WEEKLY NEWS


REROUTING COSTS CLIMB AS MIDDLE EAST CONFLICTS RESHAPE US AIRFREIGHT NETWORKS


AIR CARG O WEEK


04


BY Oscar SARDINAS


REGIONAL conflict has sent U.S. cargo operators into a prolonged adjustment period. Higher insurance premiums, longer flight times and reframed 2026 network plans are now standard. Detours around closed airspace increase fuel costs and tighten capacity even as demand for pharmaceuticals, electronics and perishables remains steady.


Airspace closures and rerouting When Israel and Iran escalated hostilities in June of 2025, reverberations were immediate. Airspace over Iran, Iraq, Jordan and Israel closed, forcing extensive rerouting. WorldACD data showed cargo volumes from the Middle East and South Asia dropping nine percent in the second week of June, following an eight percent decline the week before. Iran and Syria lost nearly all freighter capacity.


Iraq saw lift drop 84 percent. U.S. carriers responded swiftly: United Airlines


and American Airlines


canceled flights to Dubai, Doha and Riyadh. British Airways, Air France KLM and Singapore Airlines soon followed suit. Flights that normally cut through Middle Eastern


airspace shifted south, detouring via the Arabian Sea or Central Asia. Transit times increased two to four hours. For U.S. cargo moving through Dubai, Doha or Abu Dhabi, those delays rippled through supply chains that were already stretched thin. These disruptions affected flows in both


directions. U.S. exports to the Middle East; pharmaceuticals,


aerospace ACW 02 MARCH 2026 components, and


high-value electronics, faced similar routing complications and tighter capacity. Latin American perishables moving through Gulf hubs to reach Asian markets dealt with unpredictable transit windows.


War risk escalates and insurance costs follow suit War risk insurance for Red Sea shipping more than doubled to one percent of vessel value after Houthi attacks intensified in mid-2025. A US$100 million ship that cost US$400,000 to insure before the July sinking of the Magic Seas now runs closer to US$1 million per voyage. Higher ocean freight costs pushed some shippers


to take to the skies, especially for high-value goods. That helped airfreight volumes even as routing got messier. But airfreight operators weren’t insulated. Insurance premiums also shot up for flights near conflict zones. Freight rates from India and Southeast Asia to the


U.S. and Europe rose about 15 to 20 percent. India’s pharmaceutical exports, worth over US$6 billion annually in air cargo, faced pressure from limited freighter availability and unpredictable access to slots.


Capacity tightens as belly space contracts Airspace


closures passenger squeezed belly capacity


hubs have tremendous impact: India and Southeast Asia move over three million tonnes of perishable exports annually, much through Dubai, Doha and Abu Dhabi. “We had to adapt quickly, rerouting shipments, capacity,


redeploying rethinking


working in close coordination with our customers,” said Badr Abbas, Divisional Senior Vice President at Emirates SkyCargo. Here’s the twist: Middle East hubs actually grew


in 2024. Ground handler dnata processed over one million tonnes of cargo in Dubai alone, a 30 percent year-on-year increase. Hamad International Airport in Doha hit 2.6 million tonnes, up 12 percent. But those gains reflected cargo rerouting and supply chain shifts rather than organic growth.


Adapting to structural shifts For U.S. importers and exporters, these strains have created what trade specialists call non-tariff barriers. Pharmaceutical companies sourcing from India dealt with longer lead times. Electronics manufacturers watched transit windows become unpredictable. Perishable exporters faced higher spoilage risk. Exportside, U.S. forwarders managing westbound


on flights. Freighters rerouted to safer lanes. The crunch hit hardest where Middle East


shipments to the Gulf reported similar challenges. Medical equipment destined for Saudi Arabia, aerospace parts for UAE maintenance facilities and tech products bound for Dubai’s re-export market all faced a capacity crunch as carriers prioritised


www.aircargoweek.com


higher-yielding routes. The response varied. Some shippers rerouted


through Istanbul, which handled 549,309 flights in 2025. Others built bigger


inventory buffers. strategies and


Forwarders saw demand spike for real-time tracking and route visibility.


Planning for resilience over expansion Carriers planning 2026 networks are prioritizing resilience over expansion. IATA forecasts modest global cargo growth of 2.6 percent. Middle East volumes should stay stable. Capacity will grow six to seven percent as new widebodies enter service, but aircraft shortages remain an expansion bottleneck. For U.S. carriers and forwarders, that means


baking flexibility into contracts and insurance coverage. It’s less about whether to use Middle East hubs and more about managing the instability. Guillaume Crozier, dnata, put it plainly:


chief cargo officer at “The industry should focus


on strengthening its foundations: data quality, interoperability and collaboration across the value chain.” An optimistic scenario has airspace restrictions


loosening up and insurance premiums returning to normal. The realistic one, however, acknowledges the region’s unpredictability as a planning factor for the near future, so U.S. shippers are responding by diversifying their routing and deepening their contingency plans.


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