The Asia-Europe air cargo market is tightening rapidly as shippers face a double blow: rising freight rates and sharply higher fuel surcharges.
The disruption stems largely from the ongoing US-Iran war, which has constrained routing options through the Middle East — a region that normally handles an estimated 30% of all Asia-Europe air cargo flows.
With those routes severely limited, cargo is being redirected elsewhere, putting heavy pressure on remaining capacity. Xeneta said dynamic load factors on the Asia-Europe trade lane rose to 86% last week, up from 80% the week before, signaling a market that is becoming increasingly difficult to navigate.
Forwarders are already being forced into expensive alternatives. Some shipments are reportedly moving from Asia to Europe in the bellyhold of passenger aircraft via North America, a costly workaround that reflects just how tight direct capacity has become.
Freightos data shows spot rates from China to Europe are up about 13% from the previous week, while rates from South Asia to Europe have surged 82% compared with levels seen before the war began. The Baltic Air Index also reported a sharp week-on-week increase in outbound Singapore rates, as Gulf hub disruptions pushed traffic toward Asian gateways.
Flight availability through the Middle East remains heavily constrained. Key airports in Abu Dhabi, Amman, Bahrain, Doha, Dubai and Tel Aviv continue to face major disruption. Emirates and Etihad are operating only limited flights, while Qatar Cargo — the Gulf’s largest air freight carrier — is not flying in or out of Doha as Qatari airspace remains closed.
Overall capacity into and out of the affected Middle Eastern airports has dropped by 90% compared with normal pre-war levels, according to Rotate.
The disruption is particularly severe for South Asia. A significant share of cargo from India, Pakistan and Bangladesh typically moves via Gulf hubs, meaning the closure of those pathways is forcing freight into alternative routings through Hong Kong, Taiwan, Singapore, South Korea and Japan. That, in turn, is creating additional pressure on intra-Asia and trans-Pacific capacity.
Fuel is adding a second layer of pain. Airlines are now reviewing fuel surcharges weekly instead of monthly as jet fuel prices soar. Cathay Pacific is raising its cargo fuel surcharge from $0.41 per kilogram to $1.65 per kilogram from March 20. Lufthansa Cargo has also increased its surcharge, while IAG Cargo has so far avoided changes thanks to extensive fuel hedging.
For carriers, the cost pressure is coming from both sides: higher fuel prices and longer flight paths required to avoid conflict zones, often with reduced payloads. Several operators, including Maersk Air Freight, have already warned customers that they will adjust surcharges frequently and may apply additional disruption charges to maintain service continuity.
If the conflict drags on, some analysts believe short-term rate increases of 100% to 200% are possible in selected markets. What was already a sensitive trade lane has suddenly become one of the most volatile in global air cargo.
