Global Air Cargo Rates Surge Amid Regional Conflict 📈

The global air cargo market is facing significant volatility as stakeholders adjust to military escalations involving the US, Israel, and Iran. The resulting disruptions to capacity and rising fuel costs have driven a sharp spike in freight pricing. • Price Trends: Average global full-market rates rose +7% WoW to US$ 2.84/kg, following gains of 8-10% in previous weeks. Global spot rates reached US$ 3.38/kg, marking a +26% YoY increase. • Regional Impact: The Middle East and South Asia (MESA) region, critical for Sri Lankan transshipments and exports, saw spot prices skyrocket by +70% YoY. Spot rates from South Asia specifically rose +8% WoW. • Capacity Crunch: Global tonnages fell -6% YoY. While South Asia capacity has recovered to near pre-war levels, overall MESA capacity remains -37% lower than last year. Gulf area capacity is still down roughly -20% compared to February levels. • Sector Logistics: The apparel & textiles and perishable goods sectors—vital to Sri Lanka's economy—face higher overheads as major European and North American carriers suspend operations in Gulf markets, forcing a reliance on disrupted regional networks. • Outlook: Rates remain elevated across all origins, with Africa (+41%) and Europe (+23%) seeing significant YoY spot rate hikes as the industry grapples with restricted capacity and a backlog in demand.