WorldACD: global air cargo traffic “severely” affected by U.S.-Israeli war on Iran

Data of the first full week of the U.S.-Israeli war on Iran show that air cargo traffic has been severely affected by the conflict in patterns that extend well beyond the Middle East, according to analysis by Dutch air cargo data firm WorldACD. The temporary loss of capacity from air space and airport shutdowns in the region sent airfreight prices rising and prompted routing and capacity shifts, the report found. Doubts about an early end of the hostilities point to further pricing hikes from fuel and war risk surcharges and headwinds for governments trying to hold down inflation that could further undermine consumer confidence. The report also found that solutions may be slow to come. Barring a quick end of the US-Israeli war on Iran, pricing is set to climb further, regardless of the anticipated further recovery of Middle Eastern airline operations, the firm said. A number of airlines have already announced fare increases in their passenger operations as a result of the sharp escalation in the price of jet fuel (+58%, WoW), and a jump in war risk insurance premiums is bound to add upward momentum to pricing. By the numbers, global airfreight traffic in the week ending 8 March contracted by 4% from the previous week, 12% lower than a year ago, according to WorldACD Market Data. With the exception of North America (+3%) and Asia Pacific (+5%), all regions suffered week-on-week drops in chargeable weight, particularly for origin Middle East and South Asia (MESA), which showed a decline of 36%, followed by drops of 23% from Africa, 7% from Europe, and 2% from Central and South America. Overall outbound volume for tonnage with MESA origin fell even more steeply, following the suspension of commercial flight operations in Dubai on March 7 after a drone strike. Even after those operations were subsequently restored, albeit at a reduced scope, volumes out of Dubai to the US and Europe slumped -82% and -38%, WoW, respectively. Carriers and forwarders have alleviated the situation by using alternative gateways in the region like Saudi Arabia and adding charter capacity, combined with increased trucking activities.