Registry.
DP World has suspended operations at the port of Jebel Ali in Dubai after an aerial interception caused a fire there Saturday night.
Iran-backed Houthi rebels in Yemen have threatened to resume strikes. In response, carriers that had restarted some Red Sea sailings have diverted vessels back around the Cape of Good Hope, postponing industry plans to return to the shortcut between Asia and Europe.
“While the situation is still developing, we can already now advise of significant delays ahead for both shipments already in transit and for upcoming shipments to and from the Middle East. It is also likely that there will be delays on the Asia-Europe trade lane as a result of this,” said Scan Global Logistics in a notice to customers.
International supply chains have buffeted by geopolitical events in recent years, including the Ukraine war, the Israel-Hamas war and the proliferation of global tariffs triggered by the United States.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
Write to Eric Kulisch at ekulisch@freightwaves.com.
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