The ongoing Iran war has significantly impacted global air cargo operations, leading to substantial disruptions and increased costs. Immediately following the resumption of hostilities on February 28, more than 12% of global air cargo capacity was taken out of service due to airspace closures, flight cancellations, and rerouting. This led to an initial capacity reduction of nearly 20%, though some of this has been offset by increased direct Asia-Europe capacity.
Global air cargo spot rates in March reached $2.86 per kilogram, surpassing 2025 peak-season levels and marking the highest point since December 2024. The share of global air cargo volumes shipped under spot rates increased to 52%, just one point below the level seen at the start of the COVID-19 pandemic. Rates from Northeast and Southeast Asia to North America have seen mid to high double-digit year-over-year increases, while South Asia to North America rates surged by 75% due to the significant presence of Middle East-based carriers in that corridor. Air cargo rates from Southeast Asia to Europe climbed over 6% to $3.82 per kilogram, with South Asia rates up 3% to Europe and 5% to the United States.
The conflict has prompted shippers to move away from annual contracts to shorter, three-month agreements to adapt to the turbulent market. Experts at Xeneta have advised postponing tenders due to the rapidly changing geopolitical landscape. Long-term contract rates, initially expected to retreat, are now projected to rise by 5% to 15% in 2026. This increase is driven by a combination of higher demand, which grew 4% year-over-year in the first half of 2026, and the temporary contraction in supply.
Airlines are benefiting from these higher rates; for example, United Airlines reported a 22.6% gain in cargo revenue during the second quarter, reaching $527 million, and Delta Air Lines saw a 39% increase in cargo revenue to $291 million. The disruptions have also led to increased war risk surcharges by airlines and logistics companies like Maersk and DHL. The war has grounded flights in key hubs like Doha and Dubai, affecting critical shipments ranging from pharmaceuticals and vaccines to airplane parts, with concerns about potential drug shortages if disruptions persist.
