Dive Brief:
- The Iran war is influencing carrier-forwarder annual air cargo contract negotiations as shippers contemplate the advantage of spot rates during a turbulent and uncertain market dynamic, according to an April 2 Xeneta report.
- The military conflict has only accelerated a shipper trend toward three-month agreements instead of an annual contract, which is shortening market rate validity, per Xeneta.
- “We have been recommending postponing tenders during the present uncertainty, because what is the value of making a longer-term commitment now when the whole backdrop can change so quickly?” Chief Airfreight Officer Niall van de Wouw said.
Dive Insight:
U.S. military strikes against Iran on Feb. 28 have scrambled logistics activity in the Middle East, with air carriers facing service disruptions for cargo transiting through the region. While the start of the year looked promising for the air cargo market, the 2026 outlook has since been muddied.
While the disruption is not pandemic-scale, the ongoing closure of the Strait of Hormuz — a sea passage critical for transiting oil and other commodities — is driving up the cost of oil. The resulting oil shock has since nearly doubled the cost of jet fuel, further squeezing carriers already facing capacity and network pressures, per Xeneta. On March 30, the spot price of U.S. Gulf Coast kerosene-type jet fuel reached $4.24, up from $3.93 the week prior, according to U.S. Energy Information Administration data.
“Will the increase in fuel prices dampen demand for air freight? Not immediately, but if this conflict continues in the longer term, then definitely yes because the world would be facing a much broader economic issue,” van de Wouw said.
Despite a more regionalized impact, cities such as Dubai in the United Arab Emirates and Doha, Qatar, are “strategic midpoints” between the Americas, Asia and Europe, per Xeneta. In turn, the conflict is reshaping cargo flows across tradelanes, including South Asia to the Americas, prompting a spike in prices.
High level, global air cargo spot rates in March reached $2.86 per kilogram, surpassing 2025 peak-season levels and reaching the highest point since December 2024, Xeneta reported. In March, the share of global air cargo volumes shipped under spot rates were up three percentage points to 52% — one point below the level recorded at the onset of the COVID-19 pandemic.
Meanwhile, air freight rates from Northeast and Southeast Asia to North America have rocketed by mid to high double digits year over year due to the rising cost of jet fuel. South Asia to North America were even higher, up 75% YoY due Middle East-based carriers holding a significant share of that corridor.
Long term rates tell a different story, according to Xeneta. On the Northeast Asia and Southeast Asia to America trade lanes, rates valid for more than one month were up only by low single digits compared to four weeks earlier. The rates were primarily influenced by tariffs and the demise of de minimis exemptions.
Despite the Iran war further muddying the already low growth expectations for the 2026 air cargo market, the lessons learned from past crises offers some short-term stability as shippers, carriers and forwarders wait to see how things play out, Xeneta reported.
“Tariffs created uncertainty but the fallout here is bigger because of the cost of jet fuel, the potential energy crisis. and inflation growth,” van de Wouw said. “Right now, the air cargo market is suffering from a supply issue – and this will be resolved. But, the longer this recovery takes is going to determine if it becomes a much bigger demand issue.”
