March 19th, 2026 – Asia–Europe air cargo is under significant strain as shippers face a combination of rising freight rates and sharply increasing fuel surcharges. The disruption is being driven by Middle East airspace constraints linked to the ongoing U.S.–Iran conflict, a rebound in Chinese production after Lunar New Year, and a surge in jet fuel prices.
Around 30% of Asia–Europe air cargo typically moves through the Middle East, but restricted access has forced a scramble for alternative capacity. This has tightened the market considerably, with load factors climbing to 86%, up from 80% the previous week. As a result, securing space has become more difficult and costly.
Some forwarders are turning to indirect routes, including shipping via North America using passenger aircraft belly capacity. While this provides a workaround, it comes at a high price, especially since trans-Pacific routes were already near full capacity before the conflict began.
Rate increases reflect the imbalance between supply and demand. China–Europe spot rates have risen about 13% week over week, while South Asia–Europe rates have surged as much as 82% compared to pre-conflict levels. Singapore outbound rates have also jumped nearly 48% in a single week as cargo is diverted away from Gulf hubs to Asian gateways.
There are early indications of stabilization on certain lanes, potentially due to limited capacity returning from Middle Eastern carriers and additional direct services from European and Asian airlines. However, the overall outlook remains uncertain. If disruptions persist, short-term rate increases of 100% to 200% are possible, with some markets already experiencing sharp spikes.
Middle East capacity disruption
The conflict has significantly reduced operations across key Middle Eastern hubs, with flights suspended to major airports including Dubai, Doha, and Tel Aviv. While Emirates and Etihad are operating limited services, Qatar Airways Cargo remains largely offline due to airspace closures.
The Gulf region is critical to global air freight, and capacity to and from affected airports has dropped by about 90% compared to normal levels. South Asia is particularly impacted, as a large share of exports from India, Pakistan, and Bangladesh typically transit through Gulf hubs.
With those routes constrained, cargo is being redirected to Asian hubs such as Hong Kong, Singapore, and Seoul. This shift is tightening capacity on feeder routes and increasing pressure on intra-Asia and trans-Pacific lanes.
Fuel costs and surcharges climb
At the same time, airlines are rapidly increasing fuel surcharges in response to rising jet fuel prices. Many carriers have shifted from monthly to weekly adjustments.
Fuel accounts for roughly 20% to 30% of airline operating costs, and longer flight paths to avoid conflict zones are driving consumption even higher. Reduced payloads on extended routes further increase per-unit costs, compounding the financial pressure on carriers.
In response, logistics providers are revising pricing structures. Some are tying surcharges to fuel indexes on a weekly basis, while others are allocating a fixed portion of freight rates—around 15%—to fuel. Additional transit disruption fees are also being introduced to cover rerouting and capacity challenges.
Shift to alternative transport
With air freight becoming more expensive and less predictable, shippers are increasingly exploring multimodal solutions. Road freight is gaining traction for moving cargo between Asia and Europe and for connecting regional hubs in the Middle East.
This shift highlights a broader adjustment in global supply chains as companies diversify transport options to maintain reliability and manage rising costs.
