DHL Global Forwarding highlights impact of Iran war on air cargo

At a recent webinar, senior executives from DHL Global Forwarding (DGF) highlighted the impact

The Iran war is having an impact on air cargo to and from the Middle East, and the pressures exerted on the sector and its shipper customers by the severe disruption to air traffic in the region.

Discussions also focused on the ‘ripple effects’ of the conflict, notably the airspace restrictions it has triggered on major East-West airborne trade flows, while another topic generating a good deal of interest was how quickly a return to normality could be expected once hostilities had ended.

‘Effects Far Into Q2 at Least’

Addressing the webinar, Henk Venema, DHL Global Forwarding’s (DGF) EVP, Global Airfreight, said that at the beginning of the crisis, the common view was that it would last about a week or two. “In our ‘scenario planning’, we are now looking at multiple months.”

He pointed to heavily-inflated costs for the foreseeable future for cargo transported in and out of the GCC countries – rate hikes from capacity reductions, the recourse to chartering aircraft, the use of alternative gateways and overland transport, greater fuel burn due to re-routing, and also surcharges from the rise in jet fuel prices amid shortages. “We expect these effects to last at least far into Q2 2026.”

‘Airlines Taking 2-3 Hours’ Worth of Extra Fuel’

The crisis is also posing questions for the broader airborne trade, in particular, the China-Europe and Southeast Asia-Europe corridors.

“Flying from China and Hong Kong to Europe, the shortest route available today (since the closure of Russian and Siberian airspace following Russia's invasion of Ukraine in February 2022) is one that basically goes northwest from China to Kazakhstan, on to Azerbaijan and Baku, and over the Black Sea area and northern Turkey. What we can say is (at least from an itinerary point of view), this corridor has not been too affected by the Middle East conflict.”

Fears that an attack by Iran on Azerbaijan earlier in the conflict would lead to the closure of the country’s airspace had thankfully not materialized, Venema noted.

“It would have meant freighters from China transiting via Saudi Arabia to the south, India, and then going north, which would have impacted payloads to such an extent that either a technical stop would have been required. Even rerouting over Alaska to China might have become a feasible solution. In any case, the result would have been many more flight hours, driving up operating costs and rates.”

Much more of an impact is being felt on the corridor between Southeast Asia and Europe, whose regular itinerary had passed over India, Iran, and Iraq, before heading into Turkey and onwards to the north-west of the European continent.

“This corridor had already been subject to airspace restrictions for the past year. Airlines are taking two to three hours’ worth of extra fuel to make sure that they can do a detour. This is having an impact on the amount of air cargo that can be carried per flight, as well as on rates.”

Post-War Outlook

Looking ahead, Venema warned that a sluggish recovery in demand for air passenger services to and from the Middle East, when the military conflict finally ceases, could have a significant impact on the region’s air cargo market and those further afield.

“I think that when it comes to freighter operations, they will come back very quickly following a resolution of the conflict. However, we’ve got to keep in mind that global air cargo capacity is heavily-dependent on airlines’ passenger services and demand for such services.”

He said air passengers would very likely need an “adaptation period” before regaining their trust again in travelling to or transiting through the Middle East. Secondly, tourism in the GCC countries will take some time to recover.

“These are the two drivers of passenger demand for the Middle East carriers, and their passenger flights provide a lot of cargo capacity. If you look at India alone, every major city in India has at least four to five flights a day to the Gulf states, operated by Emirates, Etihad, and Qatar Airways. Until these flights come back, there will be an impact on the regional and wider air cargo market,” Venema added.