Jet fuel prices and air cargo rates may have risen and demand may yet be affected, but stakeholders are currently banding together to keep goods and supply chains moving during the Middle East conflict, Xeneta has reported.
The ocean and airfreight rate benchmarking and market analytics platform said that forwarders and airlines are seeing sustained demand as shippers are keen to protect market share and customer service, even as costs go up.
Current market conditions may look very different in the future, though. If fuel prices continue to rise, demand for airfreight may well be dampened.
For now, shippers, airlines and forwarders are waiting to see what developments there will be in the Middle East and the longer term economic impact, a decision which has brought some short-term stability, said Xeneta.
Niall van de Wouw, Xeneta’s chief airfreight officer, said: “There is clearly a lot of concern and unanswered questions about the market outlook, but we also see a current transparency and maturity in customer and supplier relationships, and a sense of solidarity that although the impact of the conflict is beyond their control, they will get through it together.”
However, while airfreight has typically stepped up during past crises, the current conflict is hitting airlines and air cargo industry harder than ocean shipping.
“Air freight rates are going up, and we already see evidence of the Middle East conflict reshaping global airfreight pricing,” said Van de Wouw.
There is a real risk of airfreight demand reducing if the conflict continues in the longer term.
“Will the increase in fuel prices dampen demand for airfreight? 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.
He added: “Airfreight demand might receive a temporary boost from ocean carriers declaring ‘end of voyage’ at ports outside of their intended destination, leaving shippers and forwarders to recover their supply chains, van de Wouw said, but any gains might be short-lived.”
Rates impact
Global air cargo demand fell 3% year-on-year in March, while capacity supply was 6% lower than in March 2025.
Meanwhile, dynamic load factor – Xeneta’s measurement of capacity utilisation based on volume and weight of cargo flown alongside available capacity – rose to 65%.
Air cargo capacity in the region remains roughly 30% below pre-conflict levels, while global air cargo spot rates in March surpassed 2025 peak-season levels, reaching $2.86 per kilo – their highest point since December 2024.
Shippers have favoured shorter-term three-month contracts in the first quarter of this year over annual contracts as a result of the disruption and this has compressed rate validity across the market, said 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?” van de Wouw pointed out.
Meanwhile, for airline-forwarder negotiations, the first quarter has followed the dynamics that emerged during Covid.
In March, the share of global volumes shipped under spot rates rose three percentage points to 52% – just one point below the level recorded at the onset of the pandemic, noted Xeneta.
The rate impact has been sharpest on outbound corridors from South Asia and Southeast Asia to the Middle East. Spot rates surged 50–100% in the week ending 29 March, compared to just four weeks prior.
The spike reflects a convergence of pressures: severe capacity shortages from heavy reliance on Middle Eastern carriers, near-doubled jet fuel costs, and newly added war-risk surcharges, highlighted Xeneta.
Plus, the disruption is no longer contained to the Middle East. Because the region accounts for roughly half of all capacity on Asia–Europe corridors – and for South Asia onward to the Americas – the squeeze is now reshaping flows across entire lanes.
Spot rates from Southeast Asia and South Asia to Europe have followed similar trajectories, given Middle Eastern carriers’ dominance on those routes. By contrast, Northeast Asia–Europe lanes have held up comparatively better as airlines deployed more direct flights to compensate.
Europe–Africa corridors registered 31% rate growth, reflecting the Middle East’s role as the primary transit hub connecting the two regions.
Five weeks in, the pressure has spread well beyond the immediate Asia–EMEA region. Rising jet fuel costs have pushed airfreight rates from Northeast Asia and Southeast Asia to North America up by mid-high double digits.
South Asia–North America rates surged even higher, up approximately 75%, again driven by Middle Eastern carriers’ significant share of that corridor.
But, longer term rates tell a different story, said Xeneta. Rates valid for more than a month on Northeast Asia and Southeast Asia–North America lanes rose by only low single digits compared to four weeks earlier, as US tariffs and the unwinding of de minimis exemptions continue to weigh on demand across those corridors.
But not all lanes are moving in the same direction. Europe–North America spot rates fell by some 10% in the week ending 29 March compared to four weeks prior, as summer passenger schedules restored belly cargo capacity to the market.
North America–Latin America rates held broadly flat over the same period, while Europe-Latin America spot rates rose approximately 12%, reflecting capacity withdrawals from that corridor.
Ultimately, the longer the Middle East conflict continues, the bigger the impact on the airfreight industry, said van de Wouw.
“Tariffs created uncertainty but the fallout here is bigger because of the cost of jet fuel, the potential energy crisis. and inflation growth. 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. Whether airfreight benefits or suffers in the longer-term is down to the length of the conflict and its outcomes.”
