Global air cargo rates have continued to rise strongly as stakeholders adjust to the dynamic and highly challenging conditions following the military attacks on Iran by the US and Israel, and Iran’s retaliatory strikes on targets in the region, according to WorldACD Market Data. 

Its latest weekly figures indicate that worldwide tonnages were relatively stable in week 12 (March 16 to 22) compared with the previous week, dipping -1%, although they are down -6% compared with week 12 last year amid the continuing constraints on air cargo capacity to and from key markets. 

But spot rates and average full-market rates rose again from all of the world’s main origin regions, as carriers, freight forwarders, and cargo owners adjusted to disrupted and volatile markets, restricted capacity, demand backlogs, and higher jet fuel prices.

With several of the world’s biggest air cargo carriers still facing major capacity and operational disruptions, average global full-market air cargo rates rose by a further +7%, week on week (WoW), in week 12 to $2.84 per kilo after surging +10% the previous week and +8% in week 10. 

Limited capacity increases in Gulf 

It was a similar picture for spot rates, which rose by a further +6% in week 12 to $3.38 per kilo, driven by further +8% WoW increases from Middle East & South Asia and Asia Pacific markets. That takes average worldwide spot rates +26% higher than in week 12 last year, with Middle East & South Asia spot prices +70% up, year on year (YoY). 

But with major disruptions still to the capacity, networks and services of many of the big Gulf carriers and airports, spot rates from Africa (+41%), Europe (+23%), North America, (+23%) and Asia-Pacific (+18%) also remain significantly elevated compared with the equivalent week last year, said the report.

Following the attacks on Iran since February 28, capacity from the MESA region dropped sharply in weeks 8, 9, and 10, although it has stabilized and seen some modest increases in weeks 11 (+6%, WoW) and 12 (+2%). Nevertheless, capacity from Middle East & South Asia in weeks 11 and 12, combined, was down -37% compared with the equivalent two weeks last year. 

Capacity specifically from the Gulf area also saw some increases in weeks 11 (+6%, WoW) and 12 (+3%), although it was around -20% down compared with its levels in week 7, prior to the attacks on Iran. From South Asia, capacity has recovered back close to its levels prior to the war following increases in week 11 (+7%, WoW) and week 12 (+1%).

Middle East & South Asia spot rates surge

After very big rises in spot rates from Middle East & South Asia origins in the previous three weeks, including a +22% WoW rise in week 11, the further +8% WoW increases from the region in week 12 were relatively modest. The biggest increases in spot rates from the region were to Africa (+18%, WoW, to $4.76 per kilo) and to other countries within the region (+13%), based on the more than 500,000 weekly transactions covered by WorldACD’s data. 

From the Gulf area, spot rates rose by a further +11%, WoW, including a +24% rise to Africa and a +12% increase to destinations in the MESA region. Operational restrictions mean most European and North American carriers are not currently operating to and from Gulf markets, it added.